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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, Fannie new desktop form, GSEs to use desktops for purchases loans, Time management, Freddie Secret, Liability, mortgage origination stats, etc.
By Steven W. Vehmeier
Excerpt: When should we analyze the contract?
Looking at the sales contract early on allows the appraiser to identify any “subject to” items or other conditions that could influence the value conclusion.
However, reviewing the contract early might also put the sales price in the back of the appraiser’s mind. And although it shouldn’t, it may unintentionally influence the appraiser’s comparable selection and eventually impact a direction in value.
Maybe looking at the sales contract only after developing the appraiser’s opinion of value would help avoid the above concern?
To read more, click here
My comment: Some interesting, and maybe controversial, ideas. Short and worth reading.
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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, AMCs, appraiser survey on the future, real estate market, waivers, turn times,mortgage origination stats, etc.
By Jamie Owen
Excerpts: Sometimes, two homes with wide age differences can have the same effective age. For instance, a thirty-year old home may have an effective age that is the same as a fifty-year old home, if the fifty-year old home has been renovated to a degree that is comparable to the younger home. If this is the case, while there is a relatively wide age gap, no age or condition adjustment may be supportable.
Once the home is lived in, it can never be considered “new” again. Subsequently, a new home typically has a higher market value than one that has already been lived in. The joyful homeowner makes these choices, the home is built, and they move in. Now starts the wear and tear. The degree of wear and tear depends much on the homeowner and how well they maintain their home. With new homes, typically homeowners go for a number of years without needing to do anything major to the property. However, at some point, they will need to.
To read more and see some fun animated gifs and a video, click here
My comment: Written for homeowners (an excellent marketing tool) but interesting comments for appraisers. I love Jamie’s blog posts!!
For Covid Updates, go to my Covid Science blog at covidscienceblog.com
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NOTE: Please scroll down to read the other topics in this long blog post on srange homes, adjustments, market changes, client pressure, mortgage origination stats, Covid tips for appraisers, etc.
Excerpt: I recently saw a Facebook post where an appraiser was quite upset and offended that an AMC asked him to dress professionally for an appraisal walkthrough. Now, this
was a request that was made upfront as one of the conditions for accepting the order. Reading the post, it sounded like this appraiser was upset for two reasons. One, he was offended that the AMC was implying that he does not take his job seriously enough or dress professionally enough. Two, he felt like the AMC did not have a right to tell him how to do his job (i.e., how to dress).
First, let me say that I personally do not think it was the AMC’s intention to imply that this appraiser is not professional in any way. I simply think that they were taking extra precautions to make sure the borrower was extremely impressed by the service they, and the appraiser whom they hired, provided. Now, on to the real question. Can an AMC tell an appraiser how to dress? And the answer is yes.
To read more, plus appraiser comments, click here.
My comment: This has always been a controversial topic for fee appraisers. Dustin is correct. An appraiser client can have many requirements, such as requiring a newer car, no flip-flops, etc. It is your decision whether to work for them. Primary Rule: There is always another client!
Covid-19 Residential Appraisers Tips on Staying Safe
For Covid Updates, go to my Covid Science blog at covidscienceblog.com
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Excerpt: When it comes to common appraisal violations, certain minor violations are very common. In this article, I outline several examples of less serious breaches of development STANDARD 1 and reporting STANDARD 2—and a few other types of violations, too. I have compiled these based on many years of personal experience in appraisal regulation, as well as feedback I have received from other states’ enforcement agencies. Once you’re aware of these common mishaps, you should be able to avoid them more easily.
1. Use of inappropriate sales
One of the big problems is the use of inappropriate sales in a sales comparison approach….
2. Use of unsupported site value
Another common violation is the use of unsupported site value in the cost approach. That’s something that a lot of boards have cited as a prevalent deficiency or shortcoming in appraisal reports.
To read more click here
My comment: useful information. Nothing new, but good reminders. Don’t get the “violation letter” from your state board!!
Appraisal Process Challenges(Opens in a new browser tab)
Appraising Weird Stuff is Challenging!(Opens in a new browser tab)
What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)
Excerpt: We recently asked our appraisal community, “What’s the ONE thing that is most often overlooked by appraisers?” We received a wide variety of answers ranging from big-picture oversights to specific details. The most common answer we received was “Highest and Best Use.”…
Highest and Best Use (HBU)
This was the top answer, which was written in by about 8% of survey respondents “First question when doing an appraisal is the highest and best use. If there are two very different opinions of value on a property, different HBU is often the reason.”…
Obsolescence
Obsolescence is another item mentioned by multiple survey respondents. Appraisers cited both external obsolescence and functional obsolescence as being frequently overlooked.
“External obsolescence for the subject property – When I’m reviewing appraisals, I see this more often than other oversights. When I was performing retrospective reviews for FNMA, their biggest complaint was that appraisers did not point out external obsolescence for the subject and/or its impact on marketability (if there was an impact).”
“Functional obsolescence – Appraiser focus has changed over the years as subject functionality has changed.”
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This 170-year-old Swiss guesthouse built into the side of a mountain is best accessed by a cable car.
Excerpt: The guesthouse and restaurant is quite literally built into a cliff, and its back wall is made up of the rock itself.
Its precarious perch makes it difficult to get to, and it’s only accessible after a steep hike along a mountain path or via cable car (the piano in the living room was brought in by helicopter). It’s been around for 170 years, and was originally a home for farmers; the guestbook goes back to 1940.
To check out the interesting fotos and brief description click here
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By Tim Andersen, MAI
Excerpt: Let’s start this musing by addressing the issues of value, accuracy, and misleading. You might have looked at them differently in the past. Then we’ll tie these in the idea of the value conclusion in an appraisal being right or correct.
State appraisal boards level charges against appraisers. It is very common for appraisers to defend themselves against these charges by insisting their value is “right”. Or, they assert they have properly supported their value conclusion, or something similar. In reality, this argument is utterly irrelevant and carries no weight with the appraisal board.
IRRELEVANT!?
When it comes to value, accuracy, and misleading, the appraiser’s value opinion alone is irrelevant and weightless. This is because TAF has given state appraisal boards specific instructions. Those instructions are that the appraiser’s value conclusion is not to be a part of the board’s investigation. Nor is it to be a part of its deliberations. Therefore, it is not to be part of the appraiser’s defense since it is not part of the charges against the appraiser.
To read more, click here
My comment: Tim is a regular contributor to the paid Appraisal Today. He is The USPAP Expert and helps appraisers stay out of trouble with their state boards!! Tim also has an interesting podcast – link is on the top of the page.
What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)
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Q&A with Mark Verrett, Chief Innovation Officer at Accurity Valuation
Excerpts: WRE: How can appraisers adapt to meet the profession demands?
Verrett: I think there are several ways to adapt to these challenges. The first is to work toward diversifying your practice away from 100 percent mortgage business niches. Our firm is a leader in green valuation, rural valuation, valuation consulting and litigation support and we help our offices diversify into those spaces. However, this solution isn’t for everyone….
To directly take on the challenges facing appraiser relevancy in the mortgage space, significant change is required. Appraisers need to unite to create a like-minded national voice that is not rejecting proposed changes for the profession, but rather working with stakeholders (regulators, lenders, clients, etc.) in conceptualizing, testing, tweaking, and ultimately modernizing the appraisal process on the mortgage side.
The appraisal community has a tough assignment in their role in this modernization. To be useful in the discussion, we need to challenge ourselves to be creative and open-minded, yet diligent in maintaining or, even better, improving the quality of the valuation being produced. I think it is extremely important for appraisers to listen and understand the needs of their clients and to creatively develop solutions that meet those needs.
Worth reading with some good ideas. To read more, click here
My comment: Accurity has franchisees and some very savvy appraiser officers and directors.
Covid-19 Residential Appraisers Tips on Staying Safe
For Covid Updates, go to my Covid Science blog at covidscienceblog.com
Appraiser Covid Survey Results April 2020
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Excerpts:
The Top 3
To read more, click here Check out the respondent comments and a list of some of the many previous careers
My comment: I was a chemist before I started appraising. Really liked learning about science in school, but 7 years of lab work was too boring. I felt trapped inside. Saw an ad for “appraiser assistant” at the local county offices. “Work in the field.” I had never heard of it, so read a book about it at the library (1974). I got the job and still love appraising!! I didn’t see many science careers on the “Other” list. But, I think it prepared me well for appraising as I was trained to be very objective and analytical.
Covid-19 Residential Appraisers Tips on Staying Safe
The future of residential appraising(Opens in a new browser tab)
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