Appraisal News and Business Tips

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7/19/18 Newz//Price declines? .History of Appraisals .Whale House

The History of Appraisals

By Ed Pinto
Excerpt: Many say “history always repeats itself” and in the case of appraisals, it may be for the best. We sat down with Edward Pinto, the Co-Director of AEI’s Center on Housing Markets and Finance as he shares with us his discoveries from the original FHA forms.

Dating back to the 1900’s Ed found the tools needed to bring the appraisal process back to how they were originally called for – based off of the market value and the information proved by the expert, the appraiser.

Very interesting and worth reading:

My comments: I have published several articles in my paid Appraisal Today about the history of appraising, going back to the Bible: the Book of Moses!! I have been inspired to republish them in the September issue of the paid Appraisal Today.

Read more!!

7-12-18 Newz// 3 Story Homes, Auction Prices, Portable Architecture

The Most Popular Article From Last Week’s Newsletter: Former Appraiser’s Hot Dog Stand!! FYI, unusual and weird stuff is very popular with appraisers ;>

Three-story Single-family Homes and Townhomes

Excerpt: Of the 729,000 single-family detached homes started in 2017, a little over 18,000 (2.5 percent) had three or more stories, according to National Association of Home Builder tabulation of recently released Census data.

In contrast, the 23,000 3-plus story townhomes represent 22.0 percent of single-family townhome starts.

More info here:

My comment: 3 story detached homes are not popular in very many areas. It is a long walk up to the 3rd floor. I have appraised them (attic conversions of a classic older home to a master bedroom, for example). I always look to see if an elevator can be added – usually has to be on the exterior of the home. Definitely a functional problem. I rarely see them on existing homes, except for attic conversions. Some newer detached homes have a small room on the 3rd story – family room, extra bedroom, etc.

For townhomes, I have seen a significant increase in 3 story new construction townhomes in my city (within the past few years) and other Bay Area cities. The first floor is a garage plus entry, second floor living room and kitchen, bedrooms on 3rd floor. Very profitable for home builders, especially in areas with high land prices and infill tracts. I have appraised them and the owners did not object to the 3 floors. There are sometimes a few townhomes that are 2 story.

My first apartment when I moved to San Francisco in my 20s was a third floor walkup. I vowed Never Again ;>

Read more!!

5/31/18 Newz//Crash in 2020?, Floating Homes, Rate changes since 1900s

Floating Homes the Ultimate Water View

Excerpts: For many, floating is something new and adventurous,” said Max Funk, co-editor of “Rock the Boat: Boats, Cabins and Homes on the Water” (Gestalten, 2017). The book reveals an explosion of creativity in buoyant architecture, including an egg-shaped floating cabin in England, floating spas (with working saunas) in Finland and the United States, and floating geodesic domes in Slovenia.

Outside of Seattle, where houseboat construction is being curtailed because of the potential impact on local salmon populations, Ms. Bethell said, the most prominent areas in North America for floating homes are the San Francisco Bay Area; Vancouver, British Columbia; Key West, Fla.; and Portland, Ore.; where the number of floating homes has doubled since 2012.

My comment: In the San Francisco Bay Area they are in several marinas, including in my city, Alameda. In the past, they were anchored around the bay, but were moved to marinas due to pollution concerns. When I moved here in 1968, I visited one anchored off Sausalito in a protected bay with no sewage storage.

2018’s Hottest Backyard Amenity: Detached Living Spaces

Excerpt: The reason for their rise in popularity? Privacy, for one. There’s no one-and no surrounding noises from your disruptive family or neighbors-to make you lose your focus. It’s all you, the shed and whatever your No. 1 priority is for the day. Not to mention, if you have a lush and peaceful backyard, the view is a plus.

So, what do these look like? Anything you can imagine. From hobbit hole-style sheds to more contemporary glass structures, these can take the form that best suits your needs. And what are they used for? That depends on you…

http://blog.rismedia.com/2018/detached-living-spaces

My comment: a great way to get some peace and quiet plus privacy ;>

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5-10-18 Newz//Market Value Fallacies, Broken Mortgage Market, Crazy Appraiser Stories

Is it all a big lie? Are there really 6 fallacies of market value?

By George Dell, MAI, SRA, ASA

Excerpts: Some ten years ago, we saw the start of the economic meltdown. Were appraisers to blame?  Some tried to pin the blame that way. But was there a big lie underneath? The required (federally insured) definition of value has seven distinct elements. Were appraisers doing what they were told?
Seeking entertainment for my Stats, Graphs, and Data Science¹ classes, it seemed fun to see if these assumptions had not been religiously followed.  This led to a PowerPoint slide entitled:
 “Dell Operative definition of market value”
Check it out at:

My comment: Interesting comments plus some humor ;>

In the Trenches, Crazy Appraiser Stories

Just For Fun!!

Excerpt: You’ve all got them… The crazy car chases, the surprising living conditions, the exotic assignments and the unique collectors. Here are a few of our stories we found buzz worthy.
This was a beautiful 3,200 sq ft home with all the extras. After measuring…
The Stories plus 10 comments with more stories.
My comment: I love the foto of the crazy appraiser!!

Which of us does not have a weird experience… or lots of them ;>

Read more!!

5-3-18 Newz//Federal Enforcement of USPAP?, Public Restroom App, Unusual Houses & Buildings

How Lenders and Appraisers Can Work Better Together Through Increased Transparency

By Wes Costello
Excerpts: The relationship between lenders and appraisers has never been quite right. The association was scared by improprieties of the few that led to a fallout of the many, with each party retreating behind walls of mistrust and perceived regulatory requirement. Recently, communication is civil but has been described as resembling two parties of a legal arrangement who speak to each other on an as-needed basis….

Anyone who has directed appraisal management knows that they are only as good as the appraisers they partner with. This makes it vital to value each member of your appraisal panel as an integral partner in your company’s business.

My comment: Well written and worth reading, plus the comments, of course. The author is a Senior Vice President of Quality Management & Collateral Risk at AnnieMac Home Mortgage… He is a Pennsylvania Certified Real Estate Appraiser.

Public Restroom App by Charmin: Find Clean Bathrooms!

Excerpt: A clean nearby public bathroom can be hard to find. But not all restrooms are created equal.

With SitOrSquat we put clean public toilets on the map. Literally. Clean locations have a green “Sit” rating. Less desirable ones have a red “Squat.”

So, the next time nature calls and you need to find a nearby restroom, SitORSquat will help you know where to go.

My comment: Thanks to appraiser Jerry Walsh for this great tip. He has used it for years. I am downloading it today!! I coulda used this 40 years ago when I started appraising in rural areas….. Better than The Bushes or Behind A Tree ;>

Read more!!

4-26-18 Newz//Tristar Waivers Denied, Fannie Update, FHFA Paper on Value of AMCs Questioned

Technology or Human Logical Analysis? Who Wins?

By George Dell, MAI, SRA, ASA, CDEI
Excerpt: There is evidence that human judgment WINS – the appraiser opinion beats the AVM and other valuations based on technology. In fact, I have often heard that the qualified appraisal, based on the human logical analysis – is the “gold standard” for the industry. This appears to be true of client groups, and appears to be recognized in administrative law, our federal and state and “quasi-governmental” bodies such as Fannie Mae, Freddie Mac, and the Appraisal Foundation.

Even as we say this, the human model, the appraiser, continues to lose market share to other technologies and other “non-appraiser” value providers.

Worth reading at:

My comment: George Dell’s weekly blog posts are great, but short, as is appropriate for blogs. The May issue of the paid Appraisal Today newsletter will have a much longer article by George, “Will another profession replace appraisers?”

Uredd Rest Area (Ureddplassen)

Norway has built what may be the world’s most beautiful public toilet.

Just For Fun!!

Excerpt: Norway’s newest landmark is a place of absurd beauty. The redesigned rest area, situated along a section of the Norwegian Scenic Route, overlooks stunning views of the fjords and the open sea, and is a popular spot for visitors and locals to watch the northern lights in winter and the midnight sun in summer.

Now this picturesque place is quickly gaining a stranger kind of fame, for being home to what may be the most beautiful public toilet the world over.

Check out the Fantastic Photos and short description at:

My comment: Wow!! What do I use in the field? Fast food, bushes, etc. ;> Sometimes a crummy restroom or smelly portable toilet in a public park… Please hit reply of you know any other great public restrooms…

Read more!!

4-19-18 Newz//Corelogic acquires a la mode, USPAP Q&A problems, Earth-Friendly Homes

Earth-Friendly Homes and Buildings for Earth Day, Sunday, April 22

Just For Fun!!

Click on the fotos of lots of ecofriendly buildings for more info. Fascinating, sometimes Weird, and Fun!!

A few: Mathematical Puzzle House, paper house, skyscrapers, Recycled Concrete Tube House, etc.

http://www.ecofriendlyhouses.net/ecofriendlyhouses.html

Appraisal Institute Requests Appraisal Standards Board to Rework Q&As

Excerpts: The Appraisal Institute in an April 13 letter to the Appraisal Standards Board formally requested changes to or the retraction of Q&A 2018-12, Employing an Extraordinary Assumption when a Client Provides Inspection Data and Q&A 2018-13, Appraisal Reporting – Certifications and Signatures.

The Appraisal Institute believes this advice is antiquated and out-of-step with appraisal practice and long-standing USPAP principles about not dictating the form, format or style of an appraisal report. Perhaps most concerning to AI is the apparent inclusion of additional requirements in this advice rather than in USPAP itself.

My comment: I completely agree with the AI’s issues with Q&A 2018-12 and -13. The certification issue has been around since USPAP required that the “previous 3 years” be included in the certification. The ASB needs to modify USPAP itself as I don’t think it addresses these current issues in appraising very well. Unfortunately, the new edition was effective 1/1/18. 2 years to wait.

Read more!!

4-12-18 Newz//What’s a Comp?, Multiple offers way over list, Rotating House

What’s a comp?

 
By George Dell, MAI, SRA

Excerpts: Our education tells us a comp is similar and competitive. So how do we measure “comparability”? If our job entails studying market data to get an answer … might it be important to know exactly how to describe a comp?

So what’s the issue? Why should we care? I am a highly trained expert. I have a license. “Trust me. I know a good comp when I see one.”

My comments: George is writing a longer article than his blog posts for the May issue of the paid Appraisal Today. I often wish his blog posts were longer, but they are designed to be short ;>

Read more!!

4-5-18 Newz//Weird home interiors, Reduced AQB requirements and state regulators, Data analytical tools

The rage of Airbnb rentals (and stuff to keep in mind about value)

By Ryan Lundquist

Excerpts: The owner has a cash cow. Her second unit is bringing in $3,300 per month as an Airbnb rental, and it’s paying her mortgage. Since these types of rentals are all the rage right now, let’s talk about some important details to keep in mind from a value perspective. This isn’t meant to be exhaustive, but I wanted to share some things on my mind. I’d love to hear your take in the comments.

Topics:
1) Airbnb rent vs. market rent
2) Lenders and market rent
3) Investors & seller expectations
4) The fine print and a 12% tax

Click here to read the details, plus the appraiser comments:

My comment: This stuff gives me a headache ;> These seem to be everywhere now, especially room rentals. The Local Politics can be a mess. I look at the income as a business. Very different than renting by the month or year (at much lower daily rates), unless it is in a popular vacation rental market.

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2-15-18 Newz//Fannie Appraiser Webinar, Magical Appraiser Wand, Refis Dropping

The Magical Appraiser Wand

By George Dell
 
Excerpt: Can you just give me some magical software which will calculate my adjustments?

I get asked questions like this often. Can you just show me how to do a graph a client wants? Can you just give me your class stuff so I don’t have to come all that way? So often, the question degrades into something like “Why does the regression software give stupid answers?” I pushed the magic button!

People do not like the answer. You’re paid to do an analysis, not wave a magic wand, or push a magical appraisal button. We have another name for that, it’s called an AVM.   In addition to a point value prediction, AVMs can be tested for reliability. This is called the FSD (Forecast Standard Deviation). The AVM. It gets results. It’s fast. It’s cheap. And it provides a measure of reliability – the FSD.

Why would a client want something slower and more expensive with no measure of reliability? Why hire a pesky appraiser?

Click here for the answer!!

Read more!!

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