Appraisal News and Business Tips

statistics

7-19-19 Newz: Rates Going Down?- Appraiser Boards – AVMs Misunderstood?

AVMs Are Not Understood By A Large Swath of Non-Appraisers

Source: Jonathan Miller
Here are some recent survey results that show more than half of the respondents indicated, it is either NEVER appropriate or NOT SURE if it is appropriate for a non-appraiser to perform a valuation on a home.
So the jury is still out for a third of respondents but a third are absolutely sure it is inappropriate. One can infer that appraisers have an opportunity to convey what AVMs really are to the public.
Link to NAR AVM survey results click here
My comment: Good graphics and easy to read. Lots of topics including AVMs, desktops, bifurcated, etc. Results of a survey of NAR members. Lots of topics. Scroll down to AVMs, etc.
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Fannie Mae lowers mortgage rate forecast and says home-price growth will accelerate

Mortgage giant predicts 30-year fixed rate will average 3.7% in 2019’s second half

Excerpts: Fannie Mae issued a new forecast that predicts the average U.S. rate for a 30-year fixed mortgage will be 3.7% in the second half of 2019, down from the 3.9% the mortgage financier called for a month ago. That compares to a 4.4% average rate in the first quarter and 4% in the second quarter.
“This continued decline in mortgage rates and our upwardly revised view on house price growth have led us to increase our forecast for single-family mortgage originations for the remainder of the year,” Fannie Mae said. “We now expect total originations to rise 7% from 2018 to $1.75 trillion, and we expect refinances to account for 32% of total mortgage originations in 2019, up from 29% in 2018.”
That would make this year the highest since the $1.8 trillion originated in 2017, according to Fannie Mae data.
To read more, click here
My comment: Lots more refi appraisals!!

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Joining Your Real Estate Appraisal Board

Interview with Cristy Conolly, current Chair of the Florida Real Estate Appraisal Board and Chief Appraiser at Nationwide Appraisal Network,
Excerpt: Buzz: What’s one thing you wish to convey to appraisers about being on the Board? Are there any common myths you’d like to address?
Cristy: I think a common misconception is Board members are scary and unapproachable. Board members are people, just like everyone else. They want to do good for the industry and their state. They aren’t “out to get” anyone. They are charged with protecting the public and sometimes that means disciplining the “bad actors,” but that typically includes educating them so they can learn from their mistakes and improve themselves.
To read the full interview click here:
My comment: Worth reading. I have never seen anything written about what it is like to be a state board member.
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18 Historic Homes that Would Be Fascinating to Appraise

Excerpt: Historic homes make for complex and interesting appraisal subjects. As one appraiser said, “I love unusual properties, and the challenge they present to appraise. I have always loved appraising large, older properties. They take us back to another world back in time.” We recently asked our appraisal community, “What famous historic home would you want to appraise?” Here’s what they said.
A few of the homes:
Frank Lloyd Wright’s Fallingwater
The White House
Norman Bates “Psycho” House
Graceland
To read the full list plus comments click here
My comment: For me, none of the above ;> Too difficult!

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What is a Bedroom?

Excerpt: Layout and Floor Plans (Fannie Mae)
“Dwellings with unusual layouts and floor plans generally have limited market appeal. A review of the room list and floor plan for the dwelling unit may indicate an unusual layout, such as bedrooms on a level with no bath, or a kitchen on a different level from the dining room. If the appraiser indicates that such inadequacies will result in market resistance to the subject property, he or she must make appropriate adjustments to reflect this in the overall analysis. However, if market acceptance can be demonstrated through the use of comparable sales with the same inadequacies, no adjustments are required.”
It is clear, then, that at least Fannie Mae depends on the appraiser to determine the definition of a bedroom and whether a room used as a bedroom meets local market acceptance, suggesting that adjustments for unusual layouts, be derived from the local market.
What does FHA say?
Then we move on to consider what FHA has to say about bedrooms. Here we receive more detailed information.
n Section II (B) 3. (v.)L “The Appraiser must not identify a room as a bedroom that cannot accommodate ingress or egress in the event of an
emergency, regardless of location above or below grade.”
FHA Handbook 4001.1 no longer contains the guidance concerning the size of windows below-grade.
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Should appraisers study statistics?

Excerpts: … In particular, I was already used to the fact that for both general and residential work, the data available to me included all, or substantially all, the sales in my area. I benefited from the fact that San Diego public records, assessor information, and even GIS (geographic information) was also ahead of data availability and quality in most other parts of the country. But one thing stood out. There was a conflict between what I was being taught in most of the PhD-level stats classes, and the reality of what I saw as a practicing appraiser.
The conflict was simple, yet convoluted by a belief system. The confusion mostly has to do with the difference between a sample, and a population.
… It’s time for our appraisal organizations to recognize the laws surrounding these fallacies, and cease teaching what has been fully debunked in a statement by the American Statistical Association itself.
Now is the time.
For more info, click here
My comment: I had the same problem with my appraisal classes in the 1980s. Very out of date, especially after I got my MBA and did multiple regression studies. Don’t get me started on the out of date stuff taught in commercial appraisal classes. The 3 approaches have not changed since the 1930s.
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A Truth About Bifurcation

By Robert Murphy, former Director, Property Valuation and Eligibility at Fannie Mae
Excerpt: The third-party inspection piece is the part of the bifurcation appraisal process which has garnered the most discussion. Don’t get me wrong, the discussion regarding who should be completing the inspection is understandable and justifiable. Should it be done by an appraiser or appraiser trainee? A home inspector or insurance inspector? Some random third-party? Unfortunately, as with many things today, we must be able to sort out the truths from the half-truths, and pure nonsense. There needs to be clarity on this issue prior to any type of bifurcated appraisal process becoming mainstream.
However, I believe there needs to be some focus given to the second step of the process. I have been hearing, anecdotally, of appraisers who have been completing bifurcated appraisals without ever having appraised in the specific market/geographical area where the subject is located. Therefore, a discussion regarding competency requirements might be useful.
To read the full article plus lots of appraiser comments, click here
My comment: Interesting analysis from Bob Murphy about appraiser geographic competency. I have spoken with appraisers who have done bifurcated appraisals all over the country. Bob started appraising in 1978 and worked for Fannie for many years. Very savvy. Leave your own comment.
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Homebuyer Bidding Wars Are Fading Fast, Even in San Francisco

Excerpt: Here’s how rapidly the U.S. housing market has cooled: Buyers are now about four times less likely to face a bidding war than they were just a year ago.
In June, 12% of buyers faced competition compared with 52% a year earlier, according to an analysis by brokerage Redfin of offers written by its agents. While San Francisco is the most competitive market, the share of listings that got multiple offers fell to 28% from 65%.
To read more, click here
My comment: What’s happening in your market? Mine is lot less competition for listings. Keeping a close watch for any price drops…
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time.

Mortgage applications decreased 1.1 percent from one week earlier

WASHINGTON, D.C. (July 17, 2019) – Mortgage applications decreased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 12, 2019. Last week’s results included an adjustment for the Fourth of July holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 24 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 87 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 21 percent compared with the previous week and was 7 percent higher than the same week one year ago.
“Mortgage rates increased across the board, with the 30-year fixed rate mortgage rising to its highest level in a month to 4.12 percent, which is still below this year’s average of 4.45 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Coming out of the July 4th holiday, applications were lower overall, with purchase activity slipping almost 4 percent. Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA applications. Historically, government refinance activity lags slightly in response to rate changes.”
Added Kan, “Buyer interest at the start of the second half of the year continues to outpace year ago levels, with activity last week up 7 percent.”
The refinance share of mortgage activity increased to 50.0 percent of total applications from 48.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.9 percent of total applications.
The FHA share of total applications increased to 10.6 percent from 10.1 percent the week prior. The VA share of total applications decreased to 12.9 percent from 13.2 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.12 percent from 4.04 percent, with points increasing to 0.38 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.07 percent from 4.03 percent, with points decreasing to 0.21 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.01 percent from 3.97 percent, with points decreasing to 0.28 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.48 percent from 3.42 percent, with points remaining unchanged at 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.58 percent from 3.56 percent, with points decreasing to 0.27 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105, Alameda, CA 94501
Phone 510-865-8041 | Fax 510-523-1138

2-7-19 Newz: Appraisal Dying?- Dangerous Roads- Wrong Algorithms

What If the Algorithms Are Wrong?

Excerpt: Algorithms are everywhere…
Mathematician and data scientist Cathy O’Neil coined a term for algorithms that are secret, important and harmful: “weapons of math destruction.” Learn more about the hidden agendas behind the formulas.”

“Algorithms are opinions embedded in code. It’s really different from what you think most people think of algorithms. They think algorithms are objective and true and scientific. That’s a marketing trick. It’s also a marketing trick to intimidate you with algorithms, to make you trust and fear algorithms because you trust and fear mathematics. A lot can go wrong when we put blind faith in big data…”

Check out the video of the Ted Talk: 15 minutes and well worth watching. “The Era of Blind Faith in Big Data Must End” I love Ted Talks and have subscribed to the Ted Radio Hour Podcast for a long time.

My comments: Remember the Recent Mortgage Crash The Data Did Not Predict? Why? They did not include data from the Great Depression, the last time real estate markets crashed all over the country.

Who was saying something was wrong? Whistleblower Appraisers. Appraiser Petitions fell on deaf ears. Some appraisers spoke the truth and lost their appraisal businesses and/or were blackballed by lenders.

Read more!!

8-30-18 Newz// Form or Not? – Apocalyptic Architecture – CU-Just a Machine

To Form or Not To Form? What will it be? A new 1004?

By George Dell
Excerpt: What’s the difference between a form and a data entry page? Will “forms software” even be necessary? Will the result require less appraiser expertise – or more? Will it encourage the “form-filler” people, or will it require some real understanding of problem identification, data selection, predictive methods, and communication? Will the transmittal require both an electronic data stream and human actionable views?

Will it require appraisers at all? Or will the “data analysts” simply create the ultimate model.

These are big questions. From my point of view, some of the answers are obvious. But first, let’s outline how we can even ask the right questions . . .

My comment: Fannie Mae has been planning on revising the forms. I have known George for quite a while, heard him speak and taken his class. Looks like people are finally starting to pay attention to what he says about stats, data, etc.!! His blog posts are fine, but sometimes you want more. The September issue of the paid Appraisal Today will have George’s 6 page article, “Why, Why, Why? Why do we put “stats”, “graphs”, “data,” and “science” together?”
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Read more!!

8-2-18 Newz .1004MC dropped, Treasury Proposes Appraisal Downsizing, Rural Appraisals

No more 1004MC for Fannie appraisals

Date: 7/30/18 1:46
My note: This was posted in an appraiser yahoo email discussion group I have subscribed to since it started awhile ago. The person who sent it is very reliable. I have known him personally for many years. Below is the email. When I used to travel a lot to appraisal conferences, sometimes Fannie would make comments on significant changes. This was one of those comments. When I speak I am a lot more candid than when I write for unknown reasons. Maybe Fannie speakers do the same sometimes.
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Posted discussion group message:
“I’m in Nashville at the National Appraisal Institute Conference. I just left a presentation given by the collateral policy managers at Fannie Mae and Freddie Mac.”

The Fannie spokesperson said that Fannie Mae has decided not to make the 1004MC a required from anymore; the change will be effective as of the new Selling Guide update, which is expected to come out next week.

I asked Freddie if they planned to drop the requirement as well? They said they had considered dropping it when the new reporting formats were finalized, but also said in light of Fannie’s announcement, they may not wait until the form-changes and adopt that decision sooner.

The Fannie spokesperson said that just because Fannie won’t requirement doesn’t mean a lender might not still want it. So, she warned not to expect all lenders to adopt the change instantly.

In my opinion, I think most lenders will opt out of the 1004mc form, but will require something else (data/analysis) in the report to support the market condition identification and adjustments (if warranted). So I don’t anticipate the need for market condition analyses to go away (and it shouldn’t, in my opinion) but I do anticipate more flexibility in the manner we (individual appraisers) want to present that data.”

What I think about 1004MC: The 1004MC forced appraisers to make market conditions adjustments, which lenders had to accept. When I started my appraisal business in 1986, I was told by local, well respected appraisers that lenders “did not want any time adjustments.” Apparently this had been going on for many years. During price declines in the 1990s, I personally knew appraisers who went out of business because they refused to not make time adjustments. All my lender clients allowed them or they were off my approved client list.

I started appraising in the 1970s at assessor’s offices. We were making 2% per month time adjustments. Guess I just got “bad training” for lender appraisals ;>

Appraiser comments: Of course, there were lots of appraiser comments. Dave Towne’s are below:
~1 Lenders and AMC’s (and the other gov’t agencies) won’t back down on requiring the 1004MC form in reports. So you will have to do it, regardless of what the GSE’s do.

~2 Some report users may design their own market conditions reporting form, and demand its inclusion in reports per their own assignment conditions.(One no-longer-in business-by that-name AMC did this in 2008, and demanded their form be included even after the MC form became mandated – until appraisers loudly complained.) These may not be acceptable to other lenders/users. So we could have a situation where multiple users have different forms required, which will greatly complicate completion of reports in a timely manner.

~3 The several report software providers may design something to replace the MC form, which you could then be used in reports. But if 4 (or more) different ones exist, the same situation as in #3 will occur.

~4 The GSE’s may have another form already prepared to replace the MC Form and will demand it be used instead. (By the way….”new appraisal report forms” to replace the current ones are nowhere ready to be released, at least from what the GSE’s have said in the past couple of months.)

~5 Smart, and well versed, appraisers will continue to provide supportable documents and analysis to show market trend activity – which they’ve already been including in reports as a substitute to the MC form. Appraisers who have not been doing this should take steps to learn how to document subject/comparable market trends that are specific to each assignment, and not just a regurgitation of ‘regional’ or ‘national’ trends data reported by others that may not directly apply to the appraisal assignment.

Read more!!

7/26/18// Newz .Funny Appraisal Ad, IL C/R Survey, Basements and GLA

The best appraisal ad I have ever seen – cats playing instruments, song appraisal re-title contest, etc.

 Just For Fun!

Short Excerpt: … submit a favorite song title– be it classical, jazz, rock, religious, country, or whatever- adapted to the appraisal business. Here are a few examples for starters (with a little literary license):
  • Appraising Pink Houses (John Cougar Mellencamp)
  • Measuring the House that Built Me (Miranda Lambert)
  • What Goes Up, Must Come Down (Spinning Wheel by Blood Sweat & Tears, describing the housing market)
  • Everything Happens to Me (Frank Sinatra)
Subject  line: Wednesday Wild Ideas from Intercorp
If you didn’t open it, or “opted out” of getting ads, Click here to read the full “ad” and see the cats!!

My comments: I have been doing ads for my newsletters since 1992. Boring. Boring. Boring. Yesterday’s Intercorp ad was the best I have ever seen!! Of course, my favorite is the cat playing cello. I play electric cello so I can amplify and use effects in my experimental music band, playing together for 8 years ;> Here’s link to a gig:  https://www.youtube.com/watch?v=Dk8zXPJ6hVA

AI Education

Great Spaces: Lakefront Living Goes Luxe

Just For More Fun!

Excerpt: To celebrate summer, in this month’s edition of Great Spaces, we’re highlighting some seriously serene lakefront properties, from Minnesota all the way to sunny Florida.
Click here to see the fotos:

Read more!!

11-30-17 Newz// My Client the FBI, 50 Lane Traffic Jam,Third Party Inspections

China’s 50-Lane Traffic Jam Is Every Commuter’s Worst Nightmare

What happens when a checkpoint merges 50 lanes down to 20.

Excerpts: Thousands of motorists found themselves stranded on Tuesday in what looks from above like a 50-lane parking lot on the G4 Beijing-Hong Kong-Macau Expressway, one of the country’s busiest roads. Some are dubbing the traffic jam a “carpocalypse,” while others are calling it “carmageddon.”:

China is no stranger to these ridiculous traffic jams, especially on national highways. In 2010, gridlock spanning more than 74 miles on the stretch between the Inner Mongolia Autonomous Region and Beijing left drivers with nowhere to go for a staggering 12 days. That time blame fell on everything from road construction to broken down cars and fender-benders.

My comment: Check out the photos. Wow! One of my nightmares is getting stuck in a big traffic jam, but I never thought about one as bad as this…

https://www.citylab.com/transportation/2015/10/chinas-50-lane-traffic-jam-is-every-commuters-worst-nightmare/409639

A Mysterious Device Revealed

Excerpt: On Monday, I distributed a photo (see below), which was taken by a western US appraiser at the subject property, and asked if anyone could accurately describe what this device is:

The property owner was not at the property when the appraiser was there, and the appraiser was frankly stumped as to what this ‘thing’ is.

By late afternoon Monday, the appraiser was able to talk with the property owner, and was told about this contraption. Meanwhile, dozens of appraisers wrote back with suggestions or positive “it’s a” statements.

My comment: There was a fun email thread on this topic. To sign up for Dave Towne’s emails, send an email to dtowne@fidalgo.net He has been writing a lot recently about hybrid appraisals (non-appraiser does the site inspection). Very controversial. I am working on an article for this topic in the paid Appraisal Today newsletter.

Read more!!

11-16-17 Newz//:Value Of Additional Bedrooms, 13 Animal-Shaped Homes, Timber Towers

Architectural menagerie

13 animal-shaped buildings

Just For Fun!!
Excerpt: Novelty architecture can take on many fantastical forms – think municipal water towers done up like peaches and soft serve-shaped ice cream stands – but animal-shaped buildings are in a league of their own.

Often built as roadside attractions meant to lure motorists off the highway, these completely functional structures serve a greater purpose than just kitschy ornamentation. Some are truly mimetic – that is, the building is representative of its original purpose be it a poultry shop, seafood restaurant or woolen clothing boutique. Others are more symbolic, which is probably a good thing.

Here are a few:
– Big Sheep Wool Gallery – New Zealand
– Turtle Building – Niagara Falls
– Crocodile Hotel – Australia

Good fotos and write-ups at:

Why Timber Towers Are On the Rise in France

Excerpt: Spurred by concerns over climate change and the negative impacts of concrete manufacturing, architects and developers in France are increasingly turning to wood for their office towers and apartment complexes.

Concrete was praised through much of the 20th century for its flexibility, functionality, and relative affordability. In France, the material ushered in an era of bold modernist architecture including housing by Auguste Perret and Le Corbusier. Today, however, wood is lauded for its smaller environmental footprint and the speed with which buildings can be assembled.

Read more!!

9-14-17 Newz:// No Appraisal Waivers, How Many Comps Are Enough?, Ugliest House

Google Street Views – First Big Update with Lots More Big Data!!

Excerpt: The car-top rig includes two cameras that capture still HD images looking out to either side of the vehicle. They’re there to feed clearer, closer shots of buildings and street signs into Google’s image recognition algorithms.
Those algorithms can pore over millions of signs and storefronts without getting tired. By hoovering up vast amounts of information visible on the world’s streets-signs, business names, perhaps even opening hours posted in the window of your corner deli-Google hopes to improve its already formidable digital mapping database
My comment: Fascinating article. Check it out. I use Street Views a lot, but sometimes the images are fuzzy and are hard to figure out. Looking forward to improvements, but on the minus side, more data available that field appraisers provides now.

36 Appraisal Organizations Send Letter to Party Leaders of House Committee on Financial Services and Senate Committee on Banking, Housing and Urban Affairs on “No Appraisal” Waivers

Excerpt: 36 industry groups are attempting to prevent the Fannie Mae and Freddie Mac (GSE’s) from issuing appraisal waivers by sending a letter to the chairs and ranking members of the Senate Banking, Housing and Urban Affairs Committee, and the House Financial Services Committee addressing its concerns. AI recommends the halt of the waivers until the GSEs can demonstrate that the proposed program does not harm the consumer, is properly monitored, and integrates proper safeguards to prevent fraud.
We are writing this letter to raise concern over the new appraisal waiver programs recently implemented by Freddie Mac and Fannie Mae (the ” Government Sponsored Enterprises.”)  We believe these programs will create unnecessary and unacceptable risks for taxpayers and homeowners, and they come at a time when markets are at all-time highs – when risk mitigation should be tantamount. We ask you to call on the Federal Housing Finance Agency (FHFA) to prevent the Enterprises from implementing the appraisal waiver programs until they can demonstrate the appraisal waiver program:

My comment: Worth reading. Read the names of all the organizations that sent the letter. I can’t remember when so many appraisal organizations agreed on anything!!

Read more!!

6-15-17 Newz// Appraisers Replaced by Data Analysis, Very Unusual Hotels

8 of the Most Unusual Hotels in the Netherlands

Proof the Dutch can convert nearly anything into a place to stay the night.

Excerpt: n industrial crane or wooden wine barrel would be unremarkable objects anywhere else. But in Holland, these unexpected structures have been transformed into one-of a-kind hotels, made habitable and even luxurious with some loving restoration and redesign. Prefer to spend the night in a tilted cube house or the rumored birthplace of a secret shadow government? The Dutch have got you covered there, too. Here are eight hotels in the Netherlands that offer visitors a unique place to stay.

My comment: Very Interesting. Good for a quick break from writing up appraisals. I love appraising but hate writing up the those darn reports ;>
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The Highest Home Price Increases Around the World

Excerpt: When it comes to the world’s fastest-rising prices for luxury residential real estate, don’t look to the United States.

Read more!!

9-15-16 Newz// Rush fees, Flying saucer homes, $1.1 billion home

A Map of the Last Remaining Flying Saucer Homes

All the 1960s Futuro Houses left in the world.

Just For Fun!! Take a break from writing up those darn appraisal reports ;>

Excerpt: The Futuro House, in all its space age retro splendor, is like a physical manifestation of 1960s optimism. Shaped like the Hollywood idea of a flying saucer, the Futuro is a plastic, prefabricated, portable vacation home built to easily adapt to any climate or terrain, from mountain slopes to the seaside. After enjoying a heyday in the late ’60s and early ’70s, the remaining Futuros are now scattered across all parts of the globe, from the Australian beaches to the mountains of Russia, like secluded relics of midcentury technoutopianism.

Very interesting!!

http://www.atlasobscura.com/articles/a-map-of-the-last-remaining-flying-saucer-homes

My comment: I love atlasobscura.com. The strange homes and buildings I include in these emails are just the tip of the iceberg!!!!

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What is your typical rush fee?

www.appraisalport.com poll.

 

My comment: Rush fees are another way to make more money during this boom time, to save for the downturn when AMC fees will drop.

The most critical appraisals are those for purchases, which can require rush fees to get appraisers to drop their regular refi business and do them.

I am hearing about widely varying AMC fee increases from around the country, depending on the local market supply of appraisers willing to work for AMCs I guess. Savvy AMC appraisers reply to low bids with an increased fee. After a few weeks, sometimes their fee is accepted. Local appraisers I know only work for a very few select AMCs, if any. But, when business slows way down, they take more AMC work. I also hear from appraisers in the same market with widely varying fees that they will accept.

What do I do? Rush fees stress me out too much as I am very backed up. I just put new appraisal requests in my queue, which is typically around 60 days. Sometimes I will do one faster if it is a special circumstance and/or a referral from a local real estate agent, but I don’t require a rush fee. When I used to do appraisals for purchases, I always gave them priority but never charged a rush fee. I am definitely in the minority!!

What do you think? Post your comments at https://wp.me/p7jsxG-Cl !!!

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The Most Expensive House In The World Could Sell For $1.1 Billion

Just For Fun!! Take a break from writing up those darn appraisal reports ;>

Excerpt: What can justify a $1.1 billion price tag for a house?

Before searching for the features behind the number, let’s clarify that in this case, “the house” is rather a large, opulent mansion on the French Côte d’Azur, set in a “small” privileged refuge between Nice and Monaco frequently described as the ‘billionaires’ playground.’

First, there’s the house itself, with the understated name Villa Les Cèdres-The Cedars-at the center of Saint-Jean-Cap-Ferrat, known in French as a “presqu’île,” or “almost island.”

The description of the magnificent property in the French press includes 10 bedrooms, a ballroom, concierge, a chapel, 50-meter swimming pool dug into the rocks, a winter garden and stables for 30 horses.

My comment: I could take a few months (or more) to do an appraisal for a trip to France to appraise this property… Or maybe just an open house tour ;>

Very interesting!!

http://www.forbes.com/sites/ceciliarodriguez/2016/08/20/at-1-1-billion-the-most-expensive-house-in-the-world-in-france-goes-to-market

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Beware of unknown desperate AMCs sending email solicitations

An appraiser I know, who only works for one AMC, received an email request from an AMC he had never heard of. He replied politely that he was not interested. He was added to their approved list and bombarded with requests for appraisals every day. It was a lot of hassle to get his name removed.

I seldom get any AMC appraisal requests by email or phone, or request to join their panel. I must be on a Do Not Call or Email List ;> I have been replying to emails saying I have never worked for an AMC. They are really getting desperate!! Now, I am thinking about not even replying.

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In the June 2016 issue of Appraisal Today

FHA attic inspection requirement 

Excerpt: Inspection Tips – Insulation and attic access by Doug Smith, SRA, AI-RRS

When blown in insulation is added, the installer will often add an extension or dam to the scuttle that makes it difficult to fully observe the full attic.

Formerly, attics had walkways which when blown in insulation is applied, these walkways were covered with insulation. If the scuttle is in a closet and closet shelves make it difficult to fully access the attic, the difficulty with attic must be reported and a photograph taken to demonstrate the difficulty with attic access.

However, if the access is blocked by personal possessions, it may be practical to enlist the help of the homeowner to make the attic or scuttle accessible. In the instant case of the underwriter stating that a full inspection is required, the underwriter is incorrect.

The appraiser must document why a full inspection was not performed when there is not an accessible attic. Suggested language might include: “A full attic inspection was not

performed as the subject property does not have a readily accessible attic and only has scuttle access.” Along with a photo of what can be seen from the scuttle, the appraiser might add that the appraiser completed a head and shoulders inspection of the attic.

Remember to check the block on page one of the form that the attic is accessed by a scuttle. If the property has a full attic, note if a full inspection was performed and comment how access was gained either by stairway or drop stair.

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Selling a $5 Million, Seven-Story Basket Is No Picnic

Its size, location, and fundamental basket-ness make it tough to sell, even at a steep discount

Thanks (again) to Jonathan Miller at http://www.millersamuel.com/housing-notes/

Excerpts: “You might see it three or four miles off before you come around the bend, and then you say, ‘That is a basket. That is unquestionably a basket,'” said Tom Rochon.

It is a basket, or rather, a seven-story office building shaped like one-a massive facsimile of the signature picnic basket made by the company once headquartered there. Some 40 miles outside Columbus, Ohio, the basket building, as it’s locally known, is one of the area’s grandest attractions, inviting quirky selfie-seekers, architecture nerds, and, of course, basket enthusiasts.

When the property – slightly larger than another Ohio landmark, Cleveland’s Rock and Roll Hall of Fame-was listed 18 months ago, the asking price was $7.5 million. Now it’s on the market for $5 million, or about $28 a square foot, about half of what traditionally shaped office buildings in the area usually sell for… commercial property in the area typically ranges from $50 to $80 a square foot.

The basket was built for about $32 million and finished in 1997.

http://www.bloomberg.com/news/articles/2016-09-07/selling-a-5-million-seven-story-basket-is-no-picnic

My comment: I regularly write about weird properties in my weekly emails, including the Basket House a few years ago. Finally we find out what it is (not) worth. Definitely an Appraisal Challenge!!

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Status Quo Bias: ‘Linear” Thinking in the Real Estate Industry

by Jonathan Miller

Excerpt: When we look at forecasting, planning, trending or anything that includes a look out over the future, I find the real estate industry (i.e. appraisers, real estate agents & brokers) generally thinks along linear lines.

For example:

When housing prices rise…they will rise forever.

When housing prices fall…they will fall forever.

When sales activity rises…they will rise for ever.

When inventory falls…it will fall forever.

When rental prices rise…they will rise forever.

…and so on.

Where does this status quo bias come from?

Click here for some more interesting comments..

http://www.millersamuel.com/status-quo-bias-linear-thinking-in-the-real-estate-industry/

My comment: Of course, I completely agree. It is very important if you work in a market like mine, where residential prices seem to go from stable to increasing and back overnight. I have no idea why. I go on the broker open house tour every week and see what agents are saying. For example, only 1 or 2 offers vs. 5-6 and longer days on market

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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to https://www.mba.org

Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to www.appraisaltoday.com/products or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

WASHINGTON, D.C. (September 14, 2016

Mortgage applications increased 4.2 percent from one week earlier,

according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 9, 2016. This week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 17 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index decreased 15 percent compared with the previous week and was 8 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 62.9 percent of total applications from 64.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.6 percent of total applications.

The FHA share of total applications increased to 9.6 percent from 9.5 percent the week prior. The VA share of total applications increased to 12.0 percent from 11.9 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.67 percent from 3.68 percent, with points decreasing to 0.36 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.64 percent from 3.66 percent, with points increasing to 0.36 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.50 percent from 3.52 percent, with points decreasing to 0.27 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.97 percent from 2.96 percent, with points unchanged at 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged at 2.87 percent, with points increasing to 0.37 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.