Why Comp Photos in Appraisals?

Why Comp Photos?

by Richard Hagar, SRA

Excerpt: First, don’t even think about not doing it! To begin with, it’s required. Inspecting the exterior of every comparable isn’t a USPAP requirement, by the way, it is a Fannie Mae, Freddie Mac, Federal Housing Authority (FHA), and Department of Veteran Affairs (VA) requirement.

However, FNMA’s requirement goes directly to the heart of USPAP’s “scope of work” rule. USPAP defines scope of work, in part, as: the type and extent of research and analyses. The scope of work section of the 1004 appraisal states “The appraiser must, at a minimum: (3) inspect each of the comparables sales from at least the street.” So, when an appraiser agrees to an assignment and its required scope of work, they have agreed to personally inspect the exterior of each sales comparable used in the appraisal. There is no way around this; an appraiser can’t contradict the certification requirement by inserting a qualification within the appraisal. In other words, it’s your job; you are being paid to personally inspect each sales comparable—so do it!

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My comments: Last week’s newsletter had a very popular negative post on comp photos: Original Comp Photos: Dangerous, Unnecessary. This week is the other side!! I know what it is like to drive many miles to take an original comp photo that I somehow forgot to take. But, I am more comfortable if I take another comp photo again as I forget about the details sometimes. I have used MLS photos when I cannot see the comp from the street.

Hagar discusses the many aspects of original comp photos, including the limiting conditions on the Fannie forms. In my opinion, the statement is somewhat uncertain. “…inspect each of the comparables sales from at least the street”. Does this mean original photos and always driving by? I do not have this statement in my non-lender appraisals, plus many other Fannie statements. However, many lenders and AMCs have this in their requirements.

On the other side, I used to travel to Canada to speak at appraisal conferences. At that time, taking original comp photos was not required for lending purposes. Few appraisers did them. They said they had “seen it in the past”.

Appraisal Business Tips 

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NOTE: Please scroll down to read the other topics in this long blog post on USPAP, comp photos, adjustments, Bias, mortgage origination stats, Covid tips for appraisers, etc.

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Appraisal Original Comp Photos

Original Comp Photos: Dangerous, Unnecessary

by Damian Downie

Excerpts: As I do many times a day, I was taking comparable (comp) photos for an appraisal. This one in particular is a condominium, so I was taking photos of two condos in a competing complex. There was a gate into the property, so I stopped across the street and snapped a photo of the gate.

Three minutes later, about a mile from the site, I looked over to my right out the passenger window, and I saw a man holding his phone up and pointing it at me. I asked him what he was doing and he angrily asked me why I was taking pictures of his car.

To read more plus the 59+ appraiser comments and add your own comment, click here

My comments: Always a hot, hot topic!! We’ve all got appraiser stories about comp photos (dogs, police, crazy people chasing you down the street, locked gates, etc., etc.)!! After 45 years of appraising I am never bored. There is always something new or weird that I see ;> My scariest experience (for the subject) was when two large Dobermans broke through the screen door of a mobile home and came after me. I got back into my car and told my client to get another appraiser!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Why Appraisers Love Appraising!

7 Reasons to Love Being an Appraiser

Excerpts: 1. Being your own boss

“After ‘working for the man’ for 20+ years, I changed careers to be an appraiser. Working for myself has been the biggest reward, offering flexibility and a healthy work-life balance.”

2. Having a flexible schedule

“Being able to set my own hours, as long as I get the job done.”

“Tackle the workflow when its heavy, and enjoy the reprieve when it lightens up!”

For 5 more reasons and lots more comments, click here

My comments: I worked in labs for 7 years and was bored. I saw an ad for a county assessor’s office in 1975 that said “work in the field.” I worked on the 1970 census and loved going out at looking at houses all day long. I read a book at the library about appraising and got hired. After 45 years I still love it! I am never bored. No two properties are the same. Plus, I love being self employed. I was always a bad employee with too many opinions of my own.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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New sewer line increases value for appraisals?

My new sewer line adds huge value, right?

January 19, 2021, By Ryan Lundquist

Excerpt: A new sewer line. That’s what 2020 gave my family as a parting gift before the year closed. Yep, just before Christmas, we had to replace our entire line at a whopping $13,688. I know that sounds crazy expensive, but we had four separate bids and went with the most reasonable one. In part it was so pricey because we had one hundred feet of the line under eighty feet of concrete.

The good news is my house is worth $13,688 more now, right?

To read more plus lots of appraiser comments click here

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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 fees, house settling, unusual homes, mortgage origination stats, Covid tips for appraisers, etc.

 

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Surplus vs. Excess Land for Appraisals

How Surplus & Excess Land Works

By Jamie Owen

Excerpts: It can be easy to over-simplify value because the value is not always as clear cut as it appears. For example, if a one-acre lot is selling for $10,000, does that mean that a two acre lot is worth $20,000? Not necessarily. The value of something usually changes depending on its size.

Excess land is land that is larger than what is typical for the neighborhood and capable of a separate use. Excess land is land that could be split-off and resold as a buildable lot. In the example below, the zoning required a minimum lot size of one and a half acres to be buildable.

To read lots more and see fun animated gifs, click here

My comment: Definitely worth reading!

2-16-17 Newz .Land surveys in 1784 .Common appraisal errors (Opens in a new browser tab)

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Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on vaccines and housing, waivers, appraiser skills, surveys, mortgage origination stats, Covid tips for appraisers, etc.

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Real Estate Agents and Comparable Sales – Tips for Appraisers

Agents and Comparable Sales – Tips for Appraisers

Excerpts: When real estate agents provide relevant comparable sales to appraisers, it certainly benefits both parties. Agents can ensure that appraisers are reviewing comparables that match their properties and, hopefully, meet the seller’s desired price.

Additionally, while appraisers still must verify the information, it can save them time. Here are some dos and don’ts to follow as agents and appraisers work together on establishing comps for appraisal properties.

One of the tips: Don’t go outside the neighborhood

Other neighborhoods may be less or more desirable, and that can affect overall value. Comparable sales should come from only the direct neighborhood in which the house is located—even if that means choosing homes that are slightly smaller or bigger to use as a comparison. Agents should never use sales from a “better” neighborhood to boost the value of an appraisal property.

To read more tips, click here

My comments: All appraisers get comps from agents sometimes. Unfortunately, many are not useful. I always ask if an agent has any sales or listings for me. Agents are often experts in their particular area and know what is happening. Appraisers work in a much wider area usually. Whenever I speak with agents, I tell them how to select comps, especially pending sales, using some of the criteria above.

This does not apply to the sales provided by AMCs, of course, which require a response and often wasted time for the appraiser. Most are generated by computer algorithms or occasionally a review appraiser that knows nothing about the local market.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Green Hornet – The First Lender Appraisal Form

The “Green Hornet” – first lender appraisal form in 1962 . A brief history, written by George Opelka in 2010. Worth reading

Excerpts: As a result of an early consulting-writing assignment with the U.S. (Savings and Loan) League, my Dad created appraisal form “#17-PRA” in 1962, which became the Green Hornet – The First Lender Appraisal Form.

The appraisal report form was presented to the Appraisal Committee of the U.S. League for review and consideration for adoption and use by savings and loan associations across the United States.

The form was initially presented on green paper with green ink strictly for marketing spin.

To read more, click here

My comment: Very interesting and worth reading!! Warning: there are two appraiser comments, but then long “spam” comments not worth reading.

New 1004 appraisal form?(Opens in a new browser tab)

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Appraisal Adaptation and Modernization with George Opelka, including personal information on the Green Hornet: 27-minute video

Excerpt: An interview with Joan Trice, Founder of Allterra Group, LLC, and George Opelka, ACI General Manager. We sat down with George Opelka to discuss the modernization of the appraisal industry and the adaptation that’s still yet to come.

What is the history with certain appraisal software? What are some of the lasting impacts of the pandemic? Where does this leave the future of modernization in the industry? These questions and much more will be answered by George Opelka while he shares on this evolving subject.

To watch, click here

My comment: Worth watching. A fascinating history of the Green Hornet, the first appraisal form. George is a good speaker who has been around appraisers since he helped his dad when he was young. When working for ACI, he followed all the appraisal changes over the years. I don’t always listen to long videos, but I could not stop listening to this one!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

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AMC Fined for Appraisal Order Blast Violation

AMC Fined for Appraisal Order Blast Violation

Excerpt: Consolidated Analytics, an AMC based in Anaheim California, was fined $3,000 for violating the Utah AMC Administrative Rules R162-2e-306 “Offering An Appraisal Assignment and Communicating with Two or More Appraisers About a Potential Assignment.

The specific part of this rule that pertains to broadcasting has been relatively effective in reducing the broadcasting of assignments. Clear Capital recently was fined $5,000 for failing to comply and there are additional complaints working their way through the system.

To read more, click here

My comment: Broadcast orders are bad for many reasons for both the AMC and the appraiser: goes to everyone on their list, no considerations about appraiser qualifications for the assignment including geographic. Hundreds of appraisers competing on fees when business is slow make it hard for appraisers to stay in business. There is always someone with a lower fee, in appraising, and any type of business.

When business is strong, such as today, AMCs have to take whatever warm body they can get. Many appraisers are way too booked up and not taking any more work.

Maybe you can get your state appraisal regulator to get a similar regulation!!

Working with difficult appraisal clients(Opens in a new browser tab)

Which Appraisal Clients are used the most?(Opens in a new browser tab)

Marketing and Management Tips for Appraisers

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So Many Appraisal Cost Approach Questions

So Many Appraisal Cost Approach Questions!
So Few Answers! Such Low Fees!

By Tim Andersen, MAI

Excerpt: It is clear most appraisers do not like to do the Cost approach. Generally, we are not too familiar with it. So, it is clear that most appraisers, because of this, do not appreciate the deep analytical power the Cost approach really has. So Many Appraisal Cost Approach Questions!

Therefore, I’m going to ask you 10 questions on the Cost approach (and stuff related to it). After you’ve finished reading them, you probably will still not like to tackle the Cost approach. Nevertheless, you just may have a better understanding of, and appreciation for, its powerful analytical capacities.

First Question: On the 1004 form is the indication that Fannie Mae does not require the Cost Approach to Value. Where does the form instruct the appraiser not to complete the analytics of the Cost approach?

To read the other questions and answers click here

My comment: Appraisers, including myself, seem to have a love/hate relationship with the Cost Approach. But, it can be useful. Tim’s much longer article “But Fannie Mae says I don’t have to do the Cost Approach!!” will be in the September issue of the paid Appraisal Today.

Appraisal Process Challenges(Opens in a new browser tab)

Which Appraisal Clients are used the most?(Opens in a new browser tab)

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What to Do When Your Appraisal Is Under Review

Excerpts: Residential appraisers will often — if not just about always — have their work reviewed by another appraiser. Usually, this is a routine procedure that the original appraiser barely notices. Sometimes, the review appraiser will come back with requests for extra information, or doubts, that the original appraiser might find annoying. To be sure, the reviewer’s questions might sometimes seem nit-picky, and answering them can distract from other work. However, the issues the reviewer raises almost always turn out to be legitimate. What to Do When Your Appraisal Is Under Review

We asked review appraiser Doug Nakashima (Glenview, Illinois) for advice on how to make reviews as painless as possible if you’re the one being reviewed.

Topics:

  • Remember that reviewers are on your side
  • Look out for these common points of contention
  • Avoid future revision requests

To read more, click here

My comments: Sorry, no comments section for ranting, etc. ;>

If you’re doing AMC work, the tough appraisals tend to go to reviewers. The first “reviews” are from underwriters, clerks, computer software, etc.

I don’t know of any other profession where almost all reports are reviewed by clients. Personally, I think it has resulted in appraisers being overly critical of other appraisers’ work, state boards sometimes being too aggressive, etc. Worse, some appraisers try to send in reports with as as few “problems” as possible, to minimize call backs and doing whatever it takes.

Review appraiser liability(Opens in a new browser tab)

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