The UAD and Appraisers – Past, Present, and Future

By on April 23, 2021   /   appraisal business, bias, UAD, unusual homes   /   Leave a comment

The UAD and Appraisers – Past, Present, and Future

30 minute video

Speakers: Sean Murphy and Danny Wiley of Freddie Mac

Excerpt: They offer some insightful looks into the process and delve into the specifics that appraisers need to know.

What are some of the key updates for 2021? What can appraisers expect with these changes in the UAD? How will these changes impact the appraisal industry? These questions and much more will be answered between Sean, Danny, and Joan (moderator) as they dive into more about the UAD and Freddie Mac.

 

If it does not display, to watch the video, click here

My comments: Danny Wiley is an excellent speaker (starts after the first speaker). Worth listening to. Wiley is Freddie Mac’s Senior Director of valuation for Single-Family Credit Risk Management. Sean Murphy is the Credit Policy Risk Analytics Manager. Danny has been around for a long time, starting as a fee appraiser. He knows what is happening and what it means for you.>

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Appraisal Waivers Almost 50% of Fannie/Freddie Loans

By on April 9, 2021   /   adjustments, appraisal business, appraisers, Mortgage applications, unusual homes, waivers   /   Leave a comment
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An explosion of appraisal waivers. Is that good or bad?

By Ryan Lundquist

Excerpts: Appraisal waivers have really exploded in recent years – especially during the pandemic. But how many are there exactly? Let’s look at actual numbers to walk away with some perspective. These stats are from January 2021 from AEI.

  • 47.4% of all Freddie Mac loans had a waiver
  • 44.5% of all Fannie Mae loans had a waiver
  • Waivers are far more common during refinances
  • Only 10-12% of purchases had an appraisal waiver in January
  • Non cash-out refinances have the most waivers (67-69%)
  • The higher your loan-to-value, the lower your chance of a waiver
  • Waivers have seen a dramatic increase during the pandemic

2) Seeing numbers: What real estate professionals experience with appraisal waivers with their clients can really vary. For instance, if you work with FHA borrowers putting very little down, you probably don’t see many waivers, but if you work with conventional buyers putting 30-40% down, you’re going to see more. This is why seeing actual stats is so important.

Read more of Ryan’s comments, see graphs, plus over 25 appraiser comments: click here 

To read the AEI report, click here

My comments: I wrote about this in the February issue of the monthly Appraisal Today. Also included is data on which states are doing the most, and least, alternative appraisals. I spent a lot of time trying to get any statistics from Fannie without success. I knew waivers were going way up, especially for purchases. AEI reports have the analysis

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Why Comp Photos in Appraisals?

By on February 26, 2021   /   adjustments, bias, comp photos, george dell, unusual homes, USPAP   /   Leave a comment
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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!

To read more, click here

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”.

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Appraisal Original Comp Photos

By on February 19, 2021   /   comp photos, Coronavirus, COVID, mortgage loan volume, real estate market, unusual homes, zillow   /   Leave a comment
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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!

By on February 5, 2021   /   appraisal business, appraisal waivers, bifurcated appraisals, COVID, mortgage loan volume, unusual homes   /   Leave a comment
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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

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

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New sewer line increases value for appraisals?

By on January 22, 2021   /   adjustments, appraisal business, Appraisal fees, appraisal how to, Mortgage applications, unusual homes   /   Leave a comment
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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)

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Surplus vs. Excess Land for Appraisals

By on January 15, 2021   /   appraisal how to, appraisal waivers, Coronavirus, COVID, Mortgage applications, real estate market, unusual homes   /   Leave a comment

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

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Real Estate Agents and Comparable Sales – Tips for Appraisers

By on December 25, 2020   /   appraisal business, Coronavirus, COVID, Fannie, fauci, real estate market, unusual homes, USPAP   /   Leave a comment
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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.

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Green Hornet – The First Lender Appraisal Form

By on November 20, 2020   /   Coronavirus, COVID, Fannie, Mortgage applications, real estate market, unusual homes   /   Leave a comment

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!

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Covid-19 Residential Appraisers Tips on Staying Safe

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AMC Fined for Appraisal Order Blast Violation

By on October 16, 2020   /   AMCs, appraisal business, appraisal management company, comp photos, Coronavirus, COVID, data, FHA, Freddie, Mortgage applications, unusual homes   /   Leave a comment
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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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