Posts Tagged adjustments

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NOTE: Please scroll down to read the other topics in this long blog post on time saving tips, Waivers, Non-lender appraisals, Tax savings, unusual homes, mortgage origination stats, etc.

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Large beach front home in Milton, Delaware for $2,588,170

4 bedrooms, 3.5+ baths, 2,991 square feet, 0.34 Acre lot.

The fully furnished contemporary home has ocean views from nearly every room, and its price was recently reduced by $100,000.

The four-bedroom home was built in 2019 in the gated neighborhood of Back Bay Cove. It comes with a mile of private deeded beach.

The 2,991-square-foot interior features floor-to-ceiling windows that overlook the National Prime Hook Wildlife Refuge. Other highlights include a 150-bottle wine closet, two outdoor showers, a hot tub, and an interior grilling room.

The location is just a short drive to shops, a golf course, and Rehoboth Beach.

To see a virtual tour and 50 photos Click Here

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Best Time-Saving Tips for Real Estate Appraisers

By: McKissock

Excerpts: If you operate as an independent real estate appraiser, you know that time is money. Are you looking for new ways to improve your efficiency? As part of our monthly survey series, we asked our community of real estate appraisers, “What’s the BEST way to save time in your workweek?” The number one recommendation, by far, was to use technology to your advantage.

Use technology to your advantage (45%)

“Streamlining processes with technology is a big time saver!”

“Use sketch app, laser device for measuring.”

“Technology allows some aspects of developing appraisal reports to go much faster. It is easier to streamline and automate certain parts of my reports thanks to the technology available.”

“I think for us old timers we have a hard time trying things new and there are many new things out there that not only improve our reports but help us efficiently run our daily operations. It’s hard sometimes keeping up with all the changes, but we need to grasp it as our industry is ever evolving.”

– Reduce revision requests by writing more detailed reports (23%)

– Take comp photos at the same time as the inspection (14%)

– Reserve one office-only day with no appointments (8%)

To read lots more plus appraiser comments, Click Here

My comments: Business is slow now for most appraisers. Now is the time to look at these time saving ideas, especially technology.

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2023 Year-end tax planning for appraisers.

You can still save on your 2023 taxes!

In the December 1 issue of Appraisal Today.

If your business is slow, saving on taxes is even more critical than when you are busy. Every Dollar Counts!!

Your most important tax decision now is if you expect your total taxable income (personal and business) in 2023 to go up, be stable, or go down from 2022.

If you expect your taxable income to be lower next year, make as many purchases, donations, etc., before year-end. Also, defer 2023 income until 2024, such as delayed billing.

If you expect your 2024 income to be higher than 2023, consider deferring purchases, donations, etc., as you will need them more in 2024.

If you expect no change in income for the next year or are unsure, you can make some year-end purchases and other deductions.

How to maximize deductible expenses by timing payments

Pay as many bills as you can by the end of the year, such as property taxes, software maintenance agreements, etc. I do this every year.

Charitable donations

Credit card payments for charitable donations made by December 31 are deductible. Then, pay it off when you receive your credit card statement. I do this every year. I keep good records of all my deductions to Goodwill, including receipts and photos of personal and business items.

Clean out your closets and contribute your unwanted items to a charity for a deduction. Be sure to get a receipt for all donations and contributions, regardless of the amount. Photos can also work well for verifying your donations.

Keep an accurate mileage log.

The IRS targets business mileage. I could not obtain any statistics, but I am sure many small businesses, including appraisal, may need more accurate business mileage records. Always record your mileage at the beginning of the year. Try to schedule maintenance or repair close to the start of the year so you have a receipt with a record of your mileage at that time. If your records still need to be completed, now do it for 2022 using the appraisal addresses you appraised and drove by.

If this article helped you save more than the subscription price, it pays for itself and more!

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Prevalence of GSE Appraisal Waivers (and other types of alternatives for mortgage loans)

September 2023 AEI (American Enterprise Institute)

Excerpts: Key Points:

• The share of appraisal waivers for both GSEs combined for September 2023 stood at 13%, up 0.3 ppts. from last month but down 36 ppts. from its series’ peak in March 2021. In August 2023, shares for Fannie and Freddie converged for the first time since June 2021 and have moved in lock step since then.

• Freddie introduced ACE+PDR* in July 2022. In September 2023, these shares stood at 7.9% and 3.5% for Cash-Out and No Cash-Out loans, respectively. Purchase loans had a minimal uptake of ACE+PDR.

• Fannie introduced Value Acceptance + Property Data (VA+PD)** in April 2023. In September 2023, the share of the new program was 6.9% and 3.5% for Cash-Out and No Cash-Out loans, respectively. For purchase loans, the uptake of VA+PD was 1.2%.

• The introduction of both programs subsequently reduced waiver shares, but the data show that both programs have not picked up the entire slack, suggesting further policy changes and/or slow

market pick-up.

To see the full report with graphs and tables, Click Here and scroll down to the current report link.

To subscribe to the AEI Reports, Click Here

My comments: Check out the graphs and tables! I have subscribed to their email notices for this research for a long time. Waivers are being replaced by Waiver plus Property Data Collectors. 84.8% of loans had appraisals.

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FREE Private Appraisal Tips on Zoom on December 8 at 11 AM PST by Ryan Lundquist

Ryan’s recent email (direct quote)

Appraiser friends, I’m going to do a private work Q&A thingy on December 8th at 11am PST. My goal is to encourage and give some ideas for putting yourself out there to get private work. I’ll go through a presentation, and then we’ll do Q&A.

One hour or more if needed. This is free. I’m not selling anything. Here is the Link to the Zoom (Meeting ID: 832 2414 3890 Passcode: 007).

ONLY for appraisers. This will not be recorded, so be there live if you’re interested.

For the link to the Zoom presentation Click Here

Full link if Click Here above does not work. Copy and paste.

My comments: Only 300 appraiser capacity in the Zoom room, so don’t be late. Many thanks to Ryan for this FREE Zoom session. See You There!!

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Here’s a chance to own a piece of the Pullman-Standard history.

With a Western-themed interior, the former train car now offers three bedrooms in a 900 square feet of living space. The passenger coach, which was initially built in 1925, was refurbished and “mechanically overhauled” in 1998.

Enter into the Observation Room, then make your way along the hallway past the bedrooms to the Dining Room. All rooms feature Western accents including antler light fixtures, custom decorative window shades, cattle brand adorned woodwork, and many other features.

The possible uses for the TCRY 106 are plentiful, whether as a unique residence, vacation rental, tourist attraction or whatever would suit its new location.

To see the listing with 23 photos, including interiors, Click Here

My comments: I have seen airplanes and boats on land as homes but relatively few train coaches! Highest and Best Use, mobile home financing, personal property, move to another location?? I love traveling overnight on trains and have been up and down the West Coast, seeing places no one can see from the land. Fascinating! I also traveled partway across the country and made several trips from where I live to Reno, NV.

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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, Click Here.

Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.

My comments: Rates are going up and down. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.

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Mortgage applications increased 0.3 percent from one week earlier

WASHINGTON, D.C. (November 29, 2023) — Mortgage applications increased 0.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 24, 2023. This week’s results include an adjustment for the observance of the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 33 percent compared with the previous week. The Refinance Index decreased 9 percent from the previous week and was 1 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index decreased 31 percent compared with the previous week and was 19 percent lower than the same week one year ago.

“Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed rate dipping to 7.37 percent, the lowest level in 10 weeks. There was a slight increase in applications overall, driven by a five percent increase in purchase applications, but refinance applications decreased over the week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago. The purchase market remains depressed because of the ongoing, low supply of existing homes on the market. Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”

The refinance share of mortgage activity decreased to 30.6 percent of total applications from 32.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.1 percent of total applications.

The FHA share of total applications decreased to 13.5 percent from 14.8 percent the week prior. The VA share of total applications increased to 12.6 percent from 11.3 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.37 percent from 7.41 percent, with points increasing to 0.64 from 0.62 (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 $726,200) increased to 7.54 percent from 7.51 percent, with points unchanged at 0.62 (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 decreased to 7.18 percent from 7.19 percent, with points increasing to 0.81 from 0.79 (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 decreased to 6.88 percent from 6.89 percent, with points decreasing to 0.52 from 0.76 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 6.59 percent from 6.76 percent, with points decreasing to 0.76 from 0.82 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone: 510-865-8041

Email: ann@appraisaltoday.com

Online: www.appraisaltoday.com

Strange Properties Appraisers Have Seen

By Ann O'Rourke on October 27, 2023 / adjustments, ADUs, appraisal business / Leave a comment

Tags: adjustments, ADU, appraisal business

Strange Encounters in Property Appraisal

By: McKissock

Excerpts: Property appraisal is not typically thought of as a “dangerous” profession per se. However, you may encounter some strange—or even spooky—properties from time to time. Recently we asked our appraisal community, “What’s the weirdest property you’ve appraised recently?” While some appraisers discussed atypical and challenging properties, others shared stories of strange encounters ranging from surprising to creepy to downright scary.

We’ve organized the strange and spooky properties described by our survey participants into the following categories:

Vacant and secluded homes
Spooky historic properties
Properties in horrible condition
Other surprising and strange site visits

“Vacant house that neighbors told me had not been occupied for almost 3 years. They were concerned that the electric was still on and could pose a danger as you could hear an electrical buzzing sound. Once I entered the house, the sound was evident and I looked for the source, probably a light fixture with a bad ballast or short-circuit. However what I found was a massive wasp nest that was approx 4′-5′ tall in one of the bedrooms.

When I opened the door, it clearly agitated them and I got out quickly and advised the lender to send in an exterminator ASAP. They were far too aggressive for me to even snap a photo. The AMC rep wanted to know if I could simply hit the nest with a can of wasp spray! Is this the actuality of ‘walking into a hornet’s nest’?”

To read more, click here

My comments: We have all encountered strange homes. I worked for an assessor’s office for 5 years in my first appraisal job. I appraised everything in a specific geographic area. I saw a lot of weird homes, especially in the more rural hillside areas. Lenders would have never loaned on them!

An appraiser I have known for many years saw a ghost in a haunted B&B he stayed in when traveling in Montana. He is about the last person you would think who saw an apparition of a woman. The owner and other visitors had seen her also.

Haunted House Appraisal Adjustments

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NOTE: Please scroll down to read the other topics in this long blog post, appraisers with increased income, ADUs in California can be Condos , unusual homes, mortgage origination and more!

What level appraiser are you?

By Ann O'Rourke on October 13, 2023 / appraisal business, Highest and Best Use, USPAP, zillow / Leave a comment

Tags: adjustments, appraisal business, appraisal how to, zillow

How to Level Up as an Appraiser

By Conrad Meertins Jr.

Excerpts: The key is not the letters but the competency or skill. For example, are you competent to prepare an entire appraisal from start to finish? You might answer, “Absolutely!” But what if the appraisal form was completely blank with no boilerplate text? Do you still feel the same level of assuredness? What if you could not use the URAR form at all, but still had to produce an appraisal report that could stand up in court? Are your legs shaking? These questions help us to start to gauge our current level.

The three levels that we are going to discuss are “Beginner,” “Intermediate,” and “Pro.” Now, we could go deep and say that there are levels within the levels, but for now we will keep it simple and explore these three main levels. Some view each level as a stepping stone, and some view each level as a permanent parking space. It’s your choice which level you choose to pursue. The goal here is for us to evaluate which level we are at and determine which level we want to achieve.

Level 1 – Beginner

This is where we all start. There is no shame in this level. Depending on how you were trained, at the beginner level you typically view appraisals as forms — forms with checkboxes to be checked or left blank. If all the right boxes are checked and your report is signed with a value, mission accomplished!

Level 2 – Intermediate

At the intermediate level, you realize there is more to appraising real estate than checking boxes. Here is where you provide more explanations. If you say the market is stable, perhaps you add a sentence or two to expound on that. If you say that comp #1 was the best comp, you add a sentence explaining why. If you don’t adjust for the subject being on a busy road, you add a sentence about the neutral impact of the busy road and a comparable to support that conclusion—before being prompted to do so by the underwriter.

Level 3 – Pro

There is a subtle difference between Level 2 and Level 3. But one indicator that you have crossed the line from intermediate to pro is understanding how all the pieces fit together. For example, you understand that you do not need a form to produce an appraisal.

To read more, click here

My comments: Hybrid Appraisals are coming fast for lender appraisals, when any “human” appraisals are done. Full appraisals that Level 1 and most Level 2 appraisers cannot do will be done by Level 3 appraisers. I am writing two long articles for the November issue about Hybrid Desktops and Property Data Collectors. Both positive and negative sides for appraisers. If you want to continue to do AMC appraisals, this is an option.

What if you don’t want to do either one? If you have done AMC lender appraising only, you only appraise homes that conform to GSE requirements. You have a low skill level.

If I did lender work now, I would be in the “top tier” to be called when other appraisers said no. For as long as I have been appraising, lenders had special lists for the tough ones, or for a valuable bank client that borrows money from the bank and has large deposits.

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NOTE: Please scroll down to read the other topics in this long blog post on retirement, USPAP 2024 Changes, school district app, unusual homes, mortgage origination and more!

2024 USPAP For Appraisers

By Ann O'Rourke on October 6, 2023 / adjustments, appraisal how to, Economic analysis, Fannie, hybrid appraisals, non-lender appraisals, real estate market, USPAP / Leave a comment

Tags: adjustments, appraisal business, appraisal how to, Fannie, non-lender appraisals, USPAP

2024 USPAP

Source: Appraisal Foundation

The 2024 Uniform Standards of Professional Appraisal Practice is now available for purchase in physical and digital formats.

This year, for the first time, you can purchase just the book of USPAP standards for $35. This covers all Definitions, Rules, and Standards.

We also have a new product launching this year. All Advisory Opinions, Frequently Asked Questions and the recently launched Reference Manual will now be part of a standalone publication called the 2024 USPAP Guidance and Reference Manual.

This change reflects the maturation of USPAP, resulting in longer effective dates. The ASB will continue to review USPAP for changes when necessary but will shift much of its focus to providing more guidance to the marketplace. Appraisers can now buy one set of USPAP standards and keep that publication on their bookshelf for as long as that edition is effective and purchase just the Guidance and Reference Manual as needed for coursework and updates.

If you like having the USPAP standards and guidance material linked, we still have you covered. You can also purchase a linked digital version of the eUSPAP and Guidance and Reference Manual and get seamless access across both documents.

To read the full letter, click here

My comments: USPAP 2024 is effective January 1, 2024. I’ve been waiting for a very long time for longer than 2 years between effective dates. Also, there is no ending date for the 2024 version.

When USPAP started, it was very exciting as appraisers had to decide what needed to be changed or added. Lots of people wanted to be on the ASB. Over time, I quit following the updates as there were few significant changes.

2024-2025 USPAP 7-Hour Update Course is being approved or is approved, in the states. I assume a new class will be required every two years in the future. Gotta keep that money coming into the Appraisal Foundation, I guess…

I really hated the classes when there was not much to say except a rehash of the past. I taught USPAP before the ASB told you what to teach. It was my favorite class as we could focus on issues in our current market. Of course, now there is appraiser discrimination, the current hot topic. Personally, I think there is very, very little intentional discrimination by appraisers, compared with the intentional discrimination by lenders (and others). “Red Lining” still exists, some are in the same locations.

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NOTE: Please scroll down to read the other topics in this long blog post on non-lender appraisals, economics analysis, Fannie getting rid of appraisers?, unusual homes, mortgage origination

SFR with ADU or Two Units?

By Ann O'Rourke on September 29, 2023 / ADUs, climate change, future, non-lender appraisals, real estate market, retirement, va / Leave a comment

Tags: adjustments, ADUs, mortgage loan volume, non-lender appraisals, real estate market, va

How to Identify a Single-Family with ADU vs. Two-Family Property

By McKissock

Excerpts:

The presence of an additional living unit can complicate the appraisal process. It may make it difficult for you, the appraiser, to know how to classify the subject property. How do you know whether you’re dealing with an accessory dwelling unit (ADU) or a second unit?

Topics include:

ADU meaning and types
What is a two-family property?
How to tell if it’s a single-family with ADU vs. two-family property
It’s more likely to be a two-family property vs. single-family with ADU if:
It’s more likely to be a single-family with ADU vs. two-family property if:

To read more, click here

My comments: ADUs have been a controversial topic for a long time in California as state and local governments kept changing their ADU requirements. Finally, what they are and where they can be built became standardized. Today, they are becoming popular to get extra rentals in markets low on housing. Most recently, there is a possible regulation to sell them separately from the main house. Another tricky HBU issue in California!

Check the regulations in your state, county, or city.

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NOTE: Please scroll down to read the other topics in this long blog post on non-lender appraisals, VA, flood and fires no insurance, retirement, few lender appraisals, unusual homes, mortgage origination

NAR Appraisal Survey 2022

NAR Appraiser Survey July, 2023

By Ann O'Rourke on September 15, 2023 / adjustments, ADUs, AMCs, appraisal how to, Fannie, non-lender appraisals / Leave a comment

Tags: adjustments, ADUs, AMC, appraisal how to, Fannie, non-lender appraisals

NAR Appraiser Survey July, 2023

In July 2023, NAR Research conducted a survey of all 9,800 appraiser members and 50,000 randomly-selected residential-focused non-appraiser members.

The survey results had a comparison of 2022 and 2023, which was very interesting.

Appraiser Topics
Greatest challenges in business
Lesser challenges with business
Valuations
Comfort with valuation tools
Radius in which appraisals are conducted
Radius by area type (rural, small town, urban, resort, suburban)
How often asked to conduct appraisals outside geographic area/Property type of expertise

Sample: Greatest challenges in business

(AMCs) in general among their greatest challenges. This year, this option was broken into three separate AMC-related issues. Forty-four percent cite at least one of these, with 28 percent specifically citing AMC requests for revisions.

This year, however, the single greatest challenge, cited by almost half (47 percent), is “fee pressures,” which, based on comments, is also related in many cases to pressure from AMCs. This is up sharply from 27 percent last year.

One-quarter (26 percent) cite technology fees (not an option in 2022). Appraisers are less likely this year to cite expanding regulations/interpretations of regulations, lender requirements, pressure from real estate agents/brokers, and liability concerns.

The 21 percent who cite other challenges are most likely to cite lack of business/slow market, rising interest rates, low fees, and to reiterate pressure from AMCs.

A very good graphic is included for each section.

To read the report, click here

My comments: Read the appraiser sections in the long report. Fortunately, appraiser results are in the first section. I read the full survey. Most of the questions were for all NAR members, both appraisers and non-appraiser members. Some may be of interest to you. Much of the appraiser results were what we already sort of suspected, but it is good to see actual survey results.

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NOTE: Please scroll down to read the other topics in this long blog post on GSE Appraisal Independence Update, Private money lender appraials, ADUs, adjustments, unusual homes, mortgage origination

Every unusual home has appraisal comps

Appraising Unusual Properties

By Ann O'Rourke on September 1, 2023 / adjustments, appraisal business, Bad lenders, bias / Leave a comment

Tags: adjustments, appraisal business

Appraising Odd Properties: What’s the Weirdest Property You’ve Appraised Recently?

McKissock Survey

Excerpts: As a professional appraiser, you’ll likely encounter some strange properties from time to time. Odd properties tend to be challenging yet rewarding in terms of the fee. To gain insight into these types of assignments, we asked our appraisal community, “What’s the weirdest property you’ve appraised recently?” Thank you to the many respondents who shared stories about the most unique and complex properties they’ve come across lately!

Most of them fall into these categories:

Challenging and complex properties
Unique property types
Properties with atypical characteristics
Historic properties
Rural properties
Non-compliant properties

“A yurt, a space dome, and a two-story single-wide mobile home. This was two single-wide mobile homes stacked on top of each other with a spiral staircase that was encased in semi tractor trailer chemlite panels. The stories behind them are lengthy.”

“It was a house on three lots. It has been added on to over the years. The GLA is 3200sf and there are two separate basements with a total 1100sf. There are funky angles, two kitchens next to each other divided by a wall. It was only 3 bedroom, but had 3.1 bathrooms. It had 3 family rooms on the GLA. Lots of weird spaces.”

“A custom-built art school built by artist named Solonevich that is used as a single-family dwelling. Every couple feet was a random angle. Nearly impossible to measure accurately.”

To see more examples, Click Here

My comments: I was inspired by this post and included two unusual homes in this newsletter. The one below with a jail is a good example! Down the page is a $1 listing.

If the appraisal is for lending purposes, be sure to find out if it is “lendable” before spending much time on it. Lenders and CU/AVMs, like nice newer tract homes.

Whenever two appraisers meet, there is never a lack of conversational topics! This one is very popular! Be sure to get a higher fee, of course. These properties are an excellent learning experience. If your business is slow, now is a good time to do the “tough ones.”

Highest and best use are often the issues that are the most tricky for me, especially if you have to consider non 1-4 unit uses. HBU is a regular issue for the older commercial and mixed-use properties I appraise.

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NOTE: Please scroll down to read the other topics in this long blog post on MLS hacked, Wells Fargo discrimination, unusual homes, mortgage origination

Value of a Pool for Homes?

By Ann O'Rourke on July 21, 2023 / adjustments, Freddie, non-lender appraisals, real estate market / Leave a comment

Tags: adjustments, appraisal business, real estate market

The value of a pool for Homes?

July 18, 2023 By Ryan Lundquist

Excerpts:

Some areas have more pools than others

Real estate is about location. That’s what we always hear. And, it’s true. Homes in different locations and price points tend to have different amenities, and that includes pools. Keep in mind the presence of a pool could be about lot size also – not just the price range.

More pools at higher prices

Here’s a look at the percentage of homes sold with pools by price range in a few local counties. In short, the higher the price, the greater chance of having a pool. This likely has to do with the cost of building a pool, cost of maintaining a pool, and even larger parcels at higher ranges – not to mention buyers at higher price points expecting a pool more often.

NOTE: Does your market look similar?

Adjustments for pools

Last but not least, let’s remember there is no such thing as a one-size-fits-all adjustment for a built-in pool because the value of a pool is going to depend on quality, condition, and even age. But it’s also about location because some price ranges and areas simply expect a pool to be present. In contrast, pools hardly exist in some locations, so it’s less of a factor because buyers don’t expect a pool. Ultimately, let’s look to the comps for the answers. What are buyers willing to pay? The ideal is to find similar homes with and without pools to help us understand that.

To read more and see Ryan’s tables and graphs on pools, click here

My comments: I live in an island city with a “Mediterranean” climate located on San Francisco Bay, which means some fog and moderate temperatures. This week, the highest temperature will be under 70 degrees. About 10-15 miles away, east of the hills, the climate is totally different, with very hot summers. The current high temperature there is about 100 degrees.

Where I live, very few homes have pools. After 35 years of appraising here, the value effect is none. Often, the MLS mentions that the sellers will fill in the pool, but I don’t know if that has ever happened. In dramatic contrast, when I first started appraising “over the hill”, 10-15 miles away where there are many subdivisions, I noticed that in certain neighborhoods, a pool was almost mandatory. I used comps with pools for any homes with and without pools to see any adjustment.

If you are not in an area where this is clear, making pool adjustments can be tough without adequate comps. I have appraised a few homes with pools in areas with few pools. It was tricky.

Pools can be a significant hazard, especially for children. Also, maintenance and heating is a hassle.

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NOTE: Please scroll down to read the other topics in this long blog post on non lender appraisals, foreclosures way down from 2008, Freddie and ANSI, unusual homes, mortgage origination stats, etc.

click below to read more

Quality Adjustments for Appraisers

By Ann O'Rourke on June 9, 2023 / adjustments, appraisal business, appraisal waivers, desktop appraisals / Leave a comment

Tags: adjustments, appraisal business, appraisal waivers

Quality Adjustment Research and Methodology: The Basics

By McKissock

Excerpt: Quality and condition are not the same. Quality refers to the quality of items, materials, and construction. When making appraisal adjustments, examine the quality of your data and remember that any quality ratings in your county records or MLS are not always reliable. Here are some basic things to consider regarding quality adjustment research and methodology.

Reliability of data

You need to consider: What is this data telling me? How reliable is that data? If you’re using county data, and you’re looking at quality ratings in there, how reliably do they rate properties? Should you even be using that data?

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My comments: The blog post has a link to Quality Ratings. Quality is sometimes difficult to determine on the subject and very tricky on the comps. Another appraisal challenge!

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NOTE: Please scroll down to read the other topics in this long blog post on adapting to changes in appraisal, appraisal volume, unusual homes, mortgage origination stats, etc.

Appraisers: Watch for Concessions and Kickbacks

By Ann O'Rourke on June 2, 2023 / adjustments, ADUs, appraisal business, FHA, non-lender appraisals, real estate market / Leave a comment

Tags: adjustments, ADUs, appraisal business, FHA, real estate market

Concessions, Kickbacks, and the Appraiser’s Nightmare

by Richard Hagar, SRA

Excerpts: What Appraisers Must Do

There are many steps appraisers must follow, more than I can list here. However, you should start off by listing and describing the concessions. Learn how to provide an accurate value conclusion that protects the appraiser from the potential ramifications of their bad acts.

On the first page of FNMA’s form, they ask this question:

“Is there any financial assistance [loan charges, sales concessions, gift or down payment assistance, etc.] to be paid by any party on behalf of the borrower?”

The appraiser has no choice when faced with this question, they must answer and if they get it wrong…then the appraiser is in trouble. After disclosing the information, the appraiser’s next task is to determine how the concessions have impacted the sales price. Federal law, FNMA/FHLMC guidelines and USPAP all point to a solution.

Solutions to Keep You Safe

Make sure you have a complete signed purchase contract.
In the appraisal, list how many pages of the contract you have in your possession (In case someone is hiding pages from you).
List the concessions on page 1 and in the final reconciliation.
In the sales grid, list any known concessions that were involved with the purchase of a comparable….

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My comments: Some good tips on how real estate agents try to deal with this. I have known Richard for many years. He is an expert and is a most excellent instructor. I have taken many of his seminars over the years.

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NOTE: Please scroll down to read the other topics in this long blog post on FHA and ADUs, non-lender appraisals, unusual homes, mortgage origination stats, etc.

To read more, click “read more” below