Every unusual home has appraisal comps

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Tips for choosing comps on a unique home (straw-bale house)

By Ryan Lundquist
Excerpt: It almost sounds like the big bad wolf story, but there really are homes built from straw. Literally. Today I want to mention a few things about this type of construction, share some photos of a local straw-bale house, and then talk briefly about how I approached appraising this one.
Worth reading to find out what Ryan did!!

My comment: Very good tips on appraising unique homes. No lender issues as the appraisal is pre-listing and not for a lender… Sacramento  is a Very Strange place for a straw-bale home!!

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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Appraisal Adjustments Yes, No, Maybe

 

In Search of “Perfect” Adjustment Factors

By Richard Price

Excerpt: Although a “perfect” adjustment may not exist, the search for perfect adjustments in appraisal reports is becoming a hot topic with many interesting articles, continuing education courses, and webinars addressing the subject. The message is clear. If an appraiser can’t support the adjustments, the results of the appraisal are subject to question, leading to several possible outcomes; none of them good. So, we will define the “perfect” adjustment factor as the best and most appropriate adjustment that should be made to the comparables.

https://www.appraisalbuzz.com/in-search-of-perfect-adjustmment-factors/

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Adjustments, now what?

By George Dell
Excerpt: We’re told to “support” our adjustments.  We hear words like “prove” your adjustments. . . as if there were some magic formula which can give an exact, correct, and absolutely true number.

It used to be so easy. . . Our trainer gave us a sheet with the “right” adjustments. Simple.

USPAP Standards Rule 1-1 says we must be aware of, understand, and correctly employ recognized methods and techniques. What are they? Who recognizes them? How do I apply them?

So, what are these methods and techniques? Let’s look.

In The Appraisal of Real Estate (ARE) p.46, it says: “Qualitative analysis techniques may also be applied for elements of comparison for which quantitative adjustments cannot be developed.”  So, it seems the very first reference in the ARE says some adjustments cannot be quantitatively developed!

For lots more Dell Adjustment Writings, go to the Adjustment Archives:

https://georgedell.com/category/adjustments

My comments on adjustments: CU in 2015 revealed residential form appraising’s “dirty little secret”: lack of support for adjustments.

Before starting my appraisal business in 1986, I worked part time for a local appraiser for 3-4 months. I went out with him first on a few lender appraisals. I will never forget asking him where the adjustments came from. He said “we use these” with no explanation. Later I asked other appraisers and they had the same answer.

Finally, about 3-4 years ago, I quit doing adjustments on form appraisals except for market conditions and factors that significantly affected the value, such as a very good view. Those adjustments were supported.

Appraisal Business Tips

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Using home’s previous sales in appraisals

The problem of giving too much weight to previous sales (or not enough)

By Ryan Lundquist

Excerpts: It must be worth more than it sold for in the past, right? In many cases, YES. But sometimes NO. Let’s talk through some things to consider when pulling comps and noticing a previous sale. I find many of these points coming up lately in conversation, so I hope this is helpful.

8 issues are discussed.
Here are a few
2) Unique property:
3) Unicorn buyer overpaid
8) Not penalizing because it sold too low

Closing advice: I recommend paying close attention to previous sales to get clues to understand how a property fits into the market. But don’t get so stuck that you don’t see the most important thing – current comps.

Good topic I have not seen discussed in detail before. Worth reading. Lots of comments!!

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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Appraisals and Altered Listing Photos

Digitally-doctored listing photos are on the rise

Excerpts: It will cost $2.40 for a paint job, $24 to replace flooring, and $40 to remove a wall or add a swimming pool.

Digital photo manipulation has become so widespread and cheap that home sellers are increasingly using the technology to spruce up their listings, the Wall Street Journal reported. This has the potential to create new headaches for end users, investors, appraisers and brokers…

Furthermore, with federal regulators pushing for automated appraisals that will make use of online listings, the hazards of doctored images could be spread to the general public.

My comments: How do AVMs and CU deal with this? Appraisers can always contact the agent to confirm what the home looked like. CU robo emails/calls to agents and somehow integrate this into the data?

Lenders and AVMs are now using agent MLS comments. I recently spoke with an appraiser where the lender disputed one of her comps because the MLS mentioned it was “close to shopping” and she did not. Yes, it was very close to a historic shopping street, but there was little to no off street parking on this street, as it was taken up by employees in the stores. The comp had 9 off street parking places for 2 units and sold for a premium price. Typically there is 1 or 0 parking spaces per unit in the historic apartments on the comp’s street. I recently tried to go to an open house on the street. The closest parking space was 3 blocks away. I skipped the open house. The agents often mentioned “close to shopping” to say something positive about their listing’s location.

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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Appraisal Comp Photos Drive or Not Drive?

To Drive or Not To Drive, That is the Question!!

Excerpt: The argument of using MLS photos or shooting your own photos has been debated by appraisers for the last few decades. You, as appraisers, want to be sure the comparables you are using are of the correct house and also look as the MLS illustrates. Most importantly, you want to make sure the house is still standing. The listing agent’s job is to sell the house. As the salesperson they will highlight all the positives and leave the negatives up to the imagination. This is one of the main reasons it is extremely important to not solely rely on MLS when utilizing comparables.

Click here to read the full post, plus over 50 comments from appraisers. Add your own comments!!

My comment: this issue has been going on for decades and is still controversial. Especially in rural areas!! Note: the post is a sorta promo for proxpics, a photo taking service, but the appraiser comments are great.

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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Sheds vs. outbuildings for appraisals

Are Sheds Outbuildings?

Excerpts: Often, when appraising homes, I see MLS listings that call a shed an out building. Ask any appraiser and they will likely say that a shed is not an outbuilding. So, are sheds outbuildings?…

In appraising properties, there is a big difference in value between a shed and a large outbuilding. Most of the time, at least in my market, sheds really do not add any significant market value to a home. However, a large out building can add tens of thousands of dollars in value to a home…

Well written and worth reading:

My comments: I never really thought about this before, even though I see a lot of “sheds”…

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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Wearing shoes in a house for appraisal

The Ugly (and Filthy) Truth About Wearing Shoes in the House

Excerpts: “Shoes off, please.” A reasonable request? Or are those fightin’ words?

Arguably, no other three monosyllabic words have ever led to more irritated house guests, resentful homeowners and thriving sales of shoe racks, slippers, and sing-songy, passive-aggressive signs. (“Since little fingers touch our floor, please remove your shoes at our door!”)… “So many germs and bacteria can be brought in from your shoes, including toxins and E. coli,” Mitzner explains…

“So, if one removes their shoes,” he asks, “what about all the potential bacteria on their socks?” Plus, even if you abide by a strict rule of “no shoes,” you can’t escape the fact that the interior of your home is still covered in germs, Adalja says. How reassuring.

While there are scientific arguments both for and against pulling off footwear the moment you enter the front door, experts do seem to agree on one thing: To minimize the risk of getting sick, go out of your way to keep a clean home.

My comment: I hate taking off my shoes in a house!! I have to put them, or disposable booties, back on when going in and out of the house. But, since reading this article, I am so glad I have hardwood floors with no carpets and no small children ;> Of course, the bottom line: it is their house and they can decide.


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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Valuation by Comparison – Very good residential book

Buy This Book!! Valuation by Comparison, Second Edition by Mark Ratterman, MAI, SRA

I reviewed it in the July, 2018 issue of the paid Appraisal Today.

One of the best books I have ever read for residential appraisers. (There are only a few that I recommend.)

More info and how to purchase at:

Appraisal Adjustments Yes, No, Maybe(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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Do tandem bedrooms count as bedrooms in appraisals?

Do Tandem Bedrooms and Garages Impact Value?

 Excerpt: There is less privacy in the one bedroom because it must be walked through to get to the other bedroom. This is considered to be functional obsolescence.
This type of situation is most often found in older homes. I have seen this type of situation many times on the second floors of many bungalow or cape cod style dwellings I have appraised. Although, it can exist in any style home.

My comment: I see tandem rooms a lot and sometimes tandem garages. I think I have finally convinced the local agents not to call them bedrooms. Of course, some insist on using Assessor data, which has not been updated since 1979, when Prop 13 passed and re-assessments stopped unless there was a sale or new construction.

ADD LINKS FOR HUMOR AND BIZ TIPS

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 10-11-18 long blog post with many topics, click Read More Below!!

 

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Sometimes “being nice” is best for appraisers

A Spoon Full of Sugar (when dealing with annoying borrowers, AMCs, neighbors, etc.)

Excerpt: Remember when you were a kid? No, not a goat. You know, a young human. Remember your parents giving you that thick, pink, nasty tasting medicine, called an antibiotic? While we hated the taste, we needed the medicine. And, after a few days, we began to feel better.

When it comes to appraisals, the information they provide can help to protect us from making a bad financial decision. However, there are times when the results of an appraisal may leave a bad taste in the mouths of those reading the report.

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 10-4-18 blog post with many topics, click Read More Below!!

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