25 Common Errors in Appraisal ReportsA compilation of the most common errors and deficiencies found in appraisal reports by reviewers, regulators, and appraisal boards.
Here are a few:
– Not providing enough analysis for the intended user or reader to understand the report properly.
– Inconsistencies between the description of the subject property in the improvements section and the photographs, sketch, sales comparison grid, and other areas in the report.
– Inappropriate use of boilerplate commentary in the appraisal report to describe the neighborhood or to explain the reconciliation of the sales comparison approach.
– Failure to summarize the analysis and rational that supports the Highest and Best Use opinion.
– Not complying with the most current USPAP.
Read the full list here:
My comments: Reminders are always good. For unknown reasons, I don’t see much CE or writing on these problems. These apply to all appraisals because we are licensed, not just lender appraisals.
It was soooo nice in the “old days” before licensing ;> Two Rules: Tell the truth and disclose what is bad. No USPAP changing every two years, overzealous appraisal boards, renewal fees, etc.. Of course, the reason we have licensing is the lender mess in 1989, resulting in FIRREA, regarding bad commercial property development loans by S&Ls
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Hobbit Houses in Charlevoix, MichiganJust For Fun!!Excerpts: Growing up in northern Michigan in the early 1900s, Earl Young was obsessed with boulders. Glacial boulders, to be exact-ones moored in fields, forests, and on lake coastlines across the state thanks to the slow march and retreat of glacial ice during the Precambrian age.
The homes he designed will stop you in your tracks, as one did the last time I was there, passing by on a bike. Call them “mushroom houses,” “hobbit houses,” “boulder houses”; everyone has a different name for them. They’re often described concisely, if vaguely, as “organic.” Though some see Frank Lloyd Wright’s influence, they’re distinctly Young.
Fascinating! Lots of fotos and info at:
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Woops! Last Wednesday I sent 2 ads at the same time…My apologies! I have been sending out these ads for about 10 years and never sent out two at the same time.
Two weeks ago I came down with a flu that lasts about 3 weeks. It makes me very tired with a “fuzzy brain”. I did not notice that I had two ads scheduled for the same time.
Now, I check the ad scheduling several times the day before they go out, plus my office assistant also checks them.
I rarely get sick. When I do it is usually for a only a few days, so I was not prepared. Why do I seldom get sick? After over 40 years of appraising homes, I try to never shake hands or touch doorknobs. If I do, I wash my hands as soon as possible. I shook hands with a friend while shopping at a grocery store and did not wash my hands!! —————————————————————————- |
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Fannie Mae Appraiser Update March 2019Excerpt: What appraisers need to know about property data collection
Topics:
Also: Learn how to appraise MH Advantage homes
Read the short update:
Link to Fannie’s Appraiser Page – lots of good info
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The Property Valuation Reckoning is ImminentHow Technology is Highlighting Underwriting’s Shortcoming
Excerpt: some high-level aspects that can be used to get conversations started.
1. Increasing the availability of detailed, property-specific information, including both operational (ongoing) activities and transactions (sale, refinance, etc.).
2. The collection and analysis of macroeconomic, microeconomic, and capital markets influences that affect the real estate industry.
3. Using concepts such as systems thinking, systems engineering, and advanced technology such as artificial intelligence, machine learning, and deep learning to design semi-automated models that capture and make sense of both property-specific and larger capital markets factors.
Very interesting ideas and analysis. Long, but worth reading. FYI PropTech is a newish acronym. See the next link.
What is PropTech?
My comment: The article gives commercial examples, but is relevant for residential. I have been watching commercial applications, such as AVMs, attempted since the 1990s. The biggest problem is the lack of data. Costar is the major source of data in many areas and has not allowed its data to be commercially used by AVM developers, as far as I know. For leased commercial properties you must have income and expenses, which is not always available. For some types of non-leased properties, such as owner occupied warehouses, AVMs could work well. |
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17 of the World’s Most Beautifully Broken PlacesWind, rain, and retreating glaciers left this gorgeous destruction behind.Here are two:
– Ah-Shi-Sle-Pah Wilderness Study Area New Mexico
The land is full of geologic eye candy like otherworldly spires, mushroom-shaped hoodoos, and prehistoric fossils.
Fjaðrárgljúfur Iceland
Strange rock formations tower above the river that snakes through this enchanting Icelandic canyon.
See the incredible locations and read about them at:
My comment: Click The Link And Take A Break from Your Appraisals!!
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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.
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AMCs and Respect for Appraisers??By Rachel Massey, SRA
Excerpt: …an example of an AMC that is not paying attention to the comments from the declination. If an appraiser declines due to coverage area, then it should not be reassigned. But also, if appraisers decline because the fee is inadequate, is upping it a paltry $25 going to cut it? In the time between the initial order and the subsequent, ten days passed. Had the AMC picked up the phone and started calling appraisers, they may have had much better success at finding someone who first of all covers the area, and second of all, would tell them how much it would take for them to take on the assignment.
My comments: Worth reading plus the appraiser comments, of course!!
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AVMs vs. appraisersExcerpt: Different AVMs are designed to deliver different types of valuations. And therein lies confusion.
Consumers don’t realize that there’s an AVM for nearly any purpose, which explains why different algorithms serve up different results, said Ann Regan, an executive product manager with real estate analytic firm CoreLogic. “The scores presented to consumers are not the same version that is being used by lenders to make decisions,” she said. “The consumer-facing AVMs are designed for consumer marketing purposes.”
Written for consumers, but very well written and worth reading.
My comment: How often does someone tell you what Zillow says their home is worth? What do you say? I say Zillow works well on tract homes built in the past 10 years. This article discusses AVMs, regulators, appraisers, etc.
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Best TED Talks for AppraisersHere is a sample:
Grit: The power of passion and perseverance by Angela Duckworth.
Her rousing treatise on the power of grit and determination. These valuable qualities can help you become your best self in relation to your appraisal career. Coming up with accurate estimates and choosing the right comps to use can be frustrating – but keeping calm and pushing through will mark you as an appraisal professional that folks will seek out for the hardest (and most lucrative) jobs.
My comments: Angela Duckworth is one of my favorite TED speakers. I listen to a lot of podcasts. The TED Radio Hour is one I listen to a lot. It combines several TED talks on the same topic with references on how to listen to the full TED talks. Fascinating!!
“TED is a nonprofit devoted to spreading ideas, usually in the form of short, powerful talks (18 minutes or less). TED began in 1984 as a conference where Technology, Entertainment and Design (TED) converged, and today covers almost all topics – from science to business to global issues – in more than 100 languages.”
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CHANGE YOUR TEMPLATES!!I am really going to try hard NOT to use 2018 on :
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What Was the Most Popular Home of 2018?Just For Fun!!Excerpts:
10. Cerro Gordo, Lone Pine, CA
Status: Sold for $1.4 million in July
Why it’s here: Seeking a little solitude? Look no further than Cerro Gordo, a bona fide ghost town perched 8,000 feet up in the Inyo Mountains in Southern California.
8. Beckham Creek Cave Rd, Parthenon, AR
Status: Currently off market
Why it’s here: This rustic estate carved into the side of the Ozark Mountains captured attention for its storied history of renovations. What started as a doomsday shelter was transformed into an A-list nightclub
Click here for fotos, more info, and 8 more popular homes!!
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