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Private Appraisal Work, the Final FrontierBy Rachel Massey
Author’s Note: Private appraisals aren’t really the “final frontier” for appraisers but it is a good metaphor. Private work for courts and disputes predates modern lending appraisals, so they should actually be considered the “first” frontier…but never let a good Star Trek saying go to waste!
As mortgage work has started to slow down in large swaths of the country, and likely will continue to do so, the temptation to move into the private arena is appealing. This is an area where our work is valued by those who need it the most. Private work is not lending work, and there are different requirements for different clients. Intended use and users rule supreme. Do I have the patience to walk someone through the process who is not experienced? Maybe yes, maybe no. This is not a place where I would want to spout off a bunch of expletives to a client who bothers me, but instead try to step back and ask whether I need to explain it differently so it is understandable. The onus is on me, the appraiser, to help my client understand.
My comment: A good intro to non-lender work. Marketing and client communication is very different. I have written many articles about non-lender work since 1992 in my paid newsletter.
The article “Should you do non-lender work? Pluses and minuses of both lender appraisals and each different type of non-lender appraisal.” Is in the October 2018 issue and can help you decide if non-lender work will work for you.
Appraisal Business Tips including non-lender work Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com To read more of this long blog post, click Read More Below!! ————————————————————————–
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Is the Appraisal Profession Dying?By George Dell, MAI
Excerpts:
Yes. Appraisal as we know it is dying.
Can it be saved? No.
So what should I do? What should “we” do?
The data has already been gathered. The analytics software is free. The pictures have already been taken. “Let’s Make a Deal!”
Analysis requires judgment. Human generalization is enhanced by computation. Complete data can be enhanced/cleaned as well as “confirming a comp.” A point value is an inherent part of a predictive value distribution. A documented, reproducible result is the most credible, believable answer.
My comments: I believe that human appraisals will still be needed. There are times that a human appraiser is needed to interpret results, and “go beyond” the data for Highest and Best Use, Unusual properties, etc. Lenders will move to computerized risk management, once investors will accept this. Most residential lender valuations will not need humans as the value of an individual property in investors’ portfolios is not critical. Of course, when the market inevitably crashes, there will be no appraisers to sue to recover some of the lost money. Maybe our E&O premiums will go down.
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com To read more of this long blog post, click Read More Below!! |
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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. AMCs and Respect for Appraisers??
My comments: Worth reading plus the appraiser comments, of course!!
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com To read more of this long blog post, click Read More Below!! |
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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.”
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com To read more of this long blog post, click Read More Below!! |
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Agent’s Source Of Square Footage May Affect Sale Price
Excerpts: If you use county tax assessor information as a square footage source in your listings you may want to rethink this. I recently did a study to see how homes sold based on where the agent got their information from and I have to say what I found was intriguing. Agent square footage and sales prices for appraisers is important.
The Greater Alabama MLS, of which I am a member, provides the source of square footage information that is included in the listing. The four sources include tax records, seller, building plans, and appraiser.
Below the article are links to some other good posts by the author on this topic.
My comment: Very interesting analysis and graphs. My MLS is the same, except “other” is included and tax records is the default. Tax records are iffy in California as Prop 13 passed in 1979 and records have not been updated since then, unless there is new construction. Also, what assessors include in GLA can differ from what the current market does. Some neighborhoods and properties are reasonably accurate and some are way off in my small city.
I have done a lot of relocation appraisals, where 2 or 3 appraisers appraise the same house. If we had the same square footage it was sorta suspicious… Some measure to the half foot, rounding up or down, some use decimals, etc. It is not exact.
I can really see a demand for using appraiser measurements. I will be writing an article in my paid newsletter soon about this topic. There are a few appraisers who do them, including discussing pricing and liability.
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, click Read More Below!!
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. 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, click Read More Below!! |
$400,000 Proposed bank threshold for appraisals to be replaced by evaluationsBelow are links to the proposed rule, what others are saying, and where to send your comments on the proposed rule.
OCC Issues Notice of Proposed Rulemaking to Exempt Residential Real Estate Transactions of $400,000 or Less from Appraisal Requirements
Excerpts: Rather than requiring an appraisal, the proposal would require that residential real estate transactions exempted by the threshold obtain an evaluation consistent with safe and sound banking practices.
Read what the OCC says in their announcement – one page www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-123.html
Comments will be accepted for 60 days from publication in the Federal Register.
Instructions in the full Full 69-page proposed rulemaking. Download the above link and search for comments
The word “evaluation” is included many times in the document. Google evaluation to see what it says.
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FDIC, OCC, Fed propose raising appraisal threshold for first time since 1994. Good analysis of how many loans would be affected:
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Push to cut back on home appraisals sparks controversy
By Ken Harney, long time nationally syndicated real estate writer who regularly writes about appraisal issues
Excerpt: The Trump administration wants to eliminate professional appraisals on a large number of home-sale transactions – a move that critics say could push the country back toward the see-no-evil days of mortgage lending that preceded the housing crash.
Includes comments from appraisers Ryan Lundquist and Pat Turner plus Appraisal Institute.
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Link to Appraisal Institute letter
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Get rid of appraisers while nobody’s looking
By Ryan Lundquist
Excerpt: I’m guessing these “evaluators” will be real estate agents who do BPOs, employees at banks and data firms, and probably some appraisers who need the work at $75-$100 a pop.
Read it here, plus the appraiser comments, of course.
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My comments:
– FIRREA increased the deminimus from $200,000 (1989) to $250,000 in 1994, but appraisals were still done. Why? Fannie and Freddie’s investors wanted them. FHA, VA, etc did not adopt the deminimus.
– What is an ‘evaluation’ and who does them? Hopefully, someone will tell me what is an evaluation?
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Here’s How America Uses Its Land
Excerpt: What can be harder to decipher is how Americans use their land to create wealth. The 48 contiguous states alone are a 1.9 billion-acre jigsaw puzzle of cities, farms, forests and pastures that Americans use to feed themselves, power their economy and extract value for business and pleasure.
One of the many interesting tidbits:
The U.S. is becoming more urban-at an average rate of about 1 million additional acres a year. That’s the equivalent of adding new urban area the size of Los Angeles, Houston and Phoenix combined. U.S. urban areas have more than quadrupled since 1945.
Click here for very interesting graphics and more analysis:
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 8-2-18 long blog post with many topics, click Read More Below!!