Appraising Luxury Homes

What Are the Top Luxury Markets in North America Right Now?

Excerpts: Where are the hottest high-end real estate markets? Whether you’re looking to specialize in luxury home appraisals or you’re simply reading up on the latest market trends, you may want to pay attention to areas where luxury homes are in high demand.

According to the Institute for Luxury Home Marketing’s February 2024 report¹, the single-family luxury home segment is showing promising signs of growth. Both inventory levels and new listings increased significantly in recent months, leading to an 18 percent increase in sales and a 1.6 percent increase in the median sold price. Even more telling, contract signings for homes priced at $1 million or more have increased by 11 percent over last year, and demand remains high among affluent buyers.

According to the Institute for Luxury Home Marketing’s February 2024 report¹, the single-family luxury home segment is showing promising signs of growth. Both inventory levels and new listings increased significantly in recent months, leading to an 18 percent increase in sales and a 1.6 percent increase in the median sold price. Even more telling, contract signings for homes priced at $1 million or more have increased by 11 percent over last year, and demand remains high among affluent buyers.

Top list of luxury home markets in 2024. You may be surprised!

To read more, Click Here

My comments: In this newsletter, I always know what are hot topics. Constant Contact gives me the number of clicks. Most popular is usually Claudia’s advice at the top of every email. Also popular are large luxury homes with a photo.

I have been thinking for a while about including appraising luxury homes, since my subscribers like to read about them. Maybe a possible specialization? There were not many where I worked, so I did not specialized in them But, I see my area, East Bay California is listed now! The median home price in the Bay Area is around $1,300,000.

Check out the list of areas in the article to see if any are close to you.

Lenders have always had special, very small lists of appraisers who can appraise these homes. I assume the AMCs have these types of lists. Some may not have them. You definitely must get a higher fee for them.

I know several appraisers who have been doing them in my area for a long time. To do them, it is best to work in an area with many luxury homes. You need to network with the brokers that sell them.

The post above is also a promo for McKissock’s Certified Luxury Home Appraiser Program. 14 hours of CE for $650. I have not taken it, but I don’t know of many other types of diversification with a certificate. Might be interesting even if you don’t know if you want to do them.

CubiCasa – Home Measurement From Inside A House

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For $20M, Mega Man Cave Comes With a Phoenix-Area Mansion

Excerpts: 5 bedroom, 6 bath, 9,326 sq.ft., 4.36 acre lot

For $20 million, the buyer will get not only a 10,000-square-foot house, but also all of the other structures and furnishings.

This home has a sprawling man cave, go-kart track, golf simulator, batting cage, day spa, and much, much more.

This place comes with something for everyone. How about a 6,000-square-foot man cave and a two-story closet for your favorite fashionista?

The primary suite is “ginormous,” the listing agent continues. “The wall opens all the way up, and the glass disappears into the wall. You can open it up and see everything in the backyard. Then you go into the bathroom and there’s a huge steam shower and an aquarium.”

To Read More, Click Here

To see the full listing with 119 photos, Click Here

My comments: Check out the photos. Special features go on and on! Wow! Big man cave, 2-story closet, etc., etc.! Over-improvement? Too personalized? Lots of buyers? Definitely a high appraisal fee! Cubicasa or another measuring app is recommended.

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Recap of the 4th ASC Appraisal Bias Hearing with Comments

I wrote about this last week and included PDFs of Maureen Sweeney’s two testimonies. This post has the full hearing video plus comments in Phil Crawford’s Voice of Appraisal video. Plus appraiser comments.

Excerpts: In his recent video, Phil Crawford, host of the Voice of Appraisal, provided a breakdown of the ASC appraisal bias hearing. His analysis was hard-hitting and shed light on the important points discussed during the event. It is highly recommended for all appraisers to listen to his podcast and to stay informed about the current state of the industry.

An important issue that has long been overlooked, was acknowledged by the panel members and speakers that there may be instances where deficiencies in competency are misreported as bias complaints. This is a positive recognition, as it shows that efforts are being made to differentiate between actual cases of bias and other issues that may be mistakenly categorized as such.

The ASC is accepting public comments on the hearing until March 8th, 2024. It is crucial for as many appraisers as possible to submit their comments and concerns to AppraisalBiasHearing@asc.gov. This is an opportunity for appraisers to have their voices heard and contribute to shaping the future of the industry.

To read more, including Sweeney Testimonies and Crawford Video, Click Here

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New in the March 1, 2024 issue of Appraisal Today:

  • How to manage your email and keep your inbox from filling up!
  • Extraordinary Assumptions – When, Why, How by Timothy C. Andersen, MAI and Craig Morley
  • Answers and Solutions for Tough Appraiser Questions & Client Demands. A reference Guide to Associated Laws, Rules, and Regulation. By Richard Hagar, SRA, Book Review

Managing your email – many practical tips for appraisers. A good time, while business is slow.

Extraordinary Assumptions – How to stay out of trouble with your state board. They closely watch use of this phrase.

Hagar Book. Only $35. Lots and lots of good advice. Business slow? A good time to read this book. Plus info on his webinars and classes.

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Pardon My Heuristic, It’s A Little Biased

By Brent Bowen

Excerpts: If you have a brain, you are biased. You can’t help it. Without mental shortcuts we would never get anything done. It is the helpful aid of heuristics that keeps you from taking hours to mentally process how to get dressed in the morning. Life without these mental shortcuts isn’t an option, it is hardwired into our DNA. So, like it or not, we all have to deal with cognitive biases, too.

When we are accused of bias, System 1 kicks in and we feel shame or maybe embarrassment and want to react defensively. “You’re crazy! I’ve never been biased in my whole life! You just hate [people group]!” If we give voice to that reaction, we are likely to elicit the same defensive reaction from our accuser. Nothing changes. Everyone remains unconscious of their own potential biases (both the accuser and accused), and the cycle is perpetuated.

Let’s take this into the practical world of real estate appraisal. There is great debate in the appraisal community with regard to bias, particularly racial bias. The accusation has been made largely from people who may not really know a single appraiser or understand the appraisal profession or process. The accusers are largely acting out of their own set of biases. So, each of us has a choice of how to respond. Of course, the accusation is twofold, systemic and personal (there is always a personal component, since every system is a system of humans). Let’s set aside our opinions on how best to respond to the accusation of systemic bias and focus on personal bias. Let’s consider a real-life scenario where a good, well-intentioned appraiser allows System 1 thinking drives the process, and another where System 2 thinking is engaged…

To read more, Click Here

My comments: Definitely worth reading the full article. I had never read about this bias topic before.

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Revisiting Boom-Bust Markets After Recovery in House Price Growth

By Mark Fleming on Tue Feb 27 2024, First American Blog Post

Re-Acceleration in House Prices Prompts Re-Examination of Boom-Bust Markets

A year ago, we separated the top 50 markets into four categories1 : boom-bust, boom-no bust, no boom-bust, and no boom-no bust. In January of 2023, nominal house prices had declined from their recent peaks in 35 of the top 50 markets we track. Since then, house prices have re-accelerated in many markets with 33 of the top 50 markets reaching a new house price peak in December and only 17 markets with house prices below their recent peaks.

Boom-Bust: Only two markets remain in the boom-bust category: Austin, Texas and Phoenix. House prices increased 65 percent from February 2020 to the peak in May of 2022 in both markets. Since then, nominal house prices have declined by 6 percent and 3.8 percent, respectively. House prices in these pandemic “boom towns” overheated during the pandemic, but prices are now ‘busting.’

No Boom-Bust: The example of a no boom-bust market is San Francisco. In San Francisco, house prices increased 31 percent from February 2020 until the peak in April 2022, lower than the average growth rate across the top 50 markets. Prices have since declined by 8 percent from the peak. Other markets in this category include Sacramento, Calif., Seattle, and San Jose, Calif. These coastal markets have long been among the most expensive and there wasn’t as much room for prices to rise from pre-pandemic to peak, but when mortgage rates more than doubled in a year, those already expensive markets felt the pain from the corresponding pullback in demand.

To read more, Click Here

My comments: Worth reading. Consider subscribing. I subscribe. Some interesting posts and podcasts (The REconomy Podcast). What happened in your market?

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A Desert Stream Runs Through $3M Arizona Mansion Built Into the Boulders

Excerpts: 4 bedrooms, 6 baths, 6,629 sq.ft., 1.02 acre lot, built in 1993. Price dropped from $3,315,000 8/23/23

At the entry, there are two huge boulders that have been incorporated into the design of the home, so you feel like you are really connected with the outdoors,” Paluscio noted. “It’s a beautiful way to bring the outdoors inside.”

Known as La Casa Sobre La Laguna (translated as “the house over the creek”), the property sits on an acre that offers mountain, golf course, and boulder views—plus some interesting wildlife.

“The property also has a nice connection with nature; it has an abundance of wildlife, including lizards, bobcats, and javelina,” Paluscio says, referring to the wild boar-type creatures. “It feels like you are in a nature preserve. If you are a wildlife lover, it’s a lot of fun.”

Another cool feature is the stream that runs under the house that can be viewed right through the floor.

“There is also a manmade desert stream that runs under the house,” Paluscio says. “You can look down from the walkway and den area, through these glass tiles on the floor, and see the bobcats hanging out underneath.”

The property also features two private guesthouses and a four-car garage.

To read more and see the interesting photos, Click Here

To see the listing with 46 photos, Click Here

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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.

Mortgage applications decreased 5.6 percent from one week earlier

WASHINGTON, D.C. (February 28, 2024) — Mortgage applications decreased 5.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 23, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 1 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 12 percent lower than the same week one year ago.

“Mortgage rates were little changed last week, with the 30-year conforming rate declining slightly to 7.04 percent but remaining about a quarter percentage point higher than the start of the year,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Higher rates in recent weeks have stalled activity, and last week it dropped more for those seeking FHA and VA refinances. Purchase activity is running 12 percent behind last year’s pace, but our January Builder Application Survey results showed that applications to buy new homes were up 19 percent compared to last year. This disparity continues to highlight how the lack of existing inventory is the primary constraint to increases in purchase volume. However, mortgage rates above 7 percent sure don’t help.”

The refinance share of mortgage activity decreased to 31.2 percent of total applications from 32.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.5 percent of total applications.

The FHA share of total applications decreased to 13.0 percent from 13.2 percent the week prior. The VA share of total applications decreased to 11.7 percent from 12.1 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.04 percent from 7.06 percent, with points increasing to 0.67 from 0.66 (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 $766,550) increased to 7.20 percent from 7.16 percent, with points increasing to 0.57 from 0.45 (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 6.86 percent from 6.91 percent, with points decreasing to 0.99 from 1.03 (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 increased to 6.70 percent from 6.61 percent, with points decreasing to 0.68 from 0.77 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 6.33 percent from 6.37 percent, with points decreasing to 0.58 from 0.71 (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

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Online: www.appraisaltoday.com

Appraising Historical Homes

Historical Properties and Their Unique Appraisal Approaches

Excerpts: Appraising historical properties involves a complex interplay of factors, making it a specialized field within real estate valuation. This article provides an insight into the appraisal process of historical properties, emphasizing the role of market data, potential buyers, specialized databases, appraisal methods, and the significant impact of preservation restrictions.

The appraisal process begins with a thorough analysis of market data, focusing on sales of properties that share historical or antique characteristics. This comparative market analysis extends beyond standard parameters like size and location to include age, architectural style, and historical significance. The scarcity of historical properties often requires appraisers to expand their search to find comparable sales, both geographically and over longer time frames.

The distinction between a historic property with preservation restrictions and an old house without them is crucial in the appraisal process. Preservation restrictions, often governed by the National Register or local historical commissions, can add value by ensuring the property’s integrity. However, these restrictions may also limit modifications, potentially affecting the property’s market appeal.

To read more, Click Here

My comments: If you don’t want to appraise a historic property, be sure to check it out before accepting the assignment!

Worth reading. A good summary. I suspect that a company based in Boston, MA sees lots of historic homes!

For many years I appraised in the nearby city of Berkeley, CA. There were definitely adjustments for homes built by famous, widely known, architects. Fortunately, their names were listed in the MLS.

In my small city, there are a few homes by famous architects. One was sold about 20 years ago by a famous architect, Julia Morgan. She designed more than 700 buildings in California during a long and prolific career. She is best known for her work on Hearst Castle in San Simeon, California. No effect on value. I was surprised. If it was in Berkeley, there would be a substantial adjustment.

Some cities have large historic buildings, such as the City Hall in my city, built in 1895, twenty years after the city charter in 1872. The Gold Rush in California started in 1848, which brought many people to Northern California.

But, in my city, there are many restrictions on what can be done with older homes, such as Victorians. For example, window replacements must replicate the original windows, plus some other restrictions on exterior modifications. Restrictions are from the city, the county, and the state. In my city of 78,000 population, there are over 10,000 buildings constructed prior to 1930, including many classic Victorians.

Many downtown mixed-use buildings (retail and apartments) are in my city. I appraised many of them, but never noticed any effect, plus or minus, for historic designation.

Knowing what modifications are allowed is very important for the appraiser. Many people don’t like them. You need to know the market. Sometimes buyers like them and sometimes not.

See how many historic homes and buildings are where you do appraisals and where you live. You may be surprised!

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NOTE: Please scroll down to read the other topics in this long blog post on appraiser fights back against bias accusation, ok behavior when taking Zoom CE classes, estate appraisal liability issues, unusual homes, mortgage origination stats, etc.

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USPAP Myths for Appraisers

Five USPAP Myths Dispelled in 2024 USPAP

By Daniel A. Bradley, SRA, CDEI, McKissock Learning

On May 5, 2023, the Appraisal Standards Board (ASB) voted to adopt changes to the Uniform Standards of Professional Appraisal Practice (USPAP), which will become effective January 1, 2024. These represent the first changes to USPAP in four years. Many of the changes will not have a significant impact on the way appraisers practice but are nevertheless important for public trust.

Appraisers and the public have traditionally held several misconceptions about USPAP, and these changes should help to dispel some of those myths. There are five myths and misconceptions that are addressed in the changes to the 2024 USPAP.

  • Myth 1: USPAP Allows Discrimination as Long as the Appraiser’s Conclusions are Supported
  • Myth 2: The Removal of the Definition of Misleading from USPAP Reduces Liability for Appraisers
  • Myth 3: An Inspection of the Subject Property by a Third Party is the Equivalent of a Personal Inspection by an Appraiser
  • Myth 4: Appraisers are not Required to Analyze Prior Non-Sale Transfers of the Subject Property
  • Myth 5: The USPAP Update Course Cycle is the Same as the USPAP Publication Cycle

To read more, Click Here

My comments: It’s worth reading, especially if you do residential lender appraisals. Lender issues are a significant factor in USPAP and Myths 1 to 4. I suppose it is because most appraisals are done (now) for residential lending purposes. Many thanks to Dan Bradley for writing about the 2024 USPAP changes.

2024 USPAP For Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on New CA bias classes,  2024 New Years resolutions, 2024 goals, unusual homes, mortgage origination stats, etc.

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Functional Obsolescence for Appraisers

Understanding Functional Obsolescence in Appraisals

By: McKissock

Excerpts: For appraisers, functional obsolescence can be a challenging concept because the elements that influence property values may not be obvious or immediately apparent. To help you better understand what it means and how to pinpoint it, we’re exploring some examples the different types of functional obsolescence, and how it can influence property values.

Functional obsolescence may or may not be caused by trends in buyer or market preferences, outdated design, or even advances in technology. Let’s look at a few examples:

  1. A home has three bedrooms, but to reach the third bedroom, you have to walk through the other secondary bedroom. Buyers are likely to see this as a flaw in the floor plan regardless of trends.
  2. A home has a separate formal living room, an enclosed kitchen, and a separate dining room. Today’s buyer prefers a more open, casual layout and may find the separate rooms a flaw in the floor plan, though this may change with market trends.
  3. A home with radiator heat and window unit air conditioning may be seen as functionally obsolete, and thus less valuable, as more modern homes have forced air furnaces and central air conditioning.

Measuring functional obsolescence and its effect on a property’s value can be challenging for even experienced appraisers. To ensure accurate reports, it’s essential you stay up to date and aware of market trends, and even code and building updates, as these changes over time do determine both curable and incurable obsolescence.

To read more, Click Here

My comments: All appraisers see functional obsolescence. Making adjustments can be tough. You need to know the market reaction.

For example, there are many Victorians in my market. They were built without closets and used armoires (free standing closets). It is not considered functional obsolescence as it retains a classic feature in many Victorian homes. I always wonder about what appraisers from tract home areas think about Victorians. I assume (hope) they ask local agents. When I started appraising them, that’s what I did.

I regularly tell local agents that “tandem” rooms don’t count as bedrooms. I’m trying not to think about how many listings have an incorrect number of bedrooms!

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NOTE: Please scroll down to read the other topics in this long blog post on Pool converted to man cave, saving noney, NJ appraiser censorship, bias, unusual homes, mortgage origination stats, etc.

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Superadequacy Adjustments for Appraisals

How to Account for a Superadequacy

By: McKissock

Excerpts: What is superadequacy?

Per The Dictionary of Real Estate Appraisal, 6th Ed., superadequacy is defined as “an excess in the capacity or quality of a structure or structural component; determined by market standards.” It’s a type of functional obsolescence in which the structure or one of its components is overly improved to a capacity or quality than a prudent buyer or owner would build or pay.

While we provide more detailed illustrations below, a simple example would be a 5,000 square foot luxury home built in a neighborhood comprised of two and three-bedroom mid-century ranch homes.

Example #1: Superadequate custom fireplace

Example #2: Superadequate 12-car garage

To read more, Click Here

My comments: Although the blog post references luxury homes, this can occur anywhere. Have you ever driven closer and closer to your subject and noticed that the homes are much smaller or have standard designs? You keep getting closer, hoping it is not your subject. It Is! This definitely has happened to me. Large unusual additions, two large kitchens, very extensive landscaping, etc.

Maybe you were busy and forgot to check it out in public records, MLS or speaking with the owner or agent (if a sale) when scheduling the appointment.

Market Your Appraisal Services: 59 Ways to Get More Business Now

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NOTE: Please scroll down to read the other topics in this long blog post on answering your phone, appraiser censorship, bias, how to do graphs,  unusual homes, mortgage origination stats, etc.

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UAD and Forms Redesign Update for Appraisers

UAD and Forms Redesign Update

Excerpts: Improving the Quality and Consistency of Appraisal Data

Freddie Mac and Fannie Mae (the GSEs) have worked on the UAD redesign since 2018, leveraging extensive stakeholder input to update the appraisal dataset, align it with current mortgage industry data standards (MISMO® v3.6), and replace the GSE appraisal forms with a single data-driven, flexible, and dynamic appraisal report for any residential property type.

To watch the Excellent UAD and Forms Redesign Video (3 min. 47 seconds) Click Here

For more detailed information on web page Click Here

My comments: Watch the short video. On the links list on the right side of the webpage, GSE Experts Answer Your UAD Redesign Questions is short and understandable.

The UAD and Appraisers – Past, Present, and Future

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NOTE: Please scroll down to read the other topics in this long blog post on Non-lender appraisals, handline wide swings in appraisal volume, economic analysis for appraisers, Wells Fargo Mortgage discrimination, unusual homes, mortgage origination stats, etc.

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Appraisals: Using Comps Across a Freeway?

Pulling comps from the other side of the freeway

By Ryan Lundquist

Excerpts: It can be a REALLY bad idea to pull comps from the other side of the freeway, but not always. Today I have some thoughts about location, comp selection, and lenders freaking out when schools are mentioned in appraisal reports.

I don’t normally pull comps across a highway

In so many cases it’s an awful idea to cross a major road or highway to pull comps because a highway sometimes separates markets that are far different in age, square footage, lot size, architecture, price point, school district, etc….

But, crossing the highway does work here

With that said, I want to show you an example of a local neighborhood where I have zero hesitation about pulling comps from both sides of the highway. The areas north and south of Highway 50 below represent the College-Glen area…

Why it’s no biggie to pull comps like this

A) Prices are similar: Prices are similar on each side of the highway. I’ve found this when pulling comps through the years, and I’ve also shown this when making graphs. I will say the north side tends to have a slightly larger square footage than the south side (same with west vs east), which is something to consider when we compare stats. But it’s still not a major difference.

B) Buyer Behavior …

C) School System …

To read lots more, plus maps and many appraiser comments, Click Here

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Why Comp Photos in Appraisals?

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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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Appraisers Riding the Waves of Up and Down Mortgage Rates 

The Surfing Appraiser

Riding the Waves of Up and Down Mortgage Rates 

By Mark Buhler

Excerpts: Riding the waves of the appraisal profession can result in a range of outcomes and emotions over time. Appraisers, and surfers, have varying levels of experience, and experiences. Most appraisers have been through some extremely busy seasons that have been very positive. Those same appraisers have gone through droughts, where appraisal orders dried up.

Appraisers have been blessed to have the independence and autonomy to create whatever they want for themselves. Most workers in America do not have the same opportunities for success and advancement that appraisers have. Look at this lull as a time of opportunity. A time to finally work on and execute a plan for your business.

During the refinance boom of the early 2020’s, the majority of appraisers did not have time to come up for air. The waves of work kept them down, and every time they got a chance-they grabbed the next order (or wave) and maximized the opportunity while it was there. Appraisers were busy cranking out appraisal reports. Now appraisers are not busy, but they should be. Do not get out of the water and put your surfboard away. Stay out there, splash around in the calm ocean, there are waves coming.

To read more, Click Here

My comments: Read the full article! This article uses surfing as an excellent illustration. In my 20s, I lived in my van for a few years and parked it near my surfer friends’ house in Santa Cruz, CA. They surfed every morning when the waves were good (Steamer Lane), cold or raining. When the waves were low, they stayed home or went over to see if there were any changes. I watched and listened to them talk about it and learned a lot. A very good analogy to appraising.

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Appraisers and Property Data Collectors

4 Myths About Property Data Collection

By McKissock

Excerpts:

Myth #1: PDC is the same thing as property appraisal

As a professional appraiser, you know very well that what a property data collector does is not the same as what you do — even if your clients don’t always understand the difference. While there is some overlap, being qualified to perform an appraisal requires much more training, education, and expertise, and the job goes far beyond gathering physical data.

Myth #2: Data collectors are going to replace appraisers

There’s a lot of buzz right now about PDC possibly replacing traditional property appraisal, but the intent of this service is to fill a gap in the lending process. The job assignments given to property data collectors are often the types of assignments that wouldn’t come across an appraiser’s desk. For example, property data collectors (PDCs) may be engaged by lenders for very low-risk loans where an appraisal is not required.

Myth #3: PDCs are not properly trained or qualified

While there isn’t a license, PDCs are still required to be trained and competent to do their job. Both Fannie Mae and Freddie Mac require that PDCs must be professionally trained and vetted. They must adhere to Fannie Mae or Freddie Mac’s property data standards which set forth the minimum requirements for collection of the subject property data.

Myth #4: PDC is bad for appraisers

Probably the most prevalent myth is that PDC is bad for appraisers and bad for the profession in general. But in actuality, it may offer some significant upsides for appraisers. In particular, becoming a property data collector may be beneficial for:

  • Appraisal trainees in need of extra income
  • Busy appraisers who are looking to delegate tasks
  • Older appraisers who are looking to reduce physically demanding tasks or may be transitioning into retirement
  • Any appraisers wanting to grow their bifurcated and hybrid appraisal services

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My comments: We all know that appraisers would be the best PDCs. My article in the November issue of Appraisal Today has lots of information, including lists of which AMCs use PDCs. “Property Data Collectors (PDCs) Will Be Widely Used by Lenders in the GSEs Value Acceptance + Property Data Option”

This is an excellent diversification opportunity while business is slow. Trainees can do them.

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on Liability, Bias, reviewers with little experience, GSE modernization, unusual homes, mortgage origination stats, etc.

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Strange Properties Appraisers Have Seen

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!

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