Appraising Kitchens

Newz: FHFA Waiver Expansion, AMC Appraisal Fees, Appraising Kitchens

November 1, 2024

What’s in This Newsletter (In Order, Scroll Down)

  • Construction Progress Inspection Reports: Claims Involving ADUs and Remodels
  • Appraising Kitchens: Understanding Trends, Functionality, and Market Expectations
  • Lake Tahoe Ranch Hits the Market for $188 Million, Making It One of the Priciest Listings in the U.S.
  • FHFA’s Appraisal Waivers Expansion
  • The Great Debate on Appraisal Fees
  • Updated UAD redesign timeline with specific implementation dates
  • Mortgage applications decreased 0.1 percent from one week earlier

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Appraising Kitchens: Understanding Trends, Functionality, and Market Expectations

Excerpts: When it comes to real estate appraising, kitchens often play a pivotal role in determining a home’s value. A well-appointed kitchen can significantly enhance a property’s appeal and marketability. As an appraiser, understanding the nuances of kitchens is essential to providing credible and insightful valuations. Let’s dive into appraising kitchens and how the room impacts market value.

Functional Obsolescence and Price Point

If a back corner kitchen or a galley kitchen does not align with current market preferences for homes of a similar age, it might be considered outdated and impact marketability. However, this does not necessarily rise to the level of functional obsolescence that must be remedied. An outdated but functional kitchen might not be a major concern in lower price ranges.

Conversely, in high-end homes, buyers expect the latest designs, features and finishes; and therefore, an outdated kitchen may be considered as functional obsolescence.

Appeal & Functionality Count when Appraising Kitchens

In conclusion, appraising kitchens requires a thoughtful, balanced analysis of market trends, quality, and functionality. While it’s important to understand current design preferences, the value of a kitchen is ultimately determined by how well it meets the expectations of buyers in a particular market.

A homeowner may have invested heavily in a kitchen renovation, but it is the appraiser’s responsibility to carefully consider factors such as conformity, local market preferences, and house style and price range when valuing the subject property. Remember, ultimately a kitchen’s value lies in its ability to enhance the overall appeal and functionality of the home, not its initial cost or the cost of renovation.

To read more, Click Here

My comments: This is the best analysis I have read on kitchens. Worth reading. Kitchens are a very important factor when buying a home. What is popular changes over time. Of course, appraisers see all types of kitchens.

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Lake Tahoe Ranch Hits the Market for $188 Million, Making It One of the Priciest Listings in the U.S.

Excerpts: sprawling Lake Tahoe estate known as Shakespeare Ranch hit the market on Monday for $188 million.

Not only is that a price tag that makes it the most expensive property on the market in Nevada, it’s also one of the priciest in the entire U.S., bested only by a small handful of homes in Los Angeles and South Florida.

Named after the nearby Shakespeare Rock, a nearby outcropping that is said to resemble the playwright, the property spans 130 acres on the eastern shores of Lake Tahoe and includes a colossal selection of amenities, from multiple properties and a historic barn to its own rodeo ground and private pier.

The ranch dates to the late 1800s, and its multiple properties include a 4,980-square-foot lakefront home with a waterside cabana, an under-construction 7,713-square-foot architect-designed residence and a number of cabins.

he historic barn on the property was built in 1873 and is currently outfitted with a commercial kitchen, a game center and a wine room.

The property also has a pool house with an indoor pool and spa, a gym, lawns, gardens, an office suite, a staging kitchen for catering, two boat lifts, 14 buoys and a boat house.

To read more, Click Here

For video, photos, and more information and to see the listing, Click Here

My comments: I live within driving distance to Lake Tahoe and have been there many times. A beach with a dock and a boat house is a premium feature.

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FHFA’s Appraisal Waivers Expansion

Excerpts: The recent announcement from the FHFA Deputy Director Naa Awaa Tagoe regarding the expansion of appraisal waiver eligibility for purchase loans is a significant development that has sparked debate and controversy within the mortgage industry. By increasing the maximum allowable loan-to-value (LTV) ratio for full appraisal waivers from 80% to 90%, and for inspection-based appraisal waivers from 80% to 97%, the FHFA is taking a risky and potentially irresponsible step that could have far-reaching consequences. As former FHFA Director Mark Calabria aptly pointed out, this decision is truly “dumb and irresponsible” and deeply disappointing.

The potential ramifications of this policy shift are dire. When the inevitable happens and the overinflated housing market comes crashing down, the FHFA and its decision-makers will have no one to blame but themselves. Appraisers, who have long been the scapegoats for industry missteps, will not be the ones to bear the brunt of the blame this time.

The responsibility will squarely fall on the FHFA’s shoulders for implementing such a reckless and short-sighted policy, one that undermines the essential role of professional appraisers and puts the entire housing market at risk of another catastrophic collapse.

The FHFA’s attempt to marginalize appraisers and remove them from the equation entirely is a dangerous gamble that could have dire consequences for the entire economy, and the agency will have no one to blame but itself when the inevitable happens.

To read more plus appraiser comments, Click Here

My comments: Links to the original FHFA document plus other useful links are in this blog post. In my opinion, this definitely increases risk for consumers, GSEs, the economy and the real estate market. The Wall Street Down graphic above is for the 2008 crash.

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New in the November 2024 issue of Appraisal Today

  • A brief AMC history from 1967 to now – from 5% to over 80% of the appraisal market
  • Lets talk about subpoenas, By Claudia Gaglione, Esq.
  • Using the subject as a comp – When and Why, By Timothy Andersen, MAI

AMC history helps understand how they changed over the years, most significantly after 2008. When business picks up, hopefully in early 2025, you need to start thinking about which AMCs you want to work for.

Subpoenas for a large number of appraisal documents – what to do.

Many appraisers think that you can never use the subject for a comp. Tim, the USPAP Expert goes over all issues, looking at GSEs, Appraisal text books and other sources.

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The Great Debate on Appraisal Fees

Excerpts: The Consumer Financial Protection Bureau (CFPB) recently issued a Request for Information Regarding Fees Imposed in Residential Mortgage Transactions [Docket No. CFPB-2024-0021] in which it solicited feedback from the public and industry stakeholders on the fees charged to consumers by mortgage providers and related settlement services. The CFPB framed it as an inquiry into “junk fees” in the mortgage space, writing that it wants to “understand why closing costs are increasing, who is benefiting, and how costs for borrowers and lenders could be lowered.”

“The CFPB is looking for ways to reduce anticompetitive fees that harm both homebuyers and lenders,” said CFPB Director Rohit Chopra. The real estate appraisal profession responded—with nearly 100 comments submitted that addressed appraisal fees in some way. Appraisers spoke up, alongside many of the national appraisal organizations, highlighting the need for regulatory action and greater transparency around appraisal and appraisal management company (AMC) fees.

Specifically, a key point of contention is how the current TILA-RESPA Integrated Disclosure (TRID) allows for a “bundled appraisal fee” that includes both the AMC’s fee and the appraisal fee. Many believe this bundled fee is one of the main reasons there is so much animosity between AMCs and appraisers; and that it has a seriously negative effect on market transparency, free market competition, appraisal quality, and the total cost to consumers.

Separating the AMC fee and the appraisal fee on consumer mortgage disclosures is something several national appraisal organizations have been trying to accomplish for the last 15 years, arguing that it would bring much needed transparency for all stakeholders and remove the incentive for an AMC to seek the cheapest appraiser it can find for an assignment instead of properly focusing on the “appraiser’s qualifications and credentials.”

Now, the CFPB’s request for comment has sparked a national debate on what can or should be done to address appraisal fees and the current AMC appraiser dynamic.

My comments: My opinion on the issue: No one cares much about appraisers. Many people confuse us with real estate agents.

THE BEST WAY TO FIGHT BACK IS TO EMPHAIZE THAT CONSUMERS ARE PAYING TOO MUCH FOR APPRAISALS BECAUSE AMCs ARE TAKING A BIG CUT OF THE APPRAISAL FEE.

Comprehensive article on the fee issue, with comments from appraisers, appraiser organizations AMCs, MBA and many more organizations. This was published in the Fall 2024 issue of WorkingRE magazine and was posted recently in on the WRE web site.

To read more, Click Here

In the September 6 issue I wrote about “Appraisal Regulation Compliance Council Exposes Disturbing AMC Violations” including reliable analysis from Appraisal Regulation Compliance Council (ARCC)

To read this newsletter issue, Click Here

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Updated UAD redesign timeline with specific implementation dates

October 28, 2024

Updated UAD Redesign Timeline with Specific Implementation Dates

Fannie Mae and Freddie Mac (the GSEs) have published a detailed implementation timeline for the industry migration to the Uniform Appraisal Dataset (UAD) 3.6 and dynamic Uniform Residential Appraisal Report (URAR) that provides specific implementation dates. While the timeline has not changed, we’ve updated previously provided quarters with specific dates to help the industry develop more detailed plans for implementation activities.

Highlights include:

  • Industry Prep (ongoing) Industry training available on GSE websites: November 18, 2024
  • GSEs publish policy updates: June 4, 2025
  • ULDD Mandate: July 28, 2025
  • Limited Production: September 8, 2025 – January 25, 2026
  • Broad Production: January 26, 2026 – November 1, 2026
  • UAD 3.6 Mandate: November 2, 2026
  • UAD 2.6 Retirement: May 3, 2027

Shorter list

  • 2024 Appraisers go mobile.
  • 2024-2025 Software companies, lenders, AMCs built for the new UAD.
  • Early 2025 Appraiser training starts.
  • Late 2025 GSE pilot with specific lenders.
  • Early 2026 New UAD in full production.
  • 2027 & beyond New UAD fully required.

Per the announcement:

Training Available: – Appraiser-specific training for continuing education (CE) credit will be available through appraisal education providers beginning in 2025.

Mandate: November 2, 2026

All lenders must use UAD 3.6 in the production environment. Revisions will be allowed for previously submitted appraisals that used UAD 2.6.

To read the announcement and see the time line graphic Click Here

My comments: Now is the time to start learning how to use a smartphone or tablet for your appraisals. You will need to use a them to use the for new online software being developed by forms software companies because of the complicated data entry with many new fields. Using a clipboard manually will be extremely difficult.

Your current “forms” software vendor provides updates on what is happening and what they are doing about the new UAD online software.

Thanks to NAA for sending the above highlights list in a recent email. The GSEs had a recent “train the trainer” event and classes will be coming.

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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. After early 2025, rates will drop. We are all waiting!

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Mortgage applications decreased 0.1 percent from one week earlier

WASHINGTON, D.C. (October 30, 2024) — Mortgage applications decreased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending October 25, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week and was 84 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 increased 4 percent compared with the previous week and was 10 percent higher than the same week one year ago.

“Mortgage applications were essentially flat last week as rates increased for the fourth time in five weeks, driven by bond market volatility in advance of the presidential election and the next FOMC meeting. The 30-year fixed rate, at 6.73 percent, was at its highest level since July 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “After a brief burst of activity in September when rates were almost 60 basis points lower, overall applications have declined 27 percent, driven by a pullback in refinances. Government refinances accounted for a large part of the decrease, dropping 12 percent over last week.”

Added Kan, “Purchase applications increased compared to a holiday-shortened week and were 10 percent higher than a year ago. While near-term purchase application activity has weakened, we continue to expect housing demand from younger homebuyers to support purchase growth over the next few years as for-sale inventory loosens gradually.”

The refinance share of mortgage activity decreased to 43.1 percent of total applications from 45.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications.

The FHA share of total applications decreased to 16.4 percent from 16.9 percent the week prior. The VA share of total applications decreased to 14.6 percent from 15.8 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.73 percent from 6.52 percent, with points increasing to 0.69 from 0.64 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 6.77 percent from 6.73 percent, with points decreasing to 0.49 from 0.57 (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 increased to 6.55 percent from 6.29 percent, with points increasing to 0.94 from 0.86 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.27 percent from 5.98 percent, with points increasing to 0.77 from 0.66 (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 increased to 6.20 percent from 6.12 percent, with points increasing to 0.59 from 0.56 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. 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

Waterfront Property Appraisals

Newz: Rate Drops and Appraisers, UAD Overhaul, Avoiding Court

September, 30 2024

What’s in This Newsletter (In Order, Scroll Down)

  • Avoiding Court: A Common Sentiment Among Appraisers (LIA ad below)

  • Making Waves: Appraising Waterfront Property

  • $850K Nantucket ‘Shack’ That Looks Set To Plunge Into the Sea

  • New UAD Overhaul: What Appraisers Can Expect in 2025 & Beyond

  • Sticky Prices

  • The Fed is finally lowering interest rates. What does it mean for appraisers?

  • Experts Predict Where Mortgage Rates Are Headed in 2025 as the Fed Cuts Rates

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Making Waves: Appraising Waterfront Property

Excerpts: Appraising waterfront properties involves a comprehensive evaluation of various factors that go beyond typical residential appraisals. By considering the unique aspects of water frontage, local regulations, environmental factors, and property-specific amenities, you can provide credible and comprehensive valuations that reflect the worth of these highly sought-after properties.

Understanding the depth, quality of the water, and type of shoreline is crucial, as these elements directly influence the property’s usability, aesthetics, and long-term stability. The importance of these factors cannot be overstated, and they deserve careful consideration in every waterfront property appraisal.

1. Water Frontage and Access

One of the most critical elements in appraising waterfront properties is the type and extent of water frontage. The value can vary significantly depending on whether the property is adjacent to a lake, river, ocean, or pond.

5. Depth of the Water

The depth of a water body significantly affects its usability, particularly for recreational activities like boating, fishing, and swimming. Shallow water might limit boating and can lead to stagnant water, which may contribute to unpleasant odors and an increase in insects like mosquitoes.

Conversely, deeper water is often clearer, supports a healthier ecosystem, and is more desirable for recreational use, thereby enhancing property value.

To read the details on all 8 factors, Click Here

My comments: Excellent article. Worth reading. The best I have read on this topic. Even if you never appraise a waterfront home, most people have been to a lake or other type of waterfront property on vacation. I live on an island in San Francisco Bay with water on all sides plus a small area on a nearby peninsula with 3 sides waterfront. I moved here in 1980 and appraised hundreds of waterfront properties including condos plus semi-detached and detached homes.

I lived for 25 years in three waterfront homes with boat docks in my city and am very familiar with with the issues above. I have appraised waterfront homes with 7 of the 8 factors in the blog post, except utilities as all were public utilities with no problems).

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Are Appraisers Professionals?

Valuing Appraiser Professionalism: A Blueprint for Survival

By Jo Traut, McKissock Learning

Excerpts: Having spent nearly three decades in the field of real estate appraisal, I’ve witnessed firsthand the evolution of our profession, particularly with respect to technological advancements. However, alongside these positive changes, I’ve also observed a troubling trend toward increased unprofessionalism. This phenomenon isn’t unique to our discipline. It’s permeated other careers, from medical professionals to teachers to business managers.

What professionalism means in the appraisal profession and how we can all work toward achieving it.

Integrity

Remain steadfast in your commitments, stay true to your word, and uphold your principles, even if this requires declining an appraisal assignment or future work with a client or their agent. By staying honest and true to your values, others are more likely to trust and collaborate with you or recommend you and your business.

Expertise

Professionals strive for proficiency in their field, continually enhancing their knowledge through education, webinars and personal development efforts. It’s not just about acquiring designations but staying informed about market dynamics, industry changes and emerging trends.

Commitment to Excellence

True professionals are prepared, which entails advance planning, dedicating sufficient time and giving proper attention to tasks. Before delivering work to clients, conduct a thorough review to mitigate potential errors. Acknowledge and address any skill gaps or lack of competency promptly and transparently, ensuring a commitment to excellence in every endeavor.

To read more, Click Here

My comments: I have always done “Remain steadfast in your commitments, stay true to your word, and uphold your principles.” I was first trained as a scientist, starting with my high school biology class. After graduation, I worked in labs for 7 years.

I have always been a professional appraiser since I started in 1975, trained at an assessor’s office to do what is in this article. I hate the word “industry” when applied to appraisers. I try to avoid using the word “industry”. Since licensing, residential appraising has become more of a “trade” than a professional career. I quit residential lender appraising in 2005. I know about the conflicts, which have been getting worse.

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NOTE: Please scroll down to read the other topics in this long blog post on Easement Liability, college degree requirement AQB, Fannie June Update, ADUs, unusual homes, mortgage origination stats, etc

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Value of a Pool

What is a pool worth? It depends.

By Ryan Lundquist June 26, 2024

Excerpts: With and Without Pools (Big Difference)

There’s a huge difference in the stats when we compare homes with and without pools. The properties with pools are larger in square footage and lot size, higher in price, and they’ve taken slightly less time to sell too.

In short, the higher the price, the greater chance there is 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.

The rhythm of pool sales basically follows the pattern we see in the entire market. More sales as the year unfolds, and they typically peak around June. Some smaller areas could be slightly different.

Seriously though, What is a pool worth?

It depends. Different price points and locations come with different expectations. There isn’t a one-size-fits-all answer for the value of a pool. In other words, we can’t just apply one figure to a property because that number isn’t going to make sense everywhere. This is where we have to study the comps. With that said, my observation is pool adjustments have generally gone up since the pandemic as buyers are more in tune with the importance of a backyard. Have you seen that also?

To read more, Click Here

My comments: Check out Ryan’s tables to see his data analysis, which is not difficult to set up.

When I first started appraising in suburban Bay Area cities in the mid-1980s, homes with pools sold for more in some neighborhoods with higher-priced homes. MLS always said a pool was there, which is a good way to check it out. At that time, MLS data analysis was much more limited than it is today. I saw this in a particular neighborhood with very hot summers. This is still the same now.

In contrast, where I live, about 15 miles west, on an island on San Francisco Bay, pools have never been a plus or a minus. Weather is “Mediterranean” weather without hot summers. Often sellers said they would remove the pool, but the buyers never requested it.

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NOTE: Please scroll down to read the other topics in this long blog post on HOA Horror Stories, Zillow and Redfin lawsuits Videos and Privacy, Residential to commercial transition, real estate market, unusual homes, mortgage origination stats, etc

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Tools To Support Appraisal Adjustments

What Tools Do You Use to Support Your Appraisal Adjustments?

By McKissock

As part of our monthly survey series, we asked our community of real estate appraisers, “What tool(s) do you use to support your appraisal adjustments?” Respondents were allowed to make multiple selections and write in their own answers as well.

Popular tools include Synapse by Spark, Solomon Adjustment Calculator, and Redstone by Bradford Technologies. The majority of respondents said they use a combination of various tools and methods, such as paired sales analysis.

We’ve included “paired sales/matched pair analysis” in the list as well, even though it’s a method rather than a digital or appraisal software tool, because it was mentioned by so many appraisers.

A few sample appraiser comments:

“I am capable of determining the adjustments without any software. I look at the MLS data and am able to determine appropriate adjustments. I would need to know all of the assumptions the software takes into consideration before I would trust the adjustment with my signature.”

“I use Synapse by Spark for typical property adjustments and Solomon for more complex properties.”

In addition to the top answers, we received many other write-in responses. Sample responses:

Allocation method

Depreciation

Cost to build

Sample appraiser comments

“Due to rural location, there are no algorithmic tools to be utilized for adjustment data. I utilize paired and grouped data analysis and experience and knowledge.”

To read more, Click Here

My comments: Short, well written, and Very Interesting, especially the appraiser’s comments! I quit doing adjustments a while ago. I always do market conditions adjustments (or explain why not) and for views and other factors that significantly add to value.

I have never used any of the appraisal software listed above. I use Excel and MLS data. I often go back in time for comps with views, etc. I also interview agents to see what they say. Not for a number, but about marketability.

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NOTE: Please scroll down to read the other topics in this long blog post on Geographic Data and Comps, effect of renovation on value, very low foreclosures now, current real estate market, unusual homes, mortgage origination stats, etc.

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Basement Issues and Values

Understanding Basement Contributory Value

By Jo Traut

Excerpts: Determining how a basement contributes to a residential property’s value requires an appraiser to determine what type of basement the home has, its level of finishing, and take into account common concerns, like evidence of mold or signs of structural concern.

By following best practices, including separating the basement from the above-grade finished area, understanding the intended use of the space, and completing comprehensive research, you can evaluate the basement’s contributory value more accurately.

Topics

  • Know your basic basement types
  • How is the basement finished? Determining levels
  • Best practices when appraising a basement
  • Know the intended use and client requirements
  • Common problems in basements
  • Environmental hazards: One of the most significant issues appraisers run into is mold.

To read more, Click Here

My comments: This is one of the best discussions of basements I have read. It is worth reading. In my area, there are few fully underground basements, as we have a mild climate. Most homes were built prior to 1930, and there are many types of “basements.” They are not easy to determine added value, if any. I research, check with agents, check permit histories, try to get comps with the same type of basement, etc. The type and level of finish are critical.

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NOTE: Please scroll down to read the other topics in this long blog post on non-lender appraisals and diversification of your appraisal business, home insurance problems affecting values, unusual homes, mortgage origination stats, etc.

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Non-Arms Length Sales for Appraisers

What Does Arm’s Length Mean in Real Estate?

The 7 Sale Types Explained

Excerpts: An arm’s length sale – a sale in which the buyers and sellers act independently and in their own self-interest is the most common type of real estate transaction. However, there are six other types of real estate transactions that you need to know about so you can specify these sale types in your appraisal report as they can affect the market value of the property.

A non-arm’s length sale in real estate is a transaction between a seller and buyer who have a connection by marriage, family, work, etc. Because of their relationship, each party may not be acting in their own best interests. Therefore, the final price may not reflect the market value of the property.

The type of sale can provide some clarity into whether the transaction was (or currently is) an arm’s length transaction, whether a comparable sale should be used, or whether an adjustment is warranted for the terms of sale for a comparable. By knowing the type of sale, you are better able to reconcile a current opinion of market value that falls above or below a current or recent transaction for the subject property.

For appraisals required to be Uniform Appraisal Dataset (UAD) compliant, you must indicate the type of sale for the transaction. You may report any other relevant information regarding the sale type in the appraisal report, including whether more than one sale type applies.

Non-arms length sales include: REO, Foreclosure, short sale, court ordered sale, estate sale and relocation sale.

To read more, Click Here

My comments: We all see comps that seem to sell below market. This post’s information can be very helpful in explaining why. It’s a good discussion of this topic.

I have done a lot of estate appraisals. Some estate sales occur when the beneficiaries just want to get rid of the property and don’t want to fix it up for sale. I always tell them that the sales price will be reduced.

I have also done many relocation appraisals, done before the home is listed. You are “graded” on how close you come to the sales price. I sometimes see low sales for various reasons.

What should appraisers look for in a sales contract?

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NOTE: Please scroll down to read the other topics in this long blog post on agent concessions, History of appraisal bias back to 1930s, “one mile” rule and bias, unusual homes, mortgage origination stats, etc.

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How To Appraise Rural Properties

How To Appraise Rural Properties

Excerpts: Appraising residential properties in rural areas can be both challenging and rewarding. Unlike the standardized expectations of urban and suburban properties, rural properties often present unique characteristics that require a nuanced approach to valuation. Whether you’re a seasoned appraiser or new to the field, having a better understanding of rural properties is essential for providing credible appraisals. In this guide, we’ll explore what defines a rural property, the challenges appraisers face, reasons for conducting rural appraisals, strategies for finding comparables, and tips for writing a compliant appraisal report.

  • Defining rural properties – USDA and GSEs
  • Challenges of appraising rural properties
  • Appraising rural properties presents unique challenges due to their diverse characteristics and market dynamics.

Topics include:

  • Diverse property types and uses
  • Unique property characteristics
  • Limited market activity and more
  • Writing your rural property appraisal report – good ideas

To read more, click here

My comments: Worth reading, if only to find out about rural appraising. Well written. There are relatively few residential lender appraisals available now. This is an excellent diversification opportunity, with little competition from other appraisers or the GSEs use of other ways to get a value without human appraisers.

What if there are few rural areas near you?

You can expand your area to include rural appraisals to get more business.

When I worked for a northern California assessor’s office with rural areas I learned a lot about almond growing (the main crop) and other ag topics. It is not hard to learn the valuation factors. I had niece who had several horses for many years where she lived. There are equestrian facilities within 5 miles from my house in Oakland hills and in farther out Bay Area cities with larger lots. You may have some similar rural experience now!

The American Society of Farm Managers and Rural Appraisers www.asfmra.org has a specialty in Rural Appraising, but it requires a Certified General. There may be seminars available. Another reason for upgrading!

Urban, Suburban, Rural in Appraisals

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 USPAP and Personal Inspection, GSE Appraisal Modernization, Transaction costs and values including real estate commissions, 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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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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