Appraisal News and Business Tips

Posts Tagged appraisal

VA wants fee appraisers!!

VA is A Most Excellent Appraisal Client!!
VA is one of the last lender clients that pays C/R fees with no bidding. Increasingly, even direct lenders are asking for bids, or just cutting appraisal fees.
What is most important to me is that, in direct contrast with most AMCs, VA considers its fee appraisers to be professionals.
You can apply for the VA panel without reading this article, but I have lots of “insider tips” that makes it much easier.
Applying for the VA panel is not like AMCs, other lender clients or FHA. There are specific requirements, such as three reference letters, two of them from appraisers.
There are lots of tips in this article such as:
– How long does it take to get on the panel?
– Sample phrases for reference letters (3 are required)
– Tips on getting on the panel
– Who does the reviews?
Published in the June 2014 issue of the paid Appraisal Today.
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Second unit or accessory dwelling?

Source: www.sacramentoappraisalblog.com  – Ryan Lindquist
Note: Ryan’s blog postings are written for home owners in his area, but are often helpful for appraisers also.

Excerpts:

Is it a second unit or an accessory dwelling? How do you know the difference? If the post office gives the second structure an address, that makes it a second unit, right? Or if the dwellings are separately metered, it must mean there are two units. Let’s talk through some distinctions below, and then discuss a bit of a “monkey wrench” since there is an added subjective layer when making this call.

The Short Answer: A second unit and an accessory dwelling might look like the same thing to a casual observer, but what matters most in determining whether a structure is a second unit or accessory dwelling is what zoning allows and whether the market perceives the structure as a second unit or not. The post office might have a separate address for an accessory dwelling, but that does not make it a legal and legitimate second unit. The utility company might have two meters on site also, but even that does not mean there are two units. The key comes down to the property being legal as two units in the eyes of the city or county, recognized by the market as a second unit, and even how the dwelling contributes to value.

The Monkey Wrench: Part of determining whether something is an accessory dwelling or second unit comes down to its contributory value, and the appraiser is really going to have to give this some thought…

My comment: I’m working on an appraisal of a property that has two legal homes on one lot. The front house is 2 bedroom/1 bath 1,500 sq.ft. The rear house is 2 bedroom/1 bath 1,000 sq.ft. In my city, most detached units are small “cottages” behind much larger homes and are marketed as homes with an extra unit and as duplexes. Most sell as homes with a small rear unit. Of course, when I got to the property, I found out the rear unit was much larger than the typical rear cottage!! Our market is very, very strong with a shortage of inventory. Many buyers are priced out of the sfr market and are looking at properties with 2 units, but they want a unit with at least 3 bedrooms for owner occupancy. I am still trying to figure out how my subject fits into this market as the front unit lacks a third bedroom, but does have a small room that could be used as a child’s bedroom. I am interviewing lots of agents and going on the weekly open home caravan looking at listings. Fortunately, this is not for a lender so I can take extra time to figure it out!!

http://sacramentoappraisalblog.com/2014/06/17/is-it-a-second-unit-or-an-accessory-dwelling/

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Very, very funny appraisal video!!

I just kept smiling and laughing!! Definitely one of the best, if not The Best, and Most Original, humorous appraisal video I have ever seen!!

Videos by Gary F. Kristensen, A Quality Appraisal, www.aqualityappraisal.com

“Thrift Shop” parody called “Portland Appraiser Shop.”  Lotsa comments!! What’s your favorite “Scene”? Mine is what he does with his comp printouts!!!!

Check out their other videos at their YouTube Channel

If you have a link you like, send it to me. You may see your name in this email sent to almost 14,000 appraisers!! Just hit the reply button.

This is an excerpt from my FREE appraiser email newsletters. To get the full newsletters, go to www.appraisaltoday.com and enter your email address in the left side of the Big Yellow Box!!

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How to use Google addresses in your appraisals!!

How to use Google addresses in your appraisals!!

Google’s Street View is doing photos all over the world!!

I used to spend a lot of time doing preliminary research on an appraisal by looking up property data on public records. Now, I just google the address!! Google provides a front photo and the search often includes other services such as zillow and trulia that provide public records data.

Someone calls or emails you about an appraisal. Hopefully, you check out the property before you decide whether or not you want to do the appraisal and decide your fee. Just google the address!! You can do it in your car with your smart phone.

Do you ever get back to the office and notice that your comp photo doesn’t match the MLS photo or, more likely, you are not sure you are selecting the correct photo?
You sometimes can also zoom in on google photos to check the address of a property.

Living in a rural area? Keep a lookout for a Google car,motorcyle,bicycle,camel,?? They seem to be everywhere!!! Or, just check out your relatives’-friends’-ex’s-child hood homes. It is endless!!

Click here to see where Google is now, has been, and where it is going?
https://support.google.com/maps/answer/68384?hl=en

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The Big Issue for Appraisal Fees – Consumers are paying more for appraisals if AMCs are used

The Big Issue for Appraisal Fees (if you want to get higher fees) – Consumers are paying more for appraisals if AMCs are used

There is only one relevant consumer issue: they are paying more for appraisals since AMCs took over.

They just want to get their loan. Why would they care about the appraiser? Plus, much more complicated issues such as Dodd Frankenstein, AMCs, etc. etc. are very difficult to understand for consumers. Lenders don’t care. They just want to pass their regulatory audits and sell their loans to investors.

I have no idea why appraisers don’t promote this simple message.

You could change the pitch to all consumers in the U.S. : “Why have borrower’s appraisal fees gone up?” Nobody cares about what appraisers are paid, except appraisers and a few others. Everybody, including appraisers, does not want to pay for inflated appraisal costs.

But, for appraisers, AMCs are a much easier target. AMCs work for lenders and do what they want.

I have been hearing that a few direct local lenders have started changing their fees up and down depending on the market. I don’t know why they hardly ever changed their fees before.

FYI, before licensing and mortgage brokers, lenders managed their own appraisal departments but didn’t change fees much and there was no or little bidding (residential) – since the 1930’s, when lender regulators started requiring appraisals and American appraising took off.

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What are customary fees?

I don’t know. AMCs have about 80% of the market. What is left for lender fees? VA (doesn’t change fees very often) and direct lenders are dropping fees.

What about non-lender fees? With borrowers paying lots more for appraisals, I keep increasing my fees to well over customary lender appraisal fees. They are still less than what borrowers are paying.

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Video – AMCs – fees, blacklists, etc.

The topics include:
– Major restructuring of residential lender fees since HVCC
– AMC fees and how to make more money
– Consolidation and what it means for appraisers
– What is an AMC
– AMCs since 1969, when LSI started
Note: the fee discussions start at about 14 minutes

I have been writing about AMCs since 1992 in my paid Appraisal Today newsletter. My speaking style is much more informal than my writing style ;>

Phil Crawford, the host, is a certified general appraiser who has been appraising (residential and commercial) for over 15 years. He is a third generation appraiser. He has been doing interviews on a local Cincinnati real estate radio show for a few years. We are a good match!!

To see other radio shows, go to www.voiceofappraisal.com

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My first interview was in April, on Fannie Mae’s exclusionary list. To listen to this interview, and listen to the other shows, go to www.voiceofappraisal.com and scroll down the page to the video “E3: The Fannie Mae List!!”

Topics included:
– Why Fannie is using UAD data
– Fannie and Big Data
– How appraisers get on the black list
– Which appraisers are getting on the black list
– The future of Fannie’s Big Data

10 reasons why public records and the appraiser’s square footage can differ

My comment: Too many AMCs think that the assessor’s office square footages are correct, and the appraisers don’t know how to measure. Unfortunately, some appraisers just “fudge” the measurements to fit the assessor’s records. Big Mistake!!

From Ryan Lundquist’s Sacramento appraisal blog at www.sacramentoappraisalblog.com

I love this blog!!

Here are 2 of the 10 reasons:

5. Permitted but not updated: Sometimes a home owner will do an addition with a permit, but the Assessor’s office never updates the property’s profile.

8. Ceiling height: A ceiling has to be at least 7 ft tall, and have at least 50% of the ceiling at a height of 7 ft. Sometimes a converted attic won’t meet these requirements, so the appraiser cannot consider it as square footage. It might still add value, but it won’t be included in the living area.

Click here to go directly to this blog posting

http://sacramentoappraisalblog.com/2014/04/29/10-reasons-why-public-records-and-the-appraisers-square-footage-can-differ/

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Changes to Fannie's Selling Guide dated April 15, 2014

Fannie’s Selling Guide, which includes appraisal guidelines has been updated.

Be sure to use the new Selling Guide to find out what Fannie really says vs. what your client thinks Fannie says!!

Summary of appraisal changes

New or Updated Policies
Chapter B4

Some of the new requirements/changes:

Added the requirement that a front photograph of the subject must be taken when completing the Appraisal Update portion of the Appraisal Update and/or Completion Report (Form 1004D) to validate that the appraiser has inspected at least the exterior of the property when he or she performed the
appraisal update.

Unpermitted additions
If the appraiser identifies an addition(s) that does not have
the required permit, the appraiser must comment on the quality and appearance of the work and its impact, if any, on the market value of the subject property.

Older Comparable sales
Revised the policy by removing the requirement that an explanation is required when using a comparable sale that is older than six months

Provided an example to illustrate that in some instances it
may be appropriate to use older sales with proper time
adjustments rather than a dissimilar more recent sale.
An older sale may be more appropriate in situations when
market conditions have impacted the availability of recent
sales as long as the appraisal reflects the changing market
conditions.

Information related to Fannie Mae’s acceptance of unique
property types has been provided.

The definition/characteristics and the eligibility of an
accessory dwelling unit have been provided.

Be sure to use the new Selling Guide to find out what Fannie really says vs. what your client thinks Fannie says!!

Link to summary:
https://www.fanniemae.com/content/announcement/sel1403.pdf

Link to new Web based documents:
https://www.fanniemae.com/content/guide/selling/index.html

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7 most expensive homes in the world

7. THE PENTHOUSE, ONE HYDE PARK, LONDON – $220,000,000
4. THE WHITE HOUSE – $320,364,354
1. BUCKINGHAM PALACE – $1,560,000,000

Lots of ads but worth checking out!! Click on the small numbers 1-7 on the upper right to avoid ads. Also check out how the got the prices for the homes!!

http://capitalismisfreedom.com/7-expensive-homes-world/

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Japan's disposable homes

During my morning walks, I listen to podcasts. One of my favorites is Freakonomics Radio (Yes, the same guys that wrote the book)
I recently listed to a podcast where they analyzed Japan’s very unusual home sale market. They consider many homes to last about 20 years (economic life) and then they are demolished and new homes built.
A few excerpts from the summary of the podcast:
It turns out that half of all homes in Japan are demolished within 38 years – compared to 100 years in the U.S.  There is virtually no market for pre-owned homes in Japan, and 60 percent of all homes were built after 1980. In Yoshida’s estimation, while land continues to hold value, physical homes become worthless within 30 years. Other studies have shown this to happen in as little as 15 years.
In the podcast, we look into several factors that conspire to produce this strange scenario. They include: economics, culture, World War II, and seismic activity.
Richard Koo, chief economist at the Nomura Research Institute, has argued in a paper called “Obstacles to Affluence: Thoughts on Japanese Housing” that whatever the rationale behind the disposable-home situation, the outcome isn’t desirable…
My comment: Fascinating and worth listening to!! Very interesting for appraisers, especially.

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