Paperless Appraisal Office?

By on May 31, 2024   /   appraisal how to, bias, HOME INSURANCE, liability   /   Leave a comment
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10 Steps to a Paperless Office

By Mike Fletcher

Excerpts: If you’ve talked to appraisers who have gone digital, you know they love not having boxes of old reports and workfiles cluttering their offices, homes, and garages and not spending money on paper, toner, and other equipment. Even better, appraisers who run a paperless office often enjoy increased productivity and efficiency.

If you’re ready to enjoy the benefits of getting rid of paper, I’m sharing 10 steps to switch to a completely paperless office. While you may need to tailor this blueprint to your preferred methods and workflows, this will help you get started.

Summary

Switching to digital files and a paperless office saves you time and offers better protection for your files. Making the shift to get rid of printed documents and handwritten notes isn’t easy at first, but by going one step at a time and relying on your appraisal software’s tools, you’ll be paperless in no time.

Topics with detailed and practical advice:

1. Why do you want a paperless office?

2. Commit to change – Be aware of wanting to stay in the familiar

3. Identify your paper and how to go paperless

4. Obtain needed equipment for your paperless office

5. Determine your storage needs in a paperless office

6. Establish a new workflow in your paperless office

7. Going paperless starts small

8. Add another paperless item

9. Get trained

10. Seek out your peers

To read more, Click Here

My comments: What appraiser does not want to go paperless? No one. Read this article with lots of good advice!

Business is slow for many appraisers. Going paperless is an excellent option to consider.

This is by far the best article I have read on going paperless. It is written for appraisers, is understandable, and is not too long. The author is a veteran residential appraiser and self-proclaimed “Data Nerd.” He is currently a Senior Data Steward at Corelogic.

I have a home garage and business office full of appraisal files, plus my business records for taxes. I keep hoping someone will come in and steal all the paper and the filing cabinets

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How to Find Comps With Few Sales

By on February 23, 2024   /   appraisal, bias, Fannie   /   Leave a comment
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The challenge of pulling comps in 2024

By Ryan Lundquist

February 14, 2024

Excerpts: Pulling comps in 2024 is tough. Think about it this way. If we have 40% fewer sales happening, that means there are 40% fewer comps. Yikes. Let’s talk about this. I also have some market recap visuals to unpack what’s been happening in 2024 so far.

GO BACK FURTHER IN TIME:

One of the things I’m doing more often today is looking at older comps in the immediate neighborhood. I find myself scouring 2021 onward especially. The truth is there are portions of 2021 and 2022 where prices are exactly the same as today too, so if I use an older comp, I don’t always need to adjust for the way the market has changed. But backing up, I can look at older stuff for the sake of research, but this doesn’t mean I’ll use a super old comp in a report. In short, it’s not enough today to go back 90-180 days because there just aren’t enough data points in so many cases…

WATCH THE MEDIAN TREND

The median price for the region doesn’t translate rigidly to neighborhoods, so be careful about saying stuff like, “The median is up 3% this year, so neighborhood prices are up 3%.” Maybe. Maybe not. Look to the comps most of all. In my experience, some people get really upset when I share median trends because the sentiment is the median isn’t a perfect metric (true)…

EXPAND TO OTHER NEIGHBORHOODS:

Looking up other nearby neighborhoods is something I’ve done much more of lately since sales volume has plummeted. The ideal is to compare areas with similar prices, but even if the price point is a bit different, it can be valuable to see what is happening in a different nearby neighborhood. I may or may not use comps from a different neighborhood. I’m just trying to understand what the market is doing…

To read more and see the graphs with excellent illustrations, Click Here

My comments: Very good tips from Ryan. Market conditions is the easiest adjustment to make. This is my first choice for any unusual homes without current data in any market. I quit making dollar adjustments on form appraisals many years ago, but I always do market conditions adjustments when needed. I appraise a lot of 2-4 units and regularly go to other neighborhoods for comps.

I have been doing this for many years. I do a lot of estate appraisals, which are not current value.

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2024 Updated UAD and URAR – What does It Mean for You?

By on February 2, 2024   /   appraisal, Economic analysis, forecast, real estate market   /   Leave a comment
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2024 Updated UAD and URAR – What does It Mean for You?
The Appraisal World Is Changing

January 25, 2024

Excerpts: There has been a lot of talk about the Uniform Appraisal Dataset (UAD) and Uniform Residential Appraisal Report (URAR) redesign initiative, and how it will make life easier for appraisers. What exactly does this mean? In this post, we’re providing an overview of the UAD and URAR, what’s changing, and what benefits these changes will bring.

How will these UAD and URAR changes be beneficial?

A redesigned, dynamic URAR will replace the numerous and separate appraisal forms and can be used for different property types, such as two-to-four units, condominiums, and manufactured homes, and for different scopes of work, such as interior and exterior inspections, updates, and completion assignments.

The new URAR will be better organized and populated based on the property type and characteristics.

The standardized data in the new UAD will allow appraisers to better define the property (outbuildings, additional units, site influences, energy efficient and green features, etc.).

Concerns that require attention will be easily identified in each section of the report instead of being buried in an addendum.

Photographs will be included in relevant sections to make descriptions easier for appraisers and enhance reader understanding.

To read more, Click Here

My comments: A brief summary of the coming changes. See below for more timeline information.

———————-

Freddie – Updated UAD and Forms Redesign Timeline

The Uniform Appraisal Dataset (UAD) and Forms Redesign team has released an updated timeline. The overall timeline has not changed; however, we wanted to provide the industry with more milestone details to help in development, testing and training to prepare for the new UAD and Uniform Residential Appraisal Report (URAR).

To see the timeline (from 2018 to 2026) PDF, Click Here

Too large to include in this newsletter.

To go to the Freddie UAD page (mostly technical) Click Here

To go to the Fannie UAD page, Click Here

——————–

A few comments from Dave Towne:

My concern at this point is ‘training’ materials will be available in Q4 2024, but actual implementation of the ‘new reporting process’ won’t begin until Q3 2025 with limited production, into 2026.

As someone who’s potentially interested in ‘training’ appraisers on the new process, it seems to me that providing training in Q2 2025 would be more appropriate than 6 months before. But we’ll have to see how things progress as this time-line gets more firmed up.

To read the recent appraisersblogs.com post with new comments from Dave plus other appraiser comments, Click Here

My comments: No date changes, but more information on the timeline. Maybe there will be some appraisers left to do full appraisals…

The UAD and Appraisers – Past, Present, and Future

5-24-18 Newz//UAD and Fannie Form Changes. Floating Island. Refis dropping

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New 2024 USPAP Q&As

By on January 26, 2024   /   appraisal, forecast, future, Mortgage applications, mortgage loan volume   /   Leave a comment
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New USPAP Q&As

January 16, 2024, the Appraisal Standards Board released new Questions and Answers covering important topics in the profession today including:

Demographics

Does demographic information relating to race (such as Census data) constitute “information relating to” a protected characteristic?

Artificial Intelligence

Question:

What is an appraiser’s USPAP obligations when using artificial intelligence (AI) in an appraisal assignment?

Personal Inspection

I recently completed an appraisal on a residential dwelling for Lender A that sells loans to Fannie Mae and Freddie Mac and the report was completed on a GSE form. Lender A decided not to grant the loan and the borrower then engaged Lender B to obtain financing. Lender B engaged me to perform a new appraisal assignment on the same property. Lender B indicated there wasno need for me to re-inspect the home, since my previous inspection date was only a few days earlier.

To read these new Q&As Click Here.

My comments: AI and demographics are “hot topics” now. I am glad the ASB is explaining them.

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ChatGPT for Appraisers

By on August 13, 2023   /   appraisal business, appraisal how to, bias, liability   /   Leave a comment
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ChatGPT: Valuable Tool or a Replacement for Real Estate Appraisers?

by Dustin Harris, The Appraiser Coach

Excerpts: ChatGPT: A Game-Changer for Appraisal Work

For those who have embraced it, ChatGPT has been transforming multiple aspects of appraisal work, such as:

Appraisal Work:

  • Writing narrative
  • Market analysis
  • Market-specific information
  • Descriptions of adjustments
  • Terminology
  • ResearchMarketing:
  • Creating lists
  •  Writing emails and messages to current and potential clients
  • Crafting blogs
  • Strategizing networking and relationship development
  • Writing presentations for ‘lunch and learn’ events with real estate agents
  • Crafting the perfect apology letter when you upset a key loan officer in your small town
  • To read lots more, click here
  • My comments: Many thanks to Dustin for writing this article! I have not had time to use it, but have been reading and watching demos about how it can be used for appraisers for awhile. It definitely can be very useful, as Dustin explains. It can be tricky at first to use, but Dustin explains it.

I recently had to renew my California Driver’s license, as I am over 70 and had to do a written exam and eye test. I had difficulty setting up an appointment and clicked on “Chatbot”. It was much friendlier than any other Chat support I have used. I recognized the use of software similar to ChatGPT.

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Fannie: Words and Phrases in Appraisals

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Lenders Not Using AMCs for Appraisals

By on July 1, 2023   /   appraisal, appraisal business, Fannie Forms   /   Leave a comment
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Lenders Not Using AMCs for Appraisals

By: McKissock June 23, 2023

Excerpts: Some appraisers seek alternate ways to find work outside of appraisal management companies (AMCs). One strategy is to pursue opportunities to be engaged directly by financial institutions and banks by being included on their fee panel. To help you get started, we asked our appraisal community, “What advice can you offer on how to identify financial institutions and banks that engage appraisers directly, without involving AMCs?” Here’s what they said.

Below are helpful tips on how to find financial institutions and banks that engage appraisers directly on fee panels. In a nutshell, our survey respondents recommended that you should:

  • Look for small, local banks and lenders.
  • Network to build relationships.
  • Join the Mercury Network.
  • Simply ask around!

To read more, click here

My comments: Short and worth reading. When I started fee appraising in 1986, my first client was a small local bank with a few nearby branches. After AMCs took over, the bank continued to do their own appraisal management. Their volume went up and down with mortgage rates, but they always had some appraisals to fee out. Even today, their regular fee appraisers get some work.

More Crazy Appraiser Stories!

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The Power of Praise for Appraisers and Clients 3-24-23

By on April 1, 2023   /   appraisal, appraisal how to, Fannie, lender appraisals, liability, non-lender appraisals   /   Leave a comment
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The Power of Praise

By Rachel Massey, SRA, AI-RRS, CDEI

Excerpts: …I received a really nice compliment from a reviewer with the Farm Credit Bureau. I had completed a complex appraisal assignment and was expecting multiple revision requests, but instead, got a note saying how thorough my appraisal report was and thanking me for the work. A couple days later, I got a call from a relocation company reviewer on another mind-boggling relocation assignment. Again, I was expecting multiple questions about the report since it was complex and atypical for the area. Instead this reviewer proceeded to tell me that it was one of the most detailed and well-developed reports he had seen in all his years reviewing relocation work. Boy I wish I had that one in writing!

Granted, I tend to be a bit verbose because I like to write, and I believe that it is important that my work be understandable, and not just now but in the future. I tend to put a similar amount of effort into the communication side for all clients, and like to think that my work product is solid. This begs the question of why two reviewers went out of their way to compliment my work, when it seems that almost every mortgage assignment that I complete for a production group, comes back with stipulations.

Stipulations that I forgot to add a listing which was a requirement of the engagement agreement (yes, I missed that) or that I didn’t put a sketch of an unfinished basement in the report (yes, I missed that as well). No words of thank you for an otherwise job well done. I missed something, fix it.

To read more, click here

My comments: Rachel is one of my favorite appraisal authors. She has seen all sides of the residential appraisal profession. Rachel has shifted between lender staff appraiser and reviewer and fee appraisals. Currently, she is a reviewer for a large lender. You could send a link to this article to a Very Picky or Very Supportive reviewer.>

Why Appraisers Love Appraising!

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Appraisals – Check the Water Source!

By on June 17, 2022   /   appraisal, liability, real estate market, USPAP   /   Leave a comment
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Excerpt: We continue to see claims alleging that the rural property appraiser failed to adequately identify or report details surrounding a water source. In one claim, the appraiser correctly noted that the property was serviced by a “private water well.” It was later discovered that the well was not located on the property which was appraised. Unfortunately, the well was actually located on an adjacent lot that, at one time, was part of the subject lot prior to the lots being subdivided.

My comments: An appraiser lost a lawsuit because he said the vacant parcel had public water access. It did not even though many lots nearby were developed. Nearby, I noticed a large water tank. It was shared by four nearby homes. This was not in a rural area. I worked for 4 years in rural areas. Water access was critical. If there was no access, trucks had to bring the water.

Appraisers – check the water source!

10-12-17 Newz//FHA-Appraisers responsible for water quality reporting?, Hybrid appraisal survey)

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=========================================

My Comments on Market Changes

My inbox is flooded with news emails about opinions on what is happening now and forecasts for the future. (Most of the information in these newsletters comes from emails. I am on many email lists.) It looks like the change is starting because of increasing mortgage interest rates. I have included some of the articles below.

Fannie and Freddie have long said that they want appraisers to tell them about their markets. Include graphs and charts in your appraisal to show your clients what is happening now and why they need human appraisers.  

It is extremely important for appraisers now to closely track changes in your local markets at least once every day and tell your lender clients about it. When will it affect your market? No one knows if there will be foreclosures or when they will start. The number of potential buyers will decrease as rates go up in many markets.

Segments may be very different from the overall stats. A few examples:

  • Different price ranges – first-time homebuyers, high end
  • New homes – what is happening?
  • Detached vs. townhomes and stacked condos.
  • All cash and investors
  • How many offers
  • No inspections or appraisals?

COMPS ARE THE PAST. YOU MUST KNOW YOUR MARKET TRENDS. TRACK AND GRAPH THE NUMBER OF LISTINGS VS. PENDINGS AND EXPIREDS, DAYS ON THE MARKET, PRICE CHANGES, ETC. 

Today is NOT the same as 2008+, with its massive fraudulent loans made to unqualified buyers. Computer modeling did not predict the 2008 crash. Many were in denial that it was coming and refused to listen to appraisers. We have never seen a pandemic real estate market before. Did anyone think in early 2020 that home values all over the country would go off the charts? No one did. Appraisers wrote up long disclaimers about how they did not know the effects. Some still include them in their appraisal reports today.

Watch the excellent 4-minute video with Mark Zandi, “There’s a comeuppance coming in the housing market”. It discusses how today is different from 2008 and what is happening today. Before becoming the chief economist of Moody’s Analytics, he was a real estate economist. I listened to him for many years about real estate economics. He is very savvy. I agree with what he says about real estate. I am unsure about inflation. To watch the video, click here

I have been writing about these upcoming changes in these newsletters for a while now. Ryan Lundquist writes about this almost every week. He has lots more details and examples of graphs that can help you see what is happening in your market. www.sacramentoappraisalblog.com He writes for the Sacramento, CA market but what he writes is relevant for other markets also.

Two days ago the Fed raised rates by 0.75%. Recession? Lower inflation? Real estate market?

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Appraisers – The Past and The Future

By on April 8, 2022   /   appraisal, appraisal how to, bias, Clubhouse, real estate market   /   Leave a comment
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Appraisers – The Past and The Future

The Path that Brought Us Here

by Richard Hagar, SRA

Excerpts: A wise man by the name of Jim Irish, former chief appraiser for the Federal Reserve Bank out of Topeka, Kansas, once told me something very profound: “The government is rarely proactive but always reactive.” Translation: laws, rules, and guidelines are usually developed after a problem smacks us upside the head. Since hearing this, I have found that it also applies to large enterprises.

Appraisers continued to tell lenders that they drove by each of the comparables used in the report. Years later, when lenders, Fannie Mae, Freddie Mac, FHA, and the VA spot-checked reports, they found out that the condition or location of many comparables didn’t match what was reported. So, the reactive response was to require the appraiser to affirm, under penalty of perjury (which stands to this day), and provide original photographs of each comparable.

Failure to inspect triggered client engagement letters stating the absolute requirement to personally inspect each of the comparables, provide original photographs, and create a system that inspects the photographs and can tell when a photograph is used twice or sourced from the MLS or county—clients know who’s lying to them and fees are lower because of it.

To read more, click here

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Prepare for Change

by Richard Hagar, SRA

Excerpts: In my career, I’ve been through four major changes in the market and our business, so what’s about to happen isn’t my first rodeo. I’m going to point out some things that will make a few people angry. However, I’m trying to help by pointing out how you can become better and profit from the change.

Waivers

Both Fannie Mae and Freddie Mac allow “appraisal waivers” (loans where no appraisal is required), and in the past, waivers were limited to fewer than 5% of the loans they purchased from lenders. However, their waivers have increased to 48% of their loan purchases over the past year. Imagine that 48% of the loans no longer require an inspection or appraisal.

Prior to 2022, Fannie Mae’s UAD system reviewed approximately 20,000 appraisals a day produced by approximately 40,000 appraisers. This indicates that appraisers were providing one appraisal every other day. Now, consider that waivers reduce the rate to an appraisal once every 4 days. Ouch.

To read more, click here

My comments: I have known Richard Hagar for a long time. He can sometimes be negative or even harsh but has good ideas

The future of residential appraising(Opens in a new browser tab)

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Three 2022 Residential Appraisal Forecasts

By on January 7, 2022   /   ANSI, appraisal, Fannie, forecast, UAD   /   Leave a comment
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Three 2022 Residential Appraisal Forecasts

The 20 appraisal events that will surface, occur or continue on into 2022
By Tim Andersen, MAI
Excerpt of three of the Events:
6. So far, appraisers have not organized themselves to fight the bogus bias and discrimination charges against them. Despite the need for such pugilistic organization, however, the status quo won’t change.
9. More and more state appraisal and taxing authorities will recognize Fannie Mae’s move to use the ANSI measurement standards by adopting those standards themselves. While this is likely a positive step, it will result in another level of regulation and standards imposed on appraisers.
10. State appraisal boards will continue their migration toward becoming consumer advocacy agencies; thus, their migration away from their original purpose, the credentialing, educating, and disciplining of real estate appraisers.
Warning: some are very controversial!
To read all 20, click here. I posted this on my blog, so you can make comments!

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