Appraisal News and Business Tips

Posts Tagged appraisal

FHA – Crawl space and attics

Crawl space and attics
Random Internet postings….
Man killed in crawlspace of Oklahoma City home, may have been electrocuted
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Posted on facebook, reportedly from FHA employees:
– If you can fit through the crawlspace door you must crawl the crawl space and inspect it all.
– Must inspect all the attic if there is access, even if there is no flooring.
My comment: If you’re fat, don’t have to inspect all of the crawlspace? Lots of stories about snakes, rats, dead animals, etc etc in crawl spaces. Appraisers crawling along ceiling joists and going thru the ceiling. Hmm… maybe FHA appraising is for the young, agile and small ;>

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Amazon and AMCs

Amazon and AMCs
You may, or may not, have heard about Amazon’s attitude towards employees – expected to be available 24×7, including holidays, significant health and family problems, etc. I don’t know if this is a bad way to run a company, but they do pay well and it is not bureaucratic. Demanding a lot of employees is not unusual for a tech company also. I do know that many other companies expect their employees to be available on weekends and evenings for emails.
But, I keep hearing from fee appraisers working for AMCs that they are expected to be available 24×7, including holidays. Phones and emails are sent at all times of the day. A quick response is expected. Cell phones ring on weekends and all times of the day and night. Appraisers have difficulty shutting off their phones and/or refuse to buy another phone for personal calls so they can shut off their only cell phone.
But… AMCs don’t pay well and have increasing Scope Creep, as compared with other clients. Why do appraisers put up with this treatment? Low self-esteem (no one else will give them work) or fear of having no business (common with self employed people)?

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The Power of Social Media and Appraisers

A few months ago, an AMC sent out an email to all their appraisers saying it was requiring that they include a copy of their work file with the appraisal.
Within a very short period of time after it was sent, I saw the email posted to a Facebook group. There were 356 comments posted. It soon “went viral” spreading all over the Internet. The AMC backed down.
Within the past week, another AMC sent a very rude email response to an appraiser who declined applying for a staff position at the AMC. I saw it posted on a Facebook group. It also went somewhat viral, although not as widely distributed as the workfile email.
Read more, including the original email, in the very interesting Jonathon Miller’s Housing Notes – August 21 edition.
Click here – it is near the bottom of the page.
What does this mean? In the pre-Internet days, often it would take weeks, or months, for appraisers to find out about FHA and Fannie changes, for example. Now it is available within a few minutes.
What’s the downside for appraisers? Even if you post to a group that requires approval, your postings can be obtained by others. Group members can send them to anyone. This is a definite problem if do court testimony. A while ago an attorney asked me how many appraisals I had done in the past 6 months as I had a broken ankle. How did she know about my ankle? She did not subscribe to the email-only discussion group. She asked another appraiser to check online for anything that might help her case. Other appraisers have reported similar situations.
Remember the Primary Rule, which I learned when I first browser opened the Internet to us all. At that time you assumed it could be published on the front page of the New York Times, Wall Street Journal, etc. Now, it is even worse – it can go all over the Internet. The only communication that I know of that is private is the inside of postal mail envelopes. Government agencies can track what is on the outside, but not the inside without a special court order.

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Facing AMC License Denial, Coester Sues Virginia Board

 

Facing AMC License Denial, Coester Sues Virginia Board
by Isaac Peck, Editor, WorkingRE
Excerpt:
Facing denial of its license to operate an appraisal management company (AMC) in the state of Virginia, the AMC Coester VMS has filed a lawsuit against the Virginia Real Estate Appraiser Board alleging that the Board is engaged in “a conspiracy to restrain and monopolize trade” and is operating in violation of federal antitrust laws.
The suit follows Virginia’s recently passed AMC licensing laws, which set an August 18 deadline for applicants to obtain AMC licensure or cease operations in the state. The Board has issued dozens of AMC licenses but selected Coester for closer examination. On July 15, Coester attended an informal fact-finding conference and addressed several of the Board’s concerns, including Coester’s history of consent orders and settlement agreements in five other states, for alleged violations of state laws: Maryland, North Carolina, Tennessee, Louisiana, and Minnesota. The allegations against Coester in these states include: unlicensed AMC activity, false advertising, failure to pay appraisers on time, failure to pay customary and reasonable fees, failure to respond to requests within the time period specified, failure to submit biannual certification, as well as USPAP violations committed by Brian Coester himself.
Read lots more, and get links to the docouments at:
For lots more info on Coester, just google Coester AMC or brian coester appraiser
My comment: Looks like various state appraisal boards are looking closer at AMCs. Coester recently got into a tiff with the Louisiana State Board, which was resolved. I am so glad California has never had an appraisal board!! (Gov.  Schwartzenegger wanted to cut costs back then.) Too many possible conflicts of interest… The issues seems to be mostly about fees. I am also not comfortable about appraisal state boards regulating appraisal fees. They should focus on what is important – USPAP.

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FHA new manual 9/15/15 – no changes or USPAP problems?

FHA says no significant changes from previous requirements
My comment: I have heard from knowledgeable appraisers and instructors that there are few changes from the old handbook.
Recent posting by Coleen Morrison on a Facebook group
I heard back from my contact at HUD, and here is what she said: “Ms. Conde [the author of the article] (Ed note: see below) and I have had multiple conversations. FHA has not changed any of its requirements regarding the items that she discusses. If an FHA appraiser was compliant prior to September 14, the appraiser is going to be compliant after. The language has changed a bit, mostly for clarity and format, but the requirements are the same.”
I have written back and asked specifically about their thoughts regarding the Competency Rule. I have been saying the same thing … that nothing has really changed… but I never thought about the Competency Rule. It seems very contradictory when the HUD manual states the appraisal is not to be considered a home inspection;
The handbook states: “FHA appraisals are not a guarantee that the property is free from defects. The appraisal establishes the value of the property for mortgage insurance purposes only. Buyers need to secure their own home inspections through the services of a qualified inspector and satisfy themselves about the condition of the property.”
Adding the statement from the manual into your appraisals, and referencing Assumption and Limiting Condition #5 are 2 steps you can take to help protect yourself. I don’t know how much of a fight we can have against HUD, so if you choose to do FHA appraisals, and you were not doing the extent of inspection which is very clear in the 4001 now, you will need to step it up; add what the HUD manual states above in big bold letters to your report; or choose not to do FHA appraisals. The ultimate choice is yours.
My comment: I quit doing FHA appraisals in 1988, after 2 years on the roster. Too many requirements as compared with conventional. Plus… our local property values had skyrocketed way above the FHA limits… not much work.
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FHA vs USPAP – Appraisers Caught in Catch 22
By Joanne Conde
Excerpts:
The new FHA Handbook will become effective on September 14, 2015. There has been much discussion of the implications of changing “should” to “must” in thousands of examples in the Handbook. As a Board member of the Arizona Association of Real Estate Appraisers as well as being on the FHA Roster, I have taken a good hard look at these requirements and then, it hit me as I was teaching the Uniform Standards of Professional Appraisal Practice (USPAP) which is the basis of appraisal standards for every appraiser in the United States. The FHA assignment conditions, whether under “should” to “must” force appraisers into a Catch 22 or turn down the FHA appraisal assignments. FHA is essentially making it a condition of employment that appraisers violate the Competency Rule. Why did I not see this before? I guess because the two never converged in my mind at the same time and I expect that is what has also happened to other appraisers.
It is an FHA assignment condition that appraisers make the following statement within the report: “The utilities were on and functioning at the time of inspection and the home meets 4150.2 & 4905.1 HUD Requirements,” and “Other intended users[of the report] are HUD/FHA.”
Click here to read more and read appraisers’ comments

Are you or your firm planning on any hiring trainees within the next 5 years?

Are you or your firm planning on any hiring trainees within the next 5 years?

 

My comment: I wonder what the response would be if lenders allowed trainees to sign on their own… remember the mortgage broker days? I sure wish there was a survey on trainee commercial appraisers as I see lots of them where I am. I am hearing that it is back to the “old days” when fee appraisers only hired relatives (because most appraisers were staff appraisers at lenders).

 

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21 Reasons Why Corner Lots Are For Suckers

 

 

Excerpt:

1. Noise, noise, noise. Double street and sidewalk frontage means double the noise from pedestrian and car traffic. Pull up a chair and crack open a cold one; I’m just gettin’ started.

2. Unconventional configurations. For example, the front yard of a home on a corner lot is usually bigger than the back, and the garage may be located around the corner.

My comment: I have always wondered why there was a checkbox on the 1004 for corner lot… a mystery to me;> Maybe it was a factor in the 1960s/1970s, when the first forms were developed and used. Maybe it has been taken off some of the forms…

Click here to see the other 19 reasons!!

http://time.com/money/3980951/corner-lots-are-for-suckers

 

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AMC/lender now accepts trainees signing on appraisal reports

Be sure to check your state’s requirements, as they vary widely among the states.

This is the first one I know of. Maybe they have been reading my free emails where I suggest this is the only solution to the appraiser shortage, now and in the future, that can start immediately. FYI, Red Sky is owned/affilated with U.S. Bank

Excerpts from an email (Appraiser Partner News) sent to appraisers on its panel June 11, 2015

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Supervisory Appraiser Change

Upon review, Red Sky Risk Services, LLC has refined its expectations regarding the involvement of appraiser trainees. Important to note, the following change DOES NOT override specific state statute(s) or appraiser training requirements.

Effective immediately, Red Sky is no longer requiring supervisory appraisers to be physically present with trainee appraisers at all subject property inspections and driving comparable sales.

My comment: There is a short additional list of specific requirements. But, they are nothing new – Supervisor to review report, responsible for report, etc.

 

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Are You a Tier 1 or Tier 2 Appraiser?

by Richard Hagar, SRA

Excerpt:

Nordstrom or Walmart? Mercedes or Yugo? Are you a Tier 1 or Tier 2 appraiser? Appraisers have two different business models to choose from.

I have seen that many lenders classify appraisers into two or three different tiers based on their perception of the quality of your product. Which tier are you? The amount of business you have and the amount you are paid is very likely based on how lenders classify you.

There is a lot of appraisal business right now and lenders are begging for high-quality appraisals. Many firms are buried in business, quoting three-plus weeks out in turn time, with high fees; here in the Northwest we are earning $550 for a standard home. If your company is not busy or you are making far less than this, here are some tips.

My comment: Appraiser tiers have been around for a long time. They were used when I started my appraisal business in 1986. In the past, they were referred to as “preferred” or “private banking”, etc. Prior to HVCC they were often used for high dollar properties. After HVCC, lenders placed the appraisal orders directly, not through AMCs they used.

Read the full article. Worth reading!!

http://www.workingre.com/tier-1-tier-2-appraiser/

 

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Appraiser shortage – for AMCs (Appraisal Management Companies), not other clients

Appraiser shortage – for AMCs, not other clients

There is a significant shortage of appraisers willing to work for AMCs with low fees and escalating Scope Creep.

AMCs whose business model is based on low fees to appraisers are having difficulty finding anyone willing to accept their appraisals. They keep calling and calling trying to find someone to work for their low fees.

Direct lenders or the few “good” AMCs are not experiencing an appraiser shortage. Appraisers who work for them turn down AMC work.

 

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