Posts Tagged bias

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, tech forecast, ANSI, bias, AVMs, mortgage origination stats, etc.

Neighborhood Boundaries for Appraisals

By Ann O'Rourke on January 28, 2022 / adjustments, ANSI, appraisal classes, appraisal how to, bias / Leave a comment

Tags: adjustments, ANSI, appraisal how to, bias, Fannie, mortgage lending

Gentrification, neighborhood boundaries, and bias

By Ryan Lundquist

Excerpts: Photo used with permission (thanks, Vicky).

Sometimes, crossing the street can make all the difference for value. In short, if we don’t understand where a neighborhood starts and ends, we might choose the wrong comps.

Q&A #3 How do we know neighborhood boundaries?

Okay, this is a big question, and it could easily be a dissertation. For starters, let’s consider what Fannie Mae says about neighborhoods:

Fannie Mae: “The appraiser should provide an outline of the neighborhood boundaries, which should be clearly delineated using ‘North,’ ‘South’, ‘East,’ and ‘West’. These boundaries may include but are not limited to streets, legally recognized neighborhood boundaries, waterways, or other natural boundaries that define the separation of one neighborhood from another. Appraisers should not reference a map or other addendum as the only example of the neighborhood boundaries.”

Other thoughts (mine): I think sometimes we focus only on major streets, but let’s also consider school boundaries and even how neighborhood associations or city websites define areas. But also, where would residents themselves draw the lines? And where would buyers be hunting for a home before shopping somewhere else? All these things could be clues.

To read more and see lots of maps and graphs, click here

My comments: Excellent analysis of specific neighborhood boundaries with maps and graphs, of course. Worth reading. The Jan. and Feb issues of the monthly Appraisal Today has this article: Does my neighborhood really need to be analyzed? Parts I II By Tim Andersen, MAI. The best neighborhood explanations I have ever read!!

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, ANSI, bias, smells, mortgage origination stats, etc.

Appraisal Completion Certifications – be careful

Desktop appraisals okay for some Fannie Loans March 2022

By Ann O'Rourke on January 21, 2022 / ANSI, appraisal business, appraisal forms, appraisal how to, bias, desktop appraisals, Fannie, liability, square footage / Leave a comment

Tags: ANSI, appraisal business, appraisal how to, bias, desktop appraisals, Fannie, square footage

Desktop appraisals okay for some Fannie Loans March 2022

Fannie announcement – About Desktop Appraisals

Beginning in March 2022, desktop appraisals will be an option for some loan transactions. This fact sheet provides high-level information on Fannie Mae’s requirements for desktop appraisals and answers some frequently asked questions. We’ll be adding information to the fact sheet, such as additional FAQs as needed.

Excerpts:

Use Form 1004 Desktop
Must include floor plan with interior walls.
The appraiser must have sufficient information to develop a credible report.

To read the fact sheet, click here

————-

Desktop Appraisal to Become the New Norm

by Isaac Peck, Editor, WorkingRe

Note: This article was written before the Fannie announcement above.

Excerpts: A number of questions remain regarding how the GSEs will establish the eligibility criteria for what types of loans, transactions, and loan-to-value (LTV) ratios will qualify for these desktop valuations. For example, Thompson’s comments that such a move will provide relief on rural appraisals runs contrary to most conventional appraisal experience in the industry where appraisal waivers, hybrid appraisals, and other “alternative” valuation products have primarily been used in cookie-cutter, tract home neighborhoods where model-match comps are more readily available.

In fact, over the years many senior executives at the GSEs and at major lending institutions have acknowledged the need for traditional appraisals on rural properties—which are much more likely to have unique features and require more complex analysis.

There is also the question of whether the introduction of desktop appraisals will potentially lead to a broader range of alternative appraisal products into the mix. Given that some senior executives at Fannie Mae were predicting that hybrid appraisals would become mainstream by 2022, it is actually a little surprising that desktop appraisal assignments are the first alternative product to get a permanent place on the GSE’s valuation roster. Appraisers will just have to wait to see what the future holds!

To read more, click here

My comment: Interesting and worth reading about the background of Fannie’s change

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, ANSI, Liability, appraisal business, Fannie, How to, mortgage origination stats, etc.

Three 2022 Residential Appraisal Forecasts

By Ann O'Rourke on January 7, 2022 / ANSI, appraisal, Fannie, forecast, UAD / Leave a comment

Tags: ANSI, appraisal, bias, Fannie, forecast

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!

Residential Appraisal Errors

Appraisal Errors from Reviewers and State Boards

By Ann O'Rourke on December 17, 2021 / appraisal, bias, Fannie / Leave a comment

Tags: appraisal, bias, Fannie

25 Common Errors in Appraisal Reports

Excerpts: As a real estate appraiser, much of your success relies on your reputation as a competent professional. Unfortunately, certain appraisal violations are quite common—including errors in appraisal reports. Make sure you’re aware of these mistakes so that you can avoid them. Here’s a compilation of the most common errors and deficiencies found in appraisal reports by reviewers, regulators, and appraisal boards.

Not stating the report option utilized.
Not providing enough analysis for the intended user or reader to understand the report properly.
Inconsistencies between the description of the subject property in the improvements section and the photographs, sketch, sales comparison grid, and other areas in the report.
Inappropriate use of boilerplate commentary in the appraisal report to describe the neighborhood or to explain the reconciliation of the sales comparison approach.
Failure to summarize the support and rationale that supports the highest and best use opinion.
Not complying with the most current USPAP.
Failure to explain the exclusion of the cost and or income approaches.

To read more, click here

My comments: This was originally published by McKissock in 2019 and updated in 2020. We can always use these reminders. We know them, but sometimes forget to do them, update templates, boilerplate, etc.

What is “retirement” for appraisers?Appraisal Business Tips

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on Fannie and ANSI, Fannie news, FHFA and bias, unusual homes, mortgage origination stats, etc.

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

Appraisal vs Zillow vs AVM which is best(Opens in a new browser tab)

Zillow Quits Buying Homes – Their AVM Did Not Work Well!

By Ann O'Rourke on November 12, 2021 / appraisal business, AVMS, bias, zillow / Leave a comment

Tags: appraisal business, bias, zillow

A ‘Fail’ Stamp vector over a white background.

Zillow Quits Buying Homes – AVM Did Not Work Well!!!

Two appraisers comment – Jonathan Miller and Ryan Lundquist

Goodbye Zillow

By Ryan Lundquist

Some of the topics:

Failure despite massive price increases
Zillow losing isn’t about the market
The school of hard knocks
Public perception
Cannot smell the cats: I gave a quote to Money.com last week, and I was especially excited they used my “Zillow cannot smell if 20 cats live there…” line.

To read more, click here

My comment: I love the “20 cats” comment. I appraised a house with at least that many cats. They were on all the tops of dressers, cabinets, etc., Very Creepy! I still have nightmares about it sometimes. A volunteer owned it for a local animal shelter. She had a large outdoor enclosure. Did not smell, but…

——————————————————————————————

By Jonathan Miller

Zillow Offers As A Proxy For ‘Big Data’ Shows The Lack Of Qualitative Analysis

Yes, big data usually infers ‘quantitative’ analysis, as in “relying on numbers.” The Zestimate legacy of profound inaccuracy finally reached a devastating conclusion with the collapse of Zillow Offers this week and the loss of hundreds of millions in shareholder…

To read more, click here

—————————————-

This Just In: The ‘A’ in ‘Zillow’ Stands for ‘Accuracy’

Excerpt: Yet it would seem unlikely that Zillow Offers used something completely separate and conceptually very different from their ‘Zestimate’ because it would be quite expensive and extremely difficult to keep a radical new valuation concept a complete secret. All we know at this point is whatever valuation methodology they used was a complete fail. And to go a step further their Zestimate valuation methodology has long been a complete failure in the accuracy department. But it hasn’t been a complete failure in the consumer credibility department at all.

To read more and see fun videos, click here

Zillow (in) accuracy(Opens in a new browser tab)

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, mortgage origination stats, etc.

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

Dr. Seuss House aka The Goose Creek Tower

What is “retirement” for appraisers?(Opens in a new browser

Appraiser Retirement?

By Ann O'Rourke on November 5, 2021 / appraisal business, Appraisal Subcommittee, bias, real estate market / Leave a comment

Tags: appraisal business, Appraisal Subcommittee, bias, real estate market

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

Appraiser Retirement?

By An Anonymous Appraiser

Excerpt: …retired 2 months ago, and I am SO GLAD I did. I’ve had enough. I decided on an appraisal career because I found real estate, and especially the valuation of homes to be extremely fascinating and challenging, and although I had heard that the appraisal profession was making changes back 30+ years ago, I “assumed” it was becoming a more upstanding, professional occupation, in the eyes of the lenders, politicians and general public, similar in stature to doctors, lawyers and accountants. In other words, they would would hold the appraiser’s opinion via “trust in the professionals opinion”.

What we got, was 30+ years of complaints from the lenders and politicians who blamed appraisers for all of the lenders and political wrong doings. And the public believed them! Why? Because appraisers NEVER got together as an organization to support other residential appraisers! Oh yes, there was the Appraisal Society and the Appraisal Institute, of which I became a candidate, but when I realized that they catered to commercial appraisers, and recently to their own needs, I decided there was no reason for me to join. Besides when licensing came along, the license was the main criteria for selecting the appraiser.

To read more plus many appraiser comments, click here

My comments: Many appraisers are getting older and retiring now for various reasons.

I am 78 years old and have been appraising for 45 years. I love appraising!! (I have not done any lender res appraisals since 2005.) I have friends near my age who are still appraising and like it. They work for direct lenders mostly and do little AMC work.

What is “retirement” for fee appraisers? One of the great reasons to be a fee appraiser is choosing when, where, what you appraise, and whom you work for. In the past, I worked long hours 7 days a week on properties in a wide geographic area. It has been many years since I worked that hard. Many of us just fade away gradually ;>

I recently spoke with two 55-year-old female appraisers. They had both invested in real estate and were retiring early. I have known appraisers over the years who did this. Why aren’t there more? Risk avoidance, I guess. I invested in a duplex in 1986 ($120,000 purchase price). I am living there now after selling my large home. My tenants pay mortgage, insurance, and taxes. I shoulda bought more when the prices were way down here!

I have written about appraiser retirement in my monthly newsletter many times over the years. Be sure you have “tail” insurance to cover any e&O claims after you retire. Mine is free from my E&O company. My most recent article is from May 2021, “Retirement: To Stay or Not to Stay. That is the question!!” Lots of issues to consider. Tip: don’t start taking Social Security until you are 70. I get $3,235 per month now, before the cost of living coming increases. The maximum is $3,985 per month.

Appraiser retirement plans?

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, Bias and ASC, real estate market, mortgage origination stats, etc.

The UAD and Appraisers – Past, Present, and Future(Opens in a new browser tab

6 Appraiser Tips on Increasing Productivity

By Ann O'Rourke on September 24, 2021 / appraisal business, bias, Fannie, Fannie Forms / Leave a comment

Tags: appraisal business, bias, Fannie, Fannie forms

6 Ways to Streamline Your Appraisal Workflow

Excerpt:

#6. Reduce revision requests

A revision will waste 15 minutes minimum. To reduce revision requests, track your clients’ common questions, and include that information in all reports when applicable. If you work for a lot of different lenders or do a lot of appraisals for lending-related purposes, those clients and intended users are probably asking some of the same questions over and over.

For example, if your clients often ask about septic, go ahead and include a comment about the septic system in your initial report. In other words, answer the question before they ask it.

To read more plus get 5 more tips, click here

My comments: Short and well written, worth reading. I have been writing about time management in my Appraisal Today monthly newsletter since June 1992, the first issue. Saving time is a very hot topic now when everyone is very busy. All of my many articles are available free to paid subscribers. They are much longer than this blog post, of course.

How to increase appraisal productivity without spending any money

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on Fannie News on Forms and UAD, September Fannie Update, Bias (again), unusual homes, mortgage origination stats, etc.

Wholesale lender has AMC-free appraisals

By Ann O'Rourke on September 17, 2021 / AMCs, appraisal business, bifurcated appraisals, Fannie, real estate market / Leave a comment

Tags: appraisal business, bias, Fannie, real estate market

UWM launches AMC-free appraisal program to coordinate appraisals in-house

Excerpt: The Pontiac, Michigan-based wholesale lender will instead coordinate appraisals in-house, contracting with appraisers directly, offering appraisers and brokers a way to bypass AMCs altogether, which UWM CEO Mat Ishbia characterizes as “middlemen.”

During a Facebook Live address, Ishbia proclaimed that while AMCs add value to the industry, appraisals have been a stumbling block for the mortgage industry.

“It’s going to be cheaper for consumers and more money for appraisers because there’s no longer going to be a middleman with UWM Appraisal Direct,” Ishbia said.

To read more, click here

——————————————

Comments from Rob Chrisman’s daily email mortgage newsletter 9-13-21

Critics wonder if appraisers will sign up for UWM’s program, or any program for that matter, given the amount of business licensed appraisers have already. AMCs take about $125-150, maybe as much as $200. If a company like UWM offers $150 more than AMCs to take their orders, does it come with a price, such as an appraiser saying they won’t do business with other AMCs? Stay tuned!

To read lots more, click here Search for appraisals.

————————————————

Comments from AppraisedValue (Housing Wire) email with comments. No link available.

The larger question is whether UWM’s direct-to-appraiser approach will be attractive enough to keep appraisers too busy to work with AMCs and whether other lenders will follow suit. As our story notes: Likely the strongest incentive for appraisers is that UWM will pass along the full appraisal fee paid by the borrower. And, while AMCs have been dogged with allegations of late pay, UWM will pay appraisers the next business day after a successful appraisal completion.

Still, some AMCs, such as Class, have already instituted a process to pay appraisers within 24 hours. And some lenders don’t want the headache of bringing valuation in-house.

My comments: I like what UWM is doing, of course. As we all know, there are much more significant problems with AMCs than money, such as long lists of requirements, including everything from every lender they work for!

The Future of Residential Lender Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on Fannie and Bias, real estate market changing?, appraisal business, unusual homes, mortgage origination stats, etc.

Location, Location, Location In Appraisals

By Ann O'Rourke on September 3, 2021 / adjustments, appraisal, appraisal how to, bias, real estate market, time adjustments / Leave a comment

Tags: adjustments, appraisal, appraisal how to, appraiser shortage, bias, real estate market, time adjustments

What’s Location Got to Do with It?

By Steven W. Vehmeier

Excerpts: We’ve all heard the old mantra that real estate is all about “location, location, location.” A perfect example of the importance of location in appraising can be found in The Villages in central Florida.

The development called “The Villages” has seventy-eight communities, each called a “village,” ranging in size from 100 to around 1,500 homes in each. In total, there are somewhere around 140,000 residents, and the home prices in these individual villages range from the low one-hundred thousand up to a couple million. In some cases, villages located near and/or adjacent to each other can vary significantly in price….

An appraiser not familiar with The Villages could easily over-or under-value a property by mixing villages. For example, let’s say the subject is a 3-bedroom, 2-bath, 2,000 square foot home with a two-car garage on a typical sized lot. It would not be hard to find hundreds of homes with similar physical characteristics nearby; however, some might be located in the “wrong” village…

Can we apply this “village” concept to other areas? Are there typically many villages or neighborhoods in and around most major cities? Do the same principles apply in comparable selection and resultant values? Of course, they do!

To read more, click here

My comments: Very interesting “case study.” Tim Andersen soon will have two articles on neighborhoods and what USPAP says in Appraisal Today monthly newsletters.

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on bedrooms, bias, time adjustments, unusual homes, mortgage origination stats, etc.