99.99% price drop from $1 billion. Appraisal Challenge

By on August 30, 2019   /   appraisal how to, AVMS, Mortgage applications, real estate market   /   Leave a comment
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Once listed for $1 billion. Sold for $100,000. What just happened?

Excerpt: A heated court battle, a last-second offer and a sparsely attended auction behind a fountain in Pomona — this chapter of the famed Mountain of Beverly Hills ends not with a princely sum but a sale price more like that of a sports car. 99.99% price drop from $1 billion. Appraisal Challenge.

Touted as the city’s finest undeveloped piece of land, the 157-acre property redefined the luxury market when it listed for a record $1 billion last year. On Tuesday, it sold for a mere $100,000 at a foreclosure auction, a fraction of the $200-million loan outstanding on the property.

A markdown of 99.99%, of course, comes with some fine print. Any other buyer would have been on the hook to repay that loan — and this buyer has to eat that loss

To read more, click here

My comment: Quite a story!! Only in LA, of course!! FYI, I am in Northern CA… very different here. We think we are superior to LA ;>

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Why do appraisers hit the sales price?

By on May 31, 2019   /   adjustments, bifurcated appraisals, commercial appraisal, humor, hybrid appraisals, Mortgage applications, real estate market, state appraiser regulators, Uncategorized, weird properties   /   Leave a comment
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Why do appraisers hit the sales price?

By George Dell

Excerpt: A recent study includes a graph which shows that some 90% of appraisals hit the sale price exactly, or were higher, while only some 10% were below the sale price (when the sale price is known).

Is this a bias on the part of appraisers, or is the bias the cause of the system? What could possibly cause this strong upside skew?

First, ignore the ongoing pressures from the entire ‘loan industry’ to make the loan, make the commission, make the quota, make the bonus, and look successful. Ignore the claimed purpose of the public trust (of our quasi-governmental standards and licensing quagmire).

The goal of protecting the public trust failed, and will fail again— this time with different excuses and blaming— but it will fail again.

Let’s look at some underlying economic truths and social/governmental policy. What economics and public policies come into play here? Three come to mind immediately:

To read the full, very interesting post click here

My comment: When I started my appraisal business in 1986, I was told by local very experienced appraisers to appraise at the sales price or I may be kicked off a lender’s approved list. Of course, since I was trained at an assessor’s office, I was shocked and refused to do this… There was always another lender client I could get.

Dell’s blog has very short posts. My June paid newsletter will have a much longer article written by him: “Old Versus New: Conflict or Opportunity?” It has a brief look into the past, including a photo of an acoustic coupler for connecting to remote sites. Plus, of course, comments on the future! I remember 30 baud transmission rates in the early 1980s connecting from my home PC to my company’s servers;>

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Dancing and Crooked Houses for Appraisers

By on May 17, 2019   /   hybrid appraisals, marketing, mortgage loan volume, real estate market, unusual homes, weird homes   /   Leave a comment
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Krzywy Domek, The Very Crooked Little House of Sopot, Poland

Woops!! I forgot to include this in last week’s newsletter!!

Just For Fun!!

Excerpt: In 2004, the Polish architecture firm Szotynski & Zaleski built a wonderfully illusory building in Sopot, Poland that doesn’t quite look real. The design was based upon whimsical, fairy tale sketches of artist Jan Marcin Szancer and is quite aptly named “Krzywy Domek” or crooked little house. The building’s front facade is made up of crooked lines and distorted shapes that recall childhood cartoons, but the back of the building is a rather standard setup that leads to the main shopping area.

Check out the videos and fotos.

My comment: Fascinating!! I think this is the most crooked house I have ever seen. No photoshopping done on fotos!!
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The Famous Dancing House of Prague by Frank Gehry

Another Just for Fun House!!

Excerpts: The building is also affectionately known as “Fred and Ginger” due to its resemblance to a perpetually swaying couple. Like the Crooked House of Sopot, Poland, the unusual lines of the building stand out from the rest of the neighborhood.

Lots of fotos at:

Brief summary of details: http://architectuul.com/architecture/the-dancing-house  Can also google it for lots of background info.

My comments: Take a break from writing up your appraisal reports and Take a Look at the photos!! And be glad you don’t have to appraise a house that looks like this ;>

Be sure to scroll down to the bottom of the post to see photos of Ghery’s other strange buildings!!

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