FHA: Cosmetic vs. MPR Repairs

Cosmetic vs. MPR Repairs: Guidance for FHA Appraisers

By: McKissock

Excerpts: If you are appraising a property that needs some cosmetic repairs but meets FHA minimum property requirements (MPR) in its current condition, you should make the appraisal “as-is.” Here is some guidance on cosmetic repairs vs. MPR repairs.

Topics include:

  • When can an FHA appraisal be completed “as-is” vs. “subject to”?
  • Cosmetic repairs Examples
  • MPR repairs Examples
  • Conditions that require inspection Examples

To read more, click here

My comments: If you do FHA appraisals, read this blog post. Photos and lots of examples. I quit doing FHA appraisals in the mid-1980s because of the inspection requirements compared to conventional appraisals, that did not have the requirement.

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on appraisal “modernization”, bias hearing, bad appraiser, USPAP, unusual homes, mortgage origination stats, etc.

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Appraiser pleads guilty in $1.3B fraud scheme

Walter Roberts II of North Carolina faces five-year maximum sentence

Excerpts: An appraiser in North Carolina is set to face the music after conspiring in a massive $1.3 billion tax fraud scheme.

… Roberts faces a maximum of five years in prison and will be sentenced in six months.

The fraud started in 2008, one year after Roberts became a licensed appraiser, according to court documents and statements. In 2007, he started appraising conservation easements, which are specified areas of land earmarked for environmental conservation. Owners with conservation easements can claim an income tax deduction.

From 2008 to 2019, Roberts fraudulently inflated the value of at least 18 different easements by violating industry norms and making false statements. He also manipulated or used manipulated data to hit a target appraisal value communication by unnamed co-conspirators to achieve a certain tax deduction.

The impact of the fraud is staggering, especially since Roberts inflated the value of some appraisals by at least 70 percent…

To read more, click here

My comments: For more info, google his name and add appraiser. Conservation easement appraisals are a definite risk for appraisers. Over time, many have been significantly over-valued per the IRS. They are not easy to do. I decided not to do them many years ago. Best to do a lot of them and become an expert or none.

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Glorious Gilded Age Mansion for $29.9M Is Washington DC’s Most Expensive Home

Excerpts: Completed in 1881, the 23,600-square-foot mansion is divided among commercial spaces on the first two floors. A residential penthouse is situated on the top two floors.

A three-year renovation, ending in 2009, converted the upper floors into the 7,000-square-foot penthouse. The space offers four bedrooms, five full bathrooms, and lots of living and entertaining space.

“There’s an atrium, multiple sitting rooms off of the atrium, a humongous dining room, and a humongous living room, so yes, I would say there’s plenty of entertaining space,” Heider (listing agent) says.

“There’s nothing [else] in this city that offers a private rooftop pool overlooking one of the most charming circles in the city,” Heider says, adding that the pool and accompanying outdoor kitchen are only for Blaine Mansion penthouse residents.

“Imagine yourself being able to go out on your rooftop and be in the pool, drinking a margarita and overlooking DuPont Circle. Right now, nothing compares to it.”

The property also comes with 14-vehicle parking capacity.

To read more and see lots of photos, click here 

My comment: Really stands out from the modernized buildings nearby! I lived in Washington, DC, until I was 9 years old. My mom used to take me regularly to Dupont Circle to play. I don’t remember much about what it was like there, but I remember Dupont Circle Park.

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Purchase and Sale Agreements

By Tim Andersen, MAI

Excerpt: Should appraisers get a copy of the purchase and sale agreement?

Some appraisers feel that lenders should not provide them with the purchase and sale contract. Then that contract does not serve to color, cloud, or otherwise bias a value opinion.

Let’s take a look at it from basically both sides. Appraisers analyze the purchase and sale contract to amass and verify data to have detailed data to use in the analytics of future assignments.

Purchase and sale agreements are also a great source of data relative to the subject, which might serve as a verified and personally inspected comp in a future assignment. Remember, we rarely get to inspect comparables.

Over time, a great deal of research has indicated that well over 90% of appraisals come in at or above the purchase and sale contract. This suggests that appraisers are indeed letting that contract price function as a target the lender expects the appraiser to reach and then support.

We all know this is true.

To read lots more about this topic, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this article helped you understand how to analyze purchase and sales agreements, it is worth the subscription price!

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Jonathan Miller testifies at ASC hearing on appraisal issues: bias and barriers to entry 

C-SPAN Video is approximately 3 hours with a 17-minute break

The Appraisal Subcommittee (ASC) held a second hearing on challenges facing the appraisal industry, including barriers for entering the profession and racial bias in home appraisals. The panel’s first hearing on such topics occurred in January 2023.

To listen and read the hearing transcript click here

My comments on the video: Usually, on these long hearings, it is hard to stay awake waiting until the section you want to hear. This video is very easy to use, plus text is available. You can search for people and speakers. 6 video segments on specific topics.

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Jonathan Miller on his experience at the hearing

Excerpts: On Friday morning, I was one of five expert witnesses (and the only as an appraiser) to testify on the topic of appraisal bias in front of the Appraisal Subcommittee (ASC). The witnesses waited together in the green room, plus additional TAF staff. We had a delightful conversation – everyone was very friendly and a pleasure to be with, given the adversarial nature of our looming testimony.

It’s a three-hour hearing, but if you are connected to the appraisal industry in any way, I encourage you to listen. You can hear my opening statement at about the 26-minute mark. The text on the C-SPAN website was generated from unedited closed captions. Here was my formal statement, but since the timing was strictly limited to 5 minutes, I read this abbreviated version, which in hindsight, was better and more to the point. (Editor note: links are in the text

Thoughts…

Morgan Williams, General Counsel, National Fair Housing Alliance – He was a compelling witness – he drove home that he wanted access to anonymized loan-level data to determine the potential valuation bias.

Angela G. Jemmott, Bureau Chief, California Bureau of Real Estate Appraisers, Member of the Association of Appraiser Regulatory Officials. She was a powerhouse of testimony, advocating practicum solutions in addition to PAREA.

To read a lot more of Jonathan Millers interesting comments, click here

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Rocket Mortgage offers new 1% down home-loan program

Excerpts: Rocket Mortgage recently introduced ONE+, a new 1% down home loan program that will dramatically increase access to homeownership for millions of low-to-moderate-income earning Americans, the company has announced.

With ONE+, Rocket Mortgage stated that a homebuyer is only required to make a down payment of 1% of the purchase price and they will cover the remaining 2% needed to reach the required threshold for conventional loans. In addition to reducing upfront costs, Rocket Mortgage says ONE+ completely eliminates the expensive monthly mortgage insurance fee for the client —which is traditionally required if the buyer places less than 20% down on their purchase.

Designed to help everyday Americans achieve homeownership, Rocket Mortgage stated that ONE+ is available to homebuyers purchasing single-family homes—including manufactured homes—whose income is equal to or less than 80% of their area median income (AMI). With this expansive AMI eligibility, the company estimates that more than 90 million people can meet the income requirements for this program—based on publicly available income data.

To read more, click here

My comment: Hopefully, they will use full appraisals because of the increased risk!

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The Next Generation of Appraisals: Revolutionizing Real Estate Valuation with Computer Vision

By Tony Pistilli

Excerpts: Before you get too worried and quit reading, let’s all agree computer vision is unlikely to replace appraisers. I believe it will only make them more accurate and more efficient. Think of computer vision as a calculator. Sure, you can use pencil and paper and divide 1,024 by 82 and come to the correct number, but there are calculators that allow us to do that much faster and with more consistent accuracy – that’s what computer vision will do for appraisers.

While computer vision holds tremendous potential for real estate appraisers, I believe several potential challenges need to be addressed. The need for standardized data formats is paramount, consistent taxonomies in MLS, and between inspection forms and appraisals. Additionally, ensuring the proper use of computer vision technologies and maintaining transparency in the valuation process are critical aspects that should be carefully addressed by state, federal and financial institution regulators and also addressed in USPAP.

To read more, plus the 20+ most negative appraiser comments, click here

My comments: The accuracy of any AI depends on the data.

As we all know, MLS, Public records, etc. are not always accurate for a property. AI has to be trained on good data.

MLS videos and photos taken by agents tend to leave out any defects or problems. They are sales persons, of course. They disclose them in the seller’s disclosure statement, hopefully! I wonder if the home would be overvalued?

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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, click here.  

Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.

My comments: Rates are going up and down. Some appraisers are very busy, and others have little work. Varies widely around the country.

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Mortgage applications decreased 4.6 percent from one week earlier

WASHINGTON, D.C. (May 24, 2023) — Mortgage applications decreased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 19, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 44 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 30 percent lower than the same week one year ago.

“Mortgage applications declined almost five percent last week as borrowers remained sensitive to higher rates. The 30-year fixed rate increased to 6.69 percent, the highest level since March,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Since rates have been so volatile and for-sale inventory still scarce, we have yet to see sustained growth in purchase applications. Refinance activity remains limited, with the refinance index falling to its lowest level in two months and more than 40 percent below last year’s pace.”

Added Kan, “Investors remained attuned to the uncertainty around the U.S. debt ceiling and communication from several Federal Reserve officials last week, which sent Treasury yields higher, along with mortgage rates. Economic data released over the past week have also pointed to a still-resilient economy. The housing market received positive data on new residential construction – which is seen as a key solution to the lack of housing inventory.”

The refinance share of mortgage activity remained unchanged at 27.4 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.

The FHA share of total applications increased to 12.5 percent from 12.0 percent the week prior. The VA share of total applications increased to 12.5 percent from 12.2 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.69 percent from 6.57 percent, with points increasing to 0.66 from 0.61 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.57 percent from 6.46 percent, with points increasing to 0.57 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.56 percent from 6.39 percent, with points increasing to 1.24 from 0.97 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 6.15 percent from 5.96 percent, with points increasing to 0.72 from 0.68 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 5.73 percent from 5.71 percent, with points increasing to 1.19 from 1.10 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.

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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041
Email  ann@appraisaltoday.com
www.appraisaltoday.com

FHA Handbook 4000.1 Appraisal Changes

FHA Handbook 4000.1 Appraisal Changes

By Dan Bradley

Excerpts: On January 18, 2023, HUD issued an announcement regarding revisions made to Handbook 4000.1. According to the announcement, the revisions included “enhancements and revisions to existing guidelines and various technical edits.”

The most significant of these revisions was the elimination of the requirement to include the 1004MC form as an attachment to the appraisal report.

Changes to the Handbook also include several other minor, but nevertheless meaningful, edits and clarifications to FHA appraisal requirements, including:

Under “Attic Observation Requirements,” a clarification was made regarding the appraiser’s obligation to “safely” access the attic. The language requiring a minimum “head and shoulders” access into the attic was deleted.

Under “Crawl Space Observation Requirements,” significant revisions were made, including removal of a bullet point list of MPR/MPS criteria for the crawl space. Also, language requiring a minimum “head and shoulders” access into the crawl space was deleted.

The changes outlined in the Handbook may be implemented immediately but must be implemented for FHA cases assigned on or after April 18, 2023.

To read more, click here

My comments: Many thanks to McKissock for telling us what we need to know. Includes a link to the “redline” version of 4000.1 so you can skip over most of it. Scroll down to “Updates, Revisions, Notifications” to get the redline versions.

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Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

Appraisal Business Tips 

Humor for Appraisers

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.

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Read more!!

Appraising Short-Term Rentals/Airbnb

Debate on Appraising Short-Term Rentals

By Julie Friess, SRA, AI-RRS, MA

Video 22 minutes. Worth Watching!

Excerpt: What can appraisers learn when it comes to short-term and long-term rentals? What role does an appraiser take when sorting between the two? What can appraisers learn when it comes to short-term and long-term rentals? What role does an appraiser take when sorting between the two? These questions and much more will be answered.

My comments: Julie is not referring to an owner-occupant renting out a spare room in their house for a short term. She is talking about an investor buying and renting many rooms in a house, sometimes changing the floor plan. The photo above is a good example: an exterior door for access to a bedroom. This is not typical for a single family home

In the video, Joan Trice and Julie disagreed on how to appraise Short Term Rentals. I have been a commercial appraiser for over 40 years. It is obvious to me that you need experience and knowledge of what to do when appraising them as commercial properties.

If the GSEs are unclear on this, that is their problem, not yours. Just Say No! Don’t Risk Your License! 

Julie has lived for decades in Sedona, a popular vacation location. Many homes were changed to investor-purchased Airbnbs with few home rentals available for local residents. Julie and a group of other concerned residents are now preparing for August 5, 2022, when there is an election for new city council members.

Julie and I are co-hosts every Thursday at 2 PM Pacific Time in our Clubhouse group (Real Estate Appraisal Questions). To attend, download the Clubhouse app on your smartphone. All sessions are recorded and available. Recent topics include Water rights, views, location, and more. Short-term Rentals. Zoning, Highest, and Best Use. Past, Present, and Future of Residential Appraising.

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Two articles by Julie on my website:

Residential Appraisals and Airbnb Income?

Click here to read

Excerpts from the article: Don’t get caught like a deer in the headlights! State appraisal boards ARE disciplining appraisers across the country for improperly using the business income (Short term Rental – STR) from AirBnBs on the residential 1007 Fannie Mae form. 

Lenders and AMCs want residential appraisers to value these properties as both the real estate and the business values of these properties – Wrong!!

Tales of a Trainee at Appraisal Camp Sedona

Click here to read

Residential Appraisals and AirBnb Income?

Appraisal Business Tips 

Humor for Appraisers

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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 Cubicasa, Desktops, FHA, unusual homes, mortgage origination stats, etc.

Read more!!

Desktop appraisals – Lots of Info Available!

Desktop appraisals – Lots of Info Available
Fannie and Freddie started using Desktops on March 19, 2022

Both a floor plan and a building sketch with dimensions and GLA calculations are required. ANSI is not required.

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March 2022 Fannie Mae Appraiser Update: 

Link to March Appraiser Update, click here:

Link to “About Desktop Appraisals” PDF with 5 pages of information, click here Watch the Noble Appraiser explore the benefits of performing desktop appraisals:
The Desktop Appraisal Discovery Link to Noble Appraiser on desktops video, click here 

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McKissock: Fannie Mae and Freddie Mac Desktop Appraisals: Your Questions Answered

Excerpts: In January 2022, Fannie Mae and Freddie Mac announced a desktop appraisal option that goes live in mid-March 2022. In various articles and opinion pieces, some claim that desktop appraisals will solve the appraiser shortage and modernize the appraisal process, while others claim that they will cause the demise of the appraisal profession.

Here are a few of the 16 questions answered

  • What is a desktop appraisal?
  • Does USPAP require me to complete an inspection?
  • What data sources are used for identifying the subject’s relevant characteristics?
  • Are there any state restrictions?
  • Must I be competent in the subject’s market area?
  • Are extraordinary assumptions allowed?
  • Does the limited scope of work mitigate my liability?
  • Won’t these types of valuations be risky for the lender

To read more, click here

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Bradford Software Webinar Floor Plans for Desktops – Discover Your Options with 7 Floor Plan Providers March 24, 2022 (1 hour, 34 minutes), with comments from Scott Reuter of Freddie Mac.

It was recorded and is available at https://vimeo.com/692030955

I did not have time to watch it yesterday.

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My comments on the above resources: What’s the best resource(s) for you?

Noble appraiser video is short (3 min. 34 seconds) understandable and very informative. Fannie Mae is “the source” for desktops. McKissock’s Q and A post is well written, understandable with short answers.

Bradford’s video has demos of 7 app providers for floor plans and sketches.

If lenders will use them much is very uncertain. The Covid desktops were never widely adopted. No one knows now which cell phone apps will be used, who will use them, and their accuracy (tested by an independent company). Minimum of an IPhone 12 Pro, with LIDAR camera. Appraisers who have tested them say the floor plans are good, but sketches with dimensions and floor plans may not be accurate on complicated home designs.

Appraisal Business Tips 

Humor for 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 unusual homes, lender bias, ANSI, FHA class, mortgage origination stats, etc.

Read more!!

Appraisals Obsolete Now or Later?

Is Appraisal Obsolete?

By George Dell SRA, MAI, ASA, CRE
Excerpt: Obsolete! Such a harsh word. Can it be?
Is the problem convolution?
Does it mean I will soon be obsolete? Not needed? Not loved? Terrible. What can be done?
Yet all the little signs are pointing that way. “Automated” valuation models have much of the market, and continue to gain. Other valuation methods and appraisal exempted transactions continue to grow. Evaluations, desktops, hybrids, auto-measurements, non-appraiser inspections, broker opinions.
To read more, click here
My comment: Another different perspective from George Dell! Check out “Appraisal startup Aloft closes $20M Series A” above! Not the first, and not the last, appraisal-related company to get millions in funding. Who needs experienced field appraisers when we have AVMs, hybrids, etc.?

Appraisal Business Tips 

Humor for Appraisers

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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 Zillow, marketing tips, Freddie and Fannie new loan limits, unusual homes, mortgage origination stats, etc.

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Read more!!

Haunted House Appraisal Adjustments

Inspired by Italy, a Conical Home in Indiana

Excerpt: On the market for $424,900, the home consists of two main silolike buildings with shake conical roofs. Inside the round compound is a total of 3,111 square feet of living space.

The design was inspired by the trulli homes of the Itria Valley in Puglia, Italy. They were typically built from limestone and had conical roofs. The structures were chiefly designed as temporary shelters or storage areas in the 19th century. Today, they endure as charming residences in southern Italy. Back in Indiana, this home’s architect, Evans Woollen, combined details from trulli homes into his design.

“The house is a midcentury version of a 200-year-old village in Italy,” Landrigan says.

To read more and see lots of photos, click here

 

Top Ten Reasons Why It Is Great to be an Appraiser Humor

Appraisal Business Tips 

Humor for Appraisers

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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 FHA 4000.1 changes, Liability, appraisal forms, unusual homes, Fun Halloween links, mortgage origination stats, etc.

 

Read more!!

What is an Appraisal “Inspection”?

Appraisal Inspection Vs. Home Inspection

Excerpts: Why are these roles often confused? What is an Appraisal “Inspection”?

The root of many misconceptions about the appraisal inspection is the word “inspection” itself. It is true that as part of the appraisal process, the appraiser might perform some sort of onsite quality, condition, and functional utility survey of the property to determine its relevant characteristics and if it meets certain standards. For example, to the general public, the FHA requirements that an appraiser must operate certain systems in the home (plumbing, electrical, HVAC) seems similar to what a licensed home inspector does.

The Oxford Online Dictionary defines inspection as: “Careful examination or scrutiny”

Merriam-Webster’s Online Dictionary defines inspection as:

“The act of looking at something closely in order to learn more about it, to find problems, etc.; the act of inspecting something”

It’s somewhat of a benign definition, is it not? There’s nothing really scary there, yet many appraisers attempt to avoid confusion, and (potentially) limit their liability, by avoiding use of the word “inspection” entirely. Many appraisers use euphemisms for this term in their appraisal reports, such as “property visit” or “viewing.”

Even FHA got into the euphemism game with the publication of Handbook 4000.1, which went into effect in 2015. The words “inspect” or “inspection” generally do not appear in reference to an appraiser’s obligations. Instead, the words “observe” and “observation” are used.

To read more, click here

My comments: USPAP has never required an inspection. USPAP defines “Personal Inspection” as the following: a physical observation performed to assist in identifying relevant property characteristics in a valuation service.”

The word “inspection” is used in various locations, such as Advisory opinion A02, including Minimal level of Inspection.

The fourth exposure draft for the 2023 version has Section 1: “Review of Requirements about Disclosing a Personal Inspection.” Final comments deadline is today, July 23, 2021.

Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

Appraisal Business Tips 

Humor for 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 bedroom closets, Updated FHA 4000.1, bias, unusual homes, mortgage origination stats, etc

 

Read more!!

What AMCs Say to Appraisers and How to Respond

What AMCs say to appraisers and How to Respond

By Steven W. Vehmeier

Excerpts: A student contacted me with the following dilemma concerning an Appraisal Management Company (AMC) request: “I told the Management Company that I cannot mark the Zoning Compliance as ‘Legal’ if the report is marked “as-is,” because this would not be true for the current “as-is” condition of the subject on the effective date of the appraisal. The AMC insists that as long as I disclose in the addendum that the zoning is currently ‘illegal,’ then I can mark on the first page as ‘Legal.’”

Taking the matter to the source can be accomplished by: 1) personal research of the appropriate documents, which is sometimes faster, or 2) emailing the controlling entity for their official answer. Notice I didn’t say to phone them. I want the answer in writing to pass on to the client/AMC.

To read more, click here

My comment: Some Most Excellent and practical tips!! My bottom-line advice: Fire the AMC! We all know there is always another AMC that is desperate for appraisers today. Now is a good time to shop for one that is easy to work for. You could check in appraisal online groups to see what they say. If they are not competitors, hopefully, you can get some good ideas. Be sure to post your location.

What to Do When Your Appraisal Is Under Review

Appraisal Business Tips 

Humor for Appraisers

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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, FHA, Fannie, E&O, liability, time adjustments, price per sq.ft. mortgage origination stats, etc.

Read more!!

What Types of Sales For Appraisals

Arm’s Length or Another Type of Sale? The 7 Sale Types Explained

What types of sales for appraisals

Excerpts: As a real estate appraiser, whether you’re considering the current terms of sale or analyzing previous sales of the subject property or comparable sales, it is imperative to know whether a sale is an arms-length transaction or a different type of sale. Sales due to a job relocation, estate settlement, foreclosure, or divorce may sell for less than the property’s market value.

By knowing the type of sale, you are better able to reconcile a current opinion of market value that falls above or below a current or recent transaction for the subject property.

Here are the seven valid sale types, explained in detail below:

  • REO sale
  • Short sale
  • Court ordered sale
  • Estate sale
  • Relocation sale
  • Non-arm’s length sale
  • Arm’s length sale

To read more, click here

My comment: Worth reviewing. Some good tips, especially for today’s crazy sales market!

Using home’s previous sales in appraisals

Appraisal Business Tips 

Humor for Appraisers

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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 FHA regs, USPAP, State Boards, appraisal business, unusual homes, mortgage origination stats, etc.

Read more!!

What’s Happening in Appraisal Now?

The State of the Appraisal Industry

Jonathan Miller speaks about new appraisers and other topics 

Video – 29 minutes

Miller is an excellent speaker and worth listening to. He discusses mostly getting new appraisers (first 15 minutes or so), after commercial break, discusses tips on non-lender work and other issues.

My comments: I don’t like the term “appraisal industry” and prefer “appraisal profession.” I am an “old-timer” of 45 years and have always thought of myself as being in a profession.

I have been reading Miller’s Housing Notes for a long time. Lots of graphs from his markets, and he often has fun, strange, and controversial comments on appraisal issues.

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Appraisal Business Tips 

Humor for Appraisers

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

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