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

By on January 20, 2023   /   AMCs, appraisal business, forecast, humor, real estate market   /   Leave a comment
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Top Ten Reasons Why It Is Great to be an Appraiser!

10. Dazzle your friends with your knowledge of external obsolescence.

9. The wonderful world of rats, bats, and spiders.

8. Be a part of the profession blamed for the collapse of the savings and loan industry.

7. See places in people’s houses that usually require a search warrant to access.

6. Arouse the suspicion of an entire neighborhood when inspecting comparable sales.

5. Chance to really irritate annoying real estate salespeople.

4. Walk around holding a clipboard just like “Skip” down at the Jiffy Lube.

3. Spend hours writing volumes of supporting documentation to justify the market value of a property you already decided on when you pulled into the driveway.

2. See that some people really do hang those black velveteen pictures of Elvis on their living room walls.

1. Be one of a handful of people who know that USPAP is not a medical term.

Many thanks to reader Joe Ibach, MAI, for this great list! He doesn’t know the source…seems like it is one of those email/send/resends now floating around the Internet!

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What is a residential complex property?

By on December 23, 2022   /   adjustments, appraisal how to, george dell, humor   /   Leave a comment
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How to Identify a Residential Complex Property

By: McKissock December 16, 2022

Excerpts: The property to be appraised is atypical

In this case, the property is an outlier, oddball, or not common for the particular area. Of all the characteristics that can make a property complex, physical features are the ones that are most obvious. Some of the key physical features that can make an appraisal assignment complex include:

The form of ownership is atypical

In this case, circumstances involving ownership are uncommon or make the appraisal more complex. For example: The owner doesn’t own property rights on a waterfront property.

The market conditions are atypical

In this case, unique market conditions increase the complexity of the appraisal. For example:

The property is located in an area where there are no other sales.

There is no market for the house; no sales are occurring for some reason (e.g., the property is near a nuclear site cleanup).

Note: the link to the complementary post, “How to Pull Comps on a Complex Property,” is included in this blog post.

To read more, click here

My comments: Worth reading with good tips. I published “Tips for dealing with complex residential appraisals” in the November issue, much longer with many more tips and examples.

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Fannie requiring ANSI for appraisals starting 4/1/22

By on December 24, 2021   /   Fannie, FUN, humor, square footage   /   Leave a comment
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ANSI Update

I have been getting questions from appraisers but did not have time to research this Very Hot Topic. Below is a link to purchase the new 2021 Standards.
There are lots of comments online. The first link below by Appraisersblogs allows comments which you can read and make your own comments. The second link is a short blog post by McKissock.
Purchasing the Standards document for $25 is a good idea—link at the end of this section. I purchased a copy, so I knew what it said. Hopefully, most appraisers who do GSE appraisals will get a copy. Disclaimers coming soon regarding ANSI, assessor’s offices, etc. Disclosure of what you use is an excellent idea.
For many years, I did relocation appraisals, where 2-3 appraisers appraised the same house before the sale. Sq.ft. by the appraisers was very seldom the same. We did future values, typically 90-120 days in the future. My most favorite appraisals. Every appraisal was a test of how close I came to the sales price.
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ANSI Measuring Standard Required on April 1, 2022 – Comments allowed
By Appraisersblogs
Excerpts: includes Fannie’s 1-page “Standardized Property Measuring Guidelines” with good information.
Does following ANSI even reflect the market? Perhaps, adopting the ANSI standard will make the description of the subject property more precise. However, how is this going to help if Realtors, assessors, builders, and architects are not measuring by the same standard? Will this create a false sense of accuracy? Will there be a lot more discrepancies once the ANSI measuring standard is used by appraisers for the subject property while different measuring standards measure the comparable sales. And how do we apply the ANSI measuring standard on exterior-only appraisals, desktops, hybrids, and 2055s?
This blog post is a good place to read comments and leave your own. Over 35 comments. Click here to read.
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Fannie Mae to Adopt ANSI Measurement Standard in 2022
Short blog post with good info
By: Dan Bradley (McKissock)
Excerpt: ANSI Z765 is a copyrighted document. A downloadable PDF is available for purchase from Home Innovation Research Labs for $25.00. The website can be accessed here: https://www.homeinnovation.com/z765.
To read more, click here
Measuring Bi-level homes square footage

Why Don’t Real Estate Agents Measure Houses? Appraiser Humor

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Fannie Requiring Appraisal Floor Plans Coming?

By on November 26, 2021   /   appraisal business, george dell, humor, liability, real estate market   /   Leave a comment
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Are Floor Plans in Your Future?

By Dave Towne
Excerpts: In the Selling/Servicer Guides of FNMA and Freddie Mac, both GSE’s identify a ‘sketch’ to be a diagram of the subject as measured by the appraiser which shows exterior walls, and includes the dimensions. That’s it. They don’t even say that room labels are needed, but most appraisers include those.
Including a ‘sketch’ in reports as an exhibit is an additional Assignment Condition, beyond what USPAP requires in Standard 2, per the Assumption and Limiting Conditions on the residential forms. Both GSE’s require a more detailed diagram including interior wall locations when interior design abnormalities are discovered, and reported – which they call a “Floor Plan”.
I’ve talked with representatives from both GSE’s recently. Their line of thinking, at the present time, is a “Floor Plan” should be provided as an exhibit in the appraisal report even though the report signing appraiser was not physically present at the subject property when data was gathered. Their line of thinking is also slanted to having third parties provide the subject property data, believing appraisers are more valuable as ‘analysts instead of as observers and detailers of the property characteristics.
Thus the evolution to the new 1004 (Desktop) and 1004 (Hybrid) report forms, with different Scope of Work and Assumption and Limiting Condition statements in each version. (These forms are in your software forms package now.)
To read more and watch the video, click here
My comments: Read this post, watch Danny Wiley’s remarks in a video, and read many appraiser comments. Quite a while ago, Fannie started requiring detailed floor plans. This did not last very long, but I continued doing rough floor plans manually. I still do them but do not include the floor plans in the appraisal sketch. It keeps me from missing a small room, bathroom, etc. Of course, when there are floor plan functional problems, I put the details in the appraisal sketch. In my area, tandem rooms are common (usually from additions). They cannot be included as bedrooms.
When I used to do relocation appraisals, I always included a full interior floor plan with walls and doors. This was standard practice in my area. Doing an interior floor plan with walls and doors takes a lot of time, both measuring and using my sketch software.

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Market Decline Coming for Appraisals?

By on September 10, 2021   /   appraisal, Appraisal Subcommittee, humor, liability, real estate market, time adjustments, USPAP   /   Leave a comment
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Is There a Market Correction on Its Way? 

by Steven W. Vehmeier

Excerpt: When will the market correction arrive?

I have no idea, but there will be warning signs, and that’s what this blog article is about. Fluctuations in market activity are common, but unseasonal and ongoing changes of any of the signs listed below can often be red flags. Additional indicators can be some of the factors that led up to the last market bust; there are plenty of articles online with which to familiarize yourself.

What will be the early signs?

Some early warning signs of housing market correction are:

A) Listing inventory in MLS starts to climb steadily. Increasing inventory is generally a sign that buyers have stopped buying (due to prices being too high or a lack of consumer confidence), or there are just fewer ready, willing, and able buyers in the marketplace.

B) Days on Market for listings increase. This event is usually linked to item (A) above.

C) Listing prices begin to stabilize, and reductions in listing prices become more common, which is a sign the market is becoming saturated…

So many appraisers missed the early signs in the last boom’s bust that resulted in claims (valid or not) of over-valuations followed by lawsuits, E&O insurance claims, and regulatory disciplinary actions. Maybe this time, we should pay closer attention to the indicators…

To read lots more tips, click here

My comments: Most Excellent list of what to look for. Very comprehensive. I have been appraising during many up and down cycles in Northern California, starting in the late 1970s at 2%+ per month, followed by a crash in 1980 when interest rates went up to 15%+. Those were the days when lenders told appraisers not to make time adjustments!! Even though we don’t like the 1004mc, it forced lenders and appraisers to look at price changes.

No one knows when the increasing market peaks, but there are signs of a decline, listed in the blog post above. I sold my house in March 2008 and did not anticipate the market crash a few months later. I was very lucky. There had been some modest price declines for about 6 months previously.

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Appraisers and The Psycho Kitty

By on May 7, 2021   /   appraisal how to, appraisal waivers, humor, real estate market, state appraiser regulators, statistics, unusual home, waivers   /   Leave a comment
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Favorite Crazy Appraisal Stories – The Psycho Kitty

Excerpt: Psycho Kitty

I had an appointment at a home in the country out in the woods. The access instructions said the cat MIGHT be caged. Got to the home and the cat was at the front door and hissed at me as I went in. I tried to make friends with the cat, but it didn’t work, so I ignored the cat and started my inspection.

As I came out of the first-floor master, he was waiting. He stood on his hind legs, teeth showing, hissing, and came at me. Once again, I used my clipboard and ran to the laundry room where I was able to shut the door. I was safe…

To read more strange and/or funny appraisal stories, click here

My comment: We all have appraisal stories, of course!! In my 45 years of appraising I have never been attacked by a cat. My creepiest cat encounter was appraising the home of a cat foster parent for a local animal shelter. Large outside cat enclosure full of cats, multiple cats on top of dressers and other places, looking at me (looked like they were hungry). I wish I could forget about all the cat eyes looking at me :<

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Appraisal Waivers Almost 50% of Fannie/Freddie Loans

By on April 9, 2021   /   adjustments, appraisal business, appraisers, Mortgage applications, unusual homes, waivers   /   Leave a comment
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An explosion of appraisal waivers. Is that good or bad?

By Ryan Lundquist

Excerpts: Appraisal waivers have really exploded in recent years – especially during the pandemic. But how many are there exactly? Let’s look at actual numbers to walk away with some perspective. These stats are from January 2021 from AEI.

  • 47.4% of all Freddie Mac loans had a waiver
  • 44.5% of all Fannie Mae loans had a waiver
  • Waivers are far more common during refinances
  • Only 10-12% of purchases had an appraisal waiver in January
  • Non cash-out refinances have the most waivers (67-69%)
  • The higher your loan-to-value, the lower your chance of a waiver
  • Waivers have seen a dramatic increase during the pandemic

2) Seeing numbers: What real estate professionals experience with appraisal waivers with their clients can really vary. For instance, if you work with FHA borrowers putting very little down, you probably don’t see many waivers, but if you work with conventional buyers putting 30-40% down, you’re going to see more. This is why seeing actual stats is so important.

Read more of Ryan’s comments, see graphs, plus over 25 appraiser comments: click here 

To read the AEI report, click here

My comments: I wrote about this in the February issue of the monthly Appraisal Today. Also included is data on which states are doing the most, and least, alternative appraisals. I spent a lot of time trying to get any statistics from Fannie without success. I knew waivers were going way up, especially for purchases. AEI reports have the analysis

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How to Fight Real Estate Agents’ Appraiser Blacklisting

By on March 26, 2021   /   AMCs, appraisal business, bias, Fannie, humor   /   Leave a comment
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How to Fight Real Estate Agents’ Appraiser Blacklisting

Excerpts: When a real estate agent “blacklists” an appraiser, the result is often that the agent’s lender/AMC contacts will stop using the appraiser completely (at the agent’s request), or occasionally, the lender will continue to use the appraiser but not assign the appraiser any of the transactions that that particular agent works on. In the case of the latter, sometimes the appraiser will be assigned an order only to have it canceled later that day once the real estate agent sees the appraiser on the order and calls the lender or mortgage broker to complain. I’ve talked to appraisers who have this happen several times a year with the same agent…

Having an order canceled and reassigned is sometimes the first and only indication to the appraiser that something fishy is going on, but some appraisers who abruptly stop receiving work from a client often don’t have to look far to figure out why. While “blacklisting” is sometimes more discreet, some appraisers actually have the real estate agent call them and tell them explicitly that they are going to actively prevent the appraiser from ever working on one of their transactions.

To read more, click here

My comments: Lender blacklisting has been around for decades. I remember when the blacklists were shared among lenders. Some appraisers said it was good to be on the blacklist of the not-so-ethical lenders.

Savvy AMCs (and lenders) often just don’t give the appraiser any more work. Putting an appraiser on a blacklist can be a big issue.

Good article with practical tips from Richard Hagar and the author.

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Crazy Appraiser Stories

By on January 1, 2021   /   appraisal how to, BATHROOMS, COVID, fauci, FUN, humor, Mortgage applications, Strange homes   /   Leave a comment
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Crazy Appraiser Stories

 

You’ve all got them… The crazy car chases, the surprising living conditions, the exotic assignments, and the unique collectors….

What we all need… Here is one brief humorous escape!!

The photo above is the Crazee Appraiser writing up his appraisal!

Here is one story:

This was a beautiful 3,200 sq ft home with all the extras. After measuring, I was standing by the fireplace, taking an interior photo, being careful not to step on the expensive rug next to the hearth. The lady of the house looked a little alarmed, so I had to ask, “Is everything okay?” “Oh yes, it’s just that the camera will have a click.” I’ve heard weirder things, so after assuring her it was a very quiet click, the button went down, the picture was taken, and the excitement started.

Something hit the back of my head, a soft, but very strong hit. The equivalent of a 10 mile an hour wind passed over my left shoulder, and a shadow landed on the other side of the sofa, which was 14’ in front of me. It seems that the fluffy 6’ rug was a once wild, African Savannah cat, stretching 6’ long as it napped on its belly. It looked like a leopard rug! With teeth longer than some fork tines, I was happy to let it hide in the bedroom, but she coaxed it out of hiding to demonstrate that it could easily jump 10’ high for a kitty treat.

– Carolyn S. Richards

For more stories, click here

My comment: We all need some appraiser fun to start the New Year!!

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Appraiser Home Schooling Humor

By on December 18, 2020   /   appraisers, COVID, Fannie, fauci, george dell, Mortgage applications, unusual home   /   Leave a comment
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Many thanks to Appraisal Buzz for this Very Best Appraisal Comic!! They came up with the ideas and hired a cartoonist to do it. There are very, very few appraisal cartoons or comics.

To see a larger image on your computer, right-click and select open in a new tab.

This cartoon was posted on the Appraisal Buzz Facebook page on September 21, 2020, so you can share or make a comment click here

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