Posts Tagged liability

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Practical real estate appraisal writing tips for AMC questions

Practical Tips for Working With AMCs

By Ann O'Rourke on November 4, 2022 / adjustments, AMCs, liability, non-lender appraisals, ROVs / Leave a comment

Tags: adjustments, AMC, liability, non-lender, ROVs

Appraisers Share Their Best Tips for Working with AMCs

By McKissock

Excerpts: In a nutshell, our survey respondents recommended that you should:

1) do your research and get to know the AMCs,

2) build a relationship with them,

3) treat the relationship as a partnership, and

4) prioritize communication.

Build a relationship

“Be personable so they remember you.”

“Make yourself known by being efficient as well as timely with your reports. Be friendly—even when you feel like the UW’s question may be redundant or was already answered in the report. I promise you that this will make you known in your area.”

“Have a very responsive credo. Keep them up to date in every step of the report so that they can keep the Lender (and the Buyer/Seller/Realtor/Closing Attorneys when applicable) all in the loop on the progress of the report. Remember when they look good and trust you—you look good

Communicate, communicate, communicate!

“Update the orders quickly.”

“Keep them informed.”

“Over communicate!”

“Always communicate—even if it feels like too much. Our office updates AMCs on every scheduling attempt with details, every inspection appointment set and completion, and any materials needed ASAP in the assignment. They really appreciate it, and it ensures you can complete assignments on time as you had planned (no one likes waiting for a legal description only to have it show up on your day of 4 inspections!). It’s truly a win-win.”

“Stay in communication. Appraisers tend to get annoyed with constant emails from the AMC about inspection date, completion, report submission, etc. I make it a point to update them and answer their emails ASAP. In my opinion, that’s good business. And if you do need more time, more info, they are more willing to oblige.”

To read more, click here

My comments: Read this blog post with practical tips from practicing appraisers. It can help you get more business from AMCs (and other lender clients). Savvy appraisers I know who mostly do non-lender work also have a limited number of carefully vetted AMCs they work for, plus a few local lenders and “private” lenders.

Advertising Disclaimer: McKissock is one of my regular email advertisers. I keep my advertising clients and this newsletter’s content separate. But, McKissock’s blog posts are short, well written, and popular with readers, so I include them regularly.

LIA runs an informational ad at the top of each email newsletter. The ads regularly get the largest number of “hits,” indicating that readers like them. We all like free Liability advice!

Reconsideration of value and Appraisers

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Appraisal Neighborhood Analysis

Appraisers and Local Market Analysis

By Ann O'Rourke on October 21, 2022 / ADUs, appraisal business, E&O, humor, real estate market / Leave a comment

Tags: ADU, appraisal business, Fannie, liability, real estate market, RETIREMENT

Appraisers and Local Market Analysis

By Woody Fincham, SRA, AI-RRS, ASA

Excerpts: Social media and the mainstream media make a mess of these markets even in the best of times. They do not have the bandwidth to cover local markets. When you are in a metropolitan statistical area like Charlottesville and Waynesboro/Staunton you get some reporting from the local news. Still, if it is not driven to get online clicks from hyperbole it usually is not worth reporting. National data simply does not apply to the local real estate market and the closest large markets are Richmond and Washington DC. Neither are not great metrics for what our local markets are doing.

I think everyone has heard the old saying, “You can’t see the forest for the trees.” And that is true. We are in the middle of a market transition and exactly how it is transitioning is extremely hard to predict. The best market analysis is always retrospective, as they say, “Hindsight is 20/20.” Until we get past this period over the next few months it may be hard to say definitively what is exactly happening. As an appraiser, it is super important to understand how to gather and analyze relative data.

So, what metrics are worth watching?

Inventory levels
Absorption rates and marketing times
Actual days on market (DOM)…

To read more and see the graphs, click here

My comments: Read this article, including the case study. See if there are data types and graphs you can use in your appraisals. Your clients count on you to let them know the market today, not in the past. Of course, I agree with this. Appraisers have the most valuable data and analyses in a changing market: listings, pendings, price changes, etc.

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Reconsideration of Appraised Value

Reconsideration of Value and Appraisers

By Ann O'Rourke on September 9, 2022 / appraisal business, Appraisal Foundation, appraisal how to, liability, USPAP / Leave a comment

Tags: appraisal business, appraisal how to, liability, non-lender appraisals

How to Respond to ROV Requests: Updated Guidance

By Greg Stephens, SRA, AI-RRS

Excerpts: Suggested protocols for responding to Reconsideration of Value requests

When you receive an ROV request, some recommended steps to take include:

1. Maintain USPAP compliance – Confirm the ROV request came from your client, either directly or through the client’s AMC, acting as an agent for the client, or other party designated as an agent by the client. The importance of this cannot be overstated. Appraisers are still required to comply with USPAP when responding to an ROV request, including the confidential nature of assignment results.

2. Identify ROV content to determine next steps – take the time to analyze the content of the ROV to determine what specifically is being requested of you (the appraiser) and what level of information will be needed to respond to the requestor of the ROV. This is an opportune time to maintain a professional demeanor and not react to an ROV request as if it is an affront to your competency or experience. After receiving an ROV request, send an acknowledgement of receipt and advise the client that the ROV request will be analyzed and responded to in a timely manner.

To read more, click here

Click here to listen to Tim Andersen, MAI’s podcast, “Reconsiderations of Value: Satan’s Own Seed, Right?” (Podcast 9.5 minutes) on ROVs, included in a 12-21 issue of this newsletter, so it may look familiar to you.

My comments: ROVs are a PITA for many appraisers. Very well written and practical. Greg Stephens is a very experienced appraiser and reviewer. He worked in management positions for several large AMCs.

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ANSI Z765-2021 Resources for Appraisers

Fannie’s New ANSI FAQS July 2022

By Ann O'Rourke on July 22, 2022 / ANSI, appraisal business, Fannie Forms, lender appraisals, liability / Leave a comment

Tags: appraisal business, appraisal how to, liability

Fannie’s New ANSI FAQS July 2022

Standardized Property Measuring Guidelines

Excerpts: Updated guidance, including some new and substantively revised FAQs

In response to your feedback, we’ve updated the Standardized Property Measuring Guidelines with some new and substantively revised FAQs, including clarifications on the terms “declaration” and “statement of finished sq ft.”

A few of the Q&As

Q5. When common practice in the local market differs from the ANSI standard, can the appraiser modify the subject’s GLA to conform to local custom?

Q6. The standard mentions a “statement of finished sq ft”; does Fannie Mae require appraisal reports to make an affirmative statement that the standard was followed?

Q7. The standard describes three scenarios in which a “declaration” is required. What is the difference between the statement of finished sq ft and the declarations?

Q19. Will appraiser adherence to the ANSI standard cause confusion when the subject GLA differs from other sources such as MLS or public record?

Q20. The GLA of comparables available to appraisers may not be based on the ANSI standard. How should appraisers manage this issue?

To Read this 5-page Update click here

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Bryan Reynolds speaks with Fannie Mae representative about the new ANSI FAQ. 37-minute podcast. Listen to this podcast!!

The Appraisal Update – Episode 109 | Fannie Mae’s New ANSI FAQ

Speaker: Bryan Swartwood III, Fannie Mae Credit Risk Senior Manager – Single Family Collateral Policy

Topics: The two Bryans discuss below grade, subject GLA different from MLS, comps not measured using ANSI, what happens to appraisers not following ANSI, ceiling height below 7 ft., manufactured homes, using exception code, and many more from the FAQs.

To listen to the podcast, click here

It is on the top of the web page now. scroll down the page looking for Episode 109. If possible, a copy of the ANSI Standards and the new FAQs makes it easier to follow the speakers. I subscribe to The Appraisal Update Podcast from Appraisal eLearning.

My comments: I listened to the podcast. The speaker was very good with practical advice. Reading the 5-page FAQs was okay, but the speaker helped me remember and understand what was written.

I received the Fannie email notice on July 19, 2022, at 10:30 Pacific time. The Appraiser eLearning podcast was available on July 19 at 2 PM. Whether or not FAQs were original, revised, or new is not indicated in the document. I did not compare it to the original Fannie FAQs.

When Fannie first announced in December 2021 that ANSI would be required on April 1, 2022, there was lots of confusion among appraisers who had never used ANSI or were not using it properly. ANSI was designed by home builders, not appraisers or lenders. Also, what Fannie wanted was not clear.

ANSI standards and Fannie requirements sometimes appeared to conflict. The forms were not designed to accommodate ANSI, such as where to put the different square footages on the form. Owners, reviewers, underwriters, real estate agents, and many others who read the appraisals are sometimes confused. These FAQs help to answer some of the questions.

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Tips on appraising new construction homes

By Ann O'Rourke on May 27, 2022 / appraisal business, appraisal how to, Fannie, liability, va / Leave a comment

Tags: appraisal business, appraisal how to, Fannie, liability, va

6 Tips for Appraising New Construction Homes

Excerpts: New construction is treated a little differently by lenders, FHA, and the GSEs. When appraising new construction homes, you must take into consideration certain features and attributes that don’t necessarily apply to re-sales. It requires more work, so you want to be sure that you are charging for your effort. However, perhaps more than that, you want to be sure you’re following the proper protocol. Stick to these best practices to ensure you cover all your bases.

3. Talk to multiple local builders You can gain valuable information from builders—as long as you talk to them now to evaluate current costs and value. Some of the best construction cost data is compiled by you as you complete new construction appraisal assignments. When appraising new proposed construction, the prior data can be reviewed for those construction projects that are most similar to the subject property in quality, size, and features and be used as cost data to support cost estimates for the current appraisal. As the cost of construction materials generally continue to spiral upwards, it may be necessary to adjust for time, depending on how old the cost data is.

To read more tips, click here

My comments: Well written and worth reading. New home construction appraisals can be tricky. I quit doing them a while ago – too many various hassles, but many appraisers like doing them. There are few new homes built in my area, except stacked condos. Land is too expensive.

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What is a “good” appraiser?

By Ann O'Rourke on April 15, 2022 / desktop appraisals, Fannie, real estate market / Leave a comment

Tags: desktop appraisals, Fannie, liability, real estate market

8 Characteristics of a Successful Real Estate Appraiser

Excerpt: Here are two:

Unbiased

The ability to form an unbiased, objective opinion of value is absolutely essential in this line of work. According to this survey, many appraisers agree that this is the single-most-important trait you need to have as a real estate appraiser. In order to provide trustworthy results and uphold the integrity of the appraisal profession, you must be unbiased. Otherwise, you risk losing your professional reputation.

Analytical

It’s important for appraisers to be analytical, as each appraisal assignment will require thorough analysis and critical thinking.

To read more, click here

My comments: I was hooked on science in my first science class: high school biology. I studied biology and chemistry in college. I learned to be objective and unbiased, analytical, and open to almost any possibility. I have used these skills in appraising. I have always been curious, which keeps me up on what is new and other ways of looking at appraising a property. As far as I know, relatively few appraisers have science degrees.

Appraisers – The Past and The Future

Appraisal Business Tips

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ANSI Z765-2021 Resources for Appraisers

1004MC or 1004 ANSI

By Ann O'Rourke on February 25, 2022 / ANSI, appraisal forms, liability, real estate market / Leave a comment

Tags: ANSI, Fannie, liability, real estate market

1004MC or 1004 ANSI

By George Dell, MAI

Excerpt: The 1004MC “market conditions” appraisal addendum was created by Fannie Mae and Freddie Mac to require a form-based market analysis. This added to the traditional practice to collect a handful of ‘comps’ to opine and foretell market price. There are problems and unintended consequences.

The ANSI requirement is that residential appraisers measure houses according to the ANSI (American National Standards Institute) method. This constraint can have good long-term results for consistency, if it is adopted by the full universe of participants. The requirement would have to include tax assessors, building permit agencies, real estate agents, investors, insurance companies, architects, contractors, and unlicensed appraisers. This part might take years, if ever.

We can take a quick look at some similarities, some differences, and where things may go…

To read more, click here

My comments: George and I talked about this and agreed to disagree. He is not the only one with doubts about ANSI. Most are appraisers, like George, who have never used it. I finally found a somewhat negative post about ANSI, instead of social media rants ;>

My opinion: This Standard is better than no standard. Appraisers have been using ANSI since 1996. I did not hear about problems with using it or with lender clients. Change is hard.

See the end of this newsletter for info on Appraisal Institute’s New 4 hour online ANSI class and an excellent ANSI webinar this Monday with Lyle Radke from Fannie being grilled by three appraisers! Two of them had negative comments.

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Appraisal Obsolete? Now or in the Future?

Appraisal Comps in Lopsided Markets

By Ann O'Rourke on February 11, 2022 / ANSI, appraisal, liability, USPAP / Leave a comment

Tags: ANSI, appraisal how to, liability, USPAP

Different colorful shapes wooden blocks on beige background, flat lay. Geometric shapes in different colors, top view. Concept of creative, logical thinking or problem solving.

Choosing comps in a lopsided market

By Ryan Lundquist

Excerpt: QUESTION: With so many listings receiving offers above list, and people having to pay the shortfall between the appraised value and the contract price, how do appraisers look at comps? If a property sold at $580,000, but it actually appraised for $547,000, and the buyer paid the difference, which number do you use? $580,000 or $547,000?

ANSWER: Here are a few things on my mind.

1) Weigh the comps:

In any market (not just today), we have to weigh the comps. Or another way to say it is, we have to appraise the comps so to speak. What I mean is if something clearly sells for too much, it’s reasonable to give that property less weight in our analysis. Likewise, if a property sells for too little, we might also give less weight to that sale. Granted, selling for too little isn’t as common lately, but in past markets we regularly considered whether short sales or bank-owned sales sold below market value.

2) One sale doesn’t make or break the market:

It’s important to note one sale doesn’t make or break the market. This means one lofty “lone ranger” sale doesn’t all of a sudden mean the rest of the market will go to that level. This would be like saying that record-breaking $7M sale in Shingle Springs from August will pull the rest of the market up. Nah, I don’t think so. Or Zillow buying a house for $40,000 more than the comps will cause the rest of the market to rise. Nope. If one sale closes at $580,000, but the rest of the market is below $550,000, we won’t arbitrarily accept $580,000 as the new neighborhood price threshold. The same would hold true if a different house sold at $450,000. This one “low ranger” (sorry) won’t automatically drag the rest of the market down.

To read more plus lots of comments, click here

My comment: Some good comments and tips for this crazee market!!

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Appraisals Obsolete Now or Later?

By Ann O'Rourke on December 3, 2021 / appraisal business, Fannie, FHA, liability, zillow / Leave a comment

Tags: appraisal business, Fannie, FHA, liability, zillow

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.?

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