How Do Driveways Affect Appraised Value?

What’s The Size of Your Driveway?

By Jamie Owen
Excerpt: It really depends on how the appraiser is looking at it. Are they reporting the width of the driveway, the depth, or how many cars can fit on the driveway?
Most appraisers reflect the width of the driveway. Why? For one thing, many lenders prefer the driveway size to be reported this way. This is likely because it is less subjective. For instance, if the appraiser reports the driveway size based upon the number of cars that can fit on it, what kind of automobile are they using for their measurement? After all, a driveway may be able to accommodate a larger number of smaller cars than bigger ones.
Does it affect value? As is the case with nearly every aspect of a home, the answer is, it depends.
For instance, in high-density neighborhoods where street parking is limited, the size of the driveway could make a difference in value. On the other hand, in other high-density neighborhoods, many homeowners may use public transportation. If this is the norm for the neighborhood, the size of the driveway may not have any impact on value.
To read more and see fun animated gif, click here
My comments: Worth reading. Lots of topics are covered. Check out the fun animated gifs, etc.
In San Francisco, for example, off-street parking is at a premium in many neighborhoods. My brother bought a house 25 years ago with no off-street parking (primarily single family homes). I warned him, but he really wanted the house. It was a hassle then, but now, it is very difficult to find parking as many neighbors rent rooms to tenants with cars.
A significant issue with ADUs is where will the car(s) park? Will they take up the neighbors’ on-street parking?
I moved to San Francisco in 1968 and worked in a lab 20 miles away. The closest parking was 2-3 long blocks away when I got home from work. I moved from Tulsa, OK, where there was lots of parking everywhere. I never lived in a place without off-street parking again!
===============================================================

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 Real estate market, ROVs, forecasting, unusual homes, mortgage origination stats, etc.

Read more!!

Appraiser Retirement?

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

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.

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, Bias and ASC, real estate market, mortgage origination stats, etc.

 

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

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

 

Read more!!

Appraising Fixer-Uppers

What About Those Fixer-Uppers?

Insights from a Seasoned Appraiser
By Steven Vehmeier
Excerpt: We’re all familiar with the term “fixer-upper.” For many different reasons, properties can come on the market in less-than-par condition. The degree and cost to cure become an issue to buyers and sellers, and a challenge for appraisers. At some point, it’s no longer “normal market value minus cost to cure equals as-is value.”
The terms “entrepreneurial incentidddve” and “entrepreneurial profit” are typically discussed in terms of investment property, but the principles involved can also be applied to the many fixer-uppers—whether the buyer is a “purely investor type” or an “owner-occupied investor type.” Maybe a couple of new terms should be discussed: “sweat equity incentive” and “sweat equity profit.”
To read more, click here
My comments: Most of my appraisals are for estates (date of death). I have never appraised a home that was ready for sale when the person died: staged, new paint and floor coverings, yards cleaned up, etc. I very seldom have any repair estimates or structural pest control or home inspection report.
I always assume the home is empty of furniture and “broom clean,” which I learned doing lots of REOs in the past. If a home is cluttered with personal stuff, the price will be lower. But, it can be fixed easily and inexpensively. If it is a mess, I tell the executor to call me when it is cleaned out so I can see what the walls, floors, kitchen countertops, etc. look like.  If I can’t see, I disclose this in the appraisal and do my best to figure out a condition estimate.
Very few MLS listings here are not fixed up for sale. I look for “fixer”, “contractor”, “as is”, “handyman”, etc. in the description.

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, mortgage origination stats, Fannie and condos, real estate market, fixer uppers, etc

 

Read more!!

What is Included in Appraisal GLA (sq.ft.)?

Stairway to Confusion – What is Included in GLA?

by C. Brett Bowen
Excerpt: There has been considerable discussion over the years about gross living area (GLA) measurement standards. The ANSI Z765 standard gets the lion’s share of the attention, and is the most widely referenced standard in the industry by far. It can also be the most difficult to interpret, particularly when it comes to stairs. Here’s why.
It is primarily important to recognize two very important facts:
 1) a standard is nothing more than the definition of a unit of comparison
 2) it is the appraiser’s responsibility to be consistent with that definition.
First, what do I mean when I say that a standard is nothing more than the definition of the unit of comparison? The unit of comparison for something is critical to the understanding of that thing.
Second, as an appraiser, consistency with the definition is actually more important than which definition is chosen.
To read more, click here
My comment: Worth reading. I have seldom used ANSI. The standards were developed for new home construction. I have appraised many homes on hillsides, with often only the garage at street level (or just a driveway). Many historic homes, on level streets, have different types of “basements” converted to living area: above grade, partly below grade, etc. If I worked in suburbia, ANSI would work better. I use what the local market tells me.

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, mortgage origination stats, sfr zoning, german appraisers, GLA, etc.

 

Read more!!

Wholesale lender has AMC-free appraisals

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!

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 Fannie and Bias, real estate market changing?, appraisal business, unusual homes, mortgage origination stats, etc.

Read more!!

Market Decline Coming for Appraisals?

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.

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 liability, Market declining?, Humor, unusual homes, USPAP, mortgage origination stats, etc.

Read more!!

Location, Location, Location In Appraisals

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.

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 bedrooms, bias, time adjustments, unusual homes, mortgage origination stats, etc.

Read more!!

What should appraisers look for in a sales contract?

What should appraisers look for in a sales contract?

By Steven W. Vehmeier

Excerpt: When should we analyze the contract?

Looking at the sales contract early on allows the appraiser to identify any “subject to” items or other conditions that could influence the value conclusion.

However, reviewing the contract early might also put the sales price in the back of the appraiser’s mind. And although it shouldn’t, it may unintentionally influence the appraiser’s comparable selection and eventually impact a direction in value.

Maybe looking at the sales contract only after developing the appraiser’s opinion of value would help avoid the above concern?

To read more, click here

My comment: Some interesting, and maybe controversial, ideas. Short and worth reading.

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, AMCs, appraiser survey on the future, real estate market, waivers, turn times,mortgage origination stats, etc.

Read more!!

Subjective Language in Appraisals

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, bias, Airbnb, reconciliation, appraisal business mortgage origination stats, etc.

Read more!!