Appraisal News and Business Tips

Posts Tagged strange house

12-6-18 Newz// Threshold Proposed Increases, Ancient Cave Homes

Proposed appraisal threshold increases keep coming – both residential and commercial !!

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House Republicans Push to Ease Property Appraisal Rules Before Giving Democrats Control
Verification of Real Estate Values Would Drop by More Than Half Under Proposal
Source: Costar

Excerpts:

Republicans in Congress and U.S. financial regulators are proposing to ease appraisal rules for real estate sales financed by credit unions, prompting critics to warn the move could recreate some conditions that fueled the financial crisis more than a decade ago.

The proposals are part of a larger push by the Republican leadership in the House, which will hand over control to the Democrats next month, to roll back financial industry regulations while the GOP is still in charge in that chamber. The National Credit Union Administration is accepting comments until midnight on Monday on its plan to increase the threshold for nonresidential sales to $1 million, which it said would boost the portion of sales not requiring an appraisal to two-thirds of all transactions from 27 percent. About 210,000 commercial property transactions were valued at $1 million or less in 2017, according to CoStar data.

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18 Appraisal Groups send letter opposing credit union new commercial threshold

Excerpt: The letter noted that the federal banking regulatory agencies – the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Federal Reserve Board – earlier this year approved increasing the commercial appraisal threshold from $250,000 to $500,000

“We are deeply concerned the NCUA proposal, if finalized at $1 million for commercial real estate transactions, will result in a regulatory ‘arms race’ between the Agencies and the NCUA,” the letter said. “This would result in the NCUA – the agency with the least direct experience in overseeing business and commercial real estate lending – effectively driving the appraisal policies for the entire financial regulatory system.”

The letter also noted that legislation adopted this year by the U.S. House (and awaiting action by the Senate) would link commercial appraisal threshold levels for two of the U.S. Small Administration’s most popular loan programs to those established by the federal banking regulatory agencies. “This (NCUA) proposal will likely impact not just credit unions and banks, but SBA lenders and risks associated with SBA loans,” the letter said.
The NCUA did not propose changes to the appraisal threshold for residential loans. “We support the NCUA’s proposal to maintain the $250,000 threshold level for residential real estate transactions,” the letter said.
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Sign the Petition!! (residential)

Written by Ryan Lundquist and Jonathan Miller
Almost 3,000 have signed the petition as of yesterday!!

Excerpt:

While the current administration clearly believes in deregulation, this doesn’t sound like a move to protect the American consumer and the United States housing market. As recent experience tells us, it’s going to cost us.

Please sign the petition to send a message to federal regulators that exposing the consumer and taxpayer to unnecessary mortgage risk is not supposed to be their role.
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11-29-18 Newz// Proposed $400k threshold for appraisals -The American Garage – a very strange room

$400,000 Proposed bank threshold for appraisals to be replaced by evaluations

Below are links to the proposed rule, what others are saying, and where to send your comments on the proposed rule.
OCC Issues Notice of Proposed Rulemaking to Exempt Residential Real Estate Transactions of $400,000 or Less from Appraisal Requirements
Excerpts: Rather than requiring an appraisal, the proposal would require that residential real estate transactions exempted by the threshold obtain an evaluation consistent with safe and sound banking practices.

Read what the OCC says in their announcement – one page www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-123.html

Comments will be accepted for 60 days from publication in the Federal Register.

Instructions in the full Full 69-page proposed rulemaking. Download the above link and search for comments

The word “evaluation” is included many times in the document. Google evaluation to see what it says.

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FDIC, OCC, Fed propose raising appraisal threshold for first time since 1994. Good analysis of how many loans would be affected:

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Push to cut back on home appraisals sparks controversy
By Ken Harney, long time nationally syndicated real estate writer who regularly writes about appraisal issues

Excerpt: The Trump administration wants to eliminate professional appraisals on a large number of home-sale transactions – a move that critics say could push the country back toward the see-no-evil days of mortgage lending that preceded the housing crash.

Includes comments from appraisers Ryan Lundquist and Pat Turner plus Appraisal Institute.
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Link to Appraisal Institute letter
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Get rid of appraisers while nobody’s looking
By Ryan Lundquist

 

Excerpt: I’m guessing these “evaluators” will be real estate agents who do BPOs, employees at banks and data firms, and probably some appraisers who need the work at $75-$100 a pop.

Read it here, plus the appraiser comments, of course.
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My comments:
– FIRREA increased the deminimus from $200,000 (1989) to $250,000 in 1994, but appraisals were still done. Why? Fannie and Freddie’s investors wanted them. FHA, VA, etc did not adopt the deminimus.
– What is an ‘evaluation’ and who does them? Hopefully, someone will tell me what is an evaluation?
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11-15-18//Newz: – Ball Houses – No Appraisers Left? – Misleading and USPAP

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Bolwoningen Ball Houses

 Excerpt: Bolwoningen consists of 50 sphere houses. The balls are made of cement, reinforced with fiberglass. They are mounted on the base in the form of a cylinder. Each sphere’s diameter is 18 feet and each has 11 round windows. The layout of these structures is quite unusual. In the center of the sphere there is a bathroom and a tiny bedroom, and a living room and kitchen, are located on the second floor-level. The house can be completely disassembled and transported to any other place (the weight of this building is only about 2755 lbs). In addition, this building can be placed not only on the ground, but also on water, on a stationary platform.

Locals didn’t quite appreciate the vision of the architect, but there are plenty of tourists, who would love to visit or even experience living in these futuristic houses.

My comment: Fascinating!! It was built in 1984 and is surrounded by standard homes. Check out the 2 links above and/or google bolwoningen ball houses
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What Would Happen if There Were No Appraisers?

By Tom Horn
 
Excerpt:
7 Consequences of Eliminating Appraisers From Mortgage Transactions
1) Questionable accuracy due to faulty county records
2) No reconsideration of values
3) No critical thinking that takes into consideration nuances of the market

Click here for more commentary and to see the other 4 reasons.

My comment: Very good analysis!! Needs to be sent to all the people who say appraisals are not needed…
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11-8-18 Newz// 8 ft Wide Townhome – Election and Banking Regs – Template Tips

What’s 8 Feet Wide and Has an Elevator? Manhattan’s Tiniest Fancy Townhouse – asking $5 million.

Excerpts: On a cobblestoned lower Manhattan street near the approach to the Brooklyn Bridge, a four-story house is about to go on the market for $5 million. The widest room measures 10 feet.

Small houses have a long history in New York. A Dutch-style gabled house at 75 ½ Bedford St. in Greenwich Village built in 1873 is 9 ½ feet wide. It is “popularly known as the smallest house in the city,” according to the city’s landmarks preservation commission. Its tenants have included poet Edna St. Vincent Millay, and anthropologist Margaret Mead.

My comment: I wonder what an 8 ft wide floor plan, with an elevator, looks like???
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7 Quick Tips for Using Appraisal Templates

Excerpt: Use these tips for proofreading appraisal reports:
5. Proofread Will a few typos or misspellings ruin your appraisal career? Probably not. However, they do seriously undermine your professionalism and suggest that you lack attention to detail. Take the time to ensure you are putting forth polished reports.

Focus on your most recent edits. When you edit something, it’s easy to introduce new errors, such as missing or repeated words. Proof new content and comments two to three times after you edit them, but also home in on those areas again during your final proof.

For more very good tips that we can all use click here:

My comment: I use a few templates for form reports and my assistant has to very carefully check each appraisal I writeup to be sure everything is okay! I gotta make sure I change the effective date of the appraisal and signed dates around the first of the year, of course…
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11-1-18 Newz// $245M listing – Land value – Living Underground

$245M Bel Air CA mansion is nation’s most expensive listing

Originally listed for $350M, it’s still a potential record-breaker after a price cut

Excerpts: The limestone clad mansion in Bel Air owned by the late TV executive Jerry Perenchio just got a price cut.

But at $245 million, the commanding French neoclassical residence, which measures 25,000 square feet, is still the most expensive listing on the open market in the U.S.

The property, which came up for sale last year for a staggering $350 million, has long been the cream of the crop among high-end estates…

A 105,000-square-foot mega-mansion built on spec, also in Bel Air, has a ridiculous $500 million price tag, but it’s not listed on the open market.

My comment: And I just read that the Southern California market is in a slump… who knows about this price range ;>
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Living Beneath the Ground in an Australian Desert

For about a century, residents of Coober Pedy have escaped the searing heat by building their homes underground.
Excerpt: “Bars and restaurants are underground, churches, all these children growing up living underground,” Ms. Merino said in a telephone interview about the residents’ social and private lives. “There’s nothing different about them; they’re not cave men. They’re normal people choosing to live in a different way.”

My comment: I have been reading about this place for awhile, but the author, who “stumbled upon” it has an excellent Fascinating article with great photos!!
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10-11-18 Newz://Dome Homes – Tandem Bedrooms – Competency

8 Dome Homes Ideal for Well-Rounded Buyers

Excerpt: Geodesic dome homes always strike a chord with buyers looking for a different type of house.

They’re also in favor these days thanks to their cosmic, forward-looking designs. Futurist and architect Buckminster Fuller conceived the geodesic dome in the belief that the shape of these rounded dwellings was the most efficient use of resources possible, and that the homes were ideal for mind, body, and spirit.

Here are a few:
– 37849 W Johnson Lake Ln, Marcell, MN Price: $129,000
– 35685 Lake Summit Dr, Temecula, CA Price: $775,000 – Two connected domes
– 5825 E Saguaro Rd, Cave Creek, AZPrice: $469,000 – Price includes a large maze

Check out the fotos and info at:

My comment: They all kinda look the same to me ;> I have never appraised one, but don’t miss it. Very few here. Just use other odd ball properties as comps I guess. There is one in a nearby city that I drive by regularly as a reminder of what I don’t want to appraise ;>

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Is the market tanking or softening?

Video by Ryan Lundquist
About the Sacramento CA market, but applies to all markets
21 minute video. Worth watching.
More articles by Ryan at http://sacramentoappraisalblog.com
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9-6-18 Newz//School Premiums – Cabin Fever – Appraiser Diversity

Where Are the Largest Public School Real Estate Premiums in U.S.?

Excerpt: Coastal cities and their suburbs dominated the California list, with America’s most expensive prime public school areas dotting California-from the mansion-speckled towns around Silicon Valley to the affluent school district of Rancho Santa Fe, outside of San Diego.

Note:  This article focuses on California, Washington state and New York city.

Click here to see a map of the school ratings where you appraise, used to live, live now, etc. Definitely accurate for my city. Yes, being in some districts make a difference in value… Fascinating!!

https://www.greatschools.org/

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8-16-18 Newz//Market starting to tank? ;Unusual Homes ;Public Trust Failed?

Bye-bye 1004MC, Hello Analysis

By Rachel Massey, SRA, AI-RRS
Excerpt: What does this mean to the residential practitioner operating in the mortgage space? It means that the requirement for analyzing the market remains, and it is now up to the practitioner to support their opinion, without the benefit of a flawed format. Appraisers can now choose how they present their analysis, which may include multiple sources to support an opinion. Fannie Mae is clear that the one-unit housing trends section should reflect properties that are directly competitive with the property being appraised. The following information relates to several different ways to support trends, but is not an exhaustive list.

Read the full article here:

My comment: FHA and VA still require 1004mc, plus some lenders and AMCs. Freddie is expected to drop the requirement.
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8-9-18 Newz//No more 1004MC?? ;Witch Windows ;North Dakota Waivers?

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Markets slowing down. Price declines??

Housing market is showing signs of cracking: ‘Anything-goes list-price strategy is no longer working
Excerpt: But the slowdown is also tied to overheated prices. Even in the hottest markets, there is a limit to affordability, and that limit is clearly now being hit.

In pricey Southern California, sales of both new and existing homes fell sharply in June compared with a year ago, according to CoreLogic. Demand is still quite strong, and while prices continue to gain, more listings are showing price reductions.

My comment: If I knew when the prices peak, I would be rich and get the Nobel Prize!! It is very tricky. Beware of price declines starting. Keep close watch on lots more listings than pendings. Few, or no, offers way over list. The bottom of the market is easy to see. Fast declines, then stabilizes for quite a while.
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The problem of overpricing in real estate

By Ryan Lundquist

 

Excerpts: Overpricing is a problem. You’d think in such a “hot” market that it wouldn’t be an issue, but it is. I’m not trying to dog sellers, but let’s talk about some of the most common pricing mistakes right now. I hope this helps.

5) Sales instead of comps: The most common pricing mistake I see is pricing according to a sale down the street that really isn’t comparable. So a seller says, “I know that house is totally remodeled with a pool, but someone’s going to pay the same amount for my house.” My advice? Price according to similar homes that are actually getting into contract rather than dissimilar properties. Be careful about hijacking price per sq ft figures too.

My comment: Written for real estate agents, but helpful for appraisers. I encountered this when doing a retrospective estate appraisal for a house that will be listed. The owner kept going on and on about a home nearby that sold for $1,100,00 that was “smaller” than hers. Fortunately, I was not doing current value ;>

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7/19/18 Newz//Price declines? .History of Appraisals .Whale House

The History of Appraisals

By Ed Pinto
Excerpt: Many say “history always repeats itself” and in the case of appraisals, it may be for the best. We sat down with Edward Pinto, the Co-Director of AEI’s Center on Housing Markets and Finance as he shares with us his discoveries from the original FHA forms.

Dating back to the 1900’s Ed found the tools needed to bring the appraisal process back to how they were originally called for – based off of the market value and the information proved by the expert, the appraiser.

Very interesting and worth reading:

My comments: I have published several articles in my paid Appraisal Today about the history of appraising, going back to the Bible: the Book of Moses!! I have been inspired to republish them in the September issue of the paid Appraisal Today.

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