Appraisal News and Business Tips

Posts Tagged strange house

10-11-19 Newz: Appraisal Waiver Train – Multiple Offers – Secret Doors

Banks Are Driving the Appraisal Waiver Train

By Jonathan Miller

Excerpt: Look at the ASC members and their North Dakota waiver vote on July 9, 2019

Only FHFA and HUD voted against the North Dakota Waiver. Those specific agencies deal with appraisers first-hand and understand their role in the risk management process. The remainder are bank regulators or in the case of CFPD, represent consumer interests (and the agency has been gutted over the past several years to reduce its pro-consumer efforts).

In other words, banks are driving the waiver train. They want to remove a pain point from the mortgage process to grow more origination volume. The Federal government has already proved it will be willing to back up the banks if the economy collapses so why not keep pushing for removing of all pain points?

To read more, click here

My comment: Nothing new. Lenders have wanted to get rid of appraisals for decades. Impediments to The Deal.

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10-4-2019 Newz: Comp Photos – Waivers – No Permits – Rubik’s Cube

When 1,000 square feet doesn’t count

By Ryan Lundquist

Excerpts: One of the most interesting homes I’ve seen just sold. It was brand new, four stories, and a halfplex. Oh, and on paper it was 3,000 sq ft, but about 1,000 sq ft didn’t count in the square footage. This is definitely a conversation piece, so I’m thankful Realtor Brian McMartin agreed to do a Q&A. I hope this will be valuable and interesting. Any thoughts?

Quick points:

This house has 1,000 sq ft that is not permitted as square footage. The “non-conditioned” space looks just like square footage.

Understanding permits really does matter…

Interview with selling agent plus Ryan’s (and appraisers’) comments. Worth reading.

To read more, click here

My comment: I see non-permitted areas in homes a lot in my city, typically converted basements. Fortunately, I can get the permit info easily from the city and the property owner does not “get into trouble” because of my inquiry. I am lucky.

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8-23-19 Newz: Deminimus = $400,000 – Highest and Best Use – Fannie Cost Approach

Highest and Best Use – Residential Appraisers Need To Understand It!

Excerpt: There are many valuation products out there. CMA’s, BPO’s and AVM’s to name a few. What you will likely not see in those kinds of valuations, is the specific zoning class for the property being valued. Why?

With these types of valuations, a highest & best use (HBU) analysis is generally not made. However, if you hire an appraiser to value your home, we will perform this analysis. What is a highest & best use analysis? Why is it important in the development of an opinion of value? How is zoning involved?

To read more and see the fun animated gifs click here

My comments: My Most Frequent Residential Appraisal Rant!! I started at an assessor’s office in 1975. The First, and Most Important, Question was “What is the highest and best use?” In 1986 I started doing residential lender work. The form was just a check box for HBU. If you checked No, it was a big problem for the lender. Many residential appraisers don’t check the zoning, general plan, etc. One good way is to just drive around and see what is happening. For example, lots of small homes being torn down and McMansions being built. Or, lots of houses on a busy street converted to office uses. Or, a small house on a big lot with apartments all around it. A common residential issue is a possible lot split.

Don’t forget the General (Or Specific) Plan. It tells you what the city wants today and in the future for land use, which is not discussed in this article.

I have appraised a lot of older commercial properties for lenders, which often had a HBU different than the current use. I discussed it in my appraisals.

When there is a big difference in value between two appraisals, it is often due to a difference in opinion of HBU. Don’t get into trouble. Be sure to think about HBU!! If you’re not sure, contact an experienced appraiser, particularly one who does a lot of non-lender work and/or commercial appraisals.

In the Feb. 2017 issue there is an excellent article written for residential appraisers by Denis Desaix, “Residential Highest and Best Use Analysis: more than Just a “Check box” available to paid subscribers. See below.

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6-6-19 Newz: What’s Fannie Doing and Why – Shadow Banks – Photoshopping

Tracking the Economy Through New-Home Square Footage

Excerpt: The U.S. housing market may not be synonymous with the business cycle, as a famous 2007 paper proclaimed, but the ups and downs in housing, which represents a big part of the economy, usually do offer hints about what’s going on more broadly.

That’s why economists closely watch housing market indicators like sales volumes and home prices — as well as how Americans are accessing the market and managing their obligations to mortgages, rental costs, taxes, and so on.

To read more, click here

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5-17-19 Newz: Dancing and Crooked Houses – Will Appraisals Be Transformed??

Will Fintech Transform/Disrupt Appraisals?

Bifurcated appraisals is the “tip of the iceberg” in changes coming to lender appraisals

I recently attended Jeff Bradford’s excellent presentation on coming changes in the type of valuation used in the residential mortgage industry. I also attended a webinar “New Valuation Trends Disrupting the Industry” that focused on the lender side, especially loan originations. Both saw significant changes coming in the next 5-10 years, going from legacy to digital lending that will transformational.

Both used the term “Fintech” regularly.
Here are two definitions “computer programs and other technology used to support or enable banking and financial services” and “fintech is one of the fastest-growing areas for venture capitalists”. I have written about several VC funded appraisal companies in this newsletter, both residential and commercial, working on new ways to make appraisals more efficient.

Both presentations talked about many ways, such as using AI, photos and data to evaluate interior condition, estimating square footage without measuring, “real time” google earth, etc.

I will be writing about both presentations in the next month’s issue of the paid Appraisal Today.

For more info, google Fintech and mortgage lending and/or Fintech and mortgage lending appraisals. FYI, I did not know what fintech referred to and had to google it after the presentations;>
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4-26-19 Newz: Praising Appraisers – Hobbit Houses – New York AMC law

Hobbit Houses in Charlevoix, Michigan

Just For Fun!!

Excerpts: Growing up in northern Michigan in the early 1900s, Earl Young was obsessed with boulders. Glacial boulders, to be exact-ones moored in fields, forests, and on lake coastlines across the state thanks to the slow march and retreat of glacial ice during the Precambrian age.
The homes he designed will stop you in your tracks, as one did the last time I was there, passing by on a bike. Call them “mushroom houses,” “hobbit houses,” “boulder houses”; everyone has a different name for them. They’re often described concisely, if vaguely, as “organic.” Though some see Frank Lloyd Wright’s influence, they’re distinctly Young.

Fascinating! Lots of fotos and info at:
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4-18-19 Newz: Strange Bathrooms; Secret Suburbs; Accurate MLS Data?

SUBSCRIBER NOTICE:
Starting next week this email newsletter will be sent out on Fridays.
Why? After 25 years of sending on Thursdays, time for a change! Also, fewer emails on Fridays, so more time to read this newsletter (and not lose it in your inbox) ;>
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4-4-19 Newz: Loan Apps Way Up – Straw Bale House – Revised FHA Handbook 4001.1

Tips for choosing comps on a unique home (straw-bale house)

By Ryan Lundquist
Excerpt: It almost sounds like the big bad wolf story, but there really are homes built from straw. Literally. Today I want to mention a few things about this type of construction, share some photos of a local straw-bale house, and then talk briefly about how I approached appraising this one.

Worth reading to find out what Ryan did!!

My comment: Very good tips on appraising unique homes. No lender issues as the appraisal is pre-listing and not for a lender… Sacramento  is a Very Strange place for a straw-bale home!!

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These Locations Were Abandoned Years Ago. Look At Them Today

Excerpt: We’re used to seeing places maintained and kept to a high standard. Usually, we travel to places that are made to look as nice as possible through consistent cleaning and maintenance. But what about the places that are left behind?

Fascinating!! Take a break from appraising and check these out!!

https://www.editorchoice.com/abandoned-places/

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3-28-19 Newz: Adjustments Yes, No, Maybe – 2 Ads – Fannie Update

Woops! Last Wednesday I sent 2 ads at the same time…

My apologies! I have been sending out these ads for about 10 years and never sent out two at the same time.

Two weeks ago I came down with a flu that lasts about 3 weeks. It makes me very tired with a “fuzzy brain”. I did not notice that I had two ads scheduled for the same time.

Now, I check the ad scheduling several times the day before they go out, plus my office assistant also checks them.

I rarely get sick. When I do it is usually for a only a few days, so I was not prepared. Why do I seldom get sick? After over 40 years of appraising homes, I try to never shake hands or touch doorknobs. If I do, I wash my hands as soon as possible. I shook hands with a friend while shopping at a grocery store and did not wash my hands!!

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Fannie Mae Appraiser Update March 2019

Excerpt: What appraisers need to know about property data collection
Topics:
  • Appraisal Modernization
  • Property Data Collection (PDC)
  • Desktop Appraisal
  • Scope of Work and USPAP

Also: Learn how to appraise MH Advantage homes

Read the short update:
Link to Fannie’s Appraiser Page – lots of good info

https://www.fanniemae.com/singlefamily/appraisers

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3-14-19 Newz: Terrible RE Agent Fotos – Appraiser Article in Rolling Stone – Appraisers and Ipads/Tablets

The Property Valuation Reckoning is Imminent

How Technology is Highlighting Underwriting’s Shortcoming

Excerpt: some high-level aspects that can be used to get conversations started.

1. Increasing the availability of detailed, property-specific information, including both operational (ongoing) activities and transactions (sale, refinance, etc.).
2. The collection and analysis of macroeconomic, microeconomic, and capital markets influences that affect the real estate industry.
3. Using concepts such as systems thinking, systems engineering, and advanced technology such as artificial intelligence, machine learning, and deep learning to design semi-automated models that capture and make sense of both property-specific and larger capital markets factors.

Very interesting ideas and analysis. Long, but worth reading. FYI PropTech is a newish acronym. See the next link.

What is PropTech?

My comment: The article gives commercial examples, but is relevant for residential. I have been watching commercial applications, such as AVMs, attempted since the 1990s. The biggest problem is the lack of data. Costar is the major source of data in many areas and has not allowed its data to be commercially used by AVM developers, as far as I know. For leased commercial properties you must have income and expenses, which is not always available. For some types of non-leased properties, such as owner occupied warehouses, AVMs could work well.

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