6-26-20 Newz: Lot Size Mistakes – Reconsideration of Value- Unusual Mailboxes

Lot size mistakes 

By Ryan Lundquist

Excerpts: I’ve seen it happen twice lately where Tax Records lists the lot size, but it’s actually incorrect. In one instance Realist showed the lot was five acres when in fact it was only two acres. In another example it said two acres when it was less than one. Yikes.

My advice? Thankfully most of the time we can trust the lot size in Tax Records, but it’s still a good idea to quickly double-check just to be sure. After all, listing the wrong lot size in MLS or an appraisal could lead to litigation, right? What we can do is view the plat map to see if there is anything abnormal as well as try to piece together the lot size (easy to do if it’s a rectangle)…

To read more, click here

Short with good map illustrations. Plus many, many appraiser comments. I guess it is a hot topic!!

My comments: Also check out Ryan’s local recent market video for some good ideas on how to show market conditions. Plus, all his graphs illustrating his local market.

When I want to know the lot dimensions to determine lot size, I always get a copy of the legal description (usually from the recorded deed). Assessor’s office maps are for assessment purposes and do not always match the legal description. Google Maps is a good way to determine parcel size if the site boundaries are clear.

When an owner asks about lot dimensions and lot line locations (usually a dispute with a neighbor), I always give the same answer: “I Always Assume the Fences Are Not on the Property Line. Hire A Surveyor! ”

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6-12-20 Newz: AMC Fined $2.8 Million – Terrible Agent Photos – Accuracy of Opinions

Can You Measure the Accuracy of An Opinion?

Excerpt: Two appraisals are completed on the same property. Each appraiser has a different opinion of the market value. Which one is accurate? Can they both be accurate?

Occasionally, I read articles or hear of companies that refer to the appraiser’s “accuracy rate”. I’ve always wondered how this is possible to measure. After all, an appraisal is an opinion of market value. Interestingly, if you look up the word “opinion” on www.dictionary.com, one of the definitions is, “a personal view, attitude, or appraisal.” Another is, “The formal expression of a professional judgement”. Can an opinion, or a person’s professional judgement be measured?

To read more, click here

My comment: I used to do a lot of relocation appraisals, where 2 or 3 appraisals were done on the same home. If the appraisals had the same values, it was suspicious. We were usually within 5%. Our accuracy was judged on how close we were to the sales price 60-90 days in the future. Very challenging appraisals!!

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6-5-20 Newz: Waivers; Wavy House; Unemployment Help For Fee Appraisers

A Very Wavy House 

Just For Fun!!

Excerpt: “Everyone basically has this ‘Wow!’ reaction, and it’s pretty polarizing: You either love it, or you hate it,” Assemi says of the home, which is now listed for $599,000. Its roof mimics ocean waves and is covered with cedarwood shingles.

“It’s just so unconventional, but inside, it’s a regular house,” …

The home has three bedrooms and three bathrooms in 1,845 square feet, and its ceilings are 21 feet high. It comes with 6.22 wooded acres on Collins Creek at the base of the Sierras and Sequoia National Park, about 20 minutes from Fresno, CA.

Interesting article and lots of fotos: To read more, click here

My comment: Located in Sanger CA, close to Fresno in a primarily agricultural area. A very unusual home for this part of California!! The median home price in Fresno is $258,500 per Zillow. Can You say: over-improvement? In the Bay Area, our the median price is around $950,000.

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What’s the ONE thing that is most often overlooked by appraisers?

By McKissock

Excerpt: We recently asked our appraisal community, “What’s the ONE thing that is most often overlooked by appraisers?” We received a wide variety of answers ranging from big-picture oversights to specific details. The most common answer we received was “Highest and Best Use.”…

Highest and Best Use (HBU)

This was the top answer, which was written in by about 8% of survey respondents“First question when doing an appraisal is the highest and best use. If there are two very different opinions of value on a property, different HBU is often the reason.”…

Obsolescence

Obsolescence is another item mentioned by multiple survey respondents. Appraisers cited both external obsolescence and functional obsolescence as being frequently overlooked.

“External obsolescence for the subject property – When I’m reviewing appraisals, I see this more often than other oversights. When I was performing retrospective reviews for FNMA, their biggest complaint was that appraisers did not point out external obsolescence for the subject and/or its impact on marketability (if there was an impact).”

“Functional obsolescence – Appraiser focus has changed over the years as subject functionality has changed.”

To read lots more, click hereb>

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5-22-20 Newz: Refis to Surge – Selling Over List – What’s Happening in Your Market?

Mortgage refinancings set to surge to a 17-year high

Lenders probably will originate $1.5 trillion in refis, a 51% jump from 2019, Fannie Mae says

Excerpt: Even as other parts of the economy tank, lenders will originate $1.5 trillion in refis in 2020, a 51% jump from 2019, according to the forecast. That would be the highest level since 2003 when $2.5 trillion of mortgages were refinanced, according to data from the Mortgage Bankers Association.

The lowest interest rates on record will bolster refis after the Federal Reserve began buying mortgage-backed securities to stimulate bond demand and grease the wheels of the credit markets. The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 3.23% at the end of April, according to Freddie Mac.

It’s probably heading even lower, according to the Fannie Mae forecast. The average rate probably will be 3.2% in the second quarter, down from 3.5% in the first quarter, and drop for the rest of the year.

To read more, click here

My Comment: And I thought my 3.5% rate loan was a low rate!! Everyone should refi!! Appraisers will be very busy!! Maybe more lenders will order external and desktop appraisals.

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Will Sex Sell? BDSM Dungeon in Arkansas Basement

Excerpts: A hidden door gives access to the dungeon, leading down a spiral staircase. At the bottom is a full nightclub, outfitted with an entertainer’s pole, along with custom-BDSM furniture Shayne made himself.

The couple says the neighborhood is quiet and an excellent place to raise a family.

Some of their neighbors know about the dungeon, and a few have been invited over. The space isn’t a dirty secret, and the couple is happy to talk about it with anyone who shows interest.

Despite the fact that the surrounding community is largely conservative, Shayne says the couple has had “zero negative feedback ”

For more info and lotsa fotos click here

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5-15-20 Newz: 700 Missing Sales – Comml Appraisals Down – 22 Unusual Homes

Weird or Wonderful? 22 Homes That Are Anything But Ordinary

JUST FOR FUN! TAKE A SHORT BREAK NOW. YOU DESERVE IT!!!

Excerpts: Homebuyers and renters who dare to be different often put down roots in alternative dwellings that others eschew. Even if your inner compass tells you to steer clear of the offbeat or the outlandish, you may enjoy window-shopping these eccentric estates with …

Here’s one – foto above:

Sky-high Single Family Home in Prescott, Arizona

Is it a bird? Is it a plane? No, it’s the Falcon Nest, a ten-story dwelling whose 124-foot stature makes it the tallest single family home in North America.

To read more, click here

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Fannie Appraiser Update

Undated. Received by email on 5-13-20

NOTE: This is about exterior only and desktops. These appraisals are NOT the same as the old “drivebys” where you assumed the inside was like the outside, no owner interviews, etc. The old Desktops (aka comp checks) are not the same now. Lots more research is required.

Excerpt: As Fannie Mae has begun to examine appraisals completed using our temporary appraisal flexibilities in Lender Letter LL-2020-04, Impact of COVID-19 on Appraisals, one issue we’ve observed is that some appraisals rely on assumptions about the subject property condition. Whether completing an exterior-only or a desktop appraisal, the appraiser must have a data source for all the relevant characteristics including interior condition. Obtaining that information, whether it be from homeowners or other sources, is not only encouraged, but is required. This is addressed in the FAQs regarding the temporary flexibilities (Q47):

As stated in Lender Letter LL-2020-04, the appraiser’s certification #10 was removed recognizing that the appraiser may have to rely on information from an interested party to the transaction (borrower, real estate agent, property contact, etc.) and additional verification may not be possible. The removal of this certification acknowledges this could affect the assignment’s results. If adequate information is not available to complete the appraisal, the assignment cannot be completed.

Excerpt:

My comment: Of course, a big problem is that few of them are being done now. I am sure this is the reason why there is so much confusion. They are a lot of work. You could decide just to turn them down if you get requests for very few of them.

Also, some clients order the “traditional” 2055, where you drive by, take a few photos, and assume the inside is like the outside. This is NOT acceptable for GSEs and VA. You MUST ask your client what type of 2055 they are ordering or, who are they selling the loan to. FHA does not use 2055s.

I sent out similar information last week. This is the “official” notice with references. You MUST take the time to learn about all the changes and do a lot more work than before. That is why you should charge the same for full appraisals, exterior, and desktops.

To read more, click here

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4-1-20 Newz: Effects on Value; FHA/VA; Return to Normal?; Fun Video

The paid Appraisal Today April newsletter will be free on April 3, Friday.

It focuses on what COVID-19 means for appraisers. I researched and discuss details: why data is the key, what are the comps, etc. Topics such as using gloves and face masks. There is lots of mis-information out there. I use the experts – scientists, especially epidemiologists.

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SOCIAL DISTANCING IS CRITICAL. WE ALL MUST WORK TOGETHER TO SO THAT FEWER PEOPLE GET THE VIRUS. WE MUST MAKE PERSONAL SACRIFICES. FOLLOW THE ADVICE OF YOUR STATE AND LOCAL HEALTH DEPARTMENTS.

Louisiana is an example of what happens when lots of people gather together. Mardi Gras was February 25. No one knew much about it then.

On March 5 I took an appraisal class. No one did social distancing, even myself, or even talked about it. Some hand shaking. One person coughed and quickly said something got caught in his throat so attendees were somewhat aware of it. Hard to remember what those days were like… when there were live classes or meetings…

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BE GRATEFUL THAT YOU CAN STILL WORK!!

We all see shuttered stores, many businesses shut down, employees laid off. Appraisers are still working. Lenders need appraisals. You choose which personal protection to use. You decide which appraisals to accept. You can drive around while most of us are staying in our homes.

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Interior Inspections: Tough Choices for Appraisers

More comments in workingre article here:

http://www.workingre.com/interior-inspections-tough-choices-for-appraisers/

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You already know what think – Just Say No.

Here are a few ideas:

  • Turn down FHA with interior inspection. way too risky!!
  • Raise your fees a lot for interior inspections. They are risky.
  • Drivebys and desktops will take a lot of time getting photos from borrowers. Asking questions, Etc. Ask higher fees than you used to ask.
  • Take fewer assignments.
  • This will not last very long. Lenders are shifting to drivebys and desktops. Why risk heath and safety you, your family and others, for a few appraisals?

GSEs/FHA/VA and bank commercial lenders are trying to protect appraiser’s health and safety by eliminating interior inspections. Freddie Mac has new guidelines for apartment appraisals.

Read more!!

3-13-20 Coronavirus & Inspections – AVMs & Wonder Bread – Toilet Race

Appraiser’s (Changing) Role

Q&A with Mark Verrett, Chief Innovation Officer at Accurity Valuation

Excerpts: WRE: How can appraisers adapt to meet the profession demands?

Verrett: I think there are several ways to adapt to these challenges. The first is to work toward diversifying your practice away from 100 percent mortgage business niches. Our firm is a leader in green valuation, rural valuation, valuation consulting and litigation support and we help our offices diversify into those spaces. However, this solution isn’t for everyone….

To directly take on the challenges facing appraiser relevancy in the mortgage space, significant change is required. Appraisers need to unite to create a like-minded national voice that is not rejecting proposed changes for the profession, but rather working with stakeholders (regulators, lenders, clients, etc.) in conceptualizing, testing, tweaking, and ultimately modernizing the appraisal process on the mortgage side.

The appraisal community has a tough assignment in their role in this modernization. To be useful in the discussion, we need to challenge ourselves to be creative and open-minded, yet diligent in maintaining or, even better, improving the quality of the valuation being produced. I think it is extremely important for appraisers to listen and understand the needs of their clients and to creatively develop solutions that meet those needs.

Worth reading with some good ideas. To read more, click here

My comment: Accurity has franchisees and some very savvy appraiser officers and directors.

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2-7-20 Newz: Obsolete Appraisers – Apartment AVMs – Outlier Sales

Not getting distracted by outlier sales

By Ryan Lundquist

It’s been a record-breaking couple of years. In New York we saw the highest residential sale ever in the United States at $238M. Then a couple months ago California got a new record with the Beverly Hillbillies mansion at $150M. And now there’s a listing in Bel-Air that just hit the market at $500M. The truth is it’s easy to get distracted by the bling of outlier sales because of how lofty the prices are, but here are a few things to keep in mind….

1) These sales don’t pull the market up: Outlier sales don’t pull the rest of the market up, and they have nothing to do with the entry-level market or affordability for the average person.

2) I just gotta have it: My observation with the highest sales is sometimes cash buyers offer prices that seem disconnected from what looks reasonable on paper. This doesn’t happen in all situations, but sometimes it does where the buyer simply says, “I just gotta have it.”…

For lots more tips, plus a few graphs, click here

My comment: When doing any type of statistical analysis, it is important to look at the outliers, high or low, so you can eliminate them in your data set. Very easy to do.

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1-30-20 Newz: Tax Records SqFt. – Weird SFR Zoning – 5 ft. Wide Home

13516718 – white wood texture with natural patterns

Tax Records is not the definitive source for square footage!

By Ryan Lundquist

Excerpt:

Why is the appraiser saying it’s only 1,400 sq ft? Tax Records shows the home is 600 sq ft larger. This issue comes up ALL the time, so let’s talk about it.

The truth: The Assessor’s records are generally reliable, but I’m just saying sometimes they’re not. Why is this? At times it’s as simple as the original builder not turning in accurate information when a house was built. Or maybe an owner took out permits but official records were never updated. Of course we’ve all seen instances where the tax roll shows two units on one lot, but there’s really just one house nowadays. Let’s not forget sometimes owners do an addition without permits, so the Assessor might actually be correct even though the house is technically larger or has even sold on MLS as a larger home. For reference, here are ten reasons why an appraiser’s sketch might be different.

For lots of comments and more info, click here

My comment: This one of the main reasons that AVMs will never be very successful for all homes. Over and over again, statistical analysis shows GLA is the most important physical feature overall.

Also, how bedrooms are determined varies a lot, depending on the local market and can vary over time. The assessor number of bedrooms may not match the appraiser’s. For example, tandem rooms. Finished basements can vary also.

I started appraising at a CA assessor’s office in 1976. In CA, State Board of Equalization regulated county assessors offices, so the procedures and terminology are very similar all over the state. However, GLA from the assessor may have different requirements than other sources, such as ANSI.

Proposition 13 passed in 1979, which only allowed an annual 2% increase in assessment per year, unless there was a sale or improvements (determined by permits). Over time, the information has become more and more out of date.

Data is not available for smaller counties if the assessor says it is confidential. Until the 90s, my county did not release any data, so I had to “guesstimate” on square footage for sales and listings. We finally got it when an MAI was elected assessor.

In the early 90s, I researched assessors records around the country. In some small rural counties the records were kept at the assessor’s home. They were not digitized and available for purchase by data companies.

Appraisers need to know which areas are not accurate. Someties GLA is “political”. Within a city, accuracy can vary. In my city the least accurate records are in the “Gold Coast” with many of the city’s larger, historic homes. In other nearby cities, some properties have low GLAs to keep the property taxes lower.

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1-24-20 Newz: Amrock suspends CA fee appraisers – Neutrality – Missle Silos

8 Funny Quotes About Appraiser Work Stress

Just For Fun!!

Excerpts: Real estate appraisal is an exciting and enjoyable profession—for the most part. But every appraiser knows that the job can be stressful at times, especially for those who are self-employed. If you’re having a hectic or frustrating day on the job, it helps to have a sense of humor. Here are some super funny quotes about work stress that we hope will brighten your day.

A few quotes

“‘Yay! It’s the weekend!’ Said nobody who is self-employed.”

“There cannot be a stressful crisis next week. My schedule is already full.” ­— Henry Kissinger

Very creative gifs! Sorry, they don’t work in these emails. To see them, click here

My comment: Very Funny and Realistic!

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