New sewer line increases value for appraisals?

My new sewer line adds huge value, right?

January 19, 2021, By Ryan Lundquist

Excerpt: A new sewer line. That’s what 2020 gave my family as a parting gift before the year closed. Yep, just before Christmas, we had to replace our entire line at a whopping $13,688. I know that sounds crazy expensive, but we had four separate bids and went with the most reasonable one. In part it was so pricey because we had one hundred feet of the line under eighty feet of concrete.

The good news is my house is worth $13,688 more now, right?

To read more plus lots of appraiser comments click here

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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 fees, house settling, unusual homes, mortgage origination stats, Covid tips for appraisers, etc.

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

Be A Crack Detective

By Jamie Owen

Excerpt: Over the years, I have seen many cracks: big cracks, small cracks, long ones, and short ones. I’ve seen cracks of all different shapes and sizes. I should make it clear that I am not a crack expert. Before I go on, I should also make clear the type of cracks I am referring to. Settlement cracks!

Let’s first talk about the two fundamental types of settlement cracks. Structural and non-structural. It should be noted that sometimes a crack may appear to be structural, when it is not, and visa-versa. That’s one reason why a qualified professional is sometimes needed to make this determination.

To read lots more, see two good videos, and find out where the phrase “Crank Detective” came from click here:

My comments: One of the first house appraisals I did in the Bay Area was a large 2-story home on a steep hillside. I saw cracks radiating from the same corner of the drywall on both floors. Outside, on the same corner, I saw cracks on the outside stucco. A drain pipe ending at a depressed area, where water had been sitting for a long time, was the cause of the interior and interior damage. The home was settling on that corner. Under the house were cracks in the foundation.

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

Anatomy of a Sales Comparable

By Tom Horn

Excerpt: 1) Verify the sale occurred – An appraiser can obtain information about a recent sale from the sources noted above or even from a homeowner who was aware that one occurred. However, this information must be confirmed and verified.

I have had multiple occasions where some of the information provided to me was not correct. This was not because anyone was lying or it was intentional but because there was a typo or some other error.

Ideally, it is best to first verify with a party to the transaction that the sale occurred and then to double-check this through public records. Verification sources include the buyer, seller, listing or selling agent, or closing documents. The information to be verified includes the sale price and date of sale.

To read more, click here

My comments: Written for real estate agents, but good reminders for appraisers.

Note: Tom recently recovered from Covid. He did not get it while appraising. A Case of COVID, 2020, and Birmingham Real Estate To read more, click here

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

Martha’s Vineyard Estate From 1688 Tops This Week’s List of the 10 Oldest Homes for Sale

Excerpt: The list is topped by an estate on Martha’s Vineyard, MA, that was established in 1688. The James Allen House sits right next to Chilmark Pond and the Atlantic Ocean beyond.

There’s something soothing about looking at things that have withstood the test of time. Perhaps that’s why our regular peeks at the oldest homes on the market are so darn popular.

The 10 oldest homes available for sale this week date all the way to the establishment of the 13 ragtag Colonies. Each represents a long-standing commitment to the stories they have to tell and to all the people who took care of these homes through the years.

To check out all 10 of the oldest homes, click here.

My comment: Here in the Bay area, there were relatively few homes until the Gold Rush, which started in 1868. People from all over the world came to San Francisco. It was a wild time! There were few comparatively homes built prior to 1860. The oldest buildings in California are missions and churches built by the Spanish in the late 1700s.

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

Getting too many ad-only emails?

4 ways to get only the FREE email newsletters and NOT the ad-only emails.

1. Twitter:  @appraisaltoday.com (same time delivery) https://twitter.com/appraisaltoday – all recent newsletters

2. Appraisal Today blog:  https://appraisaltoday.com/blog  (posted by noon Friday) To get notices when newsletters are posted, sign up in the upper right of the blog. No ads in the blog post. You will receive an email to confirm.

3. Email Archives:  https://appraisaltoday.com/archives

(posted early Friday) Link is above and to the right of the big yellow email sign up form. Newsletters start with “Newz”. Contains all recent emails sent.

4. Link to 10 most recent posts and newsletters (no ads) at www.appraisaltoday.com  scroll down past the big yellow signup block.

NOTE: When you have set up one of the choices above and it is working, you can unsubscribe from this email list, which includes getting ads, by clicking the unsubscribe button at the bottom of every email newsletter.

Click here for the list of 4 ways plus information on why I take ads, etc.

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

New in the January issue of Appraisal Today

Excerpt: Ten Top Appraiser Time Wasters by Doug Smith, SRA

1. Over emphasized work-life

Appraisers generally underestimate the fatigue factor in their lives.

Appraisers with travel time and heavy inspection schedules can become pressed for time to relax and re-energize.

Working when you are tired hinders thinking. The words “time off” and “vacation” should not be a foreign language in the appraiser’s vocabulary.

The most important software in the appraiser’s office is themselves. Why run on overload when there is a simple alternative to planning and inserting time to refresh and recharge? Sooner or later, health may suffer when the crisis point is reached. Your time off will be forced, and it will probably occur at the wrong time.

One casualty of an overly hectic schedule is sleep. Sleep is fundamental to health, and appraisers must be aware of the need for sufficient sleep and rest. Take a sleep inventory over a couple of weeks and abide by the results of this survey.

To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this article gave you one good idea about getting more done, it is worth the subscription price!!

—————————————————————-
Not sure if you want to subscribe?

Sign up for monthly auto renewal for $8.25!!

Cancel at any time for any reason!!!

$8.25 per month, $24.75 per quarter, $89 per year (Best Buy) 

or $99 per year or $169 for two years 

Subscribers get, FREE: past 18+ months of past newsletters 

To purchase the paid Appraisal Today newsletter go to

www.appraisaltoday.com/products  or call 800-839-0227. What’s the difference between the Appraisal Today free weekly email newsletters in this blog and the paid monthly newsletter?

Click here for more info!If you are a paid subscriber and did not get the January 2021 issue, emailed Jan. 4, 2021, please send an email to info@appraisaltoday.com and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.

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

Appraisal Fees on the Move: New Survey Asks How Much

by Isaac Peck, Editor, WorkingRE

Excerpt: The latest data from Freddie Mac indicates that appraisers have unquestionably participated in this boom. Danny Wiley, Senior Director of Valuation for Single-Family Credit Risk Management at Freddie Mac, reports that the seven months since the COVID-19 pandemic began (March-September 2020) represent the seven highest volume months in terms of appraisals received to the Uniform Collateral Data Portal® (UCDP®) ever on record. Compared to 2019, appraisal volume was up 40% from January–September 2020 based on UCDP numbers.

… only about 15% of appraisal assignments ordered utilize the new appraisal flexibilities permitting exterior only, or desktop assignments, according to Fannie Mae’s latest data.

To read more and take the survey click here

My comments: AMCs are desperate! I had a call from PCV Murcor AMC this week. The first AMC call I have had for a very long time. Maybe they were going to the state regulator and calling every appraiser in my small town. There very few active fee appraisers here.

I will have info on the volume of Covid alternative appraisals in each state in Appraisal Today’s February issue

Raise Your Fees Now!!! They will go down again when rates go up. 

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

Michael Jackson’s Neverland Ranch Sells for $22 Million

Excerpt: Initially listed in 2015 for $100 million, the home sat on the market for more than five years and multiple drops in the asking price until it finally sold last month for $22 million.

Before being listed in 2015, the property was extensively renovated, and most traces of Jackson had been removed, including the amusement park rides and zoo. Billionaire and former family friend of Jackson, Ron Burkle, purchased the property for what he has described as a “land banking opportunity.”

To read more, click here

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

COVID-19 Recent posts covidscienceblog.com

I got my first vaccine shot yesterday – Moderna. Plus my Covid-19 Vaccination Record Card. No side effects, No lines and very fast, except for waiting for 15 minutes to see if I had a bad reaction. A friend called last Thursday morning and said to call Kaiser Permanente, the largest provider in the Bay Area, and gave me the phone number. After an hour on hold, I got an appointment. I was very lucky. By Friday, the phones were overwhelmed. By Saturday or Sunday, Kaiser was scheduling the appointments (no call-ins) for 75+, not 65+ . Six million people in CA over 60 including 3 million over 70. The total population is 37 million.

A great weight has been lifted from me. No more worries about getting very sick and maybe dying. I will be doing appraisals and getting my house cleaned for the first time since February. Hopefully, someday we will find out that vaccinated persons cannot transmit Covid. Then, no more masks, distancing, etc., and worrying about getting someone else infected, my greatest fear.

Note: I am doing new blog posts 2-3 times a week. Subscribe to the blog to get notified – upper right of each page.

Mayo Clinic What is happening now – Vaccine Rollout, Variants, and much more. January 20, 2021, Excellent, understandable, weekly update with the latest news topics. Video 32 minutes To watch the video and read more, click here

Anyone of any age can become a Long Hauler with Covid symptoms that last for months January 19, 2021 Video 13 minutes To watch the video and read more, click here

How To Judge 6 ft. Physical Distance – What We All Need!! January 18, 2021, Fun Video 4 minutes To watch the video and read more, click here

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

HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to https://www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.Mortgage applications decreased 1.9 percent from one week earlier

WASHINGTON, D.C. (January 20, 2021) – Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 15, 2021.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 87 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 15 percent higher than the same week one year ago.

“Mortgage rates increased across the board last week, with the 30-year fixed rate rising to 2.92 percent – its highest level since November 2020 – and the 15-year fixed rate increasing for the first time in seven weeks to 2.48 percent. Market expectations of a larger than anticipated fiscal relief package, which is expected to further boost economic growth and lower unemployment, have driven Treasury yields higher the last two weeks,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “After a post-holiday surge of refinances, higher rates chipped away at demand. There was a 5 percent drop in refinance activity, driven by a 13.5 percent pullback in government refinances.”

Added Kan, “Purchase applications remained strong based on current housing demand, rising over the week and up a noteworthy 15 percent from last year. Homebuyers in early 2021 continue to seek newer, larger homes. The average loan size for purchase loans jumped to $384,000, the second highest level in the survey.”

The refinance share of mortgage activity decreased to 72.3 percent of total applications from 74.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.1 percent of total applications.

The FHA share of total applications decreased to 9.3 percent from 9.6 percent the week prior. The VA share of total applications decreased to 13.8 percent from 15.8 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.92 percent from 2.88 percent, with points increasing to 0.37 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.19 percent from 3.17 percent, with points remaining unchanged at 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.01 percent from 2.93 percent, with points decreasing to 0.29 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.48 percent from 2.39 percent, with points increasing to 0.33 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.76 percent from 2.66 percent, with points decreasing to 0.31 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

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

Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041

Email  ann@appraisaltoday.com 

www.appraisaltoday.com

Real Estate Agents and Comparable Sales – Tips for Appraisers

Agents and Comparable Sales – Tips for Appraisers

Excerpts: When real estate agents provide relevant comparable sales to appraisers, it certainly benefits both parties. Agents can ensure that appraisers are reviewing comparables that match their properties and, hopefully, meet the seller’s desired price.

Additionally, while appraisers still must verify the information, it can save them time. Here are some dos and don’ts to follow as agents and appraisers work together on establishing comps for appraisal properties.

One of the tips: Don’t go outside the neighborhood

Other neighborhoods may be less or more desirable, and that can affect overall value. Comparable sales should come from only the direct neighborhood in which the house is located—even if that means choosing homes that are slightly smaller or bigger to use as a comparison. Agents should never use sales from a “better” neighborhood to boost the value of an appraisal property.

To read more tips, click here

My comments: All appraisers get comps from agents sometimes. Unfortunately, many are not useful. I always ask if an agent has any sales or listings for me. Agents are often experts in their particular area and know what is happening. Appraisers work in a much wider area usually. Whenever I speak with agents, I tell them how to select comps, especially pending sales, using some of the criteria above.

This does not apply to the sales provided by AMCs, of course, which require a response and often wasted time for the appraiser. Most are generated by computer algorithms or occasionally a review appraiser that knows nothing about the local market.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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!!

Read more!!

Appraiser Home Schooling Humor

Many thanks to Appraisal Buzz for this Very Best Appraisal Comic!! They came up with the ideas and hired a cartoonist to do it. There are very, very few appraisal cartoons or comics.

To see a larger image on your computer, right-click and select open in a new tab.

This cartoon was posted on the Appraisal Buzz Facebook page on September 21, 2020, so you can share or make a comment click here

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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!!

Read more!!

Appraisal highest and best use analysis

The Four Tests of Highest and Best Use

Excerpt:

  1. Legally permissible

You must consider whether any zoning issues or restrictions will prevent building on or improving the lot.

Some questions to answer:

  • Do you have a current survey of the property? (If not, obtain one, specifically covering boundaries to learn if easements or encroachments exist.)
  • Are there any deed restrictions?
  • Are there zoning issues, such as minimum lot size or maximum building height or size?

To read more, click here

My comments: Short and well written with good tips for the four tests. This is particularly important for vacant land and areas that are transitioning to other uses, such as changing from homes to conversion to commercial uses. Appraisal highest and best use analysis is critical.

Many residential appraisers miss these issues as most lender appraisals are for standard properties, such as subdivision homes. You can get into Very Big Trouble by just checking the check box, which is probably already checked on your form template…

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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!!

Read more!!

Appraisal Cost To Cure

Cost to Cure 

(Plus very funny handyman video)

Excerpt: On a regular basis, I appraise homes that need some type of repair. It may be as simple as replacing an outlet or as complicated as renovating a home. In the appraisal process, the appraiser has to estimate a cost to cure many types of repairs.

Why do appraisers use the term, cost to “cure” instead of a cost to “fix” a repair? Are appraisers just trying to use fancy vernacular to try and impress the reader of the report?

Appraisers think in terms of value. The term “cure” may make you think of someone who suffers from an illness for which a cure is desired. Appraisal Cost to Cure is very different.

To read more and watch the very funny 3-minute video near the end, click here.

My comments: Written for homeowners. This very good for appraiser marketing. But, there are lots of reminders and maybe some new ideas for appraisers.

The best part: The “Weird Al Yankovic” Handy 3 minute video at the end. Very, very funny. Total Escape!! Just what I needed for the election ;> I have been following Weird Al for decades.

Once Again, Jamie Owen finds the best photos, animated gifs, and videos. Extremely Creative!! 

Unfortunately, I cannot insert a video into these emails.

If you don’t have time to read the blog post, to watch the 3-minute video, click here

Appraisal Humor

Appraisal business tips

Click Read More below for the rest of this long blog post!!

 

Read more!!

Common Appraiser Violations

Two of the common appraiser violations – Use of inappropriate sales and Use of unsupported site value

Excerpt: When it comes to common appraisal violations, certain minor violations are very common. In this article, I outline several examples of less serious breaches of development STANDARD 1 and reporting STANDARD 2—and a few other types of violations, too. I have compiled these based on many years of personal experience in appraisal regulation, as well as feedback I have received from other states’ enforcement agencies. Once you’re aware of these common mishaps, you should be able to avoid them more easily.

1. Use of inappropriate sales

One of the big problems is the use of inappropriate sales in a sales comparison approach….

2. Use of unsupported site value

Another common violation is the use of unsupported site value in the cost approach. That’s something that a lot of boards have cited as a prevalent deficiency or shortcoming in appraisal reports.

To read more click here

My comment: useful information. Nothing new, but good reminders. Don’t get the “violation letter” from your state board!!

Appraisal Process Challenges(Opens in a new browser tab)

Appraising Weird Stuff is Challenging!(Opens in a new browser tab)

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Read more!!

Appraising Weird Stuff is Challenging!

How to Handle the Weird Stuff: Appraisal Methods from an Experienced Florida Appraiser

Excerpt: Going further away or back in time

One method is to go further back in time for comparable sales.. Another method is to use sales that are more distant to find data to utilize. Both of these techniques have long been available to appraisers. When using these appraisal methods, most often a comparison is made between properties with similar characteristics to the question at hand to extract a ratio/percentage which is then brought current or to the locale and applied. This could work for the above illustration with only four houses on leased land and no similar nearby sales. Most appraisers are familiar with and have utilized these techniques… Appraising Weird Stuff is Challenging!

Well written and worth reading. To read more, click here

My comments: Lots of good tips. All of us are asked to appraise the “weird ones”. Of course, sometimes we don’t know a house is weird until we drive up and see it!! A very good discussion of methods. I have used all of them except the depreciated cost, which is a good method. Plus, lots of tips on doing them for lenders. Of course, sometimes I just say “no” as it will take too long.

I have learned that they often are money losers due to the increased time. This is what can happen with lender UAD appraisals for AMCs due to the excessive amount of questions and trying to fit the appraisal on the form. I sometimes accept the weird ones for non-lender work with no time pressures. They can be very interesting and challenging.

Appraisal Process Challenges(Opens in a new browser tab)

Common Appraiser Violations(Opens in a new browser tab)

Read more!!

Should Appraisers Pay to Be on AMC List

By Dustin Harris

Excerpt: Should appraisers pay to be on an AMC’s approved appraiser list? Is this one way to get new clients? If an AMC solicited you, would you check it out?

Now, I work for some AMCs that, frankly, you might not choose to work for. That’s fine. It’s a choice we all make. Understand that most of the areas I work are rural, so AMCs are generally willing to pay more because of this. Some AMC are very demanding. Yet, when I meet those demands, I get a lot of well-paying jobs from them.

To read more, plus lots of appraiser comments, and listen to the podcast, click here

My comment: A never-ending very controversial topic ever since AMCs took over residential lender appraisals after the mortgage crash around 2008!

Which Appraisal Clients are used the most?(Opens in a new browser tab)

Read more!!

So Many Appraisal Cost Approach Questions

So Many Appraisal Cost Approach Questions!
So Few Answers! Such Low Fees!

By Tim Andersen, MAI

Excerpt: It is clear most appraisers do not like to do the Cost approach. Generally, we are not too familiar with it. So, it is clear that most appraisers, because of this, do not appreciate the deep analytical power the Cost approach really has. So Many Appraisal Cost Approach Questions!

Therefore, I’m going to ask you 10 questions on the Cost approach (and stuff related to it). After you’ve finished reading them, you probably will still not like to tackle the Cost approach. Nevertheless, you just may have a better understanding of, and appreciation for, its powerful analytical capacities.

First Question: On the 1004 form is the indication that Fannie Mae does not require the Cost Approach to Value. Where does the form instruct the appraiser not to complete the analytics of the Cost approach?

To read the other questions and answers click here

My comment: Appraisers, including myself, seem to have a love/hate relationship with the Cost Approach. But, it can be useful. Tim’s much longer article “But Fannie Mae says I don’t have to do the Cost Approach!!” will be in the September issue of the paid Appraisal Today.

Appraisal Process Challenges(Opens in a new browser tab)

Which Appraisal Clients are used the most?(Opens in a new browser tab)

Read more!!

What to Do When Your Appraisal Is Under Review

Excerpts: Residential appraisers will often — if not just about always — have their work reviewed by another appraiser. Usually, this is a routine procedure that the original appraiser barely notices. Sometimes, the review appraiser will come back with requests for extra information, or doubts, that the original appraiser might find annoying. To be sure, the reviewer’s questions might sometimes seem nit-picky, and answering them can distract from other work. However, the issues the reviewer raises almost always turn out to be legitimate. What to Do When Your Appraisal Is Under Review

We asked review appraiser Doug Nakashima (Glenview, Illinois) for advice on how to make reviews as painless as possible if you’re the one being reviewed.

Topics:

  • Remember that reviewers are on your side
  • Look out for these common points of contention
  • Avoid future revision requests

To read more, click here

My comments: Sorry, no comments section for ranting, etc. ;>

If you’re doing AMC work, the tough appraisals tend to go to reviewers. The first “reviews” are from underwriters, clerks, computer software, etc.

I don’t know of any other profession where almost all reports are reviewed by clients. Personally, I think it has resulted in appraisers being overly critical of other appraisers’ work, state boards sometimes being too aggressive, etc. Worse, some appraisers try to send in reports with as as few “problems” as possible, to minimize call backs and doing whatever it takes.

Review appraiser liability(Opens in a new browser tab)

Appraisal Process Challenges(Opens in a new browser tab) Read more!!