Appraisal News and Business Tips

Posts Tagged unusal homes

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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9-20-19 Newz: Fannie Update – Domes – Low appraisals – Avengers

Fannie Mae September 2019 Appraiser Update

Sept. 13, 2019

Topics include:

– Forms for appraisers performing PDC and desktop appraisal

– Desktop appraisals, assumptions, and hypothetical conditions

– Locked rooms

– Consumer protections

– State board notifications

Only 5 pages. Easy to read and informative. To read more, click here

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Fannie Mae Appraiser Home Page

Everything Fannie In One Place!!

To read more, click here

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9-13-19 Newz: FRT issues – Why Suburbs Look the Same!

Fuggerei

In this truly magical place, rent hasn’t been raised since the year 1520! Just For Fun!!

Excerpts: After minting coins for the Vatican and making a name for himself as one of Europe’s greatest early entrepreneurs, Jakob Fugger (aka “Jakob the Rich”) turned his eye toward those in need. What emerged from this vision has persisted as the world’s oldest charitable social housing complex.
In the year 1517, construction began on Fugger’s vision for what would become the golden-walled enclave of Fuggerei, which he created as a way of providing affordable homes for day laborers, artisans and their families. Though it sustained heavy damage during a bombing raid in WWII, the community was restored to its pre-raid condition, where it has remained uninterruptedly inhabited since its founding in 1520. The city-within-a-city consists of private residences including 67 houses, 147 apartments, St. Mark’s Church, and an administrative building.
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My Comment: Wow!! Really gives me a perspective on rent control here in California and in my small city. Rents are increasing all over the country.

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8-30-19 Newz; 99.99% Price Drop – Curious Bathrooms – Amazon’s $105K House

Once listed for $1 billion. Sold for $100,000. What just happened?

Excerpt: A heated court battle, a last-second offer and a sparsely attended auction behind a fountain in Pomona — this chapter of the famed Mountain of Beverly Hills ends not with a princely sum but a sale price more like that of a sports car.

Touted as the city’s finest undeveloped piece of land, the 157-acre property redefined the luxury market when it listed for a record $1 billion last year. On Tuesday, it sold for a mere $100,000 at a foreclosure auction, a fraction of the $200-million loan outstanding on the property.

A markdown of 99.99%, of course, comes with some fine print. Any other buyer would have been on the hook to repay that loan — and this buyer has to eat that loss

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My comment: Quite a story!! Only in LA, of course!! FYI, I am in Northern CA… very different here. We think we are superior to LA ;>

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8-2-19 Newz: Frank Lloyd Wright Fixer- Spreadsheet Shackles – Homes under $100,000

Spreadsheets: A Shackle to the Appraisal Profession? 

Excerpts: How can spreadsheet software hinder the profession? A Wall Street Journal article, and a presentation at the Appraisal Institute National Conference have similar stories. One addresses accountants, the other is about appraisers.

The 2015 AI meetings presentation: Will Appraisers Have to Learn to Use Real Analytics Software? was given by George Dell. The main point was that accountant’s software was primarily developed for record-keeping, mimicking paper columns and rows, with analysis a later goal. Other points are:

  • Validating and tracking data is difficult.
  • No built-in audit trails, nor tracking of changes.
  • Regulatory compliance is difficult to accomplish.
  • Susceptible to trivial human errors ETC.

To read more, click here

My comment: Read this article. I totally agree. I started using spreadsheets in 1981 for financial analysis. When I started my appraisal business in 1986, commercial appraisers were using spreadsheets for Discounted Cash Flow. I knew the many problems with spreadsheets’ reliability.

They are particularly unsuitable for statistics as they are not statistics programs. In my MBA program in 1979, I used SPSS for multiple regression analysis, connecting to a large computer.

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7-19-19 Newz: Rates Going Down?- Appraiser Boards – AVMs Misunderstood?

AVMs Are Not Understood By A Large Swath of Non-Appraisers

Source: Jonathan Miller
Here are some recent survey results that show more than half of the respondents indicated, it is either NEVER appropriate or NOT SURE if it is appropriate for a non-appraiser to perform a valuation on a home.
So the jury is still out for a third of respondents but a third are absolutely sure it is inappropriate. One can infer that appraisers have an opportunity to convey what AVMs really are to the public.
Link to NAR AVM survey results click here
My comment: Good graphics and easy to read. Lots of topics including AVMs, desktops, bifurcated, etc. Results of a survey of NAR members. Lots of topics. Scroll down to AVMs, etc.
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6-21-19 Newz: MLS Cyber Attack – McMansions – FHA and Risky Loans

Valuation Is Not A Guessing Game, It’s a Development Process

Excerpts: If you’ve ever had an appraisal of your home completed, perhaps you can relate to the following scenario: insert image

The appraiser arrives at your home. You know that they have probably done a little research on what potentially comparable sales in the neighborhood are selling for.

The appraiser views each room in your home, taking photos and notes as they go. The appraiser asks you about any improvements you have made to your home in recent years.

At the end of the inspection, you assume that the appraiser has to have some idea about what the value is likely to be. You ask the appraiser, “Well…What do ya think?” What you’re probably really wanting to know is what the appraiser thinks your home is worth. At this point the appraiser is likely to give an evasive reply that doesn’t answer your question. Why?

To read more and see the funny animated fotos and gifs click here

My comment: written for homeowners, but some good ideas for appraisers. You can use for ideas for speaking to real estate agents, for example. Or, can give (or send) the owner a link to this article.

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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.

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5-24-19 Newz: Hybrids the new normal? – $9 million lot – Refi boom over?

Are you violating USPAP every day?

If you pick comps the old way, you may be violating USPAP every day!

Excerpts: (In the past) Data was hard to get. I was taught it was only necessary to use only three or four comps. And only a few comps were available. I did learn the importance of bracketing from my trainers (it was nowhere in my appraiser education). I was diligent, and of course, I picked my necessary and available comps carefully.

Then things changed. No one noticed. MLS came on line. Income properties came online. Public records came online.  All relevant sales became available. Instantly. Without thinking, I ignored the “as available” rule. But stuck to the ‘as necessary’ rule. And heck, everybody used just three comps. In fact, USPAP says I should do what my peers would do. And they all used just three or four.

So, what changed?

Today in most areas, all the sales are available. But are they necessary? Well no. All my peers use just three or four, so it is ok. But what if I want to do more than achieve credible results?

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My comment: I love George’s Most Excellent headlines plus his writings!! His blog posts are short, as they should be. But, sometimes we want to read more. The June issue of the paid Appraisal Today will have his 6-page article: “Old Versus New: Conflict or Opportunity?” about the past, current and future in appraisal analysis. Very interesting!!

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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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