Appraisal News and Business Tips

Posts Tagged unusual buildings

11-29-19 Newz: Choosing Comps – VA and Bifurcated – Most Expensive Homes

By George Dell

Excerpt: This question caused me to rethink the relationship of ‘spiritual’ or ‘mental health’ principles to profitable business practices. From last year’s blog, the research showed benefits with: relationships, physical and emotional health, reduced anger/isolation, sleep, self-esteem, and even improved brain power! Cool.

So, do these things cost me money? Or do they help make more money?

Let’s start with the obvious: what’s in an appraiser’s required belief system: Standards, ethics, and conduct. Recall that USPAP requires you to be worthy. Worthy of belief. Credible.

So, what in that list helps me make more money?

To read more, click here

My comment: Very good appraisal comments for Thanksgiving and the upcoming holidays! Worth reading.

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11-8-19 Newz: Zestimates – Fee Transparency – Science and Appraising

National Appraisers Forum

By Dave Towne

Excerpt: Appraisers, if you would like to learn from highly qualified peers (other than me! :), post questions, or offer your own comments, consider joining the FREE group, National Appraisers Forum (NAF). Use this link.

This is one of the best appraiser groups as all commentary is respectful. While not everyone always agrees with certain points, the discussions are not demeaning. There is a wealth of info participants share freely on a wide number of topics. The group has several moderators who monitor the posting activity.

One key point, NAF participants are not anonymous. You must use your name (at a bare minimum) when participating, which is required when signing up… Moderators are asking that anyone who wants to join should give their name as licensed, the state they are in, and their license number.

To read more, click here

My comments: This is my favorite appraiser online group! I get many emails from various sources for this newsletter and have been a member of many online communication places. Before the internet was widely available, I hosted live chats on aol and compuserve. Since then I have watched many online places. Unfortunately, just like any other topic, sometimes the groups end up doing lots of “flaming” (attacking another participants, etc.), negative comments, off topic, politics, etc. I quit going to these places.

Of all the groups I have subscribed to, National Appraisers Forum is the best for me. I have been a member since it started, or soon after. No complaining about AMCs, off topic, trolling and flaming, etc. The founder, Steve Smith, and the moderators keep it this way. Regular contributors are “high end” appraisers with many years of experience. Hot topics are often discussed.

There are well managed appraisal groups on Facebook, but it is too hard to for me to follow the threads, so I don’t go there very often. But, it may work for you.

Another major factor is that you must use your real name, so we know who is commenting. Allowing anonymous postings can easily decay into a mess.

I will be updating my article ” How to connect with other appraisers online. What’s the best group for you? ” in a future issue of the paid Appraisal Today discussing other email chat groups, how to find other groups or start your own, Facebook, etc.

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9-27-19 Newz: Bifurcated Appraisals and Inspections; Abandoned Resorts – New CA Independent Contractor Law

Crowdsourcing Appraiser Data

By Jerin Harper, IFA, ASA, CREA

Excerpt: Just imagine the possibilities of having a hyper-local database…

If you are not in the business of data you will be out of business. I’m not sure if I heard this somewhere or not, but this mantra has been in my head for a while now. Being in the data business is essential for every business today. We see it across all industries where the companies that embrace data are still in business, and the companies that didn’t make that pivot are out. In our profession we saw Fannie Mae get into the big data business with the creation of CU. CoreLogic took their data business to a whole new level when they bought Alamode. One of my favorite examples is sports: just in the last several years data & analytics have completely changed the way football, basketball, and baseball is played— and those sports have been around for 100 years. It doesn’t matter what business you’re in, you have to be able to capture the right data and communicate it effectively.

I suggest that appraisers start crowdfunding their data.

To read more, click here, plus the many comments,

My comment: A never ending idea… Who “owns” the appraisal data? I remember the days of the CMDC (California Market Data Cooperative) where appraisers, including myself, shared their appraisal data, long before the Internet. It still exists and is owned by FNC. Their historic data is available.

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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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9-6-19 Newz: Bidding Wars – Dumb Mistakes – U.S. Abandoned Places

Can Smart Appraisers Make Dumb Mistakes?

By George Dell, ASA, MAI, SRA

Excerpt: I am a smart and educated, award-winning appraiser. It is not possible for me to be irrational. Of course not. You can see that. I can see that.

A high IQ and education won’t necessarily protect you from highly irrational behavior—and it may sometimes amplify your errors. David Robson, in an Excerpt from The Intelligence Trap

Oh No! Who is this guy!? Doesn’t he know how smart I am? Why, even my peers have said I am smart. I pride myself on my critical thinking. Even my kids say that! What more proof do you need? Let’s get this straight: I am rational, smart, of high IQ and extremely educated, especially in my chosen field!

Recently, scientists have started to measure what things go with irrationality. There is even a name for this field of study, this measure: dysrationalia. The studies roughly parallel the studies of dyslexia and dyscalculia (difficulty in dealing with number things).

Understandable, Well Written and Interesting!! To read more, click here

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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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6-28-19 Newz: Coester Loses Lawsuit – Fannie Appraiser Update – Secret Stairways

What I think about bifurcated appraisals

Have you ever done a comp check for a mortgage broker or lender in the past? They are appraisals. You only have public records and maybe MLS. You may have driven by the property, but probably not.

What about drivebys? You drove by the outside, but never saw the rear or interior.

With bifurcated appraisals, at least you have photos, measurements of the exterior, descriptions of what the exterior and interior rooms look like, etc.

What about having trainees do them, under your supervision? A great way to get new appraisers started. I spoke with one appraiser who is doing this.

All appraisers rely on public records, MLS photos and descriptions, etc. We don’t know how accurate this data is.

Check out the company doing bifurcated appraisals and their forms software data handling. Do not work for one that requires that you manually fill in a 1004P, for example. How long have they been in business? Are there appraisers in management?

Whether or not you do them is a business decision. They are less risky than comp checks and drivebys. You have more information, assuming they do not make up the photos, sketch, etc.

The Bottom Line: appraisers don’t like change, just like most people. Some adapt, some decide not to change.

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5-31-19 Newz: Hit the Sales Price – Hybrid Warning – Guitar shaped Hotel

Why do appraisers hit the sales price?

By George Dell

Excerpt: A recent study includes a graph which shows that some 90% of appraisals hit the sale price exactly, or were higher, while only some 10% were below the sale price (when the sale price is known).

Is this a bias on the part of appraisers, or is the bias the cause of the system? What could possibly cause this strong upside skew?

First, ignore the ongoing pressures from the entire ‘loan industry’ to make the loan, make the commission, make the quota, make the bonus, and look successful. Ignore the claimed purpose of the public trust (of our quasi-governmental standards and licensing quagmire).

The goal of protecting the public trust failed, and will fail again— this time with different excuses and blaming— but it will fail again.

Let’s look at some underlying economic truths and social/governmental policy. What economics and public policies come into play here? Three come to mind immediately:

To read the full, very interesting post click here

My comment: When I started my appraisal business in 1986, I was told by local very experienced appraisers to appraise at the sales price or I may be kicked off a lender’s approved list. Of course, since I was trained at an assessor’s office, I was shocked and refused to do this… There was always another lender client I could get.

Dell’s blog has very short posts. My June paid newsletter will have a much longer article written by him: “Old Versus New: Conflict or Opportunity?” It has a brief look into the past, including a photo of an acoustic coupler for connecting to remote sites. Plus, of course, comments on the future! I remember 30 baud transmission rates in the early 1980s connecting from my home PC to my company’s servers;>

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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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2-21-19 Zestimate Obsession – Sex Dungeon – Ugly Buildings

Obsessively Checking Zestimates

Excerpts: If you own a home, or want to own one, chances are you’ve spent some time with one of the many apps that estimate home values. As real estate prices have risen in recent years, watching one’s equity grow – at least on paper – has become something of a national pastime. Some would call it an obsession.

“I check my Zestimate way more than my 401(k),” said Bradley Reed, a homeowner in Cleveland, referring to Zillow’s proprietary tool.

“On a slow week, I might check it every other day,” said Krista Burns in Doylestown, Ohio.

Listen or read the story and twitter comments, see some fotos, etc. Add your comment at the bottom.

My comment: I listen to the marketplace podcast almost every day, listened to this one last week, and really liked it. Fortunately, with this link you can read the transcript or listen to it plus read some twitter comments. I know that real estate agents have lots of problems with it. I wonder how many appraisers look at Zestimates? You may be surprised!! Some even include it in their appraisal reports and explain why their value is different.
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