6-10-20 Newz: Another New Fannie Update; Suburban Definition?

How to Tell If You Live in the Suburbs

Excerpts: The U.S. hasn’t had a formal definition for what constitutes a suburb. A new data analysis comes closer to defining America’s most popular neighborhood type.

The United States is a land of suburbs, with just one problem: No one’s quite clear what a “suburb” is.

It’s a question of semantics with real-world implications, as government programs, political campaigns and developers try to spend money in the “suburbs,” where a majority of Americans say they live despite the category having no formal definition.

For some people, it’s obvious: A suburb is a smaller city on the periphery of a larger city. Or it’s a sprawling neighborhood filled with vast swathes of single-family homes. Still other more dated conceptions of suburbia in the popular mind involve the people who live there: allegedly white, middle class and socially homogenous.

Now a new team of researchers believe they’ve cracked the code…

To read more, click here

My comments: Of course, if you do residential lender appraisals this is a Very Big Issue due to lender “requirements” such as no rural properties. Lots and lots of online discussion about this for a long time. Post this topic on your favorite Internet chat site or email list… and wait for the wide variety of opinions!!

———————————————————–

My Favorite Definitions

(This has been floating around for many years…)

Rural  Suburban  Urban

  • If you stand naked on the front porch and the neighbors can’t see you… it’s rural.
  • If you stand naked on the front porch and the neighbors call the cops on you… it’s suburban.
  • If you stand naked on the front porch and the neighbors ignore you… it’s urban.

There are other variations, of course, that are not suitable for this newsletter ;>

Read more!!

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.

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

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>

Read more!!

5-8-20 Newz: Cash-out Refis Declining – Inspection Warnings – Snowboarding Cat

USPAP Q&A April 24, 2020

2020-04: Apppraisal Development – Inspections 

Personal Inspection of Exterior plus Remote or Virtual Inspection of Interior

Question: If an appraiser makes a personal inspection of the exterior of a property as part of a mortgage finance transaction (or in any other assignment) and then receives interior photos, video, or other technology-based view(s) of the subject, can the appraiser state that they performed an interior inspection?

Response: No. A personal inspection of the interior of the property by the appraiser is not the same as viewing the interior virtually or remotely. It would be misleading for an appraiser to indicate that an interior inspection of the subject property was performed, when, in fact, the appraiser only viewed interior photos, video, or other data from technological solutions. (See Conduct sectionof the ETHICS RULE, Disclosure Obligations of the SCOPE OF WORK RULE, and Advisory Opinion 2, Inspection of Subject Property.)

My comment: My apologies for last week’s very confusing explanation of this… The explanation plus USPAP references above is very clear.

To read the original document plus other recent Q&As, click here
Update to Fannie Lender Letter (LL-2020-04)

Impact of COVID-19 on Appraisals

May 5: Extension of effective date: extending the application dates eligible for these temporary flexibilities to Jun. 30, 2020

To read this Lender Letter click here. Has updates going back to March 23. Hard to keep track of all of them!

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

Virtual Inspection Tools From Fannie’s letter above on April 14. 

Appraisers may use virtual inspection methods to augment the data and imagery that is used for either a desktop appraisal or an exterior-only appraisal. 

All traditional appraisals require the appraiser to perform a complete onsite interior and exterior inspection of the property. A virtual inspection cannot be used as a substitute for the onsite interior and exterior inspection for a traditional appraisal. 

Additionally, an onsite interior and exterior inspection is required for the Appraisal Update and/or Completion Report (Form 1004D) used to confirm completion of renovation for HomeStyle Renovation loans. Virtual inspections using video and photographs provided by the borrower or contractor can be used to evidence renovation progress to disburse additional renovation funds as described below.

My comments: YOU MUST GO INSIDE THE HOME FOR A INTERIOR INSPECTION APPRAISAL. YOU CANNOT:

– Stand outside the house and tell the borrower which photos to take.

– Take photos through the window.

– Use Virtual Inspection Tools

I guess appraisers are doing this. Don’t risk your license!!

Read more!!

5-1-20 Newz: Credit Unions Can Delay Appraisals – Bathrooms and Epidemics – Pandemic: Buyers and Sellers

 WOOPS! BATHROOM ARTICLE NOT INCLUDED. DARN!! TO READ IT GOOGLE BATHROOMS AND EPIDEMICS

75 percent alcohol disinfectant alcohol spray nearby a house concept of disinfecting the house

By Ryan Lundquist April 30, 2020
Excerpts: Buyers more sensitive about location & condition: For years buyers have been exhibiting sensitivity to adverse locations and homes that are not in pristine condition. In other words, buyers have higher expectations about what they are buying and they aren’t overlooking the true condition of a home or paying top dollar for junk. I expect going through a pandemic will only inflame this dynamic.
Cash out at the top: Some people are concerned about the market changing directions, so we’ll see certain owners try to cash out at the top so to speak. I’m not saying we’re at the top of a price cycle. I’m only saying some people think the pandemic has pushed us or will push us into a new price cycle.
To read more, click here

Personal note from Ryan: Appraiser John Carlson GoFundMe: John is a well-known appraiser in Southern California and he is going through a difficult time as he was diagnosed with cancer and hospitalized. I invite you to pray for him and donate if you can. To read more, click here.
My comments: I spoke yesterday with a local appraiser friend who is thinking about selling her house and moving to a smaller, lowered priced house. (She is 78 years old, one year older than myself, but still appraising.) No listings or pendings in her area. Seemed like a good idea to me.

On June 29, McKissock had a webinar ” Appraising in a Pandemic”. In the last half hour, Ryan gave the best presentation I have ever seen on what to put in your report about the current market, not just a “I don’t know anything disclaimer”. He also had a sample statement slide. The recording was not available by my deadline. I will send it to you in next week’s email.
=============================================

DO NOT use photos or videos, taken by the owner while you remain outside, for an appraisal requiring interior inspections!!

This is NOT ALLOWED by USPAP. When the assignment requires the appraiser to do the interior inspection and photos, use of secondary source photos and interior characteristic detailing is prohibited. Google Appraisal Foundation Q&As and scroll to 2020-04: “Personal Inspection of Exterior plus Remote or Virtual Inspection of Interior.”

Or, you are standing outside taking photos through the window or directing the owner to do photos, facetime or other videos. Even if the owner is using a Virtual Inspection Tool, it is not allowed. Don’t risk your appraisal license!!

Read more!!

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!

Read more!!

1-17-20 Newz: Appraisal Creep – Spot Value – MLS Most Popular Words – Competency

Appraisal Creep – The Hidden Reason Why House Prices Are Too High 

Excerpts: Appraisal values should not be influenced by the price of the listing, but could a bias exist that proves otherwise? “Does the typical appraisal protect you from overpaying for a house?” asks John Wake in his article, The Hidden Reason Why House Prices Are Too High (And Income Growth Is Too Low) — Appraisal Creep.

The study looked at houses where two appraisals were done, one after they were foreclosed on and Fannie took ownership, and a second appraisal when they were under contract. Both appraisals were done within 6 months of each other and no repairs were made to the houses in the meantime. After adjusting for general house price appreciation between the first and second appraisals, the study found the second appraisals were 4.2% higher than the first appraisals…

The study made a few suggestions. The one I mentioned in the Forbes.com piece was not giving the appraiser the contract price. On one hand, the contract price holds a lot of information in it. On the other hand, releasing the contract price seems to skew the resulting appraisals a lot.

Appraisal Buzz short interview To read more, click here

Read lots more analysis and graphs in his very good Forbes article, To read more, click here

Read more!!

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.

Read more!!

8-9-19 Newz: Evaluations and USPAP – Zoning Codes – Inspection Standards?

9 Very Funny Quotes for the Self-Employed Appraiser

Just For Fun!!

Some great, very funny, animated gifs ;>

Here are a few comments:

“The crappy thing about being self-employed is I never believe myself when I call in sick.”

“Things people say: ‘It’s Friday!’ Things self-employed people say: ‘It’s Friday?’”

To read more, click here

My comment: We all need some appraiser humor! Something for everyone in this blog post!! Unfortunately, animated gifs usually don’t work well in these email newsletters. You Just Gotta See Them!!

Read more!!

4-11-19 Newz: USPAP 2020-2021 – Appraiser Experience – Mortgage Reform

ASB Adopts Changes to USPAP for 2020-21

Excerpt: The current written report options (Appraisal Report and Restricted Appraisal Report) are being retained for 2020-21. One of the more significant revisions is that use of the Restricted Appraisal Report will be permitted when there are intended users in addition to the client. An appraiser will be required to identify these additional intended users by name in the report.

The Foundation will be authoring a Summary of Changes document about the pending revisions to USPAP within the next several weeks. They will also be producing a recorded webinar on the changes. The new USPAP becomes effective on January 1, 2020, so there is still plenty of time to learn about the changes to USPAP before they go into effect.
Click here for the full blog post:

My comment: Many thanks Dan Bradley at McKissock for this blog post! I will be writing about the new USPAP in my paid newsletter, but learned many years ago to wait until a few months before it is adopted. That is when appraisers want to know about it ;>

I never used Restricted Reports because other intended users could not be added. Now I have another reporting option to use.

Read more!!

2-28-19 Newz: Strange listing fotos – $400k deminimus – FHA violations

Strange and tricky listing fotos

A real estate photographer tells you how to spot staging tricks in listing photos

Excerpt: “If a photo is overly bright, over contrasted, or almost too perfect or synthetic, that should be a red flag,” Cato says.

Another is if the photo has the same level of lighting everywhere. “It’s weird,” he says. “If the brightness is the same throughout, that is just not natural. You have to show where natural light falls.”

My comment: Written about New York apartments and condos but relates to all listing fotos. We all use comp listing fotos. Tips on how to evaluate them, including digital alterations, is always good!!
—————-

The Most Hilarious Pictures Taken By Real Estate Agents
Just For Fun!!

Excerpt: From horror movie-esque semi abandoned flats for rent to excessively unique home decor cases and very impractical architecture decisions, the real estate agents behind these funny ads didn’t even care to fix the places up before snapping the hilarious pictures. The caring levels were so low that there’s also a photo with a live bat in it, a huge pig laying around in the living room and feral horses relaxing in front yards. The most baffling part is that these funny photos were really used to advertise and show the good side of housings to possible tenants.

—————————————————————————-

Read more!!