Clifford "Cliff" Diamond's Blog

Important changes in the Real Estate world on 5-1-09. This Will effect you.

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Wed, 08 Apr 2009 20:24:28 -0700

AMC's are taking over the Real Estate industry.

Where do I begin. On 5-1-09 all conventional appraisals will be required to be ordered through an unregulated middleman known as an Appraisal Management Company or AMC for short. This new Federal Government policy known as HVCC was brought to you in part by New York AG Andrew Cuomo and was well intentioned and designed to keep lenders from pressuring appraisers to "make the value". But as they say, the devil is in details and this new policy now creates a greedy middleman aka AMC. The AMC has and will charge more for an appraisal and then give the appraiser about half. This policy will award the work to the lowest bidder and pass the increased fees on to you.

This policy will in effect punish and financially penalize all appraisers that stay in the lending practice. Kind of like punishing all policemen for high crime. Keep in mind appraisers never have and never will get rich in this business, we are amongst the lowest paid and in many peoples opinion the most scrutinized, highest education requirements, even requires a college degree and highest government license fees. This new program for better or worse will cause the most seasoned and best appraisers to leave this part of the business and be replaced by whoever will work for the lowest wage, the lowest bidder will now get the job and the Banking industry in my opinion will suffer and at the very time when the Banking industry and the Real Estate industry needs the best and most experienced people for a recovery, we will now settle for the lowest bidder.

Additionally, the extra middleman will add another layer when a customer wants an answer or the Lender needs a quick response they will need to contact the AMC (in another time zone), then the AMC will need to find the appraiser when they are in the field most of the day, then the AMC will then get back to the caller, could be days. Again the Lender is not allowed to talk to or communicate with the appraiser in any way now. You will have a layer to get through first and will add more time and more delays. Possible rate lock issues and lost deals.

Who are these new AMC's and are they qualified ?

I know that my two best clients, who never pressured me in any way and had an excellent working relationship overnight sent all their work to an AMC. I called those AMC's and found that my standard $375 fee would be cut to $195, I later heard that their new trainee appraisers were "a joke" and wished this never happened. I saw this first hand. Also, I have heard that in one case the CEO/crook of one of those infamous Sub-Prime lenders started their own AMC. In another case a banned appraiser who lost his license started his own AMC. I found out, there are Zero regulations. No one is minding this hen house and our industry and the recovery rests in these hands, yikes!

What will this mean to Lenders, Realtors and Buyers/Sellers ?

No more "comp-checks" will be allowed, period. All appraisals will need to be officially ordered at the higher $500 fee paid directly to the AMC. Then the entry level appraiser (the lowest bidder) will be assigned the job. The only communication must be though the AMC, no status updates. The fees will increase but the quality and service will surely go down. Any long term relationship of trust and respect you have developed over the years is now gone, you will not know who the appraiser is or where they are from. It's whoever is desperate enough will get your order.

Is there anything that can be done ?

I for one will be contacting my Congressman. I am going to ask his help with the managing government agency known as the OREA if they can help regulate the AMC's and guide their actions. I suggest everyone do the same.

In the meantime, I have heard of a Realtor writing into the Sale Contract that the lender Must assign an appraiser "from the area" that has sufficient experience in that local marketplace. I even would suggest maybe 10 years experience or verifiable evidence of 2-3 recent appraisals in that immediate area. Or that the appraiser must reside in the same County as the property. Seems fair to me and will help ensure an experienced, local and competent appraiser will be selected, you are going to be paying more for it, so why pay more and get less.

I would also suggest hiring an experienced appraiser in advance with knowledge and experience in your market area and provide that appraisal to the low-bid appraiser and use it if necessary as a rebuttal to the lender and to the buyer/seller to pre-establish market value. The additional support can go a long way in helping your case.

Of course an independent appraisal is still needed and/or advisable for divorce work, legal issues, probate, tax disputes, estate matters and dealing with banks on short sales and bank REO's.

Please look me up if I can be of service.

Clifford Diamond, CREA

Remodel or build your home "Green" and Save Money !

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Sat, 02 Aug 2008 00:03:13 -0700

In these days many people are struggling just to keep their homes and fewer people are buying and selling. If you are in a position of deciding to keep your home and remodel and/or enlarge or sell and move-up or even downsize, then here are some options to consider.

Let me just say first, hate to admit it but I am not an environmentalist, I don't drive a hybrid and I'm not even good at recycling my own trash. I approach this as a real estate expert that has learned a thing or two and have been drawn to the green-side. If I could wave a wand right now, I would replace my cars with hybrids and have solar panels on my roof and cut my energy costs to zero. But I'll have to take baby steps for now.

Going green when you purchase a home or remodel refers to buying or installing more energy efficient appliances, windows, lighting and generally saving resources, both yours and the planets. In the best case, installing solar panels or recapturing resources allows you to live cheaper and in some cases healthier. Many of these improvements can directly increase your homes market value or could be the difference in getting your home sold. A qualified appraiser can tell you in advance what improvements will add most value.

Here are some ideas that can save you money on energy costs and may add value...

Energy efficient appliances can lower your electric and water bills and can add real value if you sell or refinance. The monthly energy saving can even help recoup the cost of the appliance over time. Also, some energy companies offer cash rebates to further increase your savings. Energy efficient furnace and air condition units. In some climates an air conditioner compressor can be running year round and having a new energy efficient unit with programmable thermostat can save big money and properly sealed ducts can make sure the air is going where it's needed and most efficient. A balanced system will be airtight but allow for proper ventilation and allow unhealthy air out.

Dual pane e-rated windows save money, look and operate better and as an added bonus shut out unwanted noise from your neighbors or street noise. A good e-rated window will be cool to the touch even when it's over 100 degrees outside. Some neighborhoods near airports have offered grants to help homeowners cope with noise.

Replacing conventional lights with fluorescent bulbs and exterior lights with solar powered can cut lighting costs by over 60%. Most conventional lights can be readily replaced with compact fluorescent lights aka CFL right away and many energy companies will offer full rebates to offset the cost. Also, there is less heat from fluorescent and thus less cooling costs.

Solar panels can be installed on the roof in sunny climates and actually make your electric meter stop or reverse during the day and then the stored power is used at night with a net zero cost. In homes I have appraised, owners have told me their electricity cost is between zero and $30 from a peak of nearly $300. There are government rebate programs, state programs and local power rebates bringing the cost down considerably and paying for itself. I will be installing these panels on my next house.

These next few ideas are becoming more popular. Concrete counter tops in the kitchen. They can look like granite and are poured & crafted on site with no quarry, no trucking, no factory and the raw costs are in the $30 range. My brother in-law did his kitchen with a beveled edge for $28 and it looked beautiful, he then did both bath's with a 2"squared edge. I have seen many luxury homes and hotel lobbies with colored or stained concrete floors, looks good and is durable. Also, using renewable natural products reduces toxic formaldehyde used in many adhesives.

There are several outdoor projects as well. Wood decks can now be built with recycled plastics that last longer and are bug and weather resistant and is a renewable resource. I have seen them and think they look better than redwood decks because they are always in perfect condition, never weathered, twisted or rotted.

Drip irrigation vs. sprinklers helps drastically reduce water waste. In Las Vegas new homes are required to use drip irrigation and in fact, grass in front yards has been eliminated on virtually all new construction. Not the most pleasant looking to me but I get the point - there is only so much water in the middle of the desert and yard water typically uses more than all the total water used inside.

So, there you go. Just doing the research has won me over to be just a little more "green" in my thinking. You can improve your home, save money, live healthier and help the planet as a bonus.

Please call me if I can be of any appraisal service to you or your clients.

Appraiser/Author

Clifford Diamond, CREA

What are the New FHA Loan Programs and do You Qualify ?

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Fri, 01 Aug 2008 23:55:15 -0700

Let me try and simplify the new FHA $300 billion "Hope" program and see if it works for you or someone you know. Let's see what else the housing bill includes and offers.

The FHA mortgage relief bill is designed to help struggling homeowners avoid foreclosure and forced short pays. By design it would write down a mortgage that is higher than the homes current market value and immediately give the homeowner a 10% equity stake and a new more affordable fixed rate loan through the FHA. Additionally the bill includes a $7,500 tax credit for first time home buyers designed to help more people to own their own home. There are some additional provisions that permanently increase the loan limit to $625,000 to help in the more pricey areas. There is almost $4 billion in neighborhood grants to refurbish homes in blighted areas to avoid abandoned homes from bringing the neighborhood down. There is also $180 million for pre-foreclosure counseling assistance.

On the inner working side it overhauls the FHA that was basically designed in the depression era and now allows the Treasury to have virtually unlimited power to lend money to the FNMA and FHLMC through 2009 and gives the Treasury some control. The idea being that this will help support the housing market and the national economy.

As far as the new home loans, they can cut your loan balance by even 40% and give you instant 10% equity and a new more affordable fixed rate loan with the FHA. But, there are restrictions. To qualify your old loan needs to have been made from 1-05 to 6-07, you must live in the home, own no other rentals and must be spending at least 31% of your GMI. There are of course other regular FHA lending programs that require only 3% down without these restrictions. Ask your lender for more details.

For the lenders side, they need to agree to write down the current loan amount to just 90% of current appraised value - also known as a "hair-cut". The appraisal must be performed by an FHA approved and licensed appraiser. They must agree to waive all fees and pre-payment penalties. They will also want to document that there is financial hardship. They must run their numbers to see if it's beneficial to re-do the loan or foreclose.

For the new FHA loan, the borrower must agree to no equity loans for 5 years unless it's for home maintenance or improvement. Borrower must agree to share the equity if the property increase at 100% of the profit the first year if sold and then 90% the second and then 10% down to 50%, that is the most unusual part of this program.

Bottom line is, there is help out there for some struggling homeowners but for this program there are restrictions and it's not a free ride. The old lender must agree to a voluntary hair-cut and waive all fees and the new lender will get a piece of the appreciation - if there is any.

The new FHA program is set to begin October 1, 2008 and the FHA programs could allow up to 1 to 2 million borrowers to participate.

Please call me if I can be of any appraisal service to you or your clients.

Appraiser/Author Clifford Diamond, CREA

Have your property taxes reassessed.

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Mon, 24 Mar 2008 15:29:11 -0700

Have your property taxes reassessed.

If your home has lost value there may be a silver lining. If you purchased your home between 2003 and 2007 its possible you are paying too much for property taxes and you can have your assessment lowered and even get a refund.

Many homes across the country has suffered value loss due to declining market values. If you purchased your home in the last 5 years it’s important to find out if you are being assessed for more than your home is worth.

Here in Southern California there was a period after the Northridge Earthquake when property values dropped dramatically and the average homeowner was over assessed on their property taxes. With the right information you can get your home reassessed and your property taxes lowered. In this economy who wants to just keep throwing money away.

The tax assessor is a government agency that assesses your property taxes based on your purchase price and some incremental increases allowed by your local regulations. You may also be reassessed every time you add a room, pool or remodel based on your permits. Lets say you live in Los Angeles and you bought a home a couple years ago for $700,000 and the market has dropped to say $500,000, you are still being assessed at the higher purchase price and even higher if you made enlargements or permitted improvements.

The tax assessor has a difficult job and I would imagine they are going to be flooded with applications for reductions in assessed value and minimal lowering of tax bills. I know when I handled my own reduction years ago I filled out an application for reduction and they readily agreed to a small decrease, well being an licensed appraiser I knew I could do much better and requested a hearing with an assessor and came prepared to do battle. I was a little nervous but knew my information was strong and was determined to win. As soon as I sat down to compare info they began to show me what data they had and found they made a huge typo mistake on their information and conceded immediately. I won and did not even have to fight for it. My taxes were probably the lowest in the neighborhood because I was persistent. I felt sorry for my neighbors who didn’t even try.

The process is a little confusing and I am not an expert on these governmental procedures. I am a licensed appraiser with some personal first hand experience on my own property. Technically you do not need an appraisal but a licensed appraiser with experience can be your best advocate by preparing a defensible appraisal for your benefit and help you get the results you are after. I would suggest you find out what you are assessed at and what your home could be valued at with these current value declines.

Appraiser/Author

Clifford Diamond, CREA

As an experienced appraiser in Southern California with over 20 years experience I am available for expert witness, court work an speaker for local attorney and accountant groups. Please look me up in Los Angeles CA.

Foreclosures and Short Pays and how it affects your market value.

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Mon, 24 Mar 2008 15:17:46 -0700

Foreclosures & Short Pays and how it affects your market value.

With all the talk of foreclosures and short pays in the news, homeowners have to be wondering when will this all end and what effect does all this bad news have on my own home and does it effect my immediate neighborhood?

First, what is an REO, short pay and foreclosure?

A “short sale” or “short pay” is when a homeowner is in trouble on their property and owe more on the property than it is currently worth and/or can be sold for. Sometimes the lender will allow the property to be “sold short” of what the loan balance is and allow the seller to walk away from that loss – usually because the seller is cooperating with the sale and keeping the property in good repair and allowing showings etc. An REO simply means Real Estate Owned or bank owned property. It has already been officially foreclosed on by the bank and they now have ownership of it and probably want to get it sold in fast sale.

What do REO’s have to do with my neighborhood?

In many neighborhoods across the Country there may be 10 for-sale signs on the same street. Lets say on the hypothetical street there are 10 similar homes for sale, of those, 4 have been on the market for months at full price, say $500,000, 3 are short sales and have permission from the lender to sell for $450,000 and 3 are REO’s and being blown out at a 20% discount to get sold fast at $400,000. You as a buyer have the choice of paying 500, 450 or 400 for a similar house. Typically the cheaper REO house will sell first. This lowers the values for the entire neighborhood making it harder to compete against these low sales.

How do these distress sales affect me?

This is where the trouble starts. If the only homes transferring are REO sales and short sales, then this becomes the market and sets the market value lower for the entire neighborhood. Since for lending purposes sales are used to determine market value it is most important what buyers are willing to pay not what sellers are trying to get. In a healthy or increasing market with many sales to choose from appraisers would try to always avoid distress sales. But, in a declining market an appraiser may not be able to find even one non-distress sale as more and more foreclosures hit the market. So if you were trying to sell or refinance then your home would likely be compared to those lower sales.

What happens next?

The strange thing is that at the beginning of a downturn there is almost two sets of prices. The higher conventional sales and the much lower bank blow-out sales. As the market enters negative territory, foreclosures continue to rise, supply has risen to 10-12 month supply levels, demand has dropped to historic levels and lending criteria has tightened on the limited buyers willing to purchase. A newer pattern of more distress sales than conventional sales emerge and lenders offer their latest REO at even steeper discounts further eroding market values in a neighborhood.

What effect does government or banking regulations have on a housing recovery?

Many of the loans that were made from 2003 to 2006 were made with lets say, easier lending criteria. This allowed many people to buy and trade up and this made demand stronger and supply shorter and increased property values at an accelerated rate. When the loan supply/credit is restricted this decreases demand, increases supply and in an already weak or declining market can accelerate a very rapid decline in values. This restriction although was needed is perhaps ill-timed and much like throwing gasoline on a forest fire.

Is there any good news?

It may sound like its all bad news but if you bought your home to stay put, you will probably be just fine and could ride out this real estate cycle. What goes up will come down and go back up again. I have seen it happen many times in my long career. Also, you may want to consider having your house appraised and/or re-assessed if you are being assessed at more than your home is worth - call your appraiser and find out. Also, if you are renting and have good credit there will be a tipping point where your rent payment will be more than it would cost to buy a home and can take advantage of tax incentives, new FHA loan programs etc.

Are all areas dropping?

I have found that not all areas are declining, and of those declining not all are declining at the same rate. Here in Southern California, many upper end neighborhoods are stable and homes listed are snapped up as soon as they hit the market. It takes a professional and knowledgeable appraiser with years of experience to determine what is happening in different neighborhoods in your local market area. Please call on me and I would be happy to discuss it with you.

Appraiser/Author,

Clifford Diamond, CREA

As an experienced appraiser in Southern California with over 20 years experience. Available for expert witness, court work and speaker for local attorney groups. I can be reached at activerain.com/cdiamond or look me up in Los Angeles, CA.

How to Sell any Property in a Down Market

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Tue, 01 Jan 2008 17:37:24 -0800

How to Sell any Property in a Down Market

If you are planning on selling your property in this market you are going to need a strategy. In the last 20 years I have pretty much seen everything and I would like to give you helpful and timely tips to help you get it done right.

First, lets talk about what you are in for. In Southern California and most parts of the country there is a huge standing inventory of homes for sale, that is your competition. It is most certainly a buyers market right now and adding another overpriced, unmotivated home for sale in this market is not a positive thing for most Realtors. Also, now is not the time to shop for a "discount" Realtor. You are going to need the best you can find and listings are "a dime a dozen" right now.

Lets start with why. If you're not serious about selling your home right now or not willing to set a realistic asking price then don't list your house at this time, it won't work out well for you, your Realtor or your neighbors. If you are motivated and ready then lets come up with a game plan. Some of these may be obvious but hear me out, you may want to re-define your goals and priorities.

First, lets start with you. It's about finding a buyer. That means your tastes and décor choices don't matter anymore. It's about trying to appeal to a future buyer and making your home better and more attractive than any other in this price range. In a perfect world your home would be vacant or professionally staged with no personal items in sight. You will also need to decide what you are really trying to accomplish. What is your goal? Is it a quick and painless sale? Squeezing every penny out of the sale? Cashing out and renting back? Avoiding foreclosure? If you are in an emergency or panic sale mode then your choices will narrow.

Second, your property will need to be in tip-top condition. If you want top dollar consider a professional paint job inside and out with up to date neutral colors. Consider new flooring. Depending on price range and your goals you may want to consider upgraded granite counters, new appliances and updated baths. If you can not or choose not to upgrade and update then your price expectations will shrink. If your goal is top dollar then these upgrades become mandatory. If you just want a fast sale then price will default to second priority it's that simple and it really is your choice.

Consider this before it's too late. The most ideal choice would be to hire an independent licensed and experienced appraiser to give you a realistic valuation of your home. An appraiser can also tell you what those upgrades would be worth before you spend your money needlessly. Even a room addition, extra bath or complete kitchen remodel can be valued before you spend a dime. This is an appraiser's job and is money well spent. If you were off in your estimate either too high you will waste your time or if you're too low you will have forever lost that money in the sale.

Here is the important part. Here is what most sellers are incorrectly doing right now. If your home is worth say $600,000 most people automatically set their asking price just above that at maybe $625,000. Makes sense to most people but that's where the trouble begins. I personally watched a neighbor do exactly this, he listed his house for $625,000 and nothing happened, weeks turned into months and that same property is still listed today, a year and half later for $399,000. On the other hand a clever neighbor sold his quickly for $610,000 to the first buyer he found and generously gave that buyer $15,000 cash back for a "landscaping allowance" in effect the buyer was thrilled to pay the full asking price because he closed and got cash back to start a pool, landscape the yard or go to Hawaii.

Here is another way to look at it. You can go with the herd mentality and make your price the same as everyone else and ride it all the way to the bottom OR you can under-price yours and make the sale happen in today's dollars and avoid any price reductions at all. Its like catching wave, you need to be at the front, do all your paddling at the beginning and catch it before it drops or you will miss the buyer and be stuck behind the wave always waiting for something to happen. It's not a good bet but, if you price it way under market you can end up with multiple offers and even get an overbid. Here is a secret, what is working right now is buyer incentives - directly to the buyer, they are your customer. Instead of dropping your price $10K, give that to your buyer in the form of cash, home improvement gift card, landscaping allowance, luxury items etc. You will create buyer activity.

Lastly, think positive. It's all about finding a win-win deal. What you probably want is to get the house sold as painlessly as possible. So price it right immediately and make the property as marketable as you can afford without wasting time or money. Keep in mind where the market is going, if it's a buyers market and prices are dropping, get it sold quickly and don't try to hold out for a better offer. But remember it's hard to sell any property with "warts" in this market. Think in terms of a $100 repair that you neglect will take off $1,000 on your final sale price, so cure all the negatives before you list and price it right from the first day and you'll be successful.

Remember to use your appraisers experience and skills in the very beginning not just at the end and you will bargain from a position of knowledge and strength. Please look me up if I can be of service.

Realtor/Appraiser

Cliff Diamond

Historical or Retro-Active Real Estate Appraisal Valuation

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Wed, 26 Sep 2007 11:07:37 -0700

If you need to know the value of a piece of real estate anywhere from a month ago to a decade ago, it can be done. I’ll show you how it can be done.

How it can benefit you or your clients. How an appraiser arrives at value even long after you have sold and moved away. As an experienced appraiser in Southern California with over 20 years experience I would like to share my real estate experience with you.

What is a historical appraisal? Really all appraisals are just a snap-shot of time. Most appraisals are for current market value. So the very day the appraiser comes out and inspects the property the value is valid on that date only and could become no longer valid the very next day. There could be an economic or natural disaster that could change the value overnight. With a historical appraisal the effective date is what the property was worth on that required date, anywhere from last month to 10 or more years ago.

What is the purpose of a historical appraisal? Many and varied reasons. Many accountants and financial planners need to determine the value of property held in estate when the owner dies. This is known as a “Date of Death” appraisal. The IRS will want a professional appraisal in the file to document the value as of that date. Attorneys use the historical appraisal to determine what assets belong to which party. For example let’s say a single person bought a home in 1985 but met and married current spouse in 1995 and separated in 2005. It would be important to know the fair market value on those dates for fair and equitable dissolution. The same would be true of business partners in a property or even family members that pooled financial resources but need to move on. Are there limitations to what can be done? You would think if you had sold the property years ago and moved away that it could not be done. That’s not true. I recently appraised a property 10 years back, that at the time it was only 1/2 the size, was before the swimming pool, and the owner sold and moved out long ago. In this case an exterior “drive-by” appraisal was called for and the house was valued based on the previous size, minus the pool and without bothering the new owner. In this case both opposing appraisals came in very close to each other and settlement was that much easier.

A historical appraisal sometimes involves similar principles of New Construction Appraisals where only specifications on paper exist and the appraiser determines the value as if completed to your plans and specs. This is sometimes referred to as a Feasibility Study and used to determine if what you plan on building is worth what you expect it to be worth and what adjustments in the build will increase or decrease value. In these more complicated retro-active or historical appraisals it is important to find an appraiser with years of experience in that market area. An appraiser with sufficient experience may have insight in this area before, during and after changes that have occurred over the last 20 years in that target market. Additionally there are certain appraisal formats that are acceptable for use and others that are in direct OREA violation. Lastly in historic appraisals, the use of comparable data must all fall before the effective date of the appraisal. If your effective date is 1-17-94 all sales comparables must fall before that date, none after. If for example you needed to know the value of a property sometime around the Northridge earthquake, using sale comps before or after would have tremendous impact on that value. If the appraisal is for court work we may be called on the witness stand to testify to our report and defend it against the opposing attorney and his witness. There are additional fees for this type of testimony.

As a professional appraiser it’s my responsibility to be the best possible resource for my client. If I can be of service please look me up... Appraiser/Author Clifford Diamond, CREA

Homeowners Guide to a Smooth Appraisal

Clifford "Cliff" Diamond (Clifford Diamond & Assoc.) — Tue, 14 Aug 2007 17:12:28 -0700

Getting your home appraised can be stressful. I would like to help take some of that stress away and help you get the most out of your appraisal experience. As an experienced appraiser in Southern California with over 20 years experience I would like you to see the assignment from our eyes.

First, remember the appraiser has a difficult job and you can help him/her by being cooperative and even friendly on the phone when he calls to schedule the appointment. Trust me, being nice goes a long way. Before the appraiser shows up, make sure the house is picked up, the areas to concentrate on would be the areas the appraiser is going to need to take pictures of. For me it’s usually the kitchen sink area, the master bathroom counter, fireplace, pool, if you have one. Its important to have the counters cleaned off for the photos, the floors clean, the walls free from marks and damage as this all counts towards your condition rating. The yards should be picked up, no junk laying around, yards maintained, pool cleaned and operating as this also counts towards your condition rating.

When I arrive I always give the owner my business card and ask if I can start in their kitchen. I personally always start in the kitchen, it tells me a lot about the rest of the house. I then work my way through the house counting bedrooms and baths, looking for any damage and any improvements and the type and condition of the existing improvements. I then usually have a brief “interview” with the owner. Any recent improvements, things I would not normally notice? If you want to prepare a brief list of the items you feel adds value, that’s always welcome. Then I ask permission to go outside and measure the house (usually I prefer to go by myself). I measure the footprint of the home and later turn this into a computerized building sketch. This helps determine if there are “bootleg” additions and if the size matches the tax records. While I am outside I look around the eves and windows for signs of dry rot or water problems. When I end up at the front door I knock and thank them and let them know I am finished. If the appraisal is COD now is the time to collect a check.

I have learned over the years not to stay and visit to long. The usual question is “so what’s my house worth” I can not answer that question for many reasons, first I have not finished the appraisal, this was just the beginning and second its bad business to haggle over their value on the doorstep. It could be several days before I could determine the value. After the inspection which usually only last 15-30 minutes on a small tract house, I am off to go drive-by and shoot the “comps” I have selected to use. These are based on similar location, size and other criteria. After this fieldwork is done its back to the office to compile the report on our required software forms, input the building sketch, import the photos of the subject property, usually 3 interior/feature photos and the photos of the 4-5 comps. It’s at this time when the comparable specs are added that the final valuation begins to form.

After all the plus and minus figures are calculated the appraiser has an “adjusted value range” it’s at this time we take a moment and reflect on the condition, the photos, the conversations we had with the owner or Realtor any bits of information we picked up that help determine that final value. Then we finish off the report, sign it, proof read it several times both on the computer and in printed form and send it off to the lender/client or whoever the intended user is.

Once the lender receives the report you would think our job is done but there is often additional info that is needed, in some cases the lender feels additional comps are needed or they may even “cut” the value. Then the original appraiser needs to submit a rebuttal to a cut value. We do this for the client but also to protect our reputation and our approval status with that lender. If the appraisal is for court work we will be called, on the witness stand to testify to our report and defend it against the opposing attorney and his witness. There are additional fees for this type of testimony.

Appraiser/Author,

Clifford Diamond, CREA

As an experienced appraiser in Southern California with over 20 years experience I am available for expert witness, court work, consultant and speaker for local attorney groups. Look me up in Los Angeles, CA.

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