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appraisal: a recent email and my response - what do you think? - 02/22/10 11:23 AM
From: xxxxxxxxSent: Monday, February 22, 2010 10:29 AMTo: Mike LaySubject: HVCC (Sent via Activerain)
You've received a contact message from your Contact Form on the ActiveRain network.
Mike,I just read your letter and think it is great. Did you receive any response? I would also like to know if you are currently doing anything to fight the HVCC? I just received a link to sign a petition against the HVCC. The link is http://www.hvccpetition.com/ . I am trying to have as many people as I can sign it. My husband has been a real estate appraiser since 1992 and in business … (3 comments)
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appraisal: More evidence the appraiser profession is dying a slow death - 02/11/10 12:06 AM
Well, in addition to the knife in the back that the HVCC has been for appraisers, we now have a new competitor to contend with. Apparently now anyone can be an appraiser, according to Equity National. I received this email today from Valuation Review.
http://www.valuationreview.com/ME2/Audiences/dirmod.asp?sid=270E8EBA5AF64172B917EBD588EDB85A&nm=&type=news&mod=News&mid=5F249E552B2C49509BC41751816632F3&tier=3&nid=0E517FDDC8CA4ECA8CC9969BC6C52AE9&AudID=F0F48C5C19CB47B3A675FD6074A3CB8A&utm_source=vwVRget&utm_medium=email&utm_campaign=VR_Tues_Enews
Basically, Equity National has an AVM that includes data gathered by "a mix of professionals with mathematical quantitative statistical background" (which I can only assume means those not able to be hired at Burger King) that will go out and view properties and take notes to enhance the AVM data.
And you all thought $200 appraisal … (4 comments)
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appraisal: THe HVCC is alive and well and working for appraisers! - 11/07/09 10:12 PM
If you have read any of my posts, you will have already guessed that the title of this one is sarcastic.
I had a good client (mortgage broker) who was pretty much forced to give up her business due to the HVCC, and ended up merging into another larger practice. Once there, she recommended me as one of the 5 appraisers that their AMC uses on a rotation (and the AMC pays full fee, so I can't complain). However, I found out last week after the orders dried up that I had killed three deals for another broker in that office, … (6 comments)
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appraisal: How stupid can this business get? - 10/14/09 09:46 PM
I've got an appraiser friend in NM that does a lot of work for the big AMC's. He emailed me yesterday to tell me he thinks he finally got the straw that broke his back. A new requirement from LSI that will "greatly reduce" the number of appraisal challenges (where the buyer/seller/borrower/realtor gets the chance to say "why didn't you use these comps?") is this gem:
"...appraisers (shall) provide a paragraph within the addendum of each report detailing the parameters used to narrow down their search for comps, including why the provided comps were the best and why others were not selected. … (9 comments)
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appraisal: The Fallacy of the Price per Square Foot Method - 08/13/09 11:02 PM
"What is the price per square foot?" In my job as a residential real estate appraiser, I hear this repeated almost daily. Other variations include "my neighbor sold for $ (x) per square foot", or "the average in my neighborhood is $(x) per square foot". Almost always, these comments and questions come from people who are unhappy with the valuation of their home. Unfortunately, the price per square foot method is very rarely a reasonable indication of the true market value of a property.
Let's look at the basics: The price/sf is determined by dividing the sale price by the number … (6 comments)
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appraisal: Why the NAR call to action for HR 3044 is a joke - 07/23/09 12:16 PM
I recently received an email asking me to call my representatives and urge them to co-sponsor H.R. 3044, which would place an 18-month moratorium on the HVCC. Along with the email were links to several articles talking about how low appraisals are hurting real estate, essentially saying that appraisers are responsible for the slow economic recovery.
New Home Appraisal Rules Stir Industry Backlash - Associated Press (July 14, 2009)
Low Ball Appraisals Spark Uproar - Post (July 3, 2009)
Appraisal Management Chart
While I understand the real estate industry's frustration, yet another delay in implementing the HVCC is not the … (65 comments)
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appraisal: The Benefits of a Beautiful Outdoors - 06/01/09 11:23 PM
I was perusing the June issue of Money magazine when I came across a short article entitled "The Benefits of a Beautiful Outdoors". The gist of it was that good landscaping adds about 10% to a homes value according to a Michigan State study. Normally I would have just laughed at that and moved on, but several days earlier I was reading a blog post on Activerain where a realtor had asked a similar question, that she had heard that 10-15% statistic (although from a different source). So now I'm going to have to post something to make sure everyone understands that … (2 comments)
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appraisal: An open letter to Andrew Cuomo - 05/06/09 12:46 AM
Dear Andrew,
Now that we are a week into May, I wanted to personally thank you for your efforts in regard to creating the Home Valuation Code of Conduct (affectionately known as the HVCC, or "Half-assed Values at the Cheapest Cost" to those of us in the appraisal industry).
But seriously, I applaud your efforts in allowing Fannie and Freddie to get out testifying in the Washington Mutual/eAppraiserIt lawsuit. I mean, what would that have accomplished anyway? Actually proving that the lenders who were pumping our financial system full of suspect loans were well aware of what they were doing? If you had actually prosecuted that … (6 comments)
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appraisal: a letter to a good client I will be losing... - 04/09/09 05:23 PM
Here is an email I wrote to a good mortgage broker client I've had for the past few years, in response to one from them asking me to please sign up with Fiserv as required by Crescent Mortgage, one of their lenders:
Hi Bob,
Tom also sent me one for Taylor Bean & Whitaker, who is using some company called SecurityOne Valuation as their AMC. Both they and FiServ typically charge the borrower more than I do now, and then only pay the appraiser about $200, keeping the rest for themselves. I actually called SecurityOne to ask what their split was, but … (12 comments)
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appraisal: Review appraisals are depressing... - 02/16/09 11:56 AM
I don't do a lot of review work, but have several good clients that will ask me to do them on occasion. I also received one through Appraisal Port recently that really made me question both the "training" that new or potential appraisers get, as well as the general ethics that some appraisers have.
The appraisal was on a home that was kind of out in the country on 5.7 acres. Not quite rural, but one of those "subdivisions" where the owner had 30 acres and decided to subdivide them into several small acreage lots and call it "Happy Acres". There is … (2 comments)
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appraisal: The benefits of using an AMC for appraisals - 02/06/09 12:40 AM
Lenders,
I would like to relay a firsthand account of what kind of quality you might expect when you choose to work with AMC's:
A very large bank, in fact one of the largest BANK's in AMERICA, uses eAppraiseIt for appraisal management services. Now, I would agree that if you wanted to deter having the LO's pressure the appraisers, a firewall such as an nonaffiliated AMC just might be a good solution. The AMC orders the appraisal, the chosen appraiser does the best possible work (or at least what you might expect for a +/-$200 fee split), he/she sends it back to the … (11 comments)
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appraisal: Great news for appraisers! - 01/21/09 12:10 AM
I am very excited today because I found out that we NO LONGER NEED TO FIND AND USE THE "BEST" COMPS IN OUR REPORTS! Nope, it looks like that old, outdated method of choosing the most comparable sales is going the way of the wooly mammoth. From now on, the only important attribute of a comparable is that it MUST HAVE SOLD IN THE PAST THREE MONTHS.
Think of how much easier our life is going to be now! We don't have to worry about stupid little things like proximity, or similarity of quality, age, condition, lot size, age, or even … (38 comments)
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appraisal: Update on the HVCC for brokers and appraisers - 12/29/08 11:18 AM
To all appraisers and mortgage professionals:
I have posted a letter on my website that I have provided to all of my clients that outlines the HVCC, including what it is, what it does, who it affects, and what they can do about it. I think it provides a reasonable summary that would be beneficial for appraisers to provide to their clients, and is just good information for mortgage brokers and lenders who aren't completely up to date on the situation.
Anyone is welcome to copy it for your own use, as long as you understand that while I believe that the content … (3 comments)
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appraisal: What is an appraiser? (a little humor) - 11/30/08 12:24 AM
(borrowed from www.thejokeshop.org)
APPRAISER (Ap*prais"er), noun: One who compiles and analyzes voluminous data of problematical accuracy from sources of dubious veracity and derives therefrom a numerical quantification of unquestionable necessity, analogous to a nebulous and euphemistic concept representational of value commensurate with ambient configurations of the open market and promulgates thereby a precise written declamation which delineates his observation, deliberations and conclusions all done while he feigns absolute ignorance of the avaricious machinations of Buyers, Sellers, Brokers and Lenders, compensated only by that penurious stipend known as the professional fee.
Top 10 Reason to Become An Appraiser
1. Dazzle your friends with … (9 comments)
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appraisal: Update on the HVCC and the AMC's push for business - 11/21/08 11:25 AM
I'm annoyed today. I received two conflicting pieces of information on what has been going on with the HVCC. The first came from an appraiser friend in Maryland, who received an email from their state board representative who was at a national meeting of the appraisal foundation. That email said:
"I know you are all concerned about the HVCC that resulted from the FannieMae/FreddieMac agreement with the State of New York.
From what I could learn at The Appraisal Foundation's Board of Trustees meeting, it is highly unlikely that the HVCC will go into effect on January 1 of next … (19 comments)
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appraisal: dealing with pets... - 11/15/08 05:19 PM
I was appraising a house a few days ago that was on several acres. A very nice house in a suburban area, with all the requisite toys - 5,000+sf, great pool with water slide, a separate pool house with wet bar, firepit/conversation area, large playscape, detached studio, etc. I noticed that there was a large stone fence across the back yard that separated the house and maybe an acre of land from the rest of the property. I saw that the was a barn down there, and so went through the gate to go measure it. There were a few mid sized lawn tractors and a 4-wheeler … (2 comments)
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appraisal: Fannie Mae, are you sure you are out there? - 10/05/08 11:21 PM
I recently had a question come up regarding an appraisal assignment that I was unsure about, and in trying to find the correct answer I got some insight into why Fannie Mae has some of the problems it does.
I got a request from a client to appraise a house on 5 acres of land. However, the actual legal parcel is about 35 acres. Now, I do these on a somewhat regular basis, and I simply make them "subject to" receiving a copy of the new survey showing the 5 acres they have subdivided, and also note in the report that the … (3 comments)
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appraisal: More on the HVCC and a suggestion for a better way... - 06/11/08 02:44 PM
I have been getting more and more email about the HVCC (Home Valuation Code of Conduct) agreement, and the more I read it, the more I hate it. Once again (similar to prior attempts to curb lender pressure), it is a poorly worded document that only truly hurts the appraisers, while giving the equivalent of only a nasty look to the lenders and loan officers that created the problem. As appraisers have always stated, without having to worry about future business, we would never inflate a value. But when you are one of those crazy people that likes to eat and have … (5 comments)
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appraisal: Over improvements, super-adequacies, and what repairs to make when selling - 04/25/08 09:12 AM
A lot of people have the mistaken impression that if you spend $20,000 redoing your kitchen, you have just increased the value of your house by the same amount. Unfortunately, that is not the case. While there are some rough standard percentages (inground pool = 50%, bathroom remodel = 70%), it really all depends on your specific area.
If you are thinking about remodeling, take the time to think about why you are doing it. If you want to spend $50,000 remodeling a kitchen on a $150,000 house, understand that it will be quite a few years (and maybe many more depending … (4 comments)
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appraisal: Lies, Damn Lies, and the Price per/sf method of estimating home values - 04/23/08 11:26 PM
I get calls regularly from unhappy realtors telling me that I must be wrong on my value, because 5 other homes sold in this neighborhood that were $125 per/sf. This always cracks me up, because why even pay for an appraisal if it were that simple? "Okay, I've pulled up all of the sales in my neighborhood in the past year. I see that the highest price per/sf was $170, so I will multiply my square footage by that amount, so my house is worth (x)". What a great concept!
Unfortunately (or fortunately for me) it's just not that easy. Appraisals are … (3 comments)
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Mike Lay
Austin,
TX
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Appraisal House Texas
Office Phone: (800) 497-2660
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