This is a great discussion of what is occuring right now between Appraisers and Realtors.
Appraisers - we need to report the market and be competent in our area. Realtors - you need to ask how far away your appraiser is coming from. Remember this term and look it up: Geographic Competency
Appraisals are an important part of the process in purchasing or selling a home. More than ever, the appraiser has the power to determine whether or not a sale goes to the closing table.
As if it were not difficult enough to value some homes in today's real estate environment where often there are no comparable sales in the last year or more, the government swoops in to 'correct' the abuses in the appraisal system, and the consequences of HVCC are that appraisers are traveling a long distance sometimes and are doing more work for less pay. Even if an appraiser has local knowledge, they may or may not do a thorough investigation of the comparable properties and they may choose to use Comparable Sales that are not ideal.
It is imperative that a real estate agent meet the appraiser when one of their listings has sold. This is not to try to influence the appraiser in any illegal way, but to give them the best information, so that the appraiser can value the property accurately. An added bonus is the information you will learn from the appraiser if you ask questions.
10 Ways to Get a Better Appraisal
1. Meet the appraiser at the house. Take the lockbox off the door after you get a contract so an appointment will have to be made.
2. Give the Appraiser as many Comparable Sales as you have for the subject property. If it's a property where there are few or no comparable sales, go out in a radius search until you find some. Go back as far as a year or even more if it's a special type property (waterfront, for example). Realize that the appraiser may deduct value if the sale is further than 3 months out.
3. Call the agents for the Comparable sales to get as much information as possible for the appraiser. The house that sold down the street that needed a new roof - they need to know that, but it's probably not in the MLS information.
4. Give a complete list of every upgrade and improvement that has been performed during the seller's ownership. Be sure to include maintenance items as well as cosmetic upgrades. There is a category for "condition" on appraisals and although it won't match dollar for dollar, it will be mentioned.
5. Be sure to note when flooring is "hardwood" instead of "wood" or "laminate." Be specific about other surfaces (granite vs. corian) and improvements. A glazed 42" raised panel cabinet with full coverage costs most than Level 1 42" cabinets. Thermador appliances are more valuable than GE Profile, for instance, and an appraiser's quick trip through the house may not take in such details.
6. Give them a copy of your Marketing materials, including the beautiful photos you have of the interior, exterior and grounds.
7. Be sure to note anything about the lot - the Preserve not only on the side but across the street, for instance. Note the size of our lot vs. any comparable sales (if it's to your advantage).
8. Local appraisers probably know the Community amenities, but it never hurts to also give a list of those as well.
9. If there are communities nearby that are not really good comparables, a map with some notes about the lack of amenities, production starter homes vs. your community with custom homes on estate lots, etc., can be very helpful to someone from out of the area.
10. Be gracious, not pushy. Even if the appraiser is from 100 miles away, respect and helpfulness will go much further than a condescending, "You drove all the way from there?" attitude.
If you make the effort to be sure the appraiser is well educated about your listing, you have a much better chance of the house appraising and the sale going through. Appraisers' work hasn't lessened but many times their fees have been cut in half or more. Anything we can do to help is in the Sellers', Buyers', ours, and the community's best interest.
Happy Selling!
Original Photography, All Rights Reserved. *10 Ways to Get a Better Appraisal*
It is interesting that at the same time in the market, I am noting trends as of the 3rd quarter 2009, showing recovery of price/sf and in many cases - increase over the prior quarters:
You can see from the above market analysis - the overall 2009 market still has an average decline of 1.52% per month. However, the 3rd quarter is showing promise! And this is a trend I am seeing in nearly all of my appraisals over the month of August.
Additionally, the affordability of homes appears to be very healthy right now for buyers. Avergage price/sf in the qurrent quarter is still at or below that of 2004! So it looks like a good time to be a buyer!
Time will tell if the trends in the market truly bounce back. You can see in the 2nd and 3rd quarter above - the market shows some signs of stability among the average price/sf. However, the trend is still going down for both list price and sold price.
Another highlight though - is that Days on Market also appears to be leveling out now - somewhere around 90-180 days here in Central Florida! So buyers are getting active again! And of course, the volume of sales in 2009 has FAR surpassed that of 2008! Which means people are actually BUYING again!
Now, if only Florida could get that unemployment rate UNDER 10%....we'd be seeing even more health in today's market!
Well SunShine State......here's to better days ahead at least!
I often had to copy and paste my "signature" from an old blog post to the current one - as trying to keep the formatting the same by retyping it was just not feasible!
But now - thanks for the continued growth of the Active Rain community - my day just got easier!
Active Rain - you just saved me .004 seconds of my day...which I can now devote to new blog posts!
Sometimes..... all it takes is finding a turtle in your front lawn to make you happy!
We all go through ups and downs, high moments and low moments. We often celebrate the great victories as we over come our challenges and obstacles.
But remember, sometimes it is just the small moments in life which really matter most. I don't remember my last great victory in business....but I'll remember how happy my daughter was when right before a rain storm, she found a turtle making its way across our lawn to the lake behind the house! This is a 'little moment' which certainly lifts my spirit even more than winning a challenge in business!
Celebrate your small moments today! And feel free to share them with me - so I can rejoice with you and smile with you as well!
One can always make more money.....we can't always get the time back for moments such as these.
I recently received an email post on the Wintotal User Forum from Adam Calvery. Adam is a VP product manager with Alamode - and allowed me to republish his email below. This is some great information to consider when thinking that we have now somehow lost income in a new appraisal world, likely to be dominated by Appraisal Management Companies!
As a software vendor, I'm not involved in running an appraisal business daily, but I understand what appraisers deal with. As someone who's been with a la mode for nearly a decade, and being the outgoing type, I've been lucky enough to create numerous relationships with our customers that go beyond the standard "vendor-client" status. The result being I get exposed to thoughts and concerns of appraisers that go much deeper than the surface. And at the end of the day, I'm a marketer concerned with how, what, why, where and when the products and services Dave made me responsible for are positioned and sold in the marketplace. My work life revolves around staying in tune with my customers and their industry, plus staying in tune with the marketing profession just like you stay in tune with the appraisal profession.
My point in mentioning all that is to say I understand your job and your challenges. And I understand the challenges you face in producing, marketing and selling your own services in the face of an industry undergoing massive changes. So, having said all that, here's why I disagree that you guys have lost income you can't replace. And by no means am I downplaying the impact of the HVCC (if in doubt, just take a peek at www.AppraisalPress.com to see what we think of it).
It's been my experience that, in general, appraisers aren't comfortable with marketing (that shouldn't be a news flash to any of you), appraisers give up on marketing too quickly (that might be a news flash), and that appraisers as a whole are virtually ignoring the non-lender part of the market (that probably is a news flash).
You offer a professional service and there are clients who have a demand for what you supply. Change is the only constant, so given new AMC roles, new Fed "guidelines", the HVCC, etc, the smart move then is to proactively try to find other markets where you can sell your services so you're not solely reliant on, specifically, lender work. Again, in my experience, the reason that appraisers aren't comfortable with marketing is natural - it's not your primary job and you've never had to do it before like you need to do it now. So the first step is to learn about it so that you are comfortable with it. Like most things, learning the fundamentals isn't necessarily difficult. It's the execution that gets tricky. Go to Barnes & Noble and find some books on it. Join www.MarketingSherpa.comto see what the pros are finding to be successful in website, e-mail, print, social media and brand marketing. That site is a reference for big and small companies alike, both B2B and B2C.
Next, don't give up on your marketing plans and goals. Realize that it takes time and effort to generate results off your marketing. And by time, I don't mean a month and two attempts. I mean it has to be ongoing, and it takes lots of time, over time. Statistically, research shows that it takes seven exposures to your marketing before the average person even remembers you and/or takes action, regardless of industry. Sometimes it takes a lot more than that. There are people using ACI we've been after for years. :)
But you can't give up, and you have to do it constantly. It's not a secondary thing to appraising. It's every bit as important, if not more so. Especially now. I could go on for hours on this topic alone. Learn about marketing and don't ever give up on it.
You've got to go after non-lenders not because of the HVCC, fee cuts, or the rest of it. It's a RIPE market segment. RIPE RIPE. IMO, it's a waste to not spend significant amounts of time trying to diversify your client base to include non-lenders. It takes time to develop those relationships, but it's never too late to start. I know loads of appraisers who've attempted this, but gave up after just a few months or a few attempts with XSellerate. Over the years, appraisers have become accustomed to creating a new contact or client, and almost instantly (i.e. a few months) seeing orders start to come their way as a result. In any other industry a vendor (you) making a relationship that bears fruit in two months is virtually unheard of. Many of you guys have worked in other industries before, and you know exactly what I mean. But non-lender clients don't typically develop that fast, and so it's easy to give up much too soon.
I also hear a lot of our customers say essentially, "bah, there's not enough non-lender work to be worth the effort." Bull. Yes, I said it and I'd say it face-to-face. Divorce and Estate attorneys, for example, have virtually no idea how to find an appraiser for doing expert witness work and dread the process of finding one because they're on the hook to their client if the one they find is a dud. Case in point: they have a book they refer to when looking for expert witnesses. A guy I know told me recently that when he was in his lawyer's office, he flipped through it and there were two (2) appraisers in it. (Yes, I'm trying to get info on that book.)
How about homeowners? There are roughly 200,000 lender-client type contacts in the USA (less now). There are what, 18,000,000 homeowners? I personally know an appraiser that has printed up branded door hangers that say in essence "Our local market has seen home values change greatly over the last several years. Do you know what your home, probably your largest investment, is worth now? I know this market and I can help you find out." At every house he appraises he walks up and down the entire block, both sides, and leaves those door hangers. After a while, he started to get enough hits that losing some traditional clients due to the HVCC didn't matter nearly as much as if he'd not done that. And he's not alone in this new tactic.
How about Ron Stalzer? He's on this forum. He's taken our advice with his XSite and XSites Desktop, and as I understand it he's seen a huge jump in the leads he's capturing online and converting into paying customers.
Lists are important too, especially for outgoing marketing like e-mails, postcards, face to face visits, etc. You can buy and rent lists from list vendors like www.InfoUSA.com, or from professional organizations. We get a lot of information about appraisers from the ASC list that's publically available. Many industries have similar possibilities. But good lists are the key to good returns.
In my opinion, love it or lump it, you absolutely can replace income lost because of the HVCC, provided you treat the marketing of your business as seriously as you treat your job as an appraiser. And I absolutely understand that it's tough to make that switch. Many of you know Matt Krodel that's been here for years. He uses the analogy of a gym membership. You can get a membership and admit you need to work out, but you're not going to get any results if you never actually do it and change your habits.
Whether you change your processes to be able to profitably work with AMCs or not, there is zero harm you can do by trying to acquire non-lender clients. All you're doing is diversifying your client base so that you're not dependent on one or two major ones.
I apologize for the length here, but this is a subject very near and dear to me. Both personally and professionally, everybody here at the Intergalactic HQ in OKC, plus our Quantum Fighter Wing in SLC, wants you to succeed. We've been banging the "marketing drum" for years now, put out XSites and XSellerate years ago to help you with marketing, released XSites Desktop last year to help with the same, continue to hold classes (new schedule coming this month), and have been banging about it in AppraisalPress. But it takes time and multiple exposures to get people to remember and take action. :)
And with that, I will relinquish the soapbox. If you read this far, you're a trooper. :)
These days the work is getting harder with the advent of the 1004MC, HVCC, AMCs, and a host of other terms and lingo - but the good news is, volume is up and the work is getting steady!
I was talking to an appraiser friend locally, who is still using paper for everything. I was encouraging her to embrace mobile technology to simplify the workflow.
I have gotten my inspection into the digital age and even down to holding it all with 1 hand!
I have been 100% paperlessnow since 2003. I have a full 5+ years now of appraisal files which are totally digital, with supporting documents and workfiles contained within the reports themselves!
My Tilt takes decent photos (as a back up) but it doesn't have a flash. So for interior photos, a standard digital camera is useful!
This set up cost me $500 +/- for the phone, $250 +/- for the Disto, and $220 +/- for the camera. I already owned Pocket Total as part of my Alamode package.
So my total outlay of funds was around $970. This has likely saved me at least an hour a day - or 30 hours a month. Even at $20/hour - that is $600 a monthin time alone and this paid for itself in 2 months. Not to mention that having my phone, personal information manager, Internet, email AND inspection forms all in one device is pretty darn slick!
My next consideration is the iPhone -
Alamode is developing an application for the iPhone- and that has me pretty excited! I can finally have my iTunes library with me when I measure homes!!
Seriously - the main point is to get you thinking of ways to shave off a few minutes a day from your current workflow. If you can save even 10 minutes a day with technology - you will have gained hours and days of your life back......which you will likely FILL with new work!
I saw an Active Rain blog roll, and clicked on the title of this since it is what I do every day - make time adjustments in the market.
When I opened the blog - I was surprised.....THIS IS MY APPRAISAL they are talking about!!
Bryant Tutas has certainly stirred up some great conversation over the validity of making adjustments.
Is it an ART or a SCIENCE ? Well - it is math! But why don't all appraisers measure the market like this? Poor training, ignorance, laziness? Yes - that likely described myself about 5 years ago! But I now consider myself a "Repentant Form Filler" - and I work diligently in every report to make up for a bad former appraiser life!
Read on and please leave your own comments about this topic!
Hi folks. I wrote a post over two years ago titled“Let the Games Begin”. In this post I was pointing out that Poinciana was beginning to be a declining market and that Appraisers were making downward adjustments for this. It created quite the stir.
For whatever reason there were many who commented that felt this was not happening and would never happen. Well…..it was and it is.
I reviewed an appraisal today where the appraiser made a downward adjustment of $150 PER DAY on the recent sales.
Just to give you an idea of how this works. One of the sold comparables that was used closed in November. The adjustment was -$20,000!! The same house had a pool and it was adjusted -$8,000.
So what do you think about that? $8,000 for not having a pool and a whooping $20,000 for being a 5 month old sale. Have you seen this in your market yet?
****The chart and data in this post was provided by Richard D Ferris Florida State Certified (FHA) Appraiser
My home and office (in my home) is loctaed just a few miles south of this wild fire. I took a drive along CR 561 this morning while the road was still open, and captured some recent pictures of the burned over area.
I am truly grateful for the firefighters and forestry division for all their hard work over the last couple of days! So far, no homes have been destroyed or damaged - although some surrounding lands are charred. It all grows back eventually - but it certainly makes one grateful for the blessing of a safe home and famlily.
I extend my heartfelt thanks to our public servants for their hard work keeping homes and families like mine safe!
There are some new regulations coming down the pike on May 1st - namely the HVCC, or Home Valuation Code of Conduct. The history of the code can be found by clicking HERE. I won't bore you will all the details - but rather sum it up for those not in the know:
Upon implementation of the HVCC, lenders will now have to have a "firewall" between the ordering parties of an appraisal and an appraisal office (or person). No more direct ordering from the loan officer or mortgage broker, etc. There are some loopholes in the code and it is a major topic of discussion around appraiser circles - as we wonder what will become of our industry in the coming year.
On a lighter note - I received a call from a woman looking to place an order with "Amc Appraisals". I said, "Sure - I can help you. Would you like to fax an order, or place it over my web site"
She began to question me about who I was, and was she ordering this from the right company. Long story short, she was a mortgage broker from Virginia, needing to order an appraisal in Florida. When she Googles "AMC" and Appraisals" and "Florida" - my site came up #1. Go ahead, try it out!
No, she didn't HAVE to order it from my company, she needed an "amc" or "Appraisal Management Company" who serviced Florida. I wasn't about to clue here in- I could use the extra order these days!
In the end, she did some more digging and found out it wasn't MY company she needed to order through - but rather one of the approved AMCs for Flagstar!
I realized though, that naming my appraisal company after my three daughters (Amorandah, Manessa, and Cannah), just might produce me more business in the end! I am NOT an appraisal management company either...just a one person appraisal firm, working from my home, wanting to provide professional, credible appraisal reports. But it has got me thinking........
I had a good laugh about it - and realized, perhaps sometimes, unintentional actions (like naming my appraisal practice after my kids) can have a good outcome after all!
These are certainly tougher times for everyone in real estate. Competition is fierce for those who have remained in our profession. In my field of residential appraisal, there are over 100 appraisers in my county alone, according the state of Florida's online records.
There is talk about cutting fees, lenders using management companies, and markets in California where appraisers are competing for $100 full appraisals.
These are certainly tough times.
I am a family man, father of three daughters. I have been an appraiser for 15 years now and I plan to remain in this business. I have had to lower fees in my areas to compete with the overwhelming number of competitors, all scratching for whatever business they can find.
I believe that in the coming year, the professionals who will not just survive - but thrive in this industry - will be those who embrace personal growth and education.
Gone are the days of filling in some forms, plotting 3 comparable sales, and using boiler plate text comments. These days, lenders expect appraisers to be doing what we were supposed to be doing all along....measuring the market, detailing supply and demand, calculating rates of decline, and considering not just 3 comparable sales - but pendings, listings, impact of REO sales, etc.
I have found that many appraisers who came into this business during the BOOM years really don't know what to do with this new environment. Some have exited the industry since easy fees are no longer available. The ones who have stayed are struggling to grasp new technology and valuation methods to accomodate the ever growing demand of more detail, now being required by lenders.
Some of us now have time for new education - but few resources to throw at education providers.
Did you know you can download ITunes for FREE? Ok....then have you explored the wealth of FREE information on ITunes?
It isn't just for downloading the latest Daughtry album or even catching up on those missed episodes of LOST.
iTunes U has a whole section of business classes from universities such as Yale, Rose State College, Missouri State University, Stanford University and even local community colleges.
There are FREE video classes on topics such as business management, marketing, advanced mathematics, and topics directly relating to our industry:
Finance, Macroeconomics, and advanced Quantitative Methods (statistics!)
And the best part of these classes?
Yes that is right.....FREE.
What will set you apart in your industry? Is it just your experiences? Customer service? The degrees you may or may not already have?
I believe what really sets a professional apart from the pack is a quest for personal growth and development. We should never be satisfied to know what we know. We should always be discovering ways to improve our businesses....and often - that means improving ourselves.
So don't procrastinate changing YOU this year. Embrace new topics even if they are not business related. Take a course on philosophy, literature, or social sciences. They are all there on iTunes U for free!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Appraisals are an important part of the process in purchasing or selling a home. More than ever, the appraiser has the power to determine whether or not a sale goes to the closing table.
These days the work is getting harder with the advent of the 1004MC, HVCC, AMCs, and a host of other terms and lingo - but the good news is, volume is up and the work is getting steady!
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