Tagged: market value

Should We Real Estate Appraisers Stop Making Adjustments? 19

Should Adjustments Actually Be Done?

How much credit should we give ourselves when it comes to making adjustments? Making adjustments is controversial. USPAP says nothing about adjustments – it does not require us to make them. They are a GSE construct. So, should we real estate appraisers stop making adjustments? Clients pay us for opinions of value, so our adjustments are really opinions based on what the market tells us (or that’s what we should base them on), but they are still opinions we form; they are not facts we find. So, maybe, should we stop making adjustments? We derive our adjustments from sources such...

USPAP or Not Mueller REO report 36

Mueller REO Hybrid Appraisal Report

Another Mueller Report has surfaced. The report is a Mueller REO Hybrid Appraisal Report and it was given to an appraiser as a sample. This one raises more questions than the last one! The photos from the property inspection do not tell the appraiser one thing. The photos are dark and the repairs the inspector states are needed, simply are not seen in the photos. It begs the question, does the appraiser have adequate information to complete a credible appraisal? Now take a look at the Mueller REO Hybrid Appraisal report. Pull up the report and follow along. Some things have...

Increased Regulatory Persecution of Real Estate Appraisers - USPAP 20

Increased Regulatory Persecution of Appraisers

The current and proposed revised version of USPAP also opens the door to increased regulatory persecution of licensed and certified real estate appraisers, while leaving all others that opine about values with no constraints, rules or limitations. I was recently asked to consider a proposed change to USPAP. As received in my email: “Also this, in the 3rd exposure draft 239 The appraiser is not required to title an appraisal report using specific terminology because 240 USPAP compliance is measured by the substantive content of a report, not by what the 241 report is called. The use of labels such as analysis,...

What Are Recognized Techniques & Methods? Adjustments: Now What? 13

Adjustments: Now What?

So, what are these methods and techniques? We’re told to “support” our adjustments. We hear words like “prove” your adjustments… as if there were some magic formula which can give an exact, correct, and absolutely true number. It used to be so easy… Our trainer gave us a sheet with the “right” adjustments. Simple. USPAP Standards Rule 1-1 says we must be aware of, understand, and correctly employ recognized methods and techniques. What are they? Who recognizes them? How do I apply them? So, what are these methods and techniques? Let’s look. In The Appraisal of Real Estate (ARE) p.46, it says: “Qualitative analysis techniques may also be...

Deal Falls Through & Everyone Blames the Appraiser - AppraisersBlogs 12

Blaming Appraisers

…deal falls through and everyone involved is convinced the appraiser ruined everything… We hear all about low appraisals, but we never seem to hear about homes that are flat-out over priced, often by an agent who wants to prove they are smarter than everyone else and will take advantage of any unusual feature or circumstance to push the value beyond any other homes in the local market. For example: A buyer finds a house in need of some updating. Medium sized market and things are selling between 90-120 days on average. The neighborhood is good and the house has a...

The Public Trust - A Failed Goal? - Rearranging the Deckchairs on the Titanic 8

The Public Trust – A Failed Goal?

Presumably, "public trust" is the foundational test. Have our institutions, rules, regulations, standards, and social expectations failed us? The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. Preamble 2018-2019 Our mission is to foster the public trust of our members and the appraisal profession through compliance with the highest levels of ethical and professional standards. The American Society of Appraisers Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. The Appraisal Institute Some ten years ago, financial...

Schizophrenic Adjustments - Down to Exact Dollar Amount 35

Schizophrenic Adjustments

Appraisers, I’ve written in the past about what I believe are strange ways to report adjustments in appraisals, and suggested ‘rounding’ is a perfectly acceptable way to report them. This is largely due to buyers and listing agents thinking and listing in $100 increments – not down to exact dollar amounts. During the past couple of weeks, I ‘came in contact with’ two separate appraisals done by different appraisers on totally different properties, in different market areas. What struck me was the incredibly precise adjustments made for only certain items in these reports, while the rest of adjustments were ‘rounded’ to...

A Rebuttal to Real Estate Agent's Article Slamming the Appraisal Industry 43

Slamming the Appraisal Industry

A Rebuttal to Real Estate Agent Slamming the Appraisal Industry… Forbes recently published an opinion article that attacked the appraisal industry and placed all the blame on appraisers for real estate transactions falling through due to a “low” opinion of value. The article was written by a real estate agent out of Arizona. While he raises some good points, he is conflating a lot of issues together. 1) He does point out that there are bad appraisals. We all know that. There are bad appraisers just like there are bad agents who have clients list a property far above any...

Difference Between Price, Cost and Value... What It's Worth 5

Price vs Value

The buyer never actually pays what something is worth… Nobody can deny that there are a lot of issues plaguing the appraisal industry at the moment. I want to talk about one issue that I sometimes see: the incorrect usage of extremely important terms. Many real estate professionals use certain terms interchangeably, even when they have significantly different definitions. Appraisers, unfortunately, are not immune in this crime against clarity. Today, I want to get back to basics and look at the actual definitions of three absolutely crucial terms in our industry: price, cost and value. I think you’ll agree these...

Importance of Including Sales Price Trend Graph in Appraisal Reports 2

Importance of Graphing Sales

Scatter graph can help you “visualize” the trend of sale prices over a time period… Appraisers, I’ve been including ‘comparable’ price trend graphs in my reports (using Excel) since 2008. The graphs are based on a chart of MLS sales in the subject’s neighborhood, and can be from 1 to 5 years prior to the report Effective Date – based on housing density and number of sales. (I work in urban, suburban and rural areas.) A Scatter Graph can help you “visualize” the trend of sale prices over a time period. It can also show questionable outlier sales that you...

xml sitemap