Tagged: property values

Goodbye 1004MC, Hello Analysis 11

Bye-bye 1004MC, Hello Analysis

On July 31, 2018, at the Appraisal Institute Annual Conference, Fannie Mae announced the end of the 1004MC. News quickly spread among the appraisal blogosphere, and on August 7, 2018, the new Selling Guide showed that the 1004MC was no longer required. Rejoicing was heard throughout the land. Although the 1004MC is no longer required by Fannie Mae, the appraiser still needs to support their opinion of market trends, supply and demand, and marketing time. The exact verbiage found in the 8/7/18 updated Selling Guide is: The appraiser’s analysis of a property must take into consideration all factors that affect...

Crystal Balls Don’t Work When Reporting Market Trends! Nor does the MC Form! 8

Crystal Ball & PFA Techniques

PFA figures & opaque crystal balls don’t work when reporting market trends! Nor does the MC Form! Appraisers, by now you’ve heard that FNMA finally has decided that their 1004MC form is basically worthless. That form is no longer required in appraisal reports for properties sold to FNMA, as of August 7, 2018. poorly designed form which never has reported accurate trends…However, sidekicks in mortgage lending have not come to the same conclusion… yet. Hopefully, in short time, they will also remove the MC ‘inclusion’ requirement in reports of this awful, poorly designed form which never has reported accurate trends – despite the...

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...

Lender Contributions FNMA Policy Adding Fuel to the Confusion... 6

Concession Reporting Confusion

…how are these "lender contributions" identified… Appraisers are ‘required’ to report comparable sales or financing concessions that benefit a borrower in the GSE form appraisal report, on the second line in the comparison grid (as a negative adjustment). Secondly, for subject properties, appraisers are ‘required’ to report any concession benefiting the borrower on page 1 of the report form. Subject concession amount is NOT entered on the Comparable grid. Well now, FNMA has issued a modification to their Selling Guide (which takes effect as of 4/03/18) – SEL–2018-03 – (I have added type face enhancements): Lender Contributions With this update we are...

Conservative Appraisers Blamed By Economist 5

So-Called Economist Slams Appraisers

Is the cost-benefit of conservative appraisers worth it? Appraisers, Mr. Adam Ozimek, who is described as a ‘senior economist’ at Moody’s Analytics (from a search I did) penned this gawd-awful piece: Appraisers May Be Holding Back the Housing Market, And That Might Be Okay. This piece appeared in Forbes.com on July 5 – the focus of which is to nearly blame ‘conservative’ appraisers for “holding back the market,” … but maybe it’s OK, he says. Where do they find these people, anyway? I love it when so-called authority figures start off with speculations, not backed with any facts, and fill the...

Purchase Price with an Appraised Value to Match? 15

Possible vs. Probable

Refusing to ‘rubber-stamp’ a purchase price with an appraised value to match. Recently, there was a news story out of Atlanta, highlighting an appraiser who had refused to ‘rubber-stamp’ a purchase price with an appraised value to match. What followed was an increasingly disturbing trend to find another appraiser who would. According to the story (which was full of holes and unknowns), the second appraiser ignored comps in the subject’s neighborhood and found sales in a superior location to help support the purchase price. This situation was talked about on social media and a man who identified himself as a...

Market conditions analysis 2

What Do You Suppose Might Have Caused This?

In my area, the Market Conditions data is basically worthless. Folks, One of the data analysis aspects I do in all reports is research sales trends of comparable properties, using MLS data, and making a graph to show report readers the actual market activity that has occurred over a long real estate cycle…usually 4-5 years back from the Effective Date. I use this to supplement, but not replace, the cruddy Market Conditions form, which poorly accounts for only 12 months of activity. In my area, the Market Conditions data is basically worthless. I’m sharing this because in the 8 years...

Value too Low? Order Multiple Appraisals! 7

Value too Low? Order Multiple Appraisals!

Appraised value is not as high as the agreed (contract) price get multiple appraisals Folks, An article titled 4 Ways to Deal If Your Appraisal Comes in Low with incorrect info has been making the rounds. This is the second time I’ve seen it in different publications. In it, Diane Saatchi, a senior broker with Saunders & Associates in Bridgehampton, NY, is quoted: “Order a second appraisal Most often, if the appraised value is not as high as the agreed (contract) price, the seller’s agent will ask to see the comps and get a second or third appraisal,” Saatchi says....

The "Property Prices Reach All Time High" Hype - Imagecredit Flickr - FaceMePLS 2

The “Property Prices Reach All Time High” Hype

“Property Prices Reach an All-Time High” Oh really? The subject line is a press release headline put out by a national sales organization. Do you buy into the hype, or do you actually do local comparable property market research to verify trends? I just completed an appraisal on a property I appraised 2 years ago. I did a 5 year market study on comparables then, and found the market for that type of property had been DECLINING at that time. I did another 5 year market study on this same property this time around. And guess what? The property values for this type...

5

NAR on Low Valuation in Home Appraisals

WASHINGTON (October 10, 2012) – The real estate market is recovering but still faces hurdles, notably from tight mortgage credit, but problems with a sizeable share of real estate appraisals also are holding back home sales, according to survey findings by the National Association of Realtors®. Most appraisers are competent and provide good valuations that are compliant with the Uniform Standards of Professional Appraisal Practice. However, appraisals generally lag market conditions and some changes to the appraisal process have been causing problems in recent years, including the use of out-of-area valuators without local expertise or full access to local data,...

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