Author: IDFPR Board

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Contract Analysis Paralysis

The most critical failure found in appraisal reports that come before the Board, whether residential, commercial, or agricultural, is a lack of analysis.  Appraisers seem to think that citing or reporting is synonymous with analysis. Analysis – to study (something) closely and carefully: to learn the nature and relationship of the parts of (something) by a close and careful examination. The URAR asks: I did or did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed. Yet many will write:...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / IDFPR / Illinois Department of Financial & Professional Regulation

Sales ratio 2

Sales Ratio & Adjustments

Three sales, if you chose wisely, bracketed your subject neatly. There was a time when appraisers popped three sales onto a grid, made adjustments, concluded an opinion of value then moved on to the next assignment. Today, appraisers routinely include five or six closed sales, plus a couple of listings or more. There was something to be said for the old Goldilocks approach. Three sales, if you chose wisely, bracketed your subject neatly. Even if you had six closed sales, you could still bracket pretty cleanly. But listings. What to do with them? Some appraisers will actually toss them on...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / IDFPR / Illinois Department of Financial & Professional Regulation

House Five Acres Appraisals 3

House and Five Acres

Five acres where? . A house and five is a typical rural/agricultural assignment throughout Illinois. Appraisers who perform these assignments are quick to point out that, “I get these assignments all of the time.” What does USPAP state in the FAQ? 178. APPRAISING PHYSICAL SEGMENTS (5-ACRE PORTION) Question: A local lender has asked me to appraiser only a 5-acre portion of a 62-acre parcel. Am I permitted to comply with this request? Response: Standards Rule 1-2(e)(v) states that the subject of an assignment may be a physical segment of a property. However, appraisers must also comply with any laws, regulations,...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / IDFPR / Illinois Department of Financial & Professional Regulation

Changes for Illinois AMCs and Appraisers 1

Changes for Illinois AMCs and Appraisers

One hundred eighty days flew by in an instant. When the AMC Administrative Rules were launched on March 4, 2013 we were in the infancy of AMC registration. Here we are, six months later and we’re nearing 140 registrants. That’s more than 20 per month. I expect by year’s end we’ll have 180 registrants or more. This is an important newsletter issue to keep. There are a lot of burning questions that need to be answered in one place so that everyone understands what is expected. What Happens Next? August 30, 2013 is the last day in which existing AMCs...

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Rental Block - Fannie Mae Form 1025 4

Rental Block

Simply dumping rents into rental grid… The Fannie Mae Form 1025 is a lame document. There. I said it. You appraisers out there all know exactly what I’m talking about. Part of what makes it lame is the goofy layout of the form and what passes for education for appraisers in how to complete it properly. Too many appraisers haven’t a clue how to compare rents in a two to four unit apartment building. In many cases they simply dump rents into rental grid and magically opine that the subject rents are supported in the  market. What market is that? Actual...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / IDFPR / Illinois Department of Financial & Professional Regulation

Letting the AIR out 4

Letting the AIR Out!

After all it’s AIR; not a vacuum. First, HVCC is dead. Dead and buried. It died back in 2010. Second, even when it was still plaguing the profession, it never stated that appraisers couldn’t or shouldn’t talk to real estate agents or brokers. Ever. I still have a copy of the HVCC because you never know when revisionist history will appear. Eventually, AIR took its place. AIR stands for Appraiser Independence Requirements. I have a copy of AIR. It resembles HVCC in many ways but, again, it doesn’t say a single word about appraisers being prohibited from chatting up or...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / IDFPR / Illinois Department of Financial & Professional Regulation

Appraisers work file critical 2

Work file, How Critical is it?

How Critical is the work file? I consider the work file responsibilities that are found in USPAP to be the most neglected. Appraisers tend to treat the work file as an after-thought rather than a fore-thought. Appraiser workfiles largely resemble a hodge-podge of scribblings, notes, dog-eared data sheets, distorted, coffee-stained sketches on legal pads and fast-food napkins. The whole thing is jammed into a file and mostly forgotten. To me, it is the bad comb-over of documentation. However, after reading this, I hope that you’ll afford it a tad more respect going forward. What Is USPAP’s Work file Big Picture?...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / IDFPR / Illinois Department of Financial & Professional Regulation

Appraisal USPAP Definition 0

Is That an Appraisal? USPAP Definition

Why Isn’t that an Appraisal? APPRAISAL: (noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services. Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value). In general terms the USPAP definition is elegant in its simplicity. We all understand what it is that appraisers provide. You provide opinions...

Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / ASB / Automated Valuation Models

Sanitizing appraisal images 1

Picture This! If You Dare!

Images of personal items and people must go! Crime and Punishment The appraiser who took the interior image below is currently serving a ten year sentence in the Fair Housing Maximum Security Prison outside of Atlanta. The charges ranged from willful imaging of stockings hung with care to wanton display of a nutcracker and malicious showcasing of Micky and Minnie without their written consent. Actually, the image below was taken by yours truly about a decade ago and somehow survived the underwriting process. The mythology of what constitutes a Fair Housing violation continues to vex this profession like some movie...

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Drive By Upgrade 0

Drive By Upgrade

How many times have you received a drive-by assignment only to come across a view from your car like the image below? This was my view back in the summer of 2004. I notified my client that they needed to upgrade to a full interior/exterior inspection appraisal. The loan officer had a fit. “The house is over 4,000 square feet. They just put $100,000 into a new addition and installed a massive new deck!” barked the loan officer. “Then I definitely need to get inside,” I said. She cancelled the order. When they took back the house in 2008, none of...

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