Tagged: Adjustments

Should We Real Estate Appraisers Stop Making Adjustments?

April 2, 2019

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...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Trending

March 26, 2019

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...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations / Appraisers News

Increased Regulatory Persecution of Real Estate Appraisers - USPAP

January 22, 2019

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,...

AARO / AGA / AI / American Society of Appraisers / Appraisal / Appraisal Institute

December 17, 2018

Report Observation & Trigger Points

Appraisers, this is another essay written about a report I have ‘observed.’ I’ve mentioned before that I “come in contact with” appraisal reports from a variety of sources. Those that I determine have significant issues I write about. Conclusions about the ‘real value’ will be disclosed below. Trigger points for having reports formally reviewed are discussed. I do this because a majority of appraisers do not participate and interact with their peers on a consistent basis, and therefore may not get exposed to items that clients and lenders see in reports, which they question. I believe it’s important to expose items in reports that...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

What Does it Mean Support and Prove? Uncertainty Is Risk

December 13, 2018

What Does it Mean ‘Support & Prove’?

What we do is subject to uncertainty. I searched the words: support and prove in both USPAP and in The Appraisal of Real Estate”. Interestingly, the word prove is not found in either document in this context. The fuzzier word support is found throughout both. The word ‘support’ seems to support supporting your opinion. How is the word “support” used in the context of making adjustments? I decided the dictionary would provide some support for how the word ‘support’ is used. The results are curious, perhaps troubling. Which comes first: the opinion, or the analysis? Do you support your opinion, or do you come to a result from doing your analysis? As a verb, the meanings of ‘support’ include: suggest the truth...

Appraisal / Appraisal News / Appraisers News / Uniform Standards of Professional Appraisal Practice / USPAP

December 7, 2018

What is Truth or Accuracy for Appraisers?

Are we supposed to be paid truth-seekers? The appraiser is supposed to be accurate. What is “accurate”? Dictionary meanings say accuracy is “the condition or quality of being true, correct, or exact.” Tell the truth. Can it be? Hmmm. A search for truth. OK. So how do we come to know the truth? Are we supposed to be paid truth-seekers? Cool. I read that there are four ways to “know” truth: Tradition, Authority, Insistence, and Science. Wow! Let’s look at these briefly. This sounds serious! Let’s look at USPAP and The Appraisal of Real Estate. Appraisers have long been steeped in the...

Appraisal / Appraisal News / Appraisers News / Uniform Standards of Professional Appraisal Practice / USPAP

November 20, 2018

Is It Possible to “Prove” an Adjustment?

We read articles and advertisements on how to prove an adjustment. Is this possible? How wonderful it would be. To prove an adjustment, just push a button and bam! Out comes the correct answer. How could we have we missed this? …prove an adjustment, just push a button…Of course, if such a simplistic and exact answer was possible – anyone could push that button. An AVM run, a BPO agent, an “evaluator”, or anyone else. Who needs all that USPAP competence and integrity stuff? Even a lender-appointed hybridized “field inspector” could just push the button. The whole process could even skip working with the licensed appraiser completely!...

Appraisal / Appraisal News / Appraisers News / AQB / Automated Valuation Models / AVM

November 15, 2018

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...

AI / Appraisal / Appraisal Institute / Appraisal News / Appraisal Organizations / Appraisers News

October 19, 2018

Theft of Appraisers’ Data

…they charge appraisers an upload fee for the privilege of having their data stolen… I would never allow my data to be used for or by a service that specifically uses to create, modify or enhance products designed to compete with my professional services to the detriment of my business and profession. THAT is something that the Fifth Circuit Court of Appeals identified when they found that CoreLogic’s subsidiary FNC STOLE appraisers data after promising them data security. FNC stole data. We now know FNMA also stole data. Alamode is delving into individuals own personal databases in order to even...

a la mode / AGA / Appraisal / Appraisal News / Appraisal Organizations / Appraisal Software

August 22, 2018

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...

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