spreadsheet - Appraisers Blogs

Visualizing Market Activity Using Graphs & Trendlines

Dave Towne — Fri, 18 Nov 2022 13:30:03 +0000

Spreadsheets and graphs are powerful tools for appraisers. With proper data, and incorporated into reports, they can enhance your professionalism and decision-making ability. Appraisers, this article will highlight the process I use to bring clarity to my research and analysis of ‘comparable’ properties. This completed process becomes an exhibit in all my appraisal reports because it helps the Intended User(s) visually see what the market has been doing over a known time period. The exhibit graph also indicates a daily rate of change for the sales over the time period, which can then be applied as a ‘time’ (market) adjustment...

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Appraiser Bias Allegations Unmask Debt Traps

Jeremy Bagott — Fri, 02 Sep 2022 12:30:33 +0000

Claims of tainted appraisal unmask something else… the renewed “churning” of mortgages by nonbank lenders. Convinced racism torpedoed valuations in their home refinancings, the owners of three properties in the San Francisco Bay Area told their stories to Julian Glover, a reporter who covers the race, culture and social justice beat for ABC’s San Francisco affiliate. Similar claims of tainted appraisals have surfaced in Philadelphia, Chicago and, more recently, Maryland. A civil lawsuit was filed in one of the cases in a federal district court. A claim was dismissed Wednesday based on a flaw unrelated to the case’s core allegation...

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Don Machholz Passing

Dave Towne — Fri, 12 Aug 2022 12:30:49 +0000

Folks, yesterday, August 11, I received the following notice about Don Machholz from a California appraiser, who requested this be circulated: With sadness, I wanted to share the news of Don Machholz passing on Tuesday, August 9 in Wikieup, AZ due to complications with COVID-19. Don was a real estate appraiser from 2003-2018 and was well known within the appraisal industry. He was active in the Real Estate Appraisers Organization (REAA) and the Nevada County and Placer County Association of Realtors throughout his career. Don was known for his market updates and sense of humor at the weekly marketing meetings....

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Solving the ANSI Measuring Dilemma

Dave Towne — Mon, 18 Apr 2022 12:30:51 +0000

…a brilliant ‘work around’ to solve the subject & comps adjustment issues, which Fannie Mae thinks is no big deal… Appraisers, I was chatting with an appraiser buddy last week about the ANSI measuring dilemma we all face when doing Conventional lending reports, which ultimately will wind up with Fannie Mae. In my view, my appraiser buddy has a brilliant ‘work around’ to solve the subject & comps adjustment issues, which Fannie Mae thinks is no big deal, but we all know will cause considerable consternation among users of our reports, and with appraisers trying to figure out how to...

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Opinion, Estimate, or Prediction?

George Dell — Wed, 08 Sep 2021 12:30:09 +0000

Join George Dell & Craig Gilbert for a free 2-hour webinar on Market Price Indexing: For Peaking Prices… Price indexing is also known by other words, such as time adjustments or market conditions adjustments or trend analysis. A number of techniques have been recommended over the years. Most are flawed. Oddly, the algorithm mechanics of calculating are fairly simple and intuitive. Best of all, once done correctly, the payoff is really high: You effectively increase the data available for comparison. For example, a very similar property is perfect, but is say 20 months ago, it becomes your best comp. It makes other adjustments easier to...

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Why is Residential Appraisal in Trouble?

George Dell — Mon, 15 Jun 2020 12:30:02 +0000

Why is Residential Appraisal in trouble? Is Residential Appraisal Finished?… There will soon be no need for residential appraisers. I remember years ago, doing education for my merging AIREA/SREA chapter(s) in San Diego. AVMs were just coming to our attention. I invited a MAI who happened to also be a PhD in economics, Phil Mitchell. The room was full. Someone asked about those “automated algorithmic computer calculated appraisals.” Could a canned program do as well as an appraiser? Without hesitation, he answered: “Not only will these models be able to appraise – they will do it better!” That was 24 years ago. He was right, partially. I...

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What Skills Do I Need Now?

George Dell — Fri, 10 Jan 2020 13:30:18 +0000

Analyst software focuses on analysis – sorting, classifying, comparing, and associating data to turn it into useful information… New technologies require new skills. The bad news is that new data science skills are not taught in appraiser education. The good news is that the new technologies are things an appraiser can sell. Let’s look at the good news! Data science skills include the ability to: Identify the relevant data. Turn the data into useful knowledge. Express the analytic flow to a customer. Who can best collect, analyze, and explain an analysis? Well, it takes someone who understands the subject (the market), the analytics (algorithms), and communication (visuals and summaries). Machines...

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What Kind of Appraiser Are You?

George Dell — Fri, 04 Jan 2019 13:30:10 +0000

Skeptical skeptics are a rare breed. But growing in number… Different appraisers have different attitudes! Some have a lot of experience, others a lot of education. Others emphasize the ‘art’, while others consider themselves ‘quants’. Let’s put aside the ‘art’ versus ‘science’ discussion, where the artists say: “No computer will ever replace the appraiser”, or “No amount of education will ever replace experience”. The other side seems a bit confused. There are traditionalists. And there are the “advanced” appraisers. And there are the “vocational” appraisers, who don’t seem to care much about all of this. They just want to push through as many reports as possible. The skeptics tend to doubt...

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How Zestimate Works

Dave Towne — Tue, 04 Dec 2018 13:30:54 +0000

Accuracy is an issue with Zestimates… I happened to find this article, which explains the processes used to generate Zillow’s Zestimate, the estimate of residential property value: Inside the Zestimate: Data Science at Zillow I found it interesting that they use the ‘R’ spreadsheet for doing some number-crunching, not Excel. ‘R’ is what George Dell has been demonstrating in his classes. But the graphs are generated by a different software. Accuracy is an issue with Zestimates, according to Zillow, per the article: “Nationally, the median error rate is 8.3 percent, the company says.” However, they don’t define what ‘error rate’ means. Is...

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Schizophrenic Adjustments

Dave Towne — Wed, 22 Aug 2018 12:30:20 +0000

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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Need for Speed? Hybrids are NOT the Answer!

VaCAP Board — Thu, 16 Aug 2018 12:30:45 +0000

…surveys indicate that appraisals ordered directly by lenders take much less time… Dear Colleagues, There is a current narrative that appraisals take too long and cost the consumer too much! Does this sound accurate? Preliminary coalition surveys indicate that appraisals ordered directly by lenders take much less time than appraisals ordered by AMCs. Additionally, the cost of Hybrid Appraisals has been disclosed in reports as $495 being paid to the AMC. How is this a savings to the consumer? They get an inferior valuation product and pay the same price as a full appraisal. Who is truly benefiting from this scenario? Fannie...

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Crystal Ball & PFA Techniques

Dave Towne — Wed, 15 Aug 2018 12:30:19 +0000

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...

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States Back LREAB Against FTC

VaCAP Board — Fri, 10 Aug 2018 12:30:43 +0000

States Support Louisiana Real Estate Appraiser Board against the FTC States (and appraisers) are very interested in the outcome of the LREAB vs FTC to protect their own sovereign actions. On July 11, 2018, the states of Mississippi, Idaho, Iowa, Rhode Island, and Utah filed an amicus brief with the United States Court of Appeals for the Fifth Circuit supporting the Louisiana Real Estate Appraiser Board. See the entire brief here or below. The outcome of this will impact each and every one of us. As we reported a few days ago, one lender, BB&T, has opted to step up...

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Financial Ecosystem Changes

VaCAP Board — Sat, 04 Aug 2018 12:30:46 +0000

Treasury report calling for a more digitalized mortgage process, including the use of AVMs, hybrid appraisals & appraisal waivers… A few days ago, HousingWire reported the Trump Administration calling for sweeping changes to the financial ecosystem. In short, the article references a report by the Department of the Treasury calling for a more digitalized mortgage process, including the use of AVMs, hybrid appraisals and appraisal waivers. The HousingWire article has a link to the Treasury Report, which is 222 pages or you can click here to read the report. VaCAP has received a copy of the ASA’s response to the Treasury Report....

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Appraisal Delays Study

VaCAP Board — Mon, 16 Jul 2018 12:30:29 +0000

Contract Date / Acceptance Date Study expanded. VaCAP did a sample study this past winter to determine the number of days from contact ratification to appraiser acceptance from both amcs and lenders. The results were a 9 day difference with amc’s taking 18 days and lenders only 9 days to assign the appraisal. We have just asked our sister coalitions to complete this survey as well. for a larger data pool and are asking every appraiser to once again participate to help our industry. This information will be used to counter the narrative the appraisal is taking too long. Below...

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Don Machholz Hangs up his Clipboard

Dave Towne — Sun, 25 Feb 2018 13:30:24 +0000

We owe a huge debt of gratitude to Don Machholz for his willingness to assist appraisers… Appraisers, A well respected appraiser who has voluntarily helped many of us has decided to hang up his clipboard, and remove the batteries from his laser measurer. I first became aware of Don Machholz back when the screwball GSE designed MC form was introduced in 2009. Don was one of the first appraisers who used his skills with Excel programming to design and distribute an Excel computation spreadsheet for the MC. Many appraisers have been using that, and his other Excel spreadsheets, ever since....

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Action Reminders

VaCAP Board — Wed, 27 Dec 2017 13:30:01 +0000

Topics getting a lot of attention… Life can be hectic around this time of the year and we wanted to remind everyone of a few items that need your attention and action: First: The AQB has another exposure draft out concerning appraiser licensing qualifications. The big issues are Degree Requirements, Alternative Tracks, Practical Applications and Experience Requirements. These topics have been getting a lot of attention as the “perceived appraiser shortage” card is being played by lenders and AMCs. Please take a few minutes and share your thoughts. The exposure draft and comment instructions can be found here. VaCAP urges every appraiser to comment on these topics. The deadline...

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Graphing Using Spreadsheet – Including Pendings

Dave Towne — Tue, 15 Aug 2017 12:30:13 +0000

Pendings can reveal market trends, turns and current activity… Appraisers, How many of you use visual graphs in your reports to demonstrate sales (and Pending) trend data? This can be a very important tool to convince your clients that you really have a good understanding of current valuation issues. I am indebted to David Braun, Patrick Egger, Steve Smith, George Dell, Anthony Young and Joe Lynch (among others) for their presentations about this key feature we can utilize. Frankly, using spreadsheets and their built-in graphing functions is something every appraiser should learn. I bring this up because an appraiser peer was...

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GLA Adjustments & Pizza Slices – They Do Correlate!

Dave Towne — Thu, 04 Aug 2016 12:30:47 +0000

Determining the GLA Adjustment in Appraisal Reports I promised in a previous post I’d send out my method for determining the GLA adjustment in appraisal reports. Goodness! Appraisers actually found that statement buried in the prior post, and have ‘rung my chimes’ requesting this info! OK, but first, the pizza analogy. I often tell clients and other appraisers that appraising (residential) real estate is far more complex than grabbing a store-bought pre-boxed pizza (that has exactly the same ingredients from box to box no matter which store you shop in) at a grocery and then applying 425 degrees of love...

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Let’s Talk Fees

Dave Towne — Wed, 29 Jun 2016 12:30:38 +0000

How different fees can affect an appraiser’s income. OK, before you lob spears and bricks my way, we can. This is not a ‘public event’ filled with associates in an open meeting setting. In places like that, the FTC takes dim view of any fee discussion, fearing price fixing and collusion. But privately, fees can be discussed among peers, with no agreement that any certain, mandated fee be charged by everyone. The gubmint can’t stop you from talking with an associate. For weeks and months, appraisers across many of the forums I read have been discussing the need for appraisers...

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