Wisdom and South Central Wisconsin Real Estate information

Archive for the ‘Appraisals’ Category

The government says that customary and reasonable fees are anti competitive and the Louisiana state appraiser board are gangsters.

I thought I would send out this latest news on customary and reasonable fees. So far I only have one response about lunch and that is that it be on a Tuesday or Wednesday. I know school will be getting out soon and graduations will begin, vacations will start. Work is steady and we will be seeing a bubble form in our market, but there is time for lunch this month. Can I get a show of hands of anyone who wants to meet?

The thing that we are not allowed to talk about and nobody wanted to do anything about is being challenged because someone did something about it. Louisiana is being charged with racketeering for doing what the Dodd Frank act told them to do. And to think I was just getting used to nothing bad happening in the appraisal industry.

https://www.ftc.gov/news-events/press-releases/2017/05/ftc-challenges-louisiana-real-estate-appraisal-board-regulations

The push is on to eliminate the need for an appraiser.

Things are busy, but not crazy due to a lack of inventory. Is anyone interested in getting together for lunch? Send me your thoughts.

I haven’t put out many emails in the last year in part due to some computer issues messing up my email list and the fact that there have not been too many bad things happening in the appraisal industry lately. That is amazing. If you know someone that is no longer getting my emails, let me know. I had to piece things back together and I am getting some kicked back as spam. When I have time I will try to get things figured out to get the emails going the way that they should.

The shortage of inventory is doing a number on buyers out there. Folks are starting to get a bit crazy in their attempt to get a house. We now have a new phenomenon of the weekend listing. Listings fell 11% from last month. You may see things in the MLS notes of “no showings until Saturday. Offers being presented on Sunday”. That is how crazy it is. Sellers in the first time home buyer market can go away for the weekend and come back to a pile of offers to choose from. The competing offers are hitting $10,000 or $20,000 over asking price and the buyers feel justified because that is the only way that they can win the bidding war. The question is this going to relate to market value? Is there some duress in the auction setting? Home owners seeing the feeding frenzy may become motivated to put their homes on the market to take advantage of demand. What happens when rates go up? Will they go up? The Fed says yes, but they seem to have gone down. Lenders have tightened requirements but are pushing to eliminate the need for appraisals so they can do more loans faster. Appraisers keep slowing things down and coming in under contract price.

One question is how will this affect risk for the lenders and what is this shortage of supply going to do to borrowers 5 year down the road when demand is down and rates are up. Will the lenders come back on the appraisers questioning why the homes were appraised so high 5 years ago like they did in 2008 and later. If the market is paying higher prices that would relate to market value. How will this year compare to next year?

There is an appraiser shortage, so let’s eliminate the need for the appraiser and make things better.

That is what I have been hearing from the GSE’s and AMC’s. I keep seeing and hearing about all of these moves by the major players to change the appraisal industry (Modernization they call it). Fannie and Freddie both changed their requirements for licensed appraisers to do inspections of properties for certain loans. There is a push to put out property reports where they send a person out to take pictures of the subject and then an appraiser uses the AMC’s AVM to analyze the market and choose some comps and give a value. There is a video below about a Value Net appraisal. It shows all the reasons not to use a real appraisal. There is also a link to an example of one.

They always seem to miss the elephant in the room. What about paying reasonable fees? What about eliminating AMC’s continual bombardment of revision requests? What about eliminating excessive AMC fees? What about eliminating AMC’s? There answer always seems to be to eliminate the appraiser.

https://www.fanniemae.com/singlefamily/property-inspection-waiver

http://www.freddiemac.com/learn/pdfs/uw/hve_fun_guide.pdf

The VA had a hearing speaking to appraisal related representatives about how to make the industry better. It is good that those in charge are asking questions finally about why appraisers are getting out of the business. You can listen to Phil’s comments on the Voice of appraisal broadcast. The speakers include Mr. Jeffrey London Director Loan Guaranty Service Veterans Benefits Administration U.S. Department of Veterans Affairs, Mr. Gerald Kifer Supervisory Appraiser Loan Guaranty Service Veterans Benefits Administration U.S. Department of Veterans Affairs, Ms. Michelle Bradley 2016 Real Property Valuation Committee Chair National Association of Realtors, Mr. Stephen S. Wagner, MAI, SRA, AI-GRS Vice President Appraisal Institute, Mr. Russell Johnson Chief Revenue Officer Clear Capital – See more at: http://veterans.house.gov/calendar/eventsingle.aspx?EventID=1666#sthash.hCy2I8zK.dpuf

Clear Capital was pushing the desktop appraisal at the hearing with a professional photographer doing the inspection.

The complaints include:

It takes too long to get an appraisal done.

It cost too much.

There aren’t enough appraisers.

The number of appraisers is declining.

Rising revision rates.

Appraisers are killing deals.

Delayed Profitability.

Frustrated borrowers.

Poor Quality.

Fast forward to about half way through because the video doesn’t start until then.

http://veterans.house.gov/calendar/eventsingle.aspx?EventID=1666

November Congressional hearing on Modernizing Appraisals.

https://www.youtube.com/watch?v=_XwhTQsguYI

Sample Value Net Appraisal

http://www.valuenet.com/

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April 11, 2017
 
The new Fannie Mae Appraiser Update keeps you on top of the latest appraisal news

How do appraiser-related policy updates, technology changes, and industry trends affect your business? To stay on top of the latest Fannie Mae appraisal news and policies, check out the new Fannie Mae Appraiser Update, a newsletter providing periodic updates for residential appraisers serving Fannie Mae lender customers.

Our first issue covers Day 1 Certainty™, including Property Inspection Waivers (PIWs) and certainty on appraised value, Collateral Underwriter® (CU™) stats, and Selling Guide updates relevant to appraisers. Whether you’re a field appraiser or work for an appraisal management company or lender, we have the information to help you effectively serve your clients.

Read the March 2017 issue and sign up to continue to receive the Fannie Mae Appraiser Update and other appraisal-related news.
https://www.fanniemae.com/content/news/current-appraiser-newsletter.pdf

 

The fence sitters are leaping over the fence

 

not usually a fence-sitter!

not usually a fence-sitter! (Photo credit: Esthr)

 

Fence-sitter

Fence-sitter (Photo credit: wynnr)

The Wisconsin Realtors Association has posted their report for June and it shows some phenomenal gains in the Wisconsin housing market. Check out the links below. It is rather inspirational. It looks like a great time to sell and with rising interest rates it is probably best to buy before rates get any higher. It looks like all of the fence sitters are getting of their fences.

https://www.wra.org/HSRJune2013/

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Great deals on older homes in Deforest, Windsor, and Morrisonville

There have been some good prices to be had in older 2 story homes in the Deforest market to include all of Deforest, the neighboring villages of Windsor and Morrisonville. There is 24 months of inventory In Deforest and 19 months of inventory in the expanded market area. Homes older than 45 years of age, between 1,100 sq. ft. and 2,200 sq. ft. above grade, on sewered lots under 1 acre, were analyzed. The average sale price was $121,095 and the median sale price was $121,675. The average list price is $130,275 and the median list price is $129,875. The average days on market is 168 and the median days on market was 155 days. The odds of selling a home in this market in the 1st month is 5%. Sales ranged from $79,900 to $140,000 and current active listings range from $79,900 to $175,000. 20% of sales were REO properties and 25% of current listings are short sale offerings. There is currently no bank owned inventory. There was a slow down in sales over the winter months. Buyer activity has increased in the last few months.

West Madison, Meadowood is getting hot.

 

Unique Green Tree Multilevel

 Have you been thinking of selling a house over by Raymond Road or off of Whitney Way? Now is the time. Have you been waitng to buy a home in Meadowood you should jump in before all the best deals are gone. Meadowood appears poised for a good spring selling seasons. Based on sales in the last year there is currently 8 months of inventory of homes in the area. This makret has remained extremly stable over the last year with a very slight dip over the winter month and sings are positive over the spring selling season. Bank owned properties are not a significant factor in this market with 10% percent of sales being bank owned. There is currently no bank owned inventory. There is a total of 24% of sales that were not typically motivated, being bank owned, estate related, flips, and short sales. The average list price in the area between Schroeder Road and Raymond Road, between Reetz Road and McKenna Boulevard is $198,666 for homes 1,200 sq. ft. to 2,100 sq. ft. finished above grade homes with finished basement. The median list price is $194,950 with the median sale price being $184,000 and an average sale price of $$183,886. List prices range from $124,500 to $360,000 and sale prices ranged from $110,000 to $292,500. Current interest rates have minimized buydowns and concessions and most homes in the area sell with conventional financing. Marketing exposure time for the subject as derived from the MLS and historical data is estimated to be 3 to 6 months.

If this is your market and you want to buy or sell a house give me a call. 608 712 6086

 

 

Luxury Homes in Dane County

A luxury home in a small town

Image via Wikipedia

Thinking of moving up to a luxury home or down sizing your current luxury home? In Dane couty the market for high quality homes over $1,000,000, between 4,000 and 9,000 sq. ft. above grade, less than 30 years of age, not on Madison lakes, there is 30 months of inventory. Listings range from $1,150,000 to $2,999,900 with the median list price at $1,595,000 and the average list price is $1,595,000. The median sale price was $1,388,875 and the average sale price was $1,373,858. Property values in the area appear to be stable though sales have declined over the winter months and listings are increaseing. There is a 3% chance of selling a home in this market in the first month.

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Steps When the Appraisal Comes in Too Low

 

English: Diagram of appraisal process for forg...

Image via Wikipedia

Steps When the Appraisal Comes in Too Low

What happens when an appraisal comes in low? Here is some input from people who have had some experience with low appraisals

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