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Appraiser Lunch December 8th at Noon

We have enough interest for an appraiser lunch on Friday December 8th. It will be at the east side Great Dane off of Cottage Grove Rd at 876 Jupiter Drive. Jim Coutts said he attended the AQB meeting in Minneapolis and is willing to share what he learned about their direction on licensing requirements.

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Appraisal Opportunities

We haven’t had much for an appraiser lunch this year, so I thought I would schedule one for Friday December 8th. I know a few people have expressed interest in getting together. If anyone has suggestions on where to meet let me know. Please RSVP if you are interested in getting together. The date may also be flexible. I will send out another email when I get some feedback.

I have grabbed a few ads that have caught my eye recently and would love to get your views on where the appraisal industry is headed and what you think about where we are at today. I also copied some appraisal polls from Appraisal Port which gives some insight to where the appraisers polled see things going. Unfortunately they do not transfer to wordpress. If you would like a copy of the full email with images that I sent out contact me at realestateeinstein@gmail.com and I will add you to my appraiser mailing list.

I love this Ad from TSI saying that I have an “Appraisal Opportunity”. It makes me feel like I am peeing my pants to know that TSI is giving me a chance to accept an appraisal order that is $100 below a reasonable fee. Another “Appraisal Opportunity” At least I can bid my customary fee.

 Overall the obnoxious 20 page engagement letters seemed to have lightened a bit from inane or erroneous requirements. Still the AMC’s report cards are still irritating. Like we need to be treated like students of appraisal by people who aren’t even appraisers.

Adding “Material Error”

Will be calculated into Conduct Score on your Performance Report

 

Hi DEAN,

We’ve added a factor for a “Material Error” to our conduct score measurement. This factor will be applied in the event a significant error is identified in your report. Some examples are as follows:

  • Reporting subject characteristics incorrectly.
    EX: Report reflects 1 bathroom when the subject actually has 2 bathrooms.
  • Omission of relevant property characteristics.
    EX: Report doesn’t reflect the subject has an in-ground swimming pool.
  • Missing or incorrect adjustments.
    EX: Subject site is 10,000 sf. Comparable site sizes are 20,000 sf, 21,000 sf, and 20,500 sf respectively. However, only comparables 1 & 2 have an adjustment applied without an explanation or support for the lack of an adjustment provided within the report.
  • Omission of supporting documentation/commentary.
    EX: A verified model match sale exhibiting similar financing, quality, upgrades, amenities, located on the subject street, and sold within the past 30 days is not disclosed or discussed within the report.

This factor will not be applied to addendum requests ordered for clarity or additional commentary; again, only for significant errors.

Review appraisals as low as $49.

 

Just think, if they are charging $49 and are taking 50% of the fee for an appraisal review, they have found a certified and general appraiser to do a review appraisal for $25. Talk about bringing the profession down to a low standard. The typical fee that an appraiser pays for annual membership is only $39.00. They are even charging the appraiser to take on this cheap work. These must be the 80 year old appraisers who have dementia.  https://validox.com/site/amc_benefits

AMC Services

AMC Compliance at 50% Less Cost Than Other Solutions!

Our low pricing on State Specific USPAP Standard 3 Compliance Reviews allow your compliance dollars to stretch further…many times we are half the price of other USPAP Compliance Solutions

VALIDOX AMC COMPLIANCE SERVICES INCLUDE

Current Edition Standard 3 USPAP Reviews that are compliant with every individual state appraiser board requirements for annual and periodic reviews (All 50 states), and the USPAP competency requirements as set forth in Federal AMC Minimum Rules. Reviews are performed by Certified and General Validox USPAP review appraisers, ensuring complete compliance to all state appraiser board requirements.

In case you did not know it, Your license will expire in less than a month. I was made aware of this by the 30 email I received from AMC’s letting me know that if I did not send them my new license they would stop sending me orders. At the same time I was also made aware that the Mercury Network has become an auction site for appraisal orders. Another “Appraisal Opportunity”.

I received Darts newsletter on how they decide what fees to pay. My first thought was why would they send this out unless they are getting complaints about their fees. They rarely send me any orders unless it is real busy and they have a scorpion that they can’t find an appraiser to do. I just figured that my customary fee was too high for them. I know a lot of appraisers got screwed when they took over the UW’s appraisal orders and dropped the fees in half. I would like to get everyone’s comments on the letter below. Do you think they follow their own guidelines? Have they been paying customary or reasonable fees? The biggest complaint I here from AMC’s is that they do not know what is customary or reasonable. Then when a state establishes C & R fees, they get hit with racketeering charges. It seems that the cheapest paying AMC’s think that customary means as low as they can get an appraiser to accept an order for. Another “Appraisal Opportunity”.

Of course they are going to ignore the second presumption of compliance.

“Second, a creditor and its agent are also presumed to comply with the interim final rule if they determine the fee by relying on third-party information, such as a government agency fee schedule, an academic study, or an independent private-sector survey. Consistent with the Dodd-Frank Act’s requirements, third-party surveys and similar studies must not include fees paid to appraisers by appraisal management companies. See comments 226.42(f)(3)-1, -2, -3.”

 

 https://www.dartappraisal.com/about-us/news/dart-board-newsletter-november-2017/

 

 

Welcome to the November issue of our Dart Board newsletter. As 2018 moves ever closer into view, I wanted to share information on how we set our pricing each year. I’ll also continue with our “behind the scenes” look into Dart’s processes, this time covering the management of our appraiser panel.

Pricing. As Dart’s pricing is primarily based on appraiser fees, any discussion about pricing has to begin with an explanation of how we establish our customary and reasonable fees. As an agent of the lender, Dart Appraisal’s process of establishing customary and reasonable fee schedules has been set using the parameters prescribed within TILA’s first presumption of compliance. Under this first presumption, a creditor and its agent are presumed to be in compliance if they have established fees by doing the following:

  1. To be customary, the fee must be related to recent rates for comparable appraisal services in the relevant geographic market; and
  2. To be reasonable, the fee must be adjusted as necessary to account for six specified factors that, in addition to geographic market, affect the level of compensation appropriate in a given transaction. The six factors include(1) the type of property; (2) the scope of work; (3) the time in which the appraisal services are required to be performed; (4) fee appraiser qualifications; (5) fee appraiser experience and professional record; and (6) fee appraiser work quality.
  3. To be reasonable, the agent must also not engage in any anticompetitive actions, in violation of state or federal law, that affect the appraisal fee, such as price-fixing or restricting others from entering the market.

Our process to determine what is customary and reasonable is done by analyzing payment data made to appraisers within the past 12 months. (Dart’s appraisers set their own fees within our system, and can update them at any time.) Using this data, we have created a customary and reasonable fee range for each county tier by state and product group. Fee adjustments are made to account for the six specified factors (property type, scope of work, time, qualifications, experience and work quality). Appraiser payment information is reviewed on a quarterly basis and appropriate adjustments are made if payments are not within the current customary and reasonable fee range.

Pricing is reviewed on an annual basis and, when appropriate, a new schedule will be published to reflect market changes. We are currently finalizing 2018 pricing for all of our clients, and expect to have the majority of our client price sheets distributed by December 1.

 

http://blog.appraisalport.com/tag/appraisalport-polls

An Appraisal is like a scorpion in your hand. Any appraisal could kill your career or your pocket book. Would you charge extra for an appraisal for this liability?

 

 

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

 

Einstein’s right again: Scientists detect ripples in gravity – Yahoo News

This seems to be a good decade for measuring things. Perhaps it will help our understanding of truth, especially if we can find more constants in the universe allowing us to prove or disprove peoples hypotheses and perceptions of how things work. We will most likely see that our current interpretation of reality is not created as we thought. we are limited in our perspective from this observation point called earth.

via Einstein’s right again: Scientists detect ripples in gravity – Yahoo News.

Einstein Quotes

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”

There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.”

“If you can’t explain it to a six year old, you don’t understand it yourself.”

“Anyone who has never made a mistake has never tried anything new.”

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”

“Coincidence is God’s way of remaining anonymous.”

“A clever person solves a problem. A wise person avoids it.”

“Science without religion is lame, religion without science is blind.”

“Reality is merely an illusion, albeit a very persistent one.”

“A human being is a part of the whole called by us universe, a part limited in time and space. He experiences himself, his thoughts and feeling as something separated from the rest, a kind of optical delusion of his consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest to us. Our task must be to free ourselves from this prison by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty.”

“You never fail until you stop trying.”

“Men marry women with the hope they will never change. Women marry men with the hope they will change. Invariably they are both disappointed.”

“I must be willing to give up what I am in order to become what I will be.”

“Time is an illusion.”

“We all know that light travels faster than sound. That’s why certain people appear bright until you hear them speak.”

“Nothing happens until something moves.”

“God does not play dice with the universe.”

“If you want to live a happy life, tie it to a goal, not to people or things.”

“The hardest thing in the world to understand is the income tax.”

“Wisdom is not a product of schooling but of the lifelong attempt to acquire it.”

“Life is a preparation for the future; and the best preparation for the future is to live as if there were none.”

“Energy cannot be created or destroyed, it can only be changed from one form to another.”

“In theory, theory and practice are the same. In practice, they are not.”

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Merry Christmas

Merry Christmas

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