About this blog

This blog has excerpts from my FREE appraiser email newsletter, sent out almost every week since June, 1994. I started with 6 subscribers on Compuserve. Now it is up to almost 14,000 subscribers!! To subscribe to the free email newsletters and get them them when they first come out,, go to www.appraisaltoday.com and sign up in the big Yellow Box!!

I have been publishing a paid Appraisal Today monthly newsletter since June, 1992 with in-depth articles on topics important to appraisers. Click below for more info!!

Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

 What you need to know and which FHA documents you need to read!! 
Available in my paid August Appraisal Today August newsletter!!

Many appraisers say they will quit doing FHA appraisals. 
This means less competition for you!!

There is lots of confusion and mis-information about the changes. Some say there is too much required and others say there have not been many changes. What about attic, crawl space, and appliance inspections?

The author, Doug Smith, SRA, interviewed an FHA executive to find out what is really happening.

There are different FHA documents you need to read, not just Handbook 4000.1. It is very confusing, but Doug tells you what information you need and where to get it. He includes:

  • Which guide to use for what, and links to the reference material, including FAQs, Webinars, and SF Housing Appraisal Report and Data Delivery Guide
  • How to keep updated on changes
  • Attic, crawl space, and appliance inspections
  • Energy efficient items contributory value
  • Highest and best use – when all 4 criteria are required
  • FHA – UAD and Fannie guidelines

And lots more information.

Appraisal Today newsletter

FHA appraisal fees going up after 9/14/15?

Another great survey from www.appraisalport.com !!

7-9-15 fha fees poll.png

My comments: Whether or not there will be increased time (and possible liability issues) required is controversial. Some say there are more requirements, others say not much has changed. My favorite response to the poll is “What changes?” ;>

In the May 2015 paid Appraisal Today June newsletter, Doug Smith’s article discussed the changes: “What’s Up with FHA’s New Manual 4000.1? More Scope Creep? The pluses and minuses of the changes in the manual”. One of the hot topics is about inspecting attic and crawl spaces. For more info on the paid newsletter, click the banner ad below.

FHA Single Family Housing Policy
Handbook (HUD Handbook 4000.1
Information Page Link:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/handbook_4000-1

New FHA Appraisal Report and Delivery Guide
It goes step-by-step through the URAR and states what is expected in each section
http://portal.hud.gov/hudportal/documents/huddoc?id=SFH_POLI_APPR_RPT_FIN.PDf
Be sure that any FHA classes you take include this new Guide!!

Appraisal Today newsletter

USPAP Nazi

I was interviewed on the Appraiser Coach/Dustin Harris Podcast, published July 3.

The topics were: Trainees inspecting, C&R fees, and Celebrity homes.

We  debated on a Facebook discussion of whether or not an appraiser can disclose the owner’s name when appraising celebrity homes. Unfortunately, I did not read the Facebook discussion since it seemed sorta lame (big mistake) and it was removed. The issue is USPAP confidentiality requirements. Dustin said you could not reveal the name and address and I said it was ok and referenced an appraiser’s web page that had the names of all the celebrities whose homes he had appraised in Southern CA.

While discussing it, I mentioned one of my favorite terms, “USPAP Nazi”. I’m sure you know what I mean. USPAP is very gray but some appraisers have very strict interpretations that they make. Do something they don’t agree with and lose your license and/or Go To Jail. No big deal, except when they are teaching USPAP classes and you disagree. But, Very, Very important when they are on state boards.

I taught USPAP for many years, until the Appraisal Foundation mandated what materials and topics had to be used. I loved teaching USPAP and related it to practical, day to day, issues that appraisers have. Not “Do what USPAP says (how I interpret it) or you will lose your license and/or go to jail!

I am sooo glad we have never had a state board in California!! When licensing started, Governor Schwarteneger did not want any additional expenses, including state appraisal boards. Licensed appraisers, that are employees of the state of California, are used for investigations in California. Appraising can be a very small world, particularly in smaller states. Who wants a competitor or personality conflicts affecting decisions on your appraisal license?

—————————————————————————————

Where to listen to the Podcast #27 – Trainees inspecting, C&R fees, Celebrity Homes with Ann O’Rourke

– Android – http://www.stitcher.com/podcast/the-appraiser-coach
– iTunes – Subscribe to the podcast so you don’t miss any! I am a subscriber.
https://itunes.apple.com/us/podcast/the-appraiser-coach-podcast/id966765322
– Website – http://theappraisercoach.libsyn.com/

Appraisal Today newsletter

AMC/lender now accepts trainees signing on appraisal reports

Be sure to check your state’s requirements, as they vary widely among the states.

This is the first one I know of. Maybe they have been reading my free emails where I suggest this is the only solution to the appraiser shortage, now and in the future, that can start immediately. FYI, Red Sky is owned/affilated with U.S. Bank

Excerpts from an email (Appraiser Partner News) sent to appraisers on its panel June 11, 2015

======================================

Supervisory Appraiser Change

Upon review, Red Sky Risk Services, LLC has refined its expectations regarding the involvement of appraiser trainees. Important to note, the following change DOES NOT override specific state statute(s) or appraiser training requirements.

Effective immediately, Red Sky is no longer requiring supervisory appraisers to be physically present with trainee appraisers at all subject property inspections and driving comparable sales.

My comment: There is a short additional list of specific requirements. But, they are nothing new – Supervisor to review report, responsible for report, etc.

 

Appraisal Today newsletter

Are You a Tier 1 or Tier 2 Appraiser?

by Richard Hagar, SRA

Excerpt:

Nordstrom or Walmart? Mercedes or Yugo? Are you a Tier 1 or Tier 2 appraiser? Appraisers have two different business models to choose from.

I have seen that many lenders classify appraisers into two or three different tiers based on their perception of the quality of your product. Which tier are you? The amount of business you have and the amount you are paid is very likely based on how lenders classify you.

There is a lot of appraisal business right now and lenders are begging for high-quality appraisals. Many firms are buried in business, quoting three-plus weeks out in turn time, with high fees; here in the Northwest we are earning $550 for a standard home. If your company is not busy or you are making far less than this, here are some tips.

My comment: Appraiser tiers have been around for a long time. They were used when I started my appraisal business in 1986. In the past, they were referred to as “preferred” or “private banking”, etc. Prior to HVCC they were often used for high dollar properties. After HVCC, lenders placed the appraisal orders directly, not through AMCs they used.

Read the full article. Worth reading!!

http://www.workingre.com/tier-1-tier-2-appraiser/

 

Appraisal Today newsletter

AQB issues Q&A on Background checks, effective 1/1/17

 

Issued June, 2015

Excerpt:

Section VI(C) of the Criteria states:

An applicant shall not be eligible for a real property appraiser credential if, during at least the five(5) year period preceding the date of the application for licensing or certification, the applicant has been convicted of, or plead guilty or nolocontender to a crime that would call into question the applicant’s fitness for licensure.

It is impractical, and likely impossible, to compile a list of every specific circumstance where an applicant must be denied a credential. Section VI(C) is intended to provide states with the ability to deny a credential based on “public trust.” States have latitude to determine, based on their own guidelines, whether or not an applicant falls into this category and should be denied a credential.

My comment: California required background checks on all applicants when licensing first started around 20 years ago. There was a lot of discussion on what disqualified you. I didn’t hear about many license denials for experienced appraisers. I suspect this is because appraisers don’t do much criminal activity (except a few being involved in mortgage fraud). But, some had felonies in the past. For example, a felony for sale of marijuana in the 1960s – many years before the 1990s. For states which have never done background checks it is easier today. They can ask the other states what they did regarding background checks. Every state is different. Check with your state if it will be implementing background checks for the first time.

Link to Q&As

https://appraisalfoundation.sharefile.com/download.aspx?id=s246eb776d104935a#

Exposure Draft, Guide Note 9

https://appraisalfoundation.sharefile.com/download.aspx?id=s79a4e964ae3446db Issued January 17, 2015

 

Appraisal Today newsletter

Appraiser shortage – for AMCs (Appraisal Management Companies), not other clients

Appraiser shortage – for AMCs, not other clients

There is a significant shortage of appraisers willing to work for AMCs with low fees and escalating Scope Creep.

AMCs whose business model is based on low fees to appraisers are having difficulty finding anyone willing to accept their appraisals. They keep calling and calling trying to find someone to work for their low fees.

Direct lenders or the few “good” AMCs are not experiencing an appraiser shortage. Appraisers who work for them turn down AMC work.

 

Appraisal Today newsletter

Comp Photos and MLS, Fannie, USPAP, etc.

Appraisalport polls on comp photos

By Steve Costello, http://www.appraisalport.com

This month I want to discuss three recent polls dealing with comp photos. In the first poll, we asked “With the availability of MLS photos, do you still feel it is necessary to drive by and photograph every comp?” We had a total of 3819 responses and the top two answers were very close. The winner, with 40 percent of the vote, was “Sometimes, it depends on the complexity of the specific assignment.” Coming in a close second was “Yes, I always want to see any property I use in a report” with 38 percent of the vote. The final answer of “No, I would rather just use MLS photos” only scored about half the votes as the first two answers, finishing with 22 percent. This makes sense because I think most appraisers want to look at a comp before they include it in a report, especially if they aren’t already familiar with the property. I can also see where some appraisers are very familiar with the properties in their area, use many of the same comps over and over again, and don’t feel a need to drive by and photograph them every time they use them.

In the next poll, we asked “In your opinion, with MLS, Google, and other photo sources available to clients, the main reason original comp photos are required from the appraiser is:” This poll had 3986 responses and had a pretty clear winner. A full 63 percent of the appraisers chose the answer “To make sure the appraiser actually drives by the comps.” So it looks like most appraisers don’t think their clients care as much about the actual photo compared to just making sure the appraiser actually visited the comp. The answer we expected to be very popular, “To provide the client with up-to-date photos of the comps – ensuring they exist in the stated condition,” only received 22 percent of the vote. A third response of “So the clients won’t have to take the time to look up the photos from one of the sources noted above” didn’t do well, only pulling in 3 percent of the vote. Not a surprise — we didn’t really expect many appraisers to choose that answer. Finally, 13 percent of appraisers went with “Other reason” as the best choice for this question. We really don’t know if there were one or many “other reasons” or what they are.

Finally, we asked “Would you be in favor of eliminating the requirement to include an original photo of every comp as long as a recent MLS photo of the property could be included with your report?” This question was very popular with 4770 total votes. It also produced a landslide vote with 79 percent of the appraisers selecting the answer “Yes.” Only 15 percent answered “No” and would not want to use an MLS photo instead of an original if it were available. A final 6 percent were “Not sure” how they felt about this issue. So, from this poll it is clear that appraisers feel that an original photo is not a necessity to produce a quality appraisal as long as a good representative photo is available from another source like an MLS.

My comment: As we all know, a photo taken at the time of listing from the MLS is often better than one taken later and USPAP does not  require comp photos. Fannie Mae certifications require that the appraiser inspect the exterior of the comp, not take a photo. What about re-using a comp photo? Why the requirement of an “original” photo? To be sure appraisers drive by the comps.

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