tag:blogger.com,1999:blog-84763437914937821242024-03-14T03:59:48.610-05:00Minnesota AppraiserMinnesota Appraiser - Posts and links about real estate appraisal methods and techniques as well as commentary about the housing and commercial markets in Minnesota. The host of Minnesota Appraiser is an experienced residential and commercial appraiser as well as an appraisal educator.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.comBlogger40125tag:blogger.com,1999:blog-8476343791493782124.post-80800239804291298822019-12-20T07:35:00.000-06:002019-12-20T07:35:00.048-06:00Getting Appraisal Experience HoursDid you know that up to half of the hours of experience needed to upgrade your appraisal licenses can come from non-client based work? Its true.<br />
<br />
I'm a big fan of this option. This allows Supervisor Appraisers to create appraisal assignments for their trainees that have no deadlines or client pressures, thus allowing for a better learning environment. Keep in mind that the final appraisal report still must comply with USPAP.<br />
<br />
<br />Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-55083893108511442662019-12-20T07:29:00.002-06:002019-12-20T07:29:55.434-06:00Minnesota Adopts the New Appraisal Licensing StandardsStarting January 1, 2020, the State of Minnesota will follow the new AQB appraisal licensing standards. The new standards will make it easier for Appraisers in Minnesota to upgrade their credentials. The new standards are as follows:<div>
<br /></div>
<div>
<b>Licensed Residential Real Property Appraiser:</b></div>
<div>
<ul>
<li>Hours of Experience: 1,000 hours accumulated in no less than 6 months</li>
<li>College Requirement: No college education requirement</li>
<li>Pre-licensing Education: 150 hours</li>
</ul>
</div>
<div>
<br /></div>
<div>
<b>Certified Residential Real Property Appraiser:</b></div>
<div>
<ul>
<li>Hours of Experience: 1,500 hours accumulated in no less than 12 months</li>
<li>College Requirement: No longer requires a 4 year degree. There are now six different ways an appraiser can satisfy the college education requirement.</li>
</ul>
<ol><ol>
<li>4 Year Degree in any major</li>
<li>2 Year Degree in Business Administration, Accounting, Finance, Economics or Real Estate</li>
<li>30 Semester hours of college level course work in each of the following</li>
</ol>
<ul><ul>
<li>English Composition</li>
<li>Micro Economics</li>
<li>Macro Economics</li>
<li>Finance</li>
<li>Algebra, Geometry or Higher Math</li>
<li>Statistics</li>
<li>Computer Science</li>
<li>Business or Real Estate Law'</li>
<li>Two Elective Courses in Accounting, Geography, Agricultural Economics, Business Management, or Real Estate</li>
</ul>
</ul>
</ol>
4. 30 semester hours of College Level Examination Program®(CLEP®) examinations</div>
<div>
5. Any combination of option 3 and 4</div>
<div>
6. No college education requirement for appraisers that have held the Licensed Real Property Appraiser credential for a minimum of 5 years.</div>
<div>
<ul>
<li>Pre-licensing education: 200 hours</li>
</ul>
</div>
<div>
<br /></div>
<div>
<b>Certified General Real Property Appraiser</b></div>
<div>
<ul>
<li>Hours of Experience: 3,000 hours accumulated in no less than 18 months, half of which must be non-residential</li>
<li> College Requirement: 4 Year Degree in any major</li>
<li>Pre-licensing education: 300 hours</li>
</ul>
</div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com7tag:blogger.com,1999:blog-8476343791493782124.post-12053451953761730992019-02-24T21:48:00.000-06:002019-02-24T21:48:15.794-06:00Lowering the Bar - Follow UpAs a follow up to a previous post, the Appraisal Qualifications Board (AQB) did ultimately adopt the new, lower standards for appraisal licensing upgrades. They went into effect in May of 2018. The new standards are found in the AQB's <a href="https://www.appraisalfoundation.org/imis/TAF/Standards/Qualification_Criteria/Qualification_Criteria__RP_/TAF/AQB_RPAQC.aspx" target="_blank">Real Property Appraiser Qualification Criteria</a>. <div>
<br /></div>
<div>
As of February of 2019, the State of Minnesota has NOT adopted the new standards. However, the Government Relations Committee of the North Star Chapter of the Appraisal Institute has introduced a bill that would change <a href="https://www.revisor.mn.gov/statutes/cite/82B" target="_blank">Statute 82B</a> and bring Minnesota into alignment with the national standard.</div>
<div>
<br /></div>
<div>
Stay Tuned!</div>
Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-68567040731964838182017-09-07T07:48:00.000-05:002017-09-07T07:48:09.261-05:00A unique way for Appraisers to help.....The SBA is looking for appraisers to help with the wave of disaster loans as a result of Hurricane Harvey. These are not volunteers positions, appraisers are paid. Check out the article published by the <a href="http://www.appraisalinstitute.org/ano/sba-seeks-appraisers-to-aid-harvey-recovery-efforts/" target="_blank">Appraisal Institute</a>.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-88705443518461336032017-04-05T14:29:00.001-05:002017-06-16T05:52:07.743-05:00Lowering The BarIn response to the declining numbers of appraisers nationwide, the Appraiser Qualifications Board (AQB) of the <a href="https://www.appraisalfoundation.org/" target="_blank">Appraisal Foundation</a> is considering lowering the qualifying education and experience requirements for appraisers. In it's <a href="https://appraisalfoundation.sharefile.com/share?#/view/s9dcbe4fac8b45099" target="_blank">third exposure draft</a> to the Real Property Appraiser Qualification Criteria issued in March 2017, the AQB is proposing changes that would make it easier for appraisers to upgrade their licenses. If adopted, the changes would go into effect no sooner than January 1, 2018.<br />
<br />
In January 2015, the AQB mandated that four year college degrees be a prerequisite to obtaining either the Certified Residential or Certified General license. Additionally they required a two year college degree or 30 hours of college level education in topics relevant to appraising.<br />
<br />
They are now proposing no college requirements for Licensed Residential Real Property Appraisers. For the Certified Residential Real Property Appraiser credential they are proposing an alternative to the four year college degree. If an applicant has held a Licensed Residential Real Property credential for at least three years and is in good standing with their respective jurisdiction, then they would only require 21 hours of college level course work. The course work will have to be in topics relevant to appraising such as algebra, economic, composition, etc. The four year degree requirement for the Certified General credential will remain.<br />
<br />
Additionally, the experience needed to upgrade an appraisal license is also potentially being changed<br />
<br />
Current Proposed<br />
Licensed Residential: 2,000 hours 1,000 hours<br />
Certified Residential: 2,500 hours 1,500 hours<br />
Certified General: 3,000 hours 2,000 hours<br />
<br />
This no doubt would be a relief to existing Licensed appraisers that are unable to meet the four year college degree requirement to get to the Certified Residential level. But add the reduction in experience requirements and the question becomes "is the bar being lowered too far?"<br />
<br />
<br />Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com7tag:blogger.com,1999:blog-8476343791493782124.post-17618621537804705612016-03-19T18:27:00.000-05:002016-03-19T18:27:21.574-05:00Number of appraisers decliningWith increasing barriers to entry and the average age of appraisers being around 55, there is a looming shortage of qualified professionals within the industry. Some locations are already experiencing it. As we all learned in economic class when supply goes down, price goes up. This creates a great opportunity. <br />
<br />
Remember in your Appraisal Principles class when we discussed a seller's market? Appraisers are increasingly operating in a seller's market where they have greater negotiating power. In Minnesota there were around 4,500 licensed and certified appraisers prior to the housing market crash. Today we are down to around 1,900. If you are of the belief your fees are not where they should be, now is the time to do something about it.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com3tag:blogger.com,1999:blog-8476343791493782124.post-39557456016550629002015-03-24T09:57:00.000-05:002015-04-13T22:04:01.675-05:00FHA Handbook 4000.1Remember when keeping track of the FHA appraisal requirements meant sifting through the 4150.2 handbook, but then having to review all the Mortgagee Letters to see what had been changed? Well no more. HUD has just released their newly revised and updated <a href="http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/handbook_4000-1" target="_blank">Single Family Housing Policy Handbook 4000.1</a>.<br />
<br />
This handbook replaces the 4150.2 handbook and includes the Mortgagee Letter changes so as to become your one stop shop for appraisal policy. The book was issued in March of 2015, with most of the changes to take effect on June 15, 2015. <br />
<br />
The handbook is much like Fannie Mae's Selling Guide in that it includes policies for not only appraisers, but lenders, originators and closers. So as an appraiser you likely do not need to read all 539 pages (unless you are suffering from insomnia and looking for a cure). The good stuff for appraisers is found in Section II. B. starting on page 421.<br />
<br />
Enjoy! <br />
<br />Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-56847294277791252762014-12-30T22:49:00.001-06:002015-04-13T22:04:17.417-05:00The New Supervisor/Trainee CourseA very common question I hear lately is "are all supervisors and trainees required to take the new supervisor/trainee course?"<br />
<br />
Drum roll please......the answer is no.<br />
<br />
Anyone within an established supervisor/trainee relationship prior to January 1, 2015 does not need to take the course. If, however, you create any <u>new</u> supervisor/trainee relationships after January 1, 2015, you will then have to take the new class.<br />
<br />
<br />Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-76617662596272984972014-12-29T22:38:00.000-06:002015-04-13T22:04:27.089-05:00Fannie Mae drops net and gross adjustment guidelinesSo I was doing a little casual reading of the Fannie Mae Selling Guide ( I know.. I'm a sick puppy) and found a recent change that made my jaw drop. Fannie Mae no longer has any guidelines with respect to net and gross adjustments. So many of us residential appraisers were weaned on the 15% net and 25% gross adjustment guidelines. Essentially these benchmarks were used to test the comparability of a sale used in the sales comparison approach. <br />
<br />
If your adjustments were in excess of 15% net or 25% gross, you had better have an explanation that was approved by the Pope (and even then it may not be accepted by some underwriters.)<br />
<br />
No more. <br />
<br />
According to Section B4-1.3-09, updated 12/16/2014 "Fannie Mae does not have specific limitations or guidelines associated with net or gross adjustments."<br />
<br />
However, this does not necessarily make the appraiser's job easier. <br />
<br />
The section goes on to say "If the extent of the appraiser’s adjustments to the comparable sales is great enough to indicate that the property may not conform to the neighborhood, the underwriter must determine if the opinion of value is adequately supported.<br />
<br />
The concern now is that rather than having clearly defined benchmarks for judging the sales comparability, it is now more open to interpretation (and possibly dispute) by the underwriter. An underwriter could now question a sale with 15% gross if they had a mind to do so.<br />
<br />
Lets hope good judgment wins out and that this relaxation of the guidelines results in more acceptance rather than more stipulations.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-28247121160937972562014-07-11T21:49:00.000-05:002014-07-11T21:49:41.122-05:00Getting that first appraisal job.As an appraisal instructor, I have the very great privilege of working with the next generation of appraisal professionals. While many come to the licensing courses with a job in hand, many do not. Getting that supervisor lined up can often be the most difficult part of becoming an appraiser. I am often asked by students how to go about it. <br />
<br />
The direct answer is networking. <br />
<br />
Most employed appraisers I know got their first gig because they already knew somebody in the industry. They had that connection already. If you do not, here is what it is going to take: persistence.<br />
<br />
Jump on-line, grab the phone book (do they still publish those things?) and call every appraiser in your area. Make them aware you are interested. You are going to be told "We're not hiring right now" a lot. Don't let that bother you. Keep their contact info and call them back in a month. Call them back the month after that. Ask to take them out to lunch so as to get their opinions about how to break into the industry and what it takes to be a successful appraiser. Make sure that when they are ready to hire a new appraiser, you are the one they are thinking of. Training a new appraiser takes a lot of time and effort. Supervisors want to know the person they hire are very interested.<br />
<br />
Contact the assessor's offices around your area. They often are willing to hire newly or soon to be licensed appraisers. Contact your local chapter of the <a href="http://www.appraisalinstitute.org/" target="_blank">Appraisal Institute</a> or other appraisal industry organization. They love having interested guests at their luncheons. You could not ask for a better networking opportunity.<br />
<br />
<br />Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com3tag:blogger.com,1999:blog-8476343791493782124.post-85027433022785544912014-05-16T21:40:00.002-05:002014-05-16T21:40:16.714-05:00Advanced EducationAfter what has felt like an eternity, I have completed the MAI and SRA designations with the Appraisal Institute. It was a long journey and I most definitely feel it was worth the effort. Are you looking to take your career to the next level? It will require more education than that which you took to get your license. This is a knowledge profession. The more you know, whether it be about a market, a property type or a particular intended use, the more valuable the clients will find you. Never stop learning. Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-26840507374706275862014-02-12T10:00:00.001-06:002014-02-12T10:00:35.542-06:00Trainee Appraisers In Minnesota - Heads UpA quick note to applicants for the Trainee Residential Real Property Appraisal license in the state of Minnesota. I just verified with the Minnesota Department of Commerce Licensing Division, that applicants must have a supervisor lined up <u>before</u> they apply for their license. <br />
<br />
The <a href="http://mn.gov/commerce/topics/Licensing/Appraiser-Licensing/Individual-Licenses/Apply-for-Individual-License.jsp" target="_blank">Licensing Instructions</a> for Trainees found on the Commerce Department's website do not specifically state the supervisor must be in place before applying. However, when completing the license application, the name of the supervisor is required. <br />
<br />
When a Trainee completes the state licensing exam, those test results are good for two years. This means you have a two year window to get the supervisor lined up before you apply for the license.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-9693158220841661032014-01-05T11:25:00.001-06:002014-01-05T11:25:35.534-06:00Welcome to USPAP 2014Here we are again with a new edition of USPAP. With this edition we see some great simplifications. Of interest to most appraisers is the retirement of "Self-Contained" and "Summary" written reports. Check your boilerplates. There are now just two written report options: Appraisal Report (which is required to have a summary level of detail) and Restricted Appraisal Report (which is appropriate only when the client is the only intended user.) <br />
<div>
<br /></div>
<div>
The other major change, is the retirement of Standards Rule 4 & 5 which deal with appraisal consultation. As these standards were rarely used correctly, they were retired.</div>
<div>
<br /></div>
<div>
Also, a clarification as to what constitutes assignment results. As appraisers, we are very well aware that our value conclusions are confidential. This clarification reminds us that not only the value conclusion are confidential, but other opinions developed during the assignment are also confidential. These include items such as the highest and best use conclusion, the opinion as to the reasonable exposure time, opinions about qualitative factors relating to the subject and comparables.</div>
<div>
<br /></div>
<div>
With a handful other minor changes, I look forward to seeing you in the 7 Hour Update Class starting in February at<a href="http://kpsminnesota.com/" target="_blank"> Kaplan</a> </div>
Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-37316303996847941562013-09-03T18:14:00.000-05:002013-09-03T18:14:25.767-05:00Trainee Residential Real Property Appraisers in Minnesota.Just a quick heads up to Trainee appraisers in Minnesota. If you do not have a supervisor lined up, you will want to find one as quickly as possible. Prior to 2008, you could obtain a Trainee Residential Real Property Appraiser license without having a supervisor. That changed in 2008 when Minnesota changed to a model similar to that used for Real Estate agents. Trainees must register themselves with a supervisory appraiser that holds a Certified Residential or General license. This is like real estate agents that must associate themselves with a broker in order to obtain a license. <br />
<br />
The Trainee can have as many supervisors as they like. However, supervisors may only have three Trainees at a time. Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com7tag:blogger.com,1999:blog-8476343791493782124.post-83275295332567452612013-06-25T20:21:00.000-05:002013-06-25T20:21:39.753-05:00The $200,000 word.What is the difference between "either" and "both?" Its about $200,000. I recently performed a valuation where the owner created an easement agreement with a neighboring property owner. They wished to build a common entry between their buildings which straddled the common property line. In crafting the agreement, however, they worded the termination clause to allow "either" party to cancel the agreement. Normally, such easement agreements require mutual agreement to cancel. Since either party could cancel the easement on a whim, the beautiful $200,000 entry way had no contributory value.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-90819975674042248372013-05-06T20:15:00.000-05:002013-05-06T21:26:31.069-05:00USPAP Nerd!Go ahead, call me a nerd. I accept it. Teaching USPAP courses is among my favorite activities.<br />
<br />
I am finishing up a USPAP power weekend by teaching the 7 Hr Update course on Friday and the 15 Hr course on Monday and Tuesday. <br />
<br />
Thanks to all that came out to Kaplan and made the classes so much fun.<br />
<br />Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-36986119960030785462012-06-06T13:28:00.001-05:002013-05-06T21:25:09.534-05:00Poetic Justice<!--[if gte mso 9]><xml>
<o:DocumentProperties>
<o:Template>Normal.dotm</o:Template>
<o:Revision>0</o:Revision>
<o:TotalTime>0</o:TotalTime>
<o:Pages>1</o:Pages>
<o:Words>142</o:Words>
<o:Characters>811</o:Characters>
<o:Company>763-398-1126</o:Company>
<o:Lines>6</o:Lines>
<o:Paragraphs>1</o:Paragraphs>
<o:CharactersWithSpaces>995</o:CharactersWithSpaces>
<o:Version>12.0</o:Version>
</o:DocumentProperties>
<o:OfficeDocumentSettings>
<o:AllowPNG/>
</o:OfficeDocumentSettings>
</xml><![endif]--><!--[if gte mso 9]><xml>
<w:WordDocument>
<w:Zoom>0</w:Zoom>
<w:TrackMoves>false</w:TrackMoves>
<w:TrackFormatting/>
<w:PunctuationKerning/>
<w:DrawingGridHorizontalSpacing>18 pt</w:DrawingGridHorizontalSpacing>
<w:DrawingGridVerticalSpacing>18 pt</w:DrawingGridVerticalSpacing>
<w:DisplayHorizontalDrawingGridEvery>0</w:DisplayHorizontalDrawingGridEvery>
<w:DisplayVerticalDrawingGridEvery>0</w:DisplayVerticalDrawingGridEvery>
<w:ValidateAgainstSchemas/>
<w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
<w:IgnoreMixedContent>false</w:IgnoreMixedContent>
<w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
<w:Compatibility>
<w:BreakWrappedTables/>
<w:DontGrowAutofit/>
<w:DontAutofitConstrainedTables/>
<w:DontVertAlignInTxbx/>
</w:Compatibility>
</w:WordDocument>
</xml><![endif]--><!--[if gte mso 9]><xml>
<w:LatentStyles DefLockedState="false" LatentStyleCount="276">
</w:LatentStyles>
</xml><![endif]-->
<!--[if gte mso 10]>
<style>
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-parent:"";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin:0in;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:12.0pt;
font-family:"Times New Roman";
mso-ascii-font-family:Cambria;
mso-ascii-theme-font:minor-latin;
mso-fareast-font-family:"Times New Roman";
mso-fareast-theme-font:minor-fareast;
mso-hansi-font-family:Cambria;
mso-hansi-theme-font:minor-latin;}
</style>
<![endif]-->
<!--StartFragment-->
<br />
<div class="MsoNormal">
As
an appraisal instructor, I often hear complaints by appraisers about having no mechanism
in place to halt the unsavory practices they see everyday in the mortgage
lending world. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In
an article published by Appraiser News Online, a staff appraiser for Countrywide
lost his job in 2009 for airing concerns about deceptive practices that were
inflating appraised values.
Normally, the appraiser losing their job and never being heard from
again would be the end of the story.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Not
this time! <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The
appraiser, Mr. Kyle Lagow, filed a whistle blower lawsuit and, as part of the
$26 billion mortgage settlement, was awarded <u><b>$14.5 million</b></u>. Provisions of the U.S. False Claims Act
allow private parties to sue organizations involved in illegal activity on
behalf of the government and then share in the settlement.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Nothing
makes me happier than hearing about an appraiser being rewarded (rather than
punished, which occurs all too often) for doing the right thing.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Way
to go Kyle!</div>
Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-48447429200574593432012-01-05T12:40:00.000-06:002012-01-05T12:40:49.790-06:00Welcome to 2012 (USPAP)An even numbered new year means a new edition of USPAP. I know every appraiser sleeps with a copy of USPAP under their pillow and has read the 2012-2013 edition so many times their copy is already worn out. Even so, I thought I would bullet point the major changes:<br />
<ul><li>Revised definitions: Client, Extraordinary Assumption, Hypothetical Condition. The definition of Exposure Time was moved from Statement 6 into the Definition Sections.</li>
<li>A new rule: Record Keeping is now a full blown Rule</li>
<li>Exposure Time (associated with market value) must now be reported.</li>
<li>Revised disclosure requirement: Disclose whether you have <u>or have not</u> performed any services with regard to the subject property within the 3 years proceeding the effective date.</li>
<li>Standards for Personal Property Appraisal (Standards 7 & 8) have been significantly updated.</li>
<li>Advisory Opinion 21 USPAP Compliance has been revised to help us understand when USPAP does and <u>does not</u> apply.</li>
</ul>See you in the 7 hour USPAP update class!Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com4tag:blogger.com,1999:blog-8476343791493782124.post-86122698433163210392011-12-28T10:11:00.000-06:002011-12-28T10:11:27.384-06:00Appraiser - Friend or FoeAre you of the opinion that appraisers are killing deals and keeping the housing market in the dumps?<br />
<br />
Many real estate agents, builders and lenders seem to think this. This belief betrays a misunderstanding about what appraisers do. Does the appraiser determine the value of the property?<br />
<br />
If you said "yes" then you are among the misinformed. It is the market that determines the value. Appraisers simply report what the market has already decided. If you disagree with a value conclusion and wish to dispute it, remember one simple thing.<br />
<br />
Data is King!<br />
<br />
The value is coming in low because that is what the data supports. If you feel the value is unjustifiably low, provide the appraiser relevant, meaningful data that suggests otherwise. Many real estate professionals have the belief they are not allowed to interact with the appraiser. This is false. You can be involved in the appraisal process as a data source. Appraisers welcome any and all useful information you can provide. <br />
<br />
Treat the appraiser as an ally rather than an adversary and I guarantee you will see positive results.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com1tag:blogger.com,1999:blog-8476343791493782124.post-63429041919854984982011-10-20T22:01:00.001-05:002011-10-20T22:03:20.446-05:00Something other than bank clients.Looking for something other than bank work? Give your local real estate attorney a call. Litigation assignments are often much more interesting and challenging...and not to mention they pay much better.<br />
<br />
Recognize that big pay checks come with expectations. Yes, the opposing attorney will try to make you look like a fool, but when the data is on your side, it's an easy argument. The data speaks for itself. <br />
<br />
What is the difference in fees you ask? I'm happy to share.<br />
<br />
I recently worked on a single-family residential property that, for mortgage lending purposes, would have commanded a fee of around $400. However, for the condemnation intended use, the fee was over $9,000. Not only was the client happy to pay the fee, I got a hug from the property owner for my efforts.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com1tag:blogger.com,1999:blog-8476343791493782124.post-55488078416203157602011-02-12T13:24:00.000-06:002014-07-11T21:51:43.197-05:00Home Loan Modifications Are Causing ForeclosuresThough the intent of home loan modifications is honorable, it is clear the system is broken. Obama's making home affordable program was intended to help homeowner's avoid foreclosure. You can read about how the program was intended to work at <a href="http://www.makinghomeaffordable.gov/">makinghomeaffordable.gov</a>.<br />
<br />
If you decide to go for a loan modification. Here is one piece of advice: Somewhere along the process the lender will allow you to make a lower monthly payment while your application is being processed. DON'T DO IT! Keep paying your original amount unit you are actually approved. Why you ask? Isn't a lower payment the whole point?<br />
<br />
Here is the reality, it is highly unlikely you will get approved. As many sources have pointed out, very few homeowner's are getting approval. Like I said the system is broken. So here is what is happening to many people attempting loan modification. <br />
<br />
They make application. They are told they can make a lower payment while their application is being processed. The lenders will take several months processing the application. The lender will likely have a never ending list of needed paper work, that they will say they never received. The lender will then deny the application on the grounds the homeowner never provided the needed paperwork in spite of the homeowner sending in the documentation two, three or even four times.<br />
<br />
And guess what, since the application was denied, the difference between the original mortgage payment and the lower payment the lender told you to make while your application was in process is now treated as LATE PAYMENTS. Since your application took 6 months to process (and be denied), you are now 6 months behind on your mortgage payment. So if you can not come up with the cash to get current on your mortage (and chances are you don't since that is why you were applying for the modification in the first place) the lender now starts foreclosure proceedings.<br />
<br />
So the program that was intended to help keep your home is actually causing you to lose it.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com1tag:blogger.com,1999:blog-8476343791493782124.post-76289563428968918152010-12-09T10:24:00.000-06:002014-12-30T22:50:36.157-06:00The New Interagency Appraisal & Evaluation GuidelinesOn December 2nd, the final Interagency Appraisal & Evaluation Guidelines were published. These represent the basic appraisal requirements when working for a federally regulated lending institution. The last set of guidelines were published in 1992 and only a few pages addressed appraisal requirements. This time around the guidelines are 70 pages and address everything from maintaining appraiser independence, appraiser selection, use of AVMs and BPO as well as requirements for reviewers. <br />
<br />
A couple things of interest from the new guidelines:<br />
<br />
BPOs can not be used as the primary basis for making a lending decision.<br />
AVMs can not be used as the primary basis for making a lending decision.<br />
Reviewers are expected to have sufficient eduction, experience and knowledge about appraisal methodology.<br />
The appraiser independence requirements found in the HVCC are now part of the new guidelines.<br />
Restricted use reports are generally not sufficient for supporting a lending decision.<br />
<br />
The new guidelines can be found on the FDIC website at <a href="http://www.fdic.gov/news/news/press/2010/pr10261a.pdf">http://www.fdic.gov/news/news/press/2010/pr10261a.pdf </a>Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com1tag:blogger.com,1999:blog-8476343791493782124.post-28706035319928366132010-11-24T21:19:00.000-06:002010-11-24T21:19:23.180-06:00What makes you an appraiser?The most common answer is holding a license or certification, but that would be the wrong answer. Notice that USPAP says nothing about licensing. <br />
<br />
The main reason for being licensed is so that you can work for banks. Granted banks are a large client base, but they are just a part of the appraisal universe, and frankly as far as clients go, they typically do not pay very well.<br />
<br />
Believe me when I say there are clients that will pay 5 and 6 digits for your work, but it is not your license or certification they care about. It is your knowledge and skills they pay for. So what it is that makes you an appraiser? <br />
<br />
Knowing the answer to this question will help you understand the opportunities that few appraisers realize. Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-16245931840324020982010-10-19T11:25:00.000-05:002010-10-19T11:25:24.607-05:00Back to the future.<span style="font-size: small;">As we all know the HVCC has expired. Some appraisers thought the good old days of working for mortgage brokers and loan originators would soon return. That is not going to happen. </span><br />
<br />
<span style="font-size: small;">The rules to protect appraiser independence are here to stay. After the</span><span style="font-size: small;"> <a href="http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act">Dodd–Frank Wall Street Reform and Consumer Protection Act</a> included the provisions of the HVCC, to no great surprise Fannie Mae has also implemented major portions of the HVCC in its policies. On October 15, Fannie Mae released <a href="https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/sel1014.pdf">SEL-2010-14</a> which describes their <a href="https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/air.pdf">appraiser independence policies</a>.</span><br />
<span style="font-size: small;"><br />
</span><br />
<span style="font-size: small;">In a nut shell Fannie Mae's policy is that:</span><br />
<span style="font-size: small;"></span><br />
<span style="font-size: small;"><br />
1. All members of the lender's production staff;<br />
<br />
2. Any person who is compensated on a commission basis upon the successful completion of a Mortgage; and<br />
<br />
3. Any person whose immediate supervisor is not independent of the lender production staff and process.</span><br />
<br />
<span style="font-size: small;"> Are prohibited from:</span><br />
<span style="font-size: small;"><br />
</span><br />
<span style="font-size: small;">1. Selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved or forbidden to perform appraisals for the lender and<br />
<br />
2. Having any substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignment.</span><br />
<span style="font-size: small;"><br />
</span><br />
<span style="font-size: small;"><span style="font-size: small;">For good or bad, the new appraisal business model of working for third parties such as AMCs or for bank appraisal departments is here to stay.</span></span>Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com0tag:blogger.com,1999:blog-8476343791493782124.post-59816646934017609152010-09-10T19:55:00.000-05:002010-09-10T19:55:45.797-05:00Cost data at a fraction of the priceIf you are looking for way to trim expenses, might I suggest the National Building Cost Manual published by <a href="http://www.craftsman-book.com/">Craftsman Books</a>. A friend and fellow appraiser brought this source to my attention and I thought I would try it out. It comes in both book and software format.<br />
<br />
I compared it to <a href="http://www.blogger.com/www.marshallswift.com">Marshall & Swift</a> and liked what I found. Granted Craftsman's data is categorized a little differently and they have a little different idea of what constitutes "average quality", "good quality" etc. But when I matched up an example cost estimate as best I could, Craftsman's result was within a few percentage points of Marshall & Swift.<br />
<br />
And here is the best part. It is roughly one-tenth the cost. I spent a total of $53 on both the book and software. Compared to over $500 for my Marshall & Swift annual subscription. Plus the book included not only residential, but many commercial, industrial and retail improvements.<br />
<br />
Now it is not as exhaustively detailed as M&S, but for simple RCN calculations it appears it could be a real good, and less expensive alternative.Brett W. Hall, MAI, SRA, SAMAhttp://www.blogger.com/profile/01677896510591182993noreply@blogger.com2