NEWZ://Michelangelo's house/FHA issues/
Income-expense polls, November 5, 2015
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Thanks to our sponsor!!
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Appraisers saving our veterans in need
From an email letter sent by Dave Biggers, Chairman, a la mode, inc.
Excerpt:
A couple of weeks ago, I was contacted by one of our appraisal customers, Carol Huffman, asking if we could help a group of current and former Marines who were on a grassroots mission to save fellow veterans at risk of suicide.
Carol's daughter is one of those former Marines and founders of the group, and also happens to be a staff appraiser with her. I know many of you appraisers have military backgrounds as well, and the story I'm about to tell will hit home. As an Army brat myself, the son of an appraiser and Vietnam veteran, I was committed the moment I heard it. And I knew right then that we couldn't just stop at building a website for them (Carol's original request). We needed to get them across the goal line completely. That's why I'm writing to you today.
We're determined to raise at least $500,000 for them as quickly as possible, starting now on Veterans Day. I'm personally contributing $250,000 of that on a dollar-for-dollar match - doubling whatever you give - so give as much as possible. Please visit our donations page at www.alamode.com/veterans to help us get there.
Click here for more info
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Michelangelo's home for sale - about $8.06 million
Excerpt:
For those who feel a thrill in their connection to history by simply touching a thousand-year-old wall, it's almost inconceivable the connection from actually living and sleeping in the same rooms and walking the same grounds as this great man did over six centuries ago. The very thought of cooking in his kitchen next to the massive stone hearth where he cooked and warmed himself. Located on over six acres above the rolling hills, the 12,915 square feet of living space is contained in three multi-story buildings, including an ancient tower, believed to date back to the 11th century.
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Spidey-Sense: Housing Market Precision That Doesn't Exist
Another great commentary by Jonathon Miller!!
How does he come up with these ideas??
Excerpts:
I think it's fair to say that most humans are driven to be accurate when it suits them. Forget daylight savings time and how we turned our clocks back last weekend as well as the usual discussions about why we should or shouldn't go through this twice a year. Let's even skip leap year and get down to business with something more important, the leap second and the relationship to the Earth's rotation. Even that methodology is now being argued by many people (especially the tidy-minded types who run national standards organisations) dislike the leap seconds' hackish nature.
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Now look at the precision expected in real estate values and trends.
Does the fact that someone upgraded only the doorknobs in the master bedroom change the value of the house?
Do national housing market reports provide any relevance to your local market?
Click here to read more!!
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Contributory Market Value Riddle
By Tim Andersen, MAI
Source: WorkingRE
Excerpt:
What do you do when the market indicates that an amenity may have no contributory market value- even if there was a substantial cost to install and maintain? You work harder.
Recently an appraiser called and presented just this conundrum on a refinance appraisal assignment. The subject property had no pool. A comparable sale, literally the same model home, built in the same year, just across the street, and sold only two-months ago, had a small pool, patio, screening, and so forth, as is common with pools. None of the other comps had pools. My first response was to drop this comp and use one without a pool so no adjustment would be necessary. However, this comp with the pool was essentially identical to the subject in every way, except for the pool. Typically, an appraiser does not abandon a comp like that.
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To summarize, we had one depreciated cost estimate of a pool, etc., one indication of a pool's value from an analogous, yet clearly different community, and one indication of a pool's value from the subject community via a comparison of listings. These all show that a pool here is not all that valuable. So, what did we do?
First, we sat on the issue for 24-hours so we could cogitate on the matter to see if we had forgotten anything or made any other mistakes in our analyses. Yes, that upset the AMC but stuff happens and the AMC had to put up with it. We concluded, after our waiting period, we had not erred.
My comment: Some good tips. We all run into this situation. I am working on an appraisal of a large 3 bedroom condo in my city, where very few 3 bedroom similar condos exist. The purpose was to set the sales price for a sale to the tenant, so I want to be as accurate as possible. I had recent 2 bedroom, much smaller, sales in the subject project. I had a one year old sale of the same model that had been completely remodeled, but no good way to get an adjustment for the remodeling. There was a sale of the subject's model in 2004, when prices were similar to today. I also looked at several large townhome projects in a superior location with 2 bedroom and 3 bedroom models similar in size to the subject's project. I used percent of value, which can be a very good way to "equalize" using differing comps. It took me a few days of thinking to figure out what to do!
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FHA AND PRIOR SALES
Thanks again to ever-vigilant Dave Towne!!
His full email message below
FHA Appraisers.........
When the new 4000.1 Handbook and associated Data Delivery Guide were released not long ago, astute readers noticed that FHA showed that they wanted the Comparable's prior transactions to be reported back in time THREE YEARS, not just 1 year as per the form.
Well, guess what? That apparently was an error, because the REVISED Data Delivery Guide (Effective Nov. 5, 2015) has that corrected back to ONE YEAR, which 'sort of' corresponds with the info on the GSE forms.
Eagle eye readers will note there may still be an error with this! The form says '....the year prior to the date of sale...." But FHA, in the DDG (below) says "....one year from the effective date of the appraisal." Those dates are NOT THE SAME.
As so often happens in the wild and wacky world, people who either write or re-write 'new' policies and procedures based on source documents, often don't correctly read or comprehend what those source docs say. That just muddies the water further, as this situation attests.
I recommend that your FHA reports have a statement that comp research is included for one year back from the report Effective Date.
This is what it says on the 11/05/2015 DDG, page 42:
FHA Single Family Housing Appraisal Report and Data Delivery Guide B. Uniform Residential Appraisal Report Form for One Family Residential Properties
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Field
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Protocol
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Analysis of prior sale or transfer history of subject and comparable properties
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Report the date(s) of prior sale(s) or transfer(s) of the subject that occurred within three years of the effective date of the appraisal.
Report the date(s) of prior sale(s) or transfer(s) of each comparable that occurred within one year of the effective date of the appraisal.
Report prior transfers regardless of conveyance type or consideration amount. If the prior transfer or offering is not relevant to the current transaction or offering, explain why.
For new construction, include any prior transfers of the land as vacant.
If the properties are located in a "non-disclosure state," the appraiser is responsible for reporting the information that is reasonably obtainable.
Report the analysis of prior sale or transfer history of the subject and comparable properties.
The appraiser must evaluate the relevancy of prior transfers to the current sale or offering of the comparable.
The appraiser must describe the difference between recent transfers versus the current sale or offering, and the effect on the appraisal problem.
The appraiser must provide an analysis of the prior sale or transfer history of the subject property and comparable properties in the report. Simply reporting a transaction is not a sufficient analysis or explanation to the reader.
FHA recognizes the limitations of form reports and the UAD format. If multiple prior transactions exist for the subject property within three years prior to the effective date of the appraisal, or one year for comparables, the appraiser must analyze and report those prior transactions.
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Dave Towne, AGA, MNAA Owner / Educator
Certified Residential RE Appraiser Appraiser Education Service
Approaching 15 yrs Experience Quality live appraiser CE education
FHA Approved 360-708-1196
360-708-1196
Mount Vernon, WA
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TAKE THIS WEEK'S POLL!! - www.appraisalport.com HOT TOPIC!!
What percentage of your clients now offers what you would consider to be customary and reasonable fees for most assignments?
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FHA POLLS - CRAWL SPACE-ATTIC AND HOME INSPECION REPORTS
When doing FHA appraisals, do you normally crawl into and inspect all attics and crawl spaces?
My comment: Interesting results on this controversial topic, plus how many are not doing FHA appraisals!! Fewer than I thought...
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Should FHA appraisers get a copy of the home inspection report?
My comment: great idea!! Would be good to have for all purchase appraisals, not just FHA!!
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APPRAISER INCOME AND EXPENSE POLLS
Considering all aspects of completing an appraisal (research, driving, inspection, writeup, etc.) what response do you think best represents your hourly wage?
My comment: Of course, this is gross, before any expenses, auto, insurance, MLS, software, etc. etc. I wonder about those making less than $25 per hour.
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In the past year, have your operating expenses:
My comment: Expenses going up, nothing new. See above poll for hourly income. What is happening with your expenses?
WHAT DO YOU THINK ABOUT APPRAISER INCOME AND EXPENSES? POST YOUR COMMENTS AND READ OTHER APPRAISERS' COMMENTS AT WWW.APPRAISALTODAYBLOG.COM !!
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org .
Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to http://www.appraisaltoday.com/products.htm or send an email to mailto:info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
Mortgage applications decreased 1.3 percent from one week earlier
WASHINGTON, D.C. (November 11, 2015) - - Mortgage applications decreased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending November 6, 2015.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 18 percent higher than the same week one year ago.
The refinance share of mortgage activity increased to 59.8 percent of total applications from 59.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications.
The FHA share of total applications increased to 14.1 percent from 13.2 percent the week prior. The VA share of total applications decreased to 10.9 percent from 11.9 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.12 percent, its highest level since August 2015, from 4.01 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.04 percent, its highest level since September 2015, from 3.90 percent, with points increasing to 0.38 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.87 percent, its highest level since September 2015, from 3.81 percent, with points decreasing to 0.25 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.35 percent, its highest level since August 2015, from 3.24 percent, with points decreasing to 0.35 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.22 percent, its highest level since February 2015, from 3.12 percent, with points increasing to 0.28 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.
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