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January 31st, 2024 9:15 AM
Single women own more homes than single men — in Georgia and nationwide.  It's quite a change considering sixty years ago women couldn't get a credit card or a mortgage without a male co-signer.  Check out the story and all the data here:  

http://https//www.axios.com/local/atlanta/2024/01/29/single-women-homeowners-atlanta-georgia



Posted by Cameron Horne on January 31st, 2024 9:15 AMLeave a Comment

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This is the final part of the three-part blog on reviewing your own appraisal like an appraiser.  Again, let's continue with the questions in the Fannie Mae Field Review Form 2000. 

And, remember: 


USPAP Standards Rule 1-1 (c) states the following:
In developing a real property appraisal, an appraiser must not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.

 

Are the data and analysis (including the individual adjustments) presented in the sales comparison approach complete and accurate?
Supporting your adjustments is a big topic in today’s appraisal industry.  Fannie Mae has been pushing for appraisers to use various methods for this rather than just a gut feeling or a “rule of thumb”.  Let’s go down the list.  Are there adjustments for concessions where the amount noted exceeds the typical amount in the area, and are those adjustments reflective of any impact on the sale price of the comparable sale?  If the property values in the area are increasing (or decreasing), are there adjustments for date of sale based on the contract date of the comparable sale?  Are there adjustments for location if applicable, or are there appropriate adjustments for location that are missing?  If there are location adjustments, is there support for those adjustments?  Are there adjustments for site if applicable or are there potential adjustments for site which are missing?  And again, what about support for those adjustments?  And the same for view?  What about quality, age and condition?  Are there appropriate, well supported adjustments or are there adjustments which should have been made and were not?  Bedrooms, baths, gross living area, basement area and finished area in the basement, too.  Are there appropriate, well supported adjustments or adjustments lacking where they should have been made?  Does the property have insulated windows, high efficiency HVAC or any other energy efficient items and, if so, is that reflected in the sales comparison approach relative to the comparable sales? 

 

Are the data and analysis presented in the income and cost approaches complete and accurate? 
For a single-family home, the income approach is almost never used.  The cost approach might not be developed, but it could be relevant to the adjustments.  A webinar on supporting your adjustments I watched recently, among other items, focused on the depreciated cost method.  The cost approach provides a value indication that is the sum of the estimated land value, plus the depreciated cost (if applicable) of the building and other improvements.  Adjustments in the sales comparison approach should make sense considering the cost approach.  For instance, if the site value of a home is $500,000 and the total value of the home is $600,000, is it reasonable for there to be a $50,000 condition adjustment?  That’s probably very high if the improvements are only contributing $100,000 to the total value of the property.    

 

Is the sale or transfer history reported for the subject property and each of the comparable sales complete and accurate? 
Check for sales and transfers of the subject’s ownership in the past three years and for sales and transfers of the comparable sales within one year prior to the date of sale noted in the report?  Are all sales and transfers reported?  If not, that is an error.  Is it another error in a series of errors?  Sometimes the prior sale of a home can help determine an appropriate condition adjustment for the area.  If a home is purchased as a fixer upper (per the Uniform Appraisal Dataset - C4 or C5 condition) and then later sold after being renovated in C2 or C3 condition, the difference in the sale prices for the two sales could be a reasonable indication of what a condition adjustment for comparable sales relative to the subject should be in the report. 

 

Is the opinion of market value in the appraisal report under review accurate as of the effective date of the appraisal? 
Yes or no?  If not, why not?  At this point the Fanne Mae Form 2000 provides a space for a detailed explanation as to reasons for disagreement with the report under review.  Then it has a sales comparison grid where the review appraiser can analyze the sales from the original report with appropriate adjustments or provide new sales and develop his or her own opinion of value.  It could be worthwhile for you to do the same. 

 

You can find a copy of Fannie Mae Form 2000 for your review and guide here:

https://singlefamily.fanniemae.com/media/12356/display


I hope that this has been a helpful exercise.  Completing an appraisal report or reviewing an appraisal report is a systematic, step by step process.  If you are faced with a lousy report, it can be overwhelming to figure out how to go about addressing it, but if you take it one step at a time you will often be surprised by what you find and how the process will bring you to a meaningful conclusion for better or worse.  I’ll be honest.  In my 21 years as an appraiser, I’ve made mistakes (believe it or not!).  And I believe I’m like most people in that I remember those mistakes, especially what I learned from them.  I’m sure I’ll make mistakes again, but I do know the mistakes I can avoid and what mistakes I find most disagreeable when I review an appraisal report.  That is, easily avoidable, lazy inaccuracies.  Things like not reporting plat book and page in a legal description, not reporting the correct zoning, not reporting the correct site dimensions from the most correct source (the actual plat if available, or the metes and bounds legal description).  Basically, any factual information.  If you set out to review an appraisal and start finding these types of errors, it’s more likely that you will continue to find a series of errors which call the value opinion into question (see
USPAP Standards Rule 1-1 (c) above). 

 

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 

 

Got an appraisal issue or question?  Call my Appraiser On-Call For You Hotline at 404-245-7577. 

 

 


Posted by Cameron Horne on January 5th, 2024 10:09 AMLeave a Comment

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Let's continue on in with the questions in the Fannie Mae Field Review Form 2000. 

Remember: 
USPAP Standards Rule 1-1 (c) states the following:
In developing a real property appraisal, an appraiser must not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results. 

 
Is the information in the site section complete and accurate?
Did the appraiser take the time to accurately report the lot dimensions from the plat if they were available in GSCCCA.org (for Georgia)?  Did they accurately describe the area of the lot?  As a sidenote here, in Dekalb County (Metro Atlanta) Tax Records site areas are rounded to the nearest tenth.  Did the appraiser report the rounded figure, or a more accurate figure based on dimensions or a measurement of the area?  Is the shape adequately described or just described as "typical"?  Is there anything special about the view to note rather than it just being residential? One of the most important aspects of this section is the zoning.  Is the zoning noted correctly, particularly if the property is in an incorporated area.  Is the property correctly noted as being on a public sewer or septic system?  Are any adverse site conditions noted?  Once again, errors here can call into question other aspects of the appraisal or be a part of a series of errors.  If the appraiser cannot correctly note the property's zoning, can they provide a reliable opinion of value?    

Is the data in the improvements section complete and accurate?
Again, take this section field by field.  If the property has an accessory unit, is that noted?  Is the correct heating fuel noted (typically gas or electric)?  Are the materials/condition fields filled out appropriately?  Is the above grade room count and GLA correct?  Is the condition of the property accurately described?  If you gave the appraiser a list of improvements/updates, are they noted here or attached to the report?  

Are the comparable sales selected locationally, physically, and functionally the most similar to the subject property? 
Good question.  Are they?  Are there similar sales in the subdivision or condo project that were not included?  If the subject home is a split level or a contemporary style home or if it has some unique feature, are there comparable sales which are similar?  Are the comparable sales all in the same marketing area in terms of offering a similar substitute for a typical buyer of the subject home?  In Metro Atlanta, as in most cities around the country there are areas where homes across the street or one street over are not within the same city limits or in a different school district.  Or sometimes homes on the other side of an interstate or other major boundary are similar in terms of their marketability.  Does the appraiser seem to have an adequate understanding of the area and what homes compete for the same buyer?  If there are homes in significantly different neighboring areas, is that noted and are appropriate location adjustments applied?  Finally, can all sales included be reasonably considered to be arm’s length transactions, reflective of the actions of typical buyers and sellers in the area?  

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 


Posted by Cameron Horne on December 19th, 2023 11:09 AMLeave a Comment

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Look for the second part of my series on reviewing your appraisal like an appraiser coming soon, but today I want to take a quick moment to discuss value, price, sales and the best day to buy something.  

I just came across this article in the MReport which discusses the best days and months to buy a home based on the lowest premium above the automated valuation model as indicated in an analysis completed by ATTOM. 

You can check out the full article here: 

http://themreport.com/news/data/11-29-2023/whens-the-best-day-to-buy  

So when?  

According to ATTOM's latest analysis of more than 47 million single family home and condo sales over the past 10 years, buyers who close on January 9th are seeing the lowest premium above the automated valuation model (AVM).

What about the best months to buy?  

October (6.2% premium above market value)
September (6.8% premium)
November (6.8% premium)
December (6.9% premium)
August (7.6% premium)

Interesting that January is not included in the month list, but January 9th is noted as the best day to buy.  

According to Merriam Webster the definition of value includes the monetary worth of something (ie: market price), a fair return or equivalent in goods, services, or money for something exchanged, relative worth, utility, or importance, something (such as a principle or quality) intrinsically valuable or desirable, and a numerical quantity that is assigned or is determined by calculation or measurement.  

Appraised value can be defined as a professional judgement of a property's worth, which may not correspond to its actual market value or selling price.

We are in the holiday season and retailers are advertising sales like crazy.  Appliances, electronics, mattresses, you name it.  What's interesting about this is that the price for these items drop over night.  One day a refigerator is $999 and the next morning you can get the exact same refrigerator for $100, $200, $300 less.  That's great if you buy at the right time, but not so great if you're the rube that bought it the day before it went on sale. 

Considering this study, I think it's interesting to contemplate that these changes occur in the real estate market as well.  They may not happen overnight, but there are definitely times of year and, based on this study, days when the stars align and properties sell for the lowest price in a given year.   

As consumers, it's up to us to be informed.  Value and price fluctuate all the time.  Just ask the retail sales associate who is covering up the $999 price tag on that refrigerator with a price tag that says $749.  XYZ retailer will gladly sell you that refrigerator the day before the sale for $250 more, and home sellers will gladly sell to you at a premium (for them) in the spring and early summer months. 

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we're the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 


Posted by Cameron Horne on November 30th, 2023 12:42 PMLeave a Comment

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Do you have an appraisal where the opinion of value is not at all what you expected? "This person couldn't appraise their way out of a paper bag!",  you might be thinking.  Or, "In all my years of working in this market, I've never seen anything like this!".  When reading appraisals, we have a tendency to quickly look at the the opinion of value and maybe quickly peruse the comps, but that may just be the tip of the iceberg when it comes to uncovering real errors in an appraisal report.  If you are dealing with a questionable appraisal, taking a systematic approach towards finding errors will generally reap rewards.  You may not find some of the problems you are looking for, but you may find other errors that you can point to which will call the entire report into question.    

Oftentimes, an erronous appraisal is not just the result of one or two errors, but a series of errors.  In fact, this being the case is addressed in the USPAP (Uniform Standards of Professional Appraisal Practice), a set of ethics that all appraisers must adhere to. 

USPAP Standards Rule 1-1 (c) states the following:
In developing a real property appraisal, an appraiser must not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results. 

If you want to review an appraisal like an appraiser, keep this in mind and use the questions on Fannie Mae Form 2000 which is used for field reviews.  This form has nine questions.  This if the first of a three part series of posts, and in this post I'll give you some thoughts on the first 3 questions on that form.  The  questions are as follows:

Is the information in the subject section complete and accurate? 

Start with this section.  Is the Owner of Public Record correctly reported as detailed in the most recent deed?  Is the legal description correct and complete, including the plat book and page number?  Are the taxes correctly reported for the most recent year available?  Does the neighborhood name make sense?  Is there a reasonable map reference? (As a side note here, most appraisers in Atlanta use the Aero Surveys of Georgia map books.  It's key to have the most recent book available in areas appraisers service, especially to keep track of ever changing city limit boundaries.  If the map reference reported comes from the Aero Surveys Book it should be in a format something like this: 836-D1; three number page-letter and number coordinate on that page.)  Is the property properly noted as being in a PUD or not, and, if so, are the dues noted correct?  If applicable, is the listing history properly and fully reported?  All of these items speak to the thoroughness of the appraiser.  If they are not correctly and reasonably reported, what other errors could be lurking in the remainder of the report?  


Is the information in the contract section complete and accurate?

Is it?  The UAD (Uniform Appraisal Dataset) has seven options for transaction type: REO sale, Short sale, Court ordered sale, Estate sale, Relocation sale, Non-arms length sale and Arms length sale.  Is the correct option selected?  Is the contract price correct?  Let's hope so.  Is the binding agreement date of the contract correct?Are the concessions correctly reported?  


Is the information in the neighborhood section complete and accurate?
 

This is a big one.  Many times in my appraisal reviews I've seen neighborhood boundaries reported that don't make sense.  If the area reported crosses city limit boundaries or school district boundaries, you may have a significant error you can point to.  On occasion, I've seen neighborhood boundaries reported where the location of the subject is not in the area described!  If the neighborhood boundaries are not reasonably and appropriately defined then the reporting in this entire section is called into question, and you can question the appraiser's ability to understand the market in the area.  Keep in mind that many appraisers will clone old reports as they are developing new ones, and data from the old reports sometimes is carried over without being corrected.  Once you have confirmed the neighborhood boundaries are reasonable (or not), take a look at the other items.  Metro Atlanta is almost without exception over 75% built up.  Do your own analysis on property values in the area described.  If they are increasing but described as stable, you have a big problem there, and date of sale adjustments should likely have been applied to several if not all of the comparable sales.  Is the price range for one unit housing reasonable and the predominant price reasonable?  What about the age range and predominant age?  Is the present land use sensible?  Are the Market Conditions reasonably and appropriately commented upon, and are there any supporting attachments (graphs, etc.) reflecting the analysis completed by the appraiser.  All of these are important questions.  As any agent working intown areas knows, sometimes being across a street, within or outside of a school district boundary, or within or outside of a city limit boundary can make all the difference in the marketability of a home.  If an appraiser doesn't understand this, and it's not reflected in the report, then there is a significant problem, and possibly a problem which is further exacerbated in the rest of the report. 

This concludes the first part of this series of blog posts.  I hope you find this information helpful.  


Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we're the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 

Posted by Cameron Horne on November 29th, 2023 11:57 AMLeave a Comment

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