Handling Appraisal Pressure from Unethical Clients

Posted by: McKissock Date: Aug 25, 2016 9:00:00 AM

It goes without saying that there's no simple, easy way to deal with appraisal pressure. A major source of frustration for appraisers is the realization that clients do not have to follow USPAP. The ethical and performance requirements of USPAP apply only to appraisers, not to clients. In other words, USPAP doesn’t prohibit a mortgage broker from calling and asking you to develop an appraisal based on a predetermined value, but USPAP does prohibit you from accepting that assignment.

Here, we put together a list of some possible ways to deal with appraisal pressure from unethical clients.

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Topics: Tips & Tricks

Where Do Appraisal-Related Adjustments Come From?

Posted by: Robert Grafe Date: Aug 18, 2016 9:00:00 AM

Appraisal-related adjustments are not just guesses by the appraiser or “rules of thumb.” Nor are they calculated numbers used to mathematically force a preconceived adjusted market value estimate in support of a value conclusion for the subject property. We tend to think of appraisal-related adjustments, as they pertain to residential appraisal assignments, as usually having to do with the sales comparison approach. However, it may become necessary to also provide cost approach adjustments and/or income approach rental adjustments that are not only necessary, but also appropriate, defensible, and reasonable.

Keep reading to learn about specific guidelines for adjustments, where appraisal adjustments actually come from, and a real-life example of adjustments in action. Plus, join McKissock and Josh Walitt for a Pro-Series webinar on Wednesday, August 24 at 1:00pm EST: How-to: Quality-Related Adjustment Methodologies.

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Topics: Residential Appraisal

Meet Former Golf Pro Turned Expert Witness Appraiser, Graham D. Smith

Posted by: John Hays Date: Aug 11, 2016 9:00:00 AM

What happens when a former golf pro decides to change gears ... and become not just an appraiser, but an expert witness appraiser? What happens is Graham D. Smith, CDA, Certified General Appraiser. Happily married to his wife, fellow appraiser, and business partner, Michelle, he is the proud father of two children. And, yes, he actually worked as a golf pro, having studied the industry at the Myrtle Beach campus of the San Diego Golf Academy.

But in 2009 he made the switch to practicing as an appraiser. These days, he and his wife head up their own firm, McCarthy & Smith Real Estate Services LLC—and expert witness appraisal work is a key component of their success.

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Topics: Expert Witness

The Realm of Relocation Appraisals

Posted by: Carole McCullough Date: Aug 4, 2016 9:00:00 AM

Up until the mid-1960s, the United States had, for the most part, a stationary workforce. The only people that seemed to move around with their jobs or careers were military personnel. That all changed with the dawn of the Age of Mobility. With the ease of transferring to a new location, and transitioning into a new career, evolved a new industry: relocation. As a result, corporations established a group to address moving household goods and real estate issues. This formed the basis for the creation of the Employee Relocation Council in 1975. Today this organization is known as Worldwide ERC, reflecting the mobility of a modern global workforce. This post will explore the realm of relocation appraisals and give advice on specializing in this particular area of residential appraisal.

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Topics: Residential Appraisal

HUD to Make Changes to Appliance Language in Handbook 4000.1

Posted by: Dan Bradley Date: Jul 29, 2016 3:42:43 PM

At a July 2016 meeting of regulators and appraisal professionals hosted by the National Association of Realtors (NAR), a HUD representative stated that the language in Handbook 4000.1 regarding appliances is going to be revised on or around September of 2016. The HUD representative stated that the exact language of the revision was still being worked on, and that it would be a clarification of the existing requirement. The current language in the Handbook states, “The Appraiser must note appliances present in the house at the time of observation and indicate whether that appliance is considered Personal Property or Real Property. The Appraiser must operate all conveyed appliances and observe their performance. The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if any conveyed appliances are inoperable.”

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Topics: fha, HUD

Appraising Stigmatized Properties: The Challenges and Opportunities

Posted by: Carole McCullough Date: Jul 28, 2016 11:00:00 AM

As an appraiser, whether you're looking for a niche market or not, you may be given the chance to enter the field of stigmatized property appraising. The opportunity usually arises when a lender contacts you to value a property in a community in which you work. When the lender places the order, and then you accept the assignment, neither one of you may know that the marketplace views the property as stigmatized. Regardless of the circumstances, once revealed, the specifics of the case will call for a level of expertise, knowledge, and research beyond that of many appraisers.

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Topics: Residential Appraisal, Commercial Appraisal

Top 5 Best Business Practices for Appraisers

Posted by: Robert Grafe Date: Jul 21, 2016 6:00:00 AM

In order to build your business and enhance the reputation of your appraisal firm, it's going to take more than just advertising your services. The top five best business practices outlined below are excellent ways to help strengthen and grow your appraisal business over time.

 

1. Be honest in all your dealings with others

As with most professionals, real estate appraisers are occasionally watched by others. Be thoughtful, careful, and honest in all your personal and business financial dealings in order to maintain that well-deserved and well-respected reputation as an “honest” professional appraiser.

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Topics: Tips & Tricks

Expectations for Location Adjustment Methodologies

Posted by: Josh Walitt Date: Jul 13, 2016 10:47:50 AM

In recent years, with the increased use of risk-based scoring and automated systems to compare your adjustments to peers’ adjustments, adjustment rates are being met with increased scrutiny.

Join us in a Pro-Series Webinar: How-to: Location Adjustment Methodologies on Wednesday, July 20 at 1:00 PM EST, where we’ll look at the sources of the data that we can use to support our location adjustments.

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Topics: Residential Appraisal

Maintaining Good Client Communication: Tips for Appraisers

Posted by: Robert Grafe Date: Jul 7, 2016 11:00:00 AM

As an appraiser, in general, the key to establishing good client communication is to communicate early and often with your clients. However, you should be very careful when attempting to communicate with clients, recognizing that clients may or may not understand much of the appraisal “lingo” that we tend to throw around easily. Sometimes we mistakenly make the assumption that everyone (including our non-appraiser clients) has a full understanding of unique appraisal terminology, such as discounted cash flow analysis, the income approach, PMI (private mortgage insurance), fee simple, absorption rate, capitalization, etc. Keep reading for more advice on how to maintain good client communication with your appraisal clients.

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Topics: Tips & Tricks

How to Avoid Appraisal Fraud

Posted by: Robert Grafe Date: Jun 30, 2016 11:00:00 AM

Just exactly what is appraisal fraud? Fraud, in its simplest form, is deliberate misrepresentation and deception. In this column, appraisal fraud is fraudulent activity for the purpose of obtaining a mortgage loan by one form of deceptive scheme or another. We’ll also focus some on mortgage fraud, which is not just predatory lending practices that target certain borrowers.

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Topics: Tips & Tricks