Residential Appraisal Services
1) Introduction - Short introduction about myself and work experience.
2) Reasons for the meeting - My goal would be to change the perception that all appraisers are basement dwelling hippies, with large egos, who don't like to socialize with agents. Most importantly, to open the discussion between appraisers and real estate agents, clarifying the laws and regulations that have been implemented over the past few years due to Frank Dodd and HVCC. Discuss the creation of AMC's, and strengthen our relationship with other real estate professionals.
3) COLLATERAL UNDERWRITER - HVCC - Frank Dodd - USPAP - BREA - What is the collateral underwriter, and how does it effect the loan process? HVCC is now known as New Appraisal Guidelines OCT/2010. Brief discussion on Frank Dodd. Brief discussion on USPAP, Uniform Standards of Professional Appraisal Practice. BREA or Bureau of Real Estate Appraisers, is the state license board of California, formally OREA, responsible for granting licensure, and disciplinary action on appraisers.
4) AMC - Appraiser Management Company. Discussion on the creation of AMC's, and how an appraisal is assigned, who is the client, intended user, intended use of the appraisal, and purpose of the appraisal. Due to the creation of the AMC, our professional relationship has dissolved. Let's change that. Agents can speak to appraisers, which is a requirement within the appraisal process. For non-lender work, or transactions not involving a federally related transaction, then an AMC is not required. Discuss the current mortgage mechanics, and the random ordering system created to obtain the cheapest appraisal service, while sacrificing geographic competence and quality. Creation of Appraisal firms, not AMC's is the answer.
5) Agent/Appraiser Relationship - What appraisers need from agents, and what agents can do to help appraisers within the appraisal process. Share with agents my passion for appraising, and to empower agents knowledge of the current mortgage machine. Together, we can fix it.
a) How can an agent prepare before they meet the appraiser? Disclosing concessions on the MLS; purchase contract specifics, ie: Is the seller paying closing costs, and is that typical for the area; type of financing; any influences that can affect value; reasons why the buyer wants the home; reasons why the seller is selling the home; disclosing the number of offers obtained; permit history; floor plan.
b) Honest reporting - Facts or state otherwise. Which data source, assessors records? Add information that could benefit the subject, ie: dual pane windows, energy effecient items, solar - owned or leased, quality of interior materials.
c) How to improve the appraisal process? Interview the appraiser - Ask him/her their level of experience, knowledge of the area, familiarity of the housing market area, quality of homes in the area? Is the appraiser competent? If not, inform the loan officer or the client. Recommend a new appraiser who has geographical competence. The lender would need to approve the appraiser, and is worth mentioning during the loan process.
d) Do not to lead the appraiser to a set value. Providing sales and an explanation about the differences compared to the subject is acceptable.
6) Comparables - How do we choose comparables? What are the key factors that influence value within a specific market area? Must decide what are the main contributors to value.
a) Appraisal guidelines - The mortgage industry follows Fannie Mae or Freddie Mac guidelines, which were not to exceed 10% net and 25% gross adjustiments on the Sales Comparison Grid - However, this was recently abandoned in 2015, and no longer is a requirement.
b) General - less than 1 mile from the subject
c) Should bracket the key components to value such as age, size, lot size, room count, garage count, basement, utilities, amenities, etc.
d) Use the most recent sales - generally less than 6 months, however can exceed this in some cases.