Appraisal Scoop

Most Profitable Renovations - Renovations cost more this year and bring less at resale

The Harvard University Joint Center for Housing Studies estimates that Americans will spend nearly $160 billion for home remodeling projects over the next 12 months

Renovation costs are shooting higher and homeowners are getting a lot less bang for their remodeling bucks, according to a report by the National Association of Realtors (NAR) and Remodeling Magazine.

Last year, for example, adding a master bedroom suite to a house cost an average of $75,959 nationwide and boosted the home's resale value by $64,419 - that's 84.8 percent of the cost recouped. The same job this year cost a lot more - $94,331 - and returned just $68,458, or 72.6 percent. 

The least profitable renovation, again this year, is a home office remodel. It recoups only 63.4 percent of its cost.

NAR president, Pat Vredevoogd Combs cautions homeowners to take the data with a grain of salt.  "Many factors affect a home's value," she said, "and, consequently, the resale value of any given remodeling project.

For the full CNN.com article - click here 

Appraisal Foundation Valuation Fraud Symposium - 13 Speakers Offer Advice

On October 12, 2006 The Appraisal Foundation opened a new front on the war on Valuation Fraud. The Foundation brought together leading experts from various aspects of the mortgage lending. These constituency groups included regulatory, law enforcement, bankers and mortgage lenders, and appraisal arenas. The goal was to focus on valuation fraud and most importantly solutions to this ever-increasing problem.

The 13 speakers from various organizations, agencies and the federal government urged appraisers to remain vigilant in their business practices and not succumb to pressures applied by lenders.

Solutions or advice offered included:

• Increasing awareness of identity theft,
• Utilizing the state regulatory complaint process,
• Recognition of red flags on an appraisal,
• Reporting overvaluation requests to lenders and regulatory agencies, fraud, and,
• Creating educational opportunities for appraisers and consumers to avoid valuation fraud
• Finding ways to deter lender pressure on appraisers.

The following links are to the speakers notes posted on the Appraisal Foundation's website:

Brad Davis's Presentation - Morgan Stanley, Vice President;Chief Appraiser

David Deverman's Presentation - National Association of Realtors

Larry Disney's Presentation - Kentucky Real Estate Appraisers Board Exec. Dir.

Rachel Dollar's Presentation - The Dollar Law Firm Attorney

Deborah Merkle's Presentation - Office of Thrift Supervision Project Manager

Richard Powers' Presentation - Appraisal Institute President

Mark Simpson's Presentation - Fannie Mae, Director of Property Standards

Douglas Vincent's Presentation - Countrywide Bank, Exec. VP; Chief Collateral Officer

Danny Wiley's Presentation  - Appraisal Standards Board Member

Constance "Connie" Wilson's Presentation - Interthinx Executive VP

The material linked to above ( Appraisal Foundation ) appears with the permission of the author, who is solely responsible for its content. No part of the material may be copied, extracted, saved, printed or otherwise disseminated, distributed or used without the express permission of the author. For more information, please contact The Appraisal Foundation at 202.347.7722.

Home Sale Incentives Might Cost You Plenty

According to Lew Sichelman, a nationally syndicated writer:

"Home buyers who bite on houses that come with free vacations, cars or other sales incentives may be surprised to find out – sometimes too late – that the places they want are not worth what they thought."

"In the eyes of lenders, these and the dozens of other “concessions” sellers are dangling in front of potential buyers have a dollar value that should be accounted for by the appraiser – if not deducted outright from the selling price – when determining the true market value of the property."

"If the appraiser does his work properly, the mortgage company may not be willing to lend as much as the buyer needs to make the deal work. And if that's the case, the buyer will have to come up with some extra cash he didn't expect he'd need, or he'll have to walk away from the deal altogether."

The author says:

"It is incumbent upon the appraiser to read the sales contract and be familiar enough with what's going on in the marketplace with regard to concessions to make the proper adjustments in his valuation. If he inadvertently misses some things, he won't be getting many more assignments. If he overlooks them, it borders on fraud. And if any party to the transaction puts pressure on him or otherwise tries to coerce the appraiser into looking the other way, they become a party to an illegal act."

Click here for the complete story by Lew Sichelman, a nationally syndicated writer based in Washington, D.C. E-mail him at lsichelman@aol.com.. 

Wall Street Leads Consolidation of Subprime Lending Business but might High Risk Loans spell Disaster for the Market?

As the housing sector cools, the mortgage market faces an awkward question: Who takes the hit when loans go bad?

A generation ago, nobody asked. Banks made loans and suffered the consequences when borrowers didn't pay. Today, a complex Wall Street machine buys and sells mortgages and packages the loans into securities that are diced and sliced and sold again to investors worldwide.

Although the $9.1 trillion mortgage market has been relatively calm as the housing market has slowed, players on Wall Street and beyond are starting to grapple over bad loans, especially in the market for borrowers with scuffed credit - so-called subprime customers.

Click below for Perfect Home Living, Inc's article:  "Wall Street Leads Consolidation of Subprime Lending Business but might High Risk Loans spell Disaster for the Market?"

Appraising Land In A Declining Market

AUTHOR: Steven R. Smith, MSREA, MAI, SRA, Smith Realty Advisors, 936 San Jacinto St., Redlands, CA 92373, Real Estate Appraisals, Consulting, Expert Testimony, Forensic Reviews, Fraud Research and Analysis, Litigation Support, Fraud Training

Yesterday an Attorney from Fresno that we had worked for recently, contacted me about appraising some land they own in the Palmdale area, just 2.5 acres, he just wanted to know the FMV for personal reasons, thinking of selling.

It is Zoned A-1. It is located in the County, SE of Palmdale, about 1-hour from my office, in Los Angeles County. I responded and asked if there were any Approvals or Maps on the property. He said there was a map in process at a high density of 12/lots per acre.

What should the Unit of Measure be, Acres or Lots?

What should our Scope of Work be?

Do we need to look at the Absorption of Home Sales and Pricing?

Click below to read on . . .

13 Steps to Real Estate Success

Decades ago, Napoleon Hill, an American author known for his work, "Think and Grow Rich," identified and published thirteen steps for success. With a little modern updating, here they are.   Full Story: http://realtytimes.com/rtapages/20061201_stepsuccess.htm