Appraisal Scoop

Appraisal Scoop - Can you Digg it?! I knew that you could!

What is Social Bookmarking and why should "Appraisal Bloggers" care?  Good questions! It's been around for a long time but is just now coming to the attention of the blogosphere.

Social bookmarking is the process of setting up an account on one or many of the social bookmarking sites like Technorati, Del.icio.us, MySpace, Stumbleupon, Google Bookmarks, Yahoo My Web, Digg, Spurl and many others. These seem to be the most popular. 

Setting up an account on any of these services is quite easy because they don't want your life story, usually just a user name and password. So - the first time you go to these sites it will take a bit longer but once your account is set up, it's a matter of clicking to the site and bookmarking your page.

What is Digg?  Digg is a place for people to discover and share content from anywhere on the web. Digg's Website says:

"From the biggest on-line destinations to the most obscure blog, Digg surfaces the best stuff as voted on by our users. You won’t find editors at Digg — we’re here to provide a place where people can collectively determine the value of content and we’re changing the way people consume information on-line."

How do they do that? Everything on Digg — from news to videos to images to Podcasts — is submitted by their community (that would be you). Once something is submitted, other people see it and Digg what they like best. If your submission rocks and receives enough Diggs, it is promoted to the front page for the millions of their visitors to see. (click here - How Digg works)

For example . . .If you liked this article, or one on black listing, market analysis, etc., you'd click the Digg hyper link at the bottom of the post and that would be registered as a vote that this was an article you found interesting and think should be shared with others. 

Click below to continue reading . . .

Appraisal Scoop.com makes the Top 100 Real Estate Blogs List!

Who can forget the famous line from "The Jerk" where Steve Martin's character Navin R. Johnson first sees his name in the phone book?

"The new phone book's here! The new phone book's here! This is the kind of spontaneous publicity I need! My name in print! That really makes somebody! Things are going to start happening to me now."

That's how I felt when the AppraisalScoop.com blog made it onto the Top 100 Real Estate Blogs list from International Listings.  Here's the setup for the list . . .

Despite the funk that the subprime crisis has brought down on Wall Street and financial institutions, this sector represents only one portion of an entire industry. Some financial analysts such as James DiGeorgia, 21st Century Investor publisher, advises investors to keep an eye on the real estate industry as an opportunity. And, savvy homeowners or those who seek to purchase houses as residences or as investments might be wise to stay on top of some of the best names in the industry. Who knows where real estate will go from here?

To find an answer, we’re treating you to the top 100 bloggers who focus on every real estate subtopic from appraisals to the title industry. You won’t find real estate listings in this article, although some blogs focus on individuals who work in real estate and others focus on consumers. Please note that the blog numbering is not meant to be a ranking–each real estate subtopic is simply listed in alphabetical order, with blogs then listed in alphabetical order within that topic.

Thanks to the power of "alphabetical listings"  . . .The "Scoop" made it to the top of the list.  Thanks to International Listings for including Appraisal Blogs!!

Appraiser Penalties for All? The New and Troubling IRS Code Provision

According to the Wills, Trusts & Estates Prof Blog: William S. Forsberg (Attorney at Law at Leonard, Street & Deinard) and Hugh F. Drake (Attorney at Law at Brown, Hay & Stephens, LLP) have recently published an article entitled The New IRS Appraiser Penalties Under Code § 6695A, Prob. & Prop., Sept./Oct. 2007, at 46.

Here is an excerpt from the introduction to their article:

The Pension Protection Act of 2006 (PPA) imposes new penalties under Internal Revenue Code (“Code”) §6695A for substantial or gross valuation misstatements.

Without question, the need for property to be valued properly is critical under our current transfer tax and income tax system. Estate and trust attorneys often must obtain appraisals of property or property interests when making strategic lifetime gifts for clients as well as on a client’s death. Common lifetime gifting strategies that require an appraisal include transfers to grantor retained annuity trusts and transfers to qualified personal residence trusts. Sales of property to grantor trusts, or gifts of family limited partnership interests, also require an appraisal. Asset transfers to certain types of charitable trusts require appraisals for both income and transfer tax purposes.

The American Bar Association Section of Real Property, Probate and Trust Law has submitted comments to the Internal Revenue Service on the issues surrounding new Code § 6695A.

The uncertainties surrounding the new Code section are troubling not only for professional appraisers but for any person involved in the appraisal process, including attorneys and CPAs.

This article will discuss the questions raised by the task force about new Code § 6695A and provide some insight into the concerns the task force raised regarding the ability of the IRS to implement its provisions fairly and equitably.

Click here to view the entire article

Backup your blog!

Does everyone reading AppraisalScoop.com back up their computer files? I believe most people do.   NOW . . . How many bloggers backup their blog? To be honest, until recently, I didn't either. I've read other people's horrifying stories of how they lost their blog and went scrambling for help to retrieve all those precious thoughts and images!

Can you image if you'd been blogging for two years, and posted 500 posts, and one day it was GONE?  Everybody's posts are different and unique so we need to backup our posts to ensure we don't lose our data if the web server crashes.

I found this FREE web service called BlogBackupOnline that's basically an Insurance Policy for Blogs!

http://www.blogbackuponline.com/ is a application that will backup your blog, including jpeg, gif files etc. Signup is simple, and after your registration, they will maintain your blog with daily incremental backups so there's no more sleepless nights.

Getting Started: You get started by filling out a simple registration form. An email will be sent to your email account verifying your status.

Full Backup: After completing the registration of your blog URL you're ready to do your first full backup. Times for this process will vary depending on quantity of posts and number of images. This first one may take a while? My http://www.AppraisalScoop.com blog has 520+ posts and about as many comments and (I didn't sit and WATCH) I'm pretty sure it was done in well under 30 minutes?

Daily Backups: After the first Full Back up, BlogBackupOnline will do the rest. Daily backups will continue automatically, saving any amendments, new posts or comments. Sooooo, at worst, you'd only lose one day's data.

Restoring Blogs: After you have fully backed up your blog it can be restored to the same blog location or you can send it to another blog platform. Current maximum storage is 50Mb and from what I see most blogs should be with this limit.

Switching Blog Platforms: BlogBackupOnline has 11 supported blogging services (Blogger, Friendster, LiveJournal, Movable Type, Multiply, Serendipity, Terapad, TypePad, Vox, Windows Live Space, or WordPress). The site is a great tool if you ever decide to move your blog from one platform to another. After you've backed up your blog, BlogBackupOnline can bring all of your old entries into the new service.

Now that my site's backed up I don't need to worry and can sleep easy at night, Can You? Not often you can get free insurance but using this free web application there's nothing to lose.

Additional Resources: A blog for webmasters and bloggers alike, daily updates on SEO and any other articles interesting and of course some money making schemes too http://yeepage.com/  Article Source: http://EzineArticles.com/?expert=Simon_Hemmings

Brian J. Davis, RAA - Brian Davis & Associates - Brian has over 23 years of appraisal experience in Central, IL and hosts the Appraisal Scoopblog and the WinTOTAL Users Group an email forum for appraisers.

Humor - Video: Housing Market . . . Freefalling

Thanks to Steve Smith, MAI for the tip on this Phoenix Area parody of Tom Petty's song Free Falling.

The YouTube "artist" sings his version of Defaulting slightly off-key but has some great lines like:

I’m a bad boy for putting my bid in.

I’m a bad boy for making in high.

The price is freeeeee

Free falling.

Yeah I’m Deeeeee

Defaulting.

Key elements of the new FHA Secure program to help homeowners avoid foreclosure: Appraiser Responsibilities / Declining Market

On Aug. 31, President Bush announced Federal Housing Administration (FHA) changes called "FHASecure" to help homeowners avoid foreclosure.  In a key policy shift, the federal mortgage insurer FHA is allowing subprime borrowers with good payment histories and at least three percent in home equity to refinance to safe FHA financing.

FHASecure, a program announced on Aug. 31, 2007, will be underwritten to ensure the borrowers have the ability to repay the loan, will require escrow for taxes and insurance, and will offer unprecedented foreclosure prevention assistance. 

The risk-based insurance premium structure will further expand FHA's reach to additional underserved borrowers. The move to risk-based premiums ensures that FHA remains on solid financial footing as a self-financed agency for the long-term.

The mortgagee letter extends eligibility to borrowers who became delinquent under their current mortgage following the reset of the interest rate.

To qualify for FHASecure, eligible homeowners must meet the following five criteria:

1. a history of on-time mortgage payments before the borrower's teaser rates expired and loans reset;
2. interest rates must have or will reset between June 2005 and December 2009;
3. three percent cash or equity in the home;
4. a sustained history of employment; and
5. sufficient income to make the mortgage payment.

Click here for Appraiser Responsibilities under the FHASecure program:

Hunters vs. Gatherers, Freedom vs. Equality, and Appraisers vs. Everybody Else!

AUTHOR: Chris Hendricks , is Director of Business Development -- PsPrint.com A full-service printing company with production facilities on both coasts serving real estate professionals across America!  Chris posts regularly on his ActiveRain blog - definitely take a look at his blog!

My colleagues and I attended the a la mode Annual Convention in Las Vegas this Summer -- a show heavily attended by a la mode's appraisal software customers (perhaps more so than their real estate, mortgage origination, and home inspection clients). 

Me, I was fascinated by the keynote speaker, George Will, the Washington Post Op-Ed columnist who had an interesting take on the inability for true freedom AND true equality to exist simultaneously here in America-- and that the difference between Democrats and Republicans essentially came down to a question of favoring either freedom or equality, one more than the other. 

His notion was that Republicans leaned toward favoring the value of "freedom" and, because of that, were inherently more comfortable with the prospect that some in society would need to experience inequality (of circumstance, of benefit, of privilege).  If one were truly "free" to excel, someone could have more than someone else.  And that was OK for Republicans because "freedom" mattered more than absolute equality. 

Democrats, on the other hand, leaned closer toward the ideal of equality and, by virtue of that leaning, were more comfortable with the notion that some sacrificing of inherent freedoms must be made to accommodate the achievement of equality.  Interesting thoughts... but not my purpose today.

What fascinated ALL of us was how many appraisers we talked to during the event that didn't appreciate how much they needed to market themselves-- especially to mortgage professionals-- to get and keep their businesses strong!  And how many didn't know to market themselves at all, knew little about what they could do, and only hoped someone would step in and do it for them!  We were a little amazed! 

Click here to continue reading . . .

Zaio Welcomes the Zone Appraiser Advisory Committee

There is a now a Zaio Zone Appraiser Advisory Committee, ZZAAC (pronounced “Zach”). This is a group of Zone Appraisers and ADOs who will represent all Zone Owners in collecting and communicating ideas and priorities to the management of Zaio.

Ken Verrett (aka Runt Rants), the chair of this new group, said the purpose is to “help us ensure the successful partnership of Zaio Inc and Zaio Zone Owners, the stakeholders in this exciting and grand endeavor!”

Thomas Inserra, MAI, SRA and Zaio’s CEO recognized that "Our appraisers have ideas and suggestions, but we have no really effective way for them to communicate those to Zaio in an organized manner. This can be an effective way to create two way communication with appraisers to constantly evaluate and provide feedback on our technology in a continuous improvement process."

Members of the new ZZAAC come from areas spread around the country.

Ken Verrett, a zone owner and ADO from Houston TX was invited to be the Chair. Ken and his 25 year old firm, Acorn Appraisal, with a staff of 9 appraisers. Mr. Verrett has a BA and MA in Economics and spent 15 years in banking, finishing as President of the Banking Division of Commonwealth Financial Group with bank branches throughout Texas.

Click here for more ZZAAC members . .

Runt Rants - Managing your business in challenging times

The summer of 2007 has been a little ragged from a volume perspective hasn't it?

The sub prime and Alt-A problems started showing up in Acorn by mid May. Prior to that we were up nineteen percent compared to last year....after that we started falling behind in order volume.....the period May 16th to the end of August we were down fifteen percent. The sub prime and Alt-A crisis is part of the reason.

But it's only part of the reason in Acorn.  The other part is particular to our market....after the hurricanes Katrina and Rita devastated the Gulf Coast in the fall of 2005, HUD placed a moratorium on foreclosure actions along the Gulf Coast. HUD lifted that ban in the Summer of 2006 and a back log of REO work began to move through the pipe line. That bulge continued through the end of the year.

That REO bulge from HUD is no longer there. That drop accounts for one third of the order volume loss...so the real impact of sub prime and Alt-A has been a drop of ten percent in our order volume. Acorn will likely be behind through the end of the year as a result of the REO factor.

Interesting, don't you agree? Do you know what impacts effect your volume of last year compared to this year? No? Maybe you should! 

I'll bet you are thinking..."Well, Ken is just more on top of the accounting stuff than I....I can't do that." 

Sure you can!  And you should!  Heck, I didn't even consider the REO factor in my looking at this year compared to last until Robert Dieudonne, one of Acorn's Bright Horses brought it up in a conversation with an out of state visitor to our offices last week. Dieu brought the point up when explaining our operations to the visiting appraiser. I just happened to over hear the comment, and that caused me to go back and push a few buttons in Quick Books.

Click below to continue reading . . .

Sequence of Adjustments - Direct Sales Comparison Approach

The sequence of adjustments, and the magnitude of how they can drastically impact the final value in the Direct Sales Comparison Approach, are the focus of this piece.

The first adjustment to be made in the Direct Sales Comparison Approach is for seller paid concessions. Concessions (cash back, seller carried paper, personal property, boats, planes, country club memberships, interest only loans, 3-2-1 buy downs or other factors), thrown into deals to help make the price work, need to be adjusted for by the professional appraiser.

In the market cycle we are in, this one adjustment (concessions) can reach more than 20% of the purchase price. It can be larger than all other adjustments.   Imagine, not knowing about the Terms and Concessions in the comparable sales relied upon, and being 20% high on a regular basis!

Step two of the Direct Sales Comparison Approach requires appraisers to verify the motivations, terms and conditions of a sale; prior to using it in a report for the reliance of others. Or at least that is what I have read on court documents when appraisers are being sued.

It does not really matter how big this adjustment is, does it? If a seller gave the buyer 25% cash back, that is just a fact.  The definition of Market Value is in terms of Cash to the Seller.  That's not too hard to calculate, once you have verified the information.

The next adjustment is for Time or Market Conditions.  Pretend you are in a Zip Code or City that statistically went down 12% in the last year. And, pretend that in the last month, the actual decline, which you can prove, was 3%. The prior month is was 2.5% and 2% the month before. Then, using a 3-month old sale would result in a -7.5% adjustment.

The Time adjustment is not a static number.  Going up or going down, it starts out slow, then picks up steam and increases, then it reaches a point where the rate begins to slow, then it slows down, and finally it stops. Stops for ever so brief a period, compared to the run-up or the run-down.

A market is normally stable for only a few months.  It might go up for several years or down for several years. It is not stable for years at a time. That is simply counter intuitive if you understand supply, demand and balance.

Click here to continue reading . . . .