To give comps or not give comps? That is the question. I met up with Realtor Steve Ostrom last week and we talked about whether a real estate agent should give an appraiser “comps” or not when meeting the appraiser at the inspection. Steve talked about why he always meets the appraiser at the property and I gave some tips for interacting with appraisers around this issue. Due to HVCC, there is still some confusion over whether agents can even talk to appraisers, but they definitely can (just don’t try to pressure for a certain value). Check out the video below (or here). Let me know what you think. I’d love to hear from other agents and appraisers especially. Any questions?

NOTE: In quite a few cases the “comps” provided by real estate agents are really not all that “comparable” to the subject property. It can be valuable when agents share their market insight with appraisers, but my advice to agents is to make sure the sales really are comparable and located in the same market area. This comes back to the difference between a property that is truly competitive / comparable (“comp”) to the subject and a sale that meets a certain price level.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

In a post-HVCC world, there is both confusion and frustration regarding talking to appraisers. Agents can no longer directly choose an appraiser for most of their deals, so sometimes it seems like appraisal quality is left to chance. Maybe the appraiser will understand the local market or maybe he won’t. Of course the hope is the appraiser is a local expert who will do a thorough job and also initiate contact with the listing agent to ask questions about the subject property too. But that’s just not going to happen in all cases, so it’s important to be ready to talk with appraisers when you can. And yes, you can still have conversations with appraisers about your listings and the neighborhood market - just don’t pressure to “hit the number”.

Tips for talking to Appraisers:

1. Meeting: If you can’t meet an appraiser at an inspection, be available by phone or email. 
2. List of Updates: Provide a detailed list of all upgrades to the appraiser (with costs if possible).
3. Background Stuff: What helped you establish the listing price? Or why did your buyer choose this specific property and pass on others? Bring market research to the inspection to help show how you arrived at your price level. Don’t tell the appraiser which comps to use and how to do his job, but rather share information to illuminate your perspective on marketing. Say something like, “here is some market data I used in my research” as opposed to ”here are your comps”. You can always share this information on the phone or email too.
4. Offer Activity: Were there many offers or showings? What were potential buyers attracted to? Let the appraiser know things like, “I had 14 offers all above asking price in two days” or “No showings at the original list price, but then I lowered the price and had 12 showings in 4 days and 4 offers.”
5. Inside the Neighborhood: Is there something you know about the property, neighborhood, street or market area that might be helpful and contribute to the overall value? If the property is selling high above all others, why is that? Are distressed sales selling for less in the market? What are the features in the neighborhood that buyers are willing to pay more for? Share your hyper-local insight and any resources you might have.
6. Play Nice: Some agents never return phone calls or act impatient when an appraiser calls. My advice? It’s nice to talk with personable communicators.  

Things NOT to say to an Appraiser:

1. Deal Killers: Talking about another appraiser that “killed your deal” doesn’t help the current deal or paint a professional image of you in the mind of the appraiser.
2. Do your job!: “Here are the best comps” (sounds like you are trying to steer a value conclusion)
3. Higher please: “Get the value as high as possible”
4. Lower please: “Get the value as low as possible” (yes, I do hear that one)
5. Make it Happen: “Is this one going to make value?”
6. The Real Hope: “Is it going to appraise for at least the sales price?”

I hope this was helpful. I’d love to hear any tips you have too. What has worked for you? What has been frustrating for you when dealing with a post-HVCC world? Do you find most appraisers to be open to conversation? Do they ask you questions?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

I spent the bulk of today at the YPC Vendor BBQ at the Sacramento Association of Realtors. It was a very successful event that raised over $5,100 for the scholarship fund. Nice job everyone!! I paid for a vendor booth too, so it was fun to represent, mingle with friends and meet some new faces too. There were quite a number of Realtors wondering why I had a booth since appraisers can no longer be hand-picked for loans. But the truth is there are thankfully so many other avenues of business where appraisers and agents can still connect. Here’s a one-minute video I did while at the Vendor BBQ. 

Thank you again everyone for making this day a great one. A special thank you to Michelle Kaspari of Essential Home Staging for doing an excellent job chairing this event.

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook.

My industry changed in a huge way two years ago. Many real estate appraisers are actually no longer in business because they were basically sideswiped when something called the Home Valuation Code of Conduct (HVCC) came along.

I get asked quite a bit about HVCC and how I feel about it, so I wanted to offer my two cents. This is probably not what you were expecting to hear, but HVCC has actually been a catalyst to take my business to the next level. Look, I’m not an HVCC groupie by any means, but rather than focus on the problems created for the appraisal industry due to HVCC, I have worked hard to expand niche areas of business instead. It’s in my DNA to find solutions – whether with business or community involvement. Watch the video below to hear my story.

Has your industry experienced changes in recent years? How did you respond to these changes? Why do you think some of us see opportunities during hardships while others only see threats? Is the glass half full or half empty for you?

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, www.LundquistCompany.com or via Facebook.

I run into real estate agents and loan officers in the Sacramento area who say, “I wish I could still refer you business, but I can’t anymore because of HVCC.” The common thought is that because the appraisal ordering process for loans has changed in recent years (basically appraisers cannot be hand-picked by loan officers or real estate agents for specific loans geared toward Fannie Mae), that our paths cannot cross for business any more. That’s not the case though, so I wanted to give you the skinny on how we can still connect for business. I know, this post seems very self-serving, but since I have this conversation at nearly every Chamber of Commerce or real estate related networking meeting, I figured it was definitely relevant blog fodder.

1. Estate Settlement / Probate Appraisals: When an estate has a transfer of ownership due to death or inheritance, it is very common for a real estate appraisal to be needed for tax purposes. Home owners and attorneys order these types of appraisals (www.SacramentoEstateSettlement.com).

2. Divorce Appraisals: I handle appraisals during the divorce / mediation process, and I run a website at www.SacramentoDivorceAppraisals.com.

3. Property Tax Appeals: Do you know anyone who is paying too much in property taxes? Send them to me. I cover multiple counties in the Greater Sacramento Region. I founded www.SacramentoTaxAppeals.com.

4. Second opinion of value: Sometimes a second opinion of value is needed. Maybe the buyer wants an outside opinion in place of the appraisal the lender ordered. Or maybe you as the real estate agent need some additional research to help the lender see true market value. Or maybe a transaction is heading south very quickly, and some value reinforcement is needed (research or full appraisal).

5. Appraisals during a short sale: Sometimes a bank will absolutely not budge to accept an offer lower than what they deem to be acceptable (even though their price is way too high), so the Listing Agent or home owner will hire me to do a full appraisal. I wrote a full post on this topic here.

6. Pre-listing appraisals:What is the current market doing? A pre-listing appraisal helps give some perspective for the home owner or agent.

7. Home owner wants an appraisal: I’m so grateful when local real estate professionals trust me with their clients’ needs. Sometimes a home owner will want to see an actual appraisal before listing their property. Or other times an all-cash buyer wants to make sure the cash purchase is consistent with market value. Or an owner needs an appraisal for some other reason, and their trusted agent will refer the owner to me.

8. Approval List: You can get me on the approved appraiser list for your favorite lender or attorney. I had a fantastic referral this year to a really great local company. They sent me quite a bit of work and they run an excellent shop. In fact, I sent the loan officer a referral this morning because he got me on their approved appraiser list (and he does a fantastic job).

9. Bankruptcy Appraisals: If a home owner needs an appraisal during the bankruptcy process, I can certainly help them with that. Read a full post here.

I sincerely vaule the relationships I have with local Realtors, real estate agents, and loan officers in the Sacramento area, and I appreciate the business we can send to one another. If you have any questions or a need for an appraisal or property tax consulting in the Sacramento area, give me a call at 916.595.3735, send me an email, or catch me on Facebook.

What does a good referral look like for you?

It’s my youngest son’s birthday tomorrow and it’s also the one-year anniversary of the Home Valuation Code of Conduct. People ask me all the time what I think about HVCC, so I figured on the eve of twelve months of HVCC, it would be appropriate to have a little discussion. In short, I think the Home Valuation Code of Conduct has been difficult for the appraisal industry, the consumer, and the real estate industry.

Appraisers definitely make less money now for loan work. I know, who cares, right? But listen between the lines because what if the government stepped into your industry and said you could no longer do business with clients you’ve had a relationship with for years. Many appraisers have gone out of business because their client-base was swept under the rug last year when HVCC was implemented.

Secondly, the consumer pays more for a real estate appraisal now. Under the direction of HVCC, appraisals geared toward Fannie Mae & Freddie Mac cannot be ordered directly by a lender or broker, but must be ordered from a neutral third-party (often times an AMC – Appraisal Management Company). These companies charge the consumer more than what an appraiser would typically charge, and many times pay the appraiser quite a bit less than what is customary in the market. There are some upstanding AMCs out there that I am thankful to do business with, but on the other hand it’s too bad to see some companies really taking advantage of the situation at hand. For example, I received an email yesterday from an AMC offering appraisers $125 for an appraisal order, while their website shows fees at nearly $500.

Lastly, HVCC has definitely impacted the real estate market. Since appraisers cannot be chosen directly by lenders, loan officers or brokers, the best appraiser for the job may no longer be hired. One might make the case therefore that there is a serious issue right now with the quality of real estate appraisals because of less experienced appraisers being hired to complete appraisals they are not as qualified to do. That’s definitely the case, but on the other hand I also think HVCC has been a bit of a microscope to the appraisal industry in some regards because it has illuminuated some shoddy work in the appraisal field.

Ultimately, I’m thankful that HVCC only applies to loans geared toward Fannie & Freddie (HUD/FHA has something similar in place now too). I still do many appraisals for investors, Realtors, and home owners, and these types of valuations are NOT affected at all by HVCC. Of course I’m not immune to some of the consequences of HVCC as I mentioned above, and the whole thing upsets me, but I’m choosing to focus on other things. I may be limited in business right now with what I can do for loan appraisals, but I can still chase other avenues of appraisal work such as bankruptcy, divorce, estate settlement, investor valuations, and assignments from local governmental agencies. In fact, just yesterday I had another Sacramento estate settlement retrospective appraisal come my way.

I know this almost sounds like a positive spin, but there is something philosophical here for me because it’s about focus. HVCC has been a sincere difficulty, but focusing all my attention on it and being negative won’t do me any good (and it won’t pay the bills either). Therefore HVCC won’t define me today, and it won’t be fuel on the fire tomorrow either on the one-year anniversary. Tomorrow I’ll be burning some hot dogs on a grill, enjoying the company of family as we celebrate my youngest son’s birthday, and intentionally not focusing on HVCC.

I’d like to hear from you as a real estate agent, consumer, or appraiser. How have you seen HVCC impact the real estate market over this past year?

If you were buying a house, how would you feel if the appraisal was ordered as below? Or if you are a real estate agent or loan officer, and your deals are hinging on quality appraisals, how does this strike you? 

I received an email with the text below just a few days ago. I don’t personally do business with these types of companies, but I guarantee someone did accept this assignment.

My name is XXXXXXX with XXXXXXXXXXX. I have a 1004 Conventional order in Auburn, CA. It has a fee of $200. Please let me know if you are interested.

What’s wrong with this message? Several things: 1) The fee is too low and not customary to typical market rates for a real estate appraisal, especially in Auburn; 2) This email was likely blasted to a high volume of appraisers, and orders like this typically go to whoever responds the fastest. Is that really a good methodology? Instead of picking the most qualified appraiser for the job, it selects whoever happens to be available to work for cheap; and 3) The management company ordering the appraisal likely charged the bank easily $400+ for the appraisal. That doesn’t seem very fair to the borrower or the appraiser.

Thankfully not all appraisal management companies (AMCs) operate like this, but unfortunately there are many that do. When I do appraisals for loans, I only work for good AMCs that respect my time, work and pay me decently. If you are in a position to order appraisals or you use an AMC, what is the process like for engaging appraisers for business? Is it like what I explained above? Different?

Please know that I’m not ranting or asking for pity for the real estate industry (like anyone would give some anyway). That’s not it at all. I just want to provide some insight and context into the happenings of the appraisal ordering process because over the long haul this is not going to be helpful to consumers or the real estate industry. 

What do you think?

Has a low appraisal destroyed one of your deals this year? We’ve been hearing so much about how real estate appraisers are “killing escrows” ever since the Home Valuation Code of Conduct came into effect last year. I’ve read and listened to countless horror stories from brokers, real estate agents, loan officers, and publications.

I’m not saying there aren’t legitimate complaints to be had about HVCC or certain appraisals. I simply want to provide a helpful resource to maybe clear things up a bit about what type of value appraisers are looking for in the market. My hope is that this article (linked below) will shed light on the appraisal process and give insight into the appraiser’s mind. It’s a good thing when appraisers and local agents can understand each other’s roles and mutually benefit one another.

PDF file: “Closing the Gap Between Sales Price and Appraised Value”

This article was published with permission and comes from Patrick Egger, a Certified General appraiser in Nevada with 35 years of experience in valuation, consulting and real estate studies. Comments are welcome below.

I heard of AppraiserSupport today, and this website is worth a look to see one of the core complaints about the Home Valuation Code of Conduct (HVCC). Certain AMCs (Appraisal Management Companies) are charging Borrowers big money for appraisals, but then turning around and giving appraisers less than 50% of the amount charged, while pocketing the rest of the fee. Ouch!!

The AppraiserSupport website lists a handful of these AMCs - what they charge and what they pay appraisers. Don’t get me wrong though. Despite the “AMC” topic being a sore subject around many appraisers, there are definitely some upstanding AMCs out there who respect appraisers and pay them reasonable fees too (I do business with a handful of the “good guys”). It’s just unfortunate to see what some AMCs are doing because it hurts the consumer, the appraiser trying to stay afloat in this economy, and definitely the overall quality of real estate appraisals (HVCC only applies to certain types of loan appraisals). 

Have a look at www.AppraiserSupport.com and let me know what you think. And just so you know, I did not build this website.

For more on HVCC, have a look at my “Talking to Appraisers in an HVCC World: Tips for Real Estate Agents” and “Can Realtors Still Talk to Appraisers After May 2009? (HVCC went into effect on 05/01/09)“.

Since the Home Valuation Code of Conduct (HVCC) went into effect on May 1, 2009, there has been quite a bit of confusion over who can now talk with appraisers. I won’t re-hash the entire gist here since I have posted previously about the subject, but I did want to post a link to Fannie Mae’s HVCC FAQ in case you have not seen it. This document may be helpful to home owners, loan officers, and real estate agents who are wondering about what type of communication is appropriate under HVCC (as well as other questions then answer).

Download Fannie Mae HVCC FAQ (PDF)

NOTE:  HVCC only impacts loans that are geared toward Fannie Mae or Freddie Mac. Appraisals for litigation, estate settlement, divorce, bankruptcy, and FHA, among other purposes, are NOT impacted at all by HVCC. In effect this means an appraiser like myself can regularly and ethically communicate with many clients during the normative course of the business day because HVCC only applies to certain facets of loan work.

www.SacramentoAppraisalBlog.com Have you read Fannie Mae’s FAQ on the Home Valuation Code of Conduct (HVCC)?

When talking recently with local Realtors, Brokers, and Loan Officers about the Home Valuation Code of Conduct (HVCC), there has been concern and fear about how HVCC might shape the mortgage industry, not to mention, their business. 

Important News from the National Association of Mortgage Broker website:

McLean, VA – The National Association of Mortgage Brokers (NAMB), with the support of Baker & Hostetler LLP, filed a lawsuit today with the United States District Court for the District of Columbia against the Federal Housing Finance Agency (FHFA) Director James B. Lockhart over the controversial Home Valuation Code of Conduct (HVCC) included in the appraisal agreements between the FHFA, Fannie Mae and Freddie Mac (GSEs), and New York Attorney General Andrew Cuomo. 

What does this mean for local mortgage brokers, real estate agents, and all involved parties (including appraisers)? Well, there is nothing definitive to report, but with the lawsuit filed it may be possible to see the deadline for HVCC postponed ,or who knows, maybe they’ll throw it out altogether. We shall see.