Sacramento Appraisal Blog

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How is the Sacramento area real estate market doing these days?

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The question “How is the real estate market doing?” usually deserves more time than just 30 seconds. There’s definitely background research, information, and experience needed to answer this question properly. 

I wanted to take you through (in part) how I get this answer as a Certified Real Estate Appraiser in the Sacramento area. In the video below (or HERE) I analyze a portion of the Lincoln Crossing community in Lincoln, CA, and I’ll show you what goes on in my mind as I crunch numbers and explore the local market. I hope this video is helpful.

Quick Real Estate Conversations at Starbucks

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I ran into an acquaintance at Starbucks recently and we ended up having a very brief conversation about the real estate market in Sacramento. This friend of a friend just happened to be spending some time with her Realtor, and while waiting for our drinks to come to the bar, the Realtor asked me, “So how is the real estate market doing?”

We literally only had about a minute to talk, and like usual I find that it’s no small task to truly sum up the happenings of the real estate market in only sixty seconds. I suppose technically real estate market conversations can be treated like some sort of a speed-networking introduction, but my sense is that this type of exchange is really best for sitting down over coffee instead of waiting for coffee. Nonetheless, I had the brief conversation of course, but I found myself wishing for more time to realy grapple with different facets of the market. 

I mention this because I have quite a few visitors to this blog every day (thank you). People type in questions in a search engine to find answers to what they are looking for. So I say to you, if you have questions about the local real estate market, appraisal standards, FHA, a particular neighborhood, property taxes, or any other topic you might find on my blog, I just wanted to let you know I’m accessible.

You can reach me at 916-595-3735, ryan@LundquistCompany.com, on Twitter at @SacAppraiser, YouTube, Facebook, or in the form to the right or below. Please contact me for questions, discussion, or if you are in need of my appraisal or property tax appeal services.

By the way, does anyone keep an app on your phone to find coffee shops, whether Starbucks or something else?

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Is a second appraisal required for an FHA loan when a property is flipped?

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This comes up for FHA deals when investors purchase properties and then “flip” them. I’ve seen quite a few flips in the Sacramento area over the past year (yes, even in this economy). I hope the information below proves helpful in case you are wondering when a second FHA appraisal is required during a flipping scenario. Verbatim from HUD:

FAQ : Is a 2nd appraisal only required under the Property Flipping Rule?

Solution Details : Under property flipping guidelines, a lender must obtain a second appraisal by another appraiser if:
1. the re-sale date of a property is between 91 and 180 days following the acquisition of the property by the seller, and
2. the resale price is 100 percent or more over the price paid by the seller when the property was acquired.

When a second appraisal is required

  • It must be completed by a FHA Roster appraiser selected by the Direct Endorsement lender that is underwriting the loan.
  • The cost of the second appraisal may not be charged to the borrower.
  • The lender must not request a second case number in the FHA Connection for the purpose of obtaining the second appraisal and is to independently contact the appraiser.
  • Only the information for one appraisal may be entered into the FHA Connection appraisal logging screens, which is the appraisal that is relied upon to determine the maximum loan amount.
  • Copies of both the first and second appraisals must be included in the case binder submitted for insurance endorsement.

ML:09-48  Handbook 4155.2: 4.7, 4.7.f, 4.10.b-c

If you have questions or any appraisal needs, feel free to contact me at 916-595-3735 or ryan@LundquistCompany.com.

Do you need to order a new appraisal when an FHA case number transfers to a new lender?

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When I do appraisals for FHA loans, this situation comes up quite a bit, and my sense is there is confusion in the marketplace about this issue. When an FHA appraisal has been done in the name of one lender, but then the loan transfers to a new lender, does the new lender need to ask the appraiser to “reassign” the appraisal so that the appraisal is in the name of the new lender? Nope. See below.

Here is all you ever wanted to know – verbatim from FHA/HUD:

FAQ : When a case number is transferred with a completed appraisal, may a new appraisal be requested?

Solution Details : When a borrower has switched lenders, the 1st lender must transfer the case to the 2nd lender upon borrower request. FHA does not require that the client name on the appraisal be changed when it is transferred to another lender.

In accordance with USPAP, the lender is not permitted to request that the appraiser change the name of the client within the appraisal report unless it is a new appraisal assignment. The appraiser cannot ‘readdress’ (transfer) the original appraisal report to another party and must perform a new appraisal assignment in compliance with Advisory Opinion #26 and FAQ # 74 in the 2008-2009 edition of USPAP.

For cases assigned on or after January 1, 2010, a 2nd appraisal may be ordered by the 2nd lender when:
1. The 1st appraisal contains material deficiencies determined by the DE underwriter for the 2nd lender.
2. The appraiser performing the 1st appraisal is on the 2nd lender’s exclusionary list.
3. Failure of the 1st lender to provide a copy of the appraisal to the 2nd lender in a timely manner would cause a delay in closing, posing potential harm to the borrower. Potential harm includes events outside of the control of the borrower such as loss of interest rate lock, purchase contract deadline, foreclosure proceedings, and late fees.

For cases in 1 and 2 above, copies of both appraisals must be retained in the case binder. For cases in 3 above, the 1st appraisal must be added to the case binder when it is received.  In all cases, the lender must document why a 2nd appraisal was ordered and retain the explanation in the case binder.

FHA prohibits appraiser shopping where lenders order additional appraisals in an effort to assure the highest possible value for the property and/or the least amount of deficiencies and/or repairs are noted and required by the appraiser.

I hope this was helpful. If you have any questions, feel free to call me at 916-595-3735 or email ryan@LundquistCompany.com.

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