As of September 1, 2011 appraisals will change drastically. We now must complete appraisals in what is defined as UAD or Uniform Appraisal Dataset format. This is a GSE Fannie, Freddie requirement.
What does this mean for you? The new reports will look foreign to you and your clients with all the codes we have to use in the reports, so you will have to be versed on what the codes mean. Instead of the old days where we described a property as being Good in condition or Good in Quality of Construction, we will now be using codes such as Q=3 and C-2, etc. It will be far less user friendly to read and more automated system friendly. Fannie and Freddie want consistency across the board for all appraisals nationwide and the codes are the way they are trying to get this accomplished. They have clearly defined what Fair, Poor, Average, Good, Very Good and Excellent Quality and Condition should entail. No more leeway in how appraisers determine this on their own. Lenders are also gearing up for uniform delivery of their loan packages and the UAD is part of this whole process.
If you GOOGLE UAD or Uniform Appraisal Dataset you should find a wealth of information on this topic. Be prepared and prepare your clients!
What do we as appraisers need from you? One of the big changes is we must know in what YEAR any renovations to the BATHS and KITCHENS were completed. In addition to the comments you already place in FMLS/MLS about renovations, we need the renovation year for the kitchens and baths. If the exact year is unknown then we need a specific range, ie: less than 1year ago, in the past 5 years, in the past 10 years or in the past 15 years.
If we cannot get this information in FMLS/MLS for the SUBJECT we must contact the owner if available or the Realtor and get this information and that takes time! For all the comparable sales and listings that we use in our reports, we of course cannot contact the owner, so we will be contacting you the Realtor unless you have this information in your comments. While we do NOT have to indicate year of renovations for the comparables, we really need this information in order to properly compare them to the SUBJECT. So any listing you have, please include as much detail about renovations as possible!
What else do we need from you? We need photos! Lots of them, more the better. Photos of the renovations and if you can add descriptions under your photos, please include the YEAR the renovations to kitchen and baths were completed or use the range noted above. Also needed is extent of renovation! Was it a REMODEL or just an UPDATE. For appraisal purposes a Remodel means a significant change, Gutting of the bath or kitchen, all new fixtures, flooring, cabinetry, appliances, etc. VS. Updating which brings it to current market appeal and standards without a total REDO! New Paint, Some new fixtures, refacing of cabinets, etc.
We must have this information included in every appraisal report. So if all Realtors add this information in the comments or under your photos, life will be easier for all as the appraisal will be completed SOONER and the deals will closed faster. Win/Win for everyone! Not to mention, the homeowner needs to get full credit for renovations and when they were performed!
Mary Thompson
Certified Apprasier
www.lakelanierappraiser.com
FDIC SUES LSI AND CORELOGIC LSI Appraisal and CoreLogic being SUED. The SUIT contains accusations of gross negligence, breach of reps and warranties, and other breaches of contract for defective and inflated appraisals"
Click on link above to read more and make sure to read all the comments too!
LSI is one of the worst AMC's out there who have always paid low ball fees and expected unrealistic turn times without regard to quality. The lowest quoted fee gets the job, I know this for a fact as I never get work from them due to my NORMAL fees. I do work for their Relocation division. That is separate and they pay R & C fees.
As I stated it my reply to this news, it could not happen to 2 better Companies. LSI continues to send out condescending emails to Appraisers telling them what they are doing wrong, they ask for more and more ridiculous information and want the report to be formatted in a certain way, with certain commentary, on and on... But do they pay for the extra time involved. H E _ _ NO!
They should love the UAD coming in September, but that is another BLOG topic for another day.
I have always been a believer of you get what you pay for and when you get paid $195.00 or $200.00 and they charge the borrower $400.00 something is definitely wrong. No wonder they have problems!
As far as I know LSI is not going to change their ways and start paying Reasonable & Customary as required by the Dodd-Frank Bill. They are finding loop holes in that Bill . They refuse to pay for good appraisers who refuse to INFLATE values just to make the deals work. Inflated Appraisals is one reason why they are being sued.
With the recession (I believe we actually had a depression not a recession) comes the law of unintended consequences!
Here is the deal. I want to hear your take on this!
Buyers are so used to price after price after price reductions and LOW, LOW sales prices that their perception of VALUE may be skewed and it may not be in their best interest.
Case in point. I appraised a home where the last sale in the same S/D was just a month prior for $125,000. Very similar style, appeal and quality home. The buyer really wanted to be in this development and there are NO other listings now available. They are willing to pay the same price for this home as the one that just sold (the one that sold however, is 600 square feet larger). The seller has no problem paying $125,000 for this home even if it is smaller, because there were no other homes in this price range that they liked and in the hey day of 2006 this home sold for $240,000. So $125,000 is ONE hell of a deal......or is it?
Based upon that most recent sale and a few others in neighboring developments the appraised value was UUGGHH dare I say $110,000. That most recent sale told the story on value and it was NOT a foreclosure sale either!
So the Realtor calls me to discuss value (how dare he...LOL) and we have a whole discussion about how this was the last home available, supply and demand issues, the home was better in THIS buyer's mind than any other they saw and they really wanted to be in that S/D.
Problem is this: While I totally understand supply and demand impact on value, the principles of substitution, etc. Based upon very recent sales, as well as some listings, this home was not worth $125,000. It was worth $125,000 tothis buyer, but does this buyer represent all buyers or the general populous of buyers out there?
Market value is what someone is willing to pay in an open market, working in their own best interest, they are knowledgeable and prudent and there is not any undue stimulus....BLAH, BLAH, BLAH.... So you may say hey this person is willing to pay $125,000. But here is the problem. Are they really knowledgeable about the comps out there? As appraisers we cannot make adjustments on perception, we can only make adjustments on real market data. If we can prove via DATA that perception does equate to a certain dollar figure...GREAT! But good luck on that approach to value!
The Realtor and I discussed about how appraising is an ART not a Science and in this case I should have been able to make an adjustment for the fact that supply is low, demand is high and even if sales don't support the value, PERCEPTION supports an upward adjustment.
The sad truth is if we adjusted on the "ART" of the profession or the perception of value without some SOLID numbers and analysis to back that adjustment up, the Underwriter is going to have a field day with our report!
I then wanted to remind the Realtor, Appraisers are here for the sole purpose of protecting the Lender when we are dealing with a Lender appraisal. We are their eyes and ears and that fact has not changed in all the years I have been appraising, with all the changes in this field. What if this lady purchased the home for $125,000 and God forbid she defaulted and then there were plenty of listings and sales in that same S/D available, all under $125,000! Now the Lender WILL lose money....So that is why it is imperative to provide a current, real and supportable value for the subject. If the lender today loaned $15,000 more in this case than the home is worth, who knows how much money they will lose down the road when they have to put it back on the market, especially in THIS market.
I will end with my favorite Line, that surprises many people still......
APPRAISER'S DO NOT DETERMINE MARKET VALUE FOR A PROPERTY! THE MARKET DOES! PERIOD!
APPRAISERS ANALYZE THE MARKET AND THEN THEY REPORT WHAT THEY FIND IN THE FORM OF AN OPINION OF VALUE FOR THE PROPERTY. WE ARE NOT SO POWERFUL AS TO DIRECT THE MARKET VALUES FOR ANY GIVEN AREA. THE MARKET DOES THAT ALL ON THEIR OWN. WE ARE JUST THE BEARER'S OF BAD NEWS SOMETIMES!
Let me hear from you and what you believe to be true! Times they are a Changing Daily!
The survey of over 10,000 appraisers nationwide is in and for Georgia, the Reasonable and Customary Fees for various reports can be found by clicking the link below.
The Dodd Frank Bill has stated that lenders and AMC's appraisal management companies need to start paying appraisers usual and customary fees. Whether they will abide by this is up to all appraisers to stand firm and refuse to do work for any less.
I am a FIRM believer you get what you pay for in this world and no matter what your profession if you are being paid cut rates for your services, something has gotta give and that may be quality!
With everything that the appraiser is responsible for when the SIGN their reports, these fees are WELL within reason. It is not a simple job these day to prepare a quality appraisal report. You need expertise in your neighborhood or property type in order to get a quality appraisal report.
In a nutshell a typical conventional appraisal report on average will cost your $350.00. Your lender or AMC may charge you more. AMC's typically charge you anywhere from $50.00 to $100.00 more than they pay the appraiser and they must disclose their fees to you!
For and FHA appraisal, the typical fee will run you from $400.00 to $450.00 in Georgia.
For more cities and information in GA, click the link below.
http://www.workingre.com/workingre/2011-Ga.pdf
As many of you know, the Obama Administration proposed the eventual dissolution of GSE's (Government Sponsored Enterprises) Fannie and Freddie. The shift of mortgage credit would go to the private sector/markets.
Larger Down payment requirements is part of this proposal. Without government backing and bailing out, you can best believe that things are going to get tougher not easier when it comes to getting a loan. But in one way this brings us back to the old days when you were expected to put down 20% on a mortgage. They call it SKIN in the GAME......while that is a large pill to swallow, this is the only way that private investors are going to play this game. They don't want the kind of risks that will allow them to fail like Fannie & Freddie. Who knows what they will require when it comes to appraisals....Could get very interesting!
As part of the proposal it calls for replacing Fannie and Freddie with a federal guarantee. FHA, Dept of Agriculture and the Dept of Veterans Affairs are proposed to be the only agencies to offer a federal guarantee. Another option would be for FHA and a federal government backstop to offer guarantees only in economic stress. Another option is for a federal backstop to be in place no matter what the market conditions.
Banks will be asked to hold more capital to increase their resistance to recession and housing ups and downs.
FHA is considering increasing down payments from 3.5 to 5%, but this would require Congressional Approval. FHA backed mortgage loans will likely decline. Due to declining home values and the increased FHA loan limits over the years, FHA is insuring the lions share of the mortgage market and according to financial experts and analysts, this is NOT a good thing as they are experiencing negative equity. They need to scale back on loans, but they need to do it carefully due to the large numbers they have insured in the past and the expectations in the market for FHA backed loans.
So what does this mean for all of us in the Real Estate market, looks like more tough times are ahead. We are far from being out of the woods. Only those who can adapt to change and figure out a way to make their business thrive will indeed come out ahead.
So keep your wits about you, plan for the worst and hope for the best and above all be informed!
Hang in there everyone!
** When loans become more difficult to come by, NOW more than ever you need to insist upon an expert in your area to perform the appraisal, especially when it comes to Lake Lanier and Golf Course property!!
While driving around on Lake Lanier the other day, after all of our snow and Ice, I saw the water glistening on our Beautiful Lake Lanier and the Sun started to peak thru the clouds. I snapped this shot and had to share it with you.
May 2011 be a great year for Lake Lanier and YOU!
lakelanier.JPG
Enjoy!
Here are the long awaited Lake Lanier Sales Stats for the First Half of 2010. We will compare these numbers against the same period last year as well as to the last half of 2009.
OVERALL THE NEWS IS VERY GOOD. CAN'T WAIT TO SEE THE NUMBERS FOR 2ND HALF OF 2010. THEY WILL REALLY TELL THE STORY ON LAKE LANIER, SINCE THIS IS THE FIRST SEASON WE HAVE BEEN AT FULL POOL WITH NO MORE DOCK PERMITS, SINCE THE "GREAT DEPRESSION" STARTED ON THIS LAKE IN 2007.
Please keep in mind that these numbers are taken from FMLS search of only those homes that are listed as Lakefront with Boat Docks or Permits in place and do not include Platform or Community Dock Home Sales.
Number of Sales first half of 2010 = 29
($195,000 - $713,900)
a 94% increase from this time last year.....WOW!
Average sales price = $421,671
Average Days on Market = 146
** Please note these numbers are actually higher, in many cases much higher because many listings are relisted and the counter starts over again.
Foreclosure Sales = 13 or 44.8%... OUCH!
Average List Price to Sales Price Ratio = 87% This is UP 4% from last year at this time, so that is GOOD news. Down just 1 % from Last Half of 2009.
Number of Sales Last Half of 2009 = 32
($165,600 - $2,000,000)
Average Sales Price: $532,253 ( over $100,000 higher than first half of 2010)
Average Days On Market = 181
Number of Foreclosures = 7 or 21.8% ( 50% + Decline from First Half of 2010)
Average List to Sales Price Ratio = 88%
Number of Sale first half of 2009 = 15
($240,000- $1,200,000)
Average Sale Price: $490,681
Average Days on Market = 179
** Take Away that one high sale over 1 million and the stats are as follows:
Average Sales Price = $440,015 (Similar to First Half 2010, lower than Last Half of 2009) ** WE may be able to expect an even higher Average Sales Price for Second Half of 2010....See below.
Average D.O.M = 96
Foreclosure Sales = 7 or 46% were Bank/Lender Sales, slightly more than 2010.
Average List Price to Sales Price Ratio: 83%.
LISTINGS:
There are currently 487 Lake Lanier Homes Listed in FMLS with individual boat dock permits, which range from low of $205,000 to High of $14,500,000. The high end listing is a home that has been on and off the market for years. The next highest listing price was $4,995,000.
The Average Listing Price is $785,000. A good bit higher than the average Sale Price. If we applied an 85% list to sales price average, the average Anticipated Sales Price going forward would be in the mid $600,000 Range. However, this number assumes the Average Listing Price does not drop considerably.
There are 27 listings Noted as Foreclosures, Corporate or Lender Owned, which is only 5.5%. This is a HUGE drop from the actual number of sales involving Foreclosures. This is a very good indicator that we are purging the system of Lake Lanier Foreclosures! Very good NEWS!
** Additional Information: There were 59 Listings Withdrawn & Expired in first quarter of 2010. Of that number 5% or 3 were listed as Foreclosures. Average Listing Price for Expired and Withdrawn Listings was $772,000.
There are 22 Pending Sales of which 9 are listed as foreclosures, which is 41%. Closer to the percentage of sales that were foreclosures. This is roughly the same number of pendings as in the first half of 2009.
Supply and Demand working in Lake Lanier's favor! The fewer the Foreclosures out there, the higher the prices are likely to go on Lake Lanier.
Mary Thompson's Viewpoint/Summary:
These Lake Lanier Stats are fantastic news overall! It is not great news for those Lake Lanier homes priced in the upper tiers, since the average sales price is under $500,000. But it is good news for the anticipated values in the future. Far less supply, far fewer foreclosures...all good indicators for rising prices.
We are still a far cry from the Peak Years in 2005-2006, but we are certainly heading in the right direction!
Sellers are pocketing a little more at closing since the list to sales price percentages have risen and it appears days on market are declining, also good news.
If you are a Seller, Buyer or Realtor on Lake Lanier, spread the news!
Lake Lanier Sellers: you may be in for a BETTER year in 2010.
Lake Lanier Buyers: You better get out there and start buying Lake Lanier as Far Fewer Deals will exist going forward.
Lake Lanier Realtors: Sales will be up and the really bad news that you have had to break to your sellers may be ending this year!
HAPPY 60th BIRTHDAY BUFORD DAM ON MONDAY 3/1/10. CHECK OUT THIS VIDEO FROM HAROLD MARTIN, ALSO A GREAT FRIEND OF OURS, WHO TOOK MOVIES OF THE DAM BEING BUILT, AN OLD BOAT HE BUILT IN THE 50'S AND HIS FAMILY SKIING BEHIND THIS BOAT ALMOST 60 YEARS AGO!
WHERE DOES THE TIME GO, SURE BRINGS BACK GREAT MEMORIES FOR THOSE WHO WERE AROUND BACK THEN, WHICH ARE FEW! I WAS ONLY A GLEAM IN MY FATHER'S EYE IN 1950!
ENJOY THE VIDEO AND LAKE LANIER THIS SUMMER, WHAT A GREAT HISTORY THIS LAKE HAS HAD.
HERE IS LINK TO THE ENTIRE STORY IN THE GAINESVILLE TIMES.
http://www.gainesvilletimes.com/news/article/30094/
They just picked the last lottery applicant which I believe was 281. Wucinski in Dawson County was the last name if I heard them correctly Congrats! Here are the last few winners of the lotto off the Corps website:
I am sure those thaat had applications in for quite some time are not happy if they do not get picked over someone who just put in an application a week or a few months ago.Not sure how fair that process is, seems that first in would be the first ones to get the docks. They likely had well over the number of applications in house as they related to the number of dock permits left over, so they decided, give them till 10/13/09 to apply and give all in the "pool" a shot at a permits.So we shall see how it all shakes out.Congrats to the winners of the Lottery.
Last October I was interveiwed by The Weather Channel due to our severe drought and how that would impact Real Estate Values. It was not a pretty picture as we were 18 feet below full pool at that time.I contacted The Weather Channel last week when we hit full pool to tell them the good news and that they should do another story about Lake Lanier hitting full pool and what good news that is for all concerned. Well, they contacted me and today at Aqualand they are conducting an interview with myself and Len Jernigan of Aqualand Marina , to talk about Real Estate now and Business now with the lake being full. Should be a much happier story!
aqualandmarinafullpool.jpg
** Interview to air tonight 10/21/09 on their evening edition 6 or 7pm or both**The only bad news is the average Lake Home Sales price declined 25% from 7/08 - 10/08 as compared to the same time this year. But the GOOD news is that we have seen 2 times, yes double the number of sales in this same period on Lake Lanier and we have 19 homes pending, of which 30% went under contract in October and 80% went under contract in the months of September and October combined.I plan to tell them that we have 3 things in our favor, dock permits being gone by the end of October, water levels above full pool and the market seems to be stabalizing.I also plan to tell them that Lake Levels seem to be tied to the DOW interestingly enough, whether that little tidbit will make the cut, who knows! So I will let you know how it all turned out and when they plan to air the show.Have a great day everyone. Remember if you need a current value on your Lake Lanier home you know who to call.
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