Monthly Archives: May 2013

Nesting, purging and house prepping!

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Yet another bag of grass seed on the lawn, sprinkler running after dark for a cool soak and I’ve been diligently purging my book shelves.  Making room and making way!  Getting things ship shape for a ship off!

I had folks ask what to do to prep their home for sale- and, frankly, with thirty days notice, it’s zero fun.  If you’re thinking of selling a few months down the line (or, next year), it’s nice to get ahead of the power curve and start to trim the fat around the homestead as well as chipping away at the monumental to-do list.

A great place to start is closets, book cases, attic storage and your garage.  The more you can part with and send off to the Goodwill or Salvation Army (or family and friends) the more room you have to work and you certainly don’t want prospective buyers or renters seeing that you’re maxed out in your own home.  Even if it’s an illusion, the more spacious and organized you can make your home, the more pleasant it will look to future occupants.

Next is make a master list of repair projects and things that may have had neglected maintenance.  Is your fence, siding, roof in need of repair?  Could your flower beds use some attention?  I happen to have two roofing contractors showing up within the next few days.  Somehow, renovating/prepping a home is like the children’s book If You Give a Mouse a Cookie.  If you paint your fence, you’ll realize the grass looks to be in rough shape, you weed and fertilize the grass and reseed and notice it accentuates your new siding but then makes the roof look terrible. . .it snowballs.

The more time you have to prepare, the less rushed you will be and the better you can keep you eyes peeled for great deals or sales for your projects.  I needed, for instance, six new globes for the white ceiling fans on my porch.  I had my master to-do/shopping list in my purse when I stumbled upon a pile of clearance goodies at Wal Mart (granted, NOT my favorite store).  I picked up some completely fine (read:not my fave but certainly got the job done) glass globes for maybe a fifth of what the local hardware store was charging.  Will they light you on fire, nah, but no one will look at them and wonder what I was thinking when I picked them up either.

How do you eat an elephant?  One bite at a time!  Same goes for your home.  So, short and sweet- the sooner you can start the better, shop smart and try to view your home the way a customer would.  Clean, organized and in great repair will never steer you wrong! 🙂

A note from our AM Sales meeting- better communication with appraisals.

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G u E S T C O L u M N I S T

 

By VIC KNIGHT

 

CERTIFIED GENERAL APPRAISER

 

VICE-CHAIR NC REAL ESTATE COMMISSION

 

Can I Talk to the Real Estate Appraiser?

 

AppRAiSER iNdEpENdENCE iS ThE LAw uNdER

 

dOdd-fRANk (wALL STREET REfORM ANd CONSuMER

 

pROTECTiON ACT), ANd ThERE ARE CERTAiN CiRCuMSTANCES whERE A BROkER CAN CONTACT & TALk TO

 

NAR conducted a survey in September 2012 and found that

 

11% of REALTORS® had a contract canceled because the

 

appraised value was lower than the contract sales price, 9%

 

reported a delay in the scheduled closing and 15% indicated

 

the purchase price was renegotiated at closing due to the

 

appraised value being lower than the original contract sales

 

“The requirements of subsection (b) shall not be construed

 

as prohibiting a mortgage lender, mortgage broker, mortgage

 

banker, real estate broker, appraisal management company,

 

employee of an appraisal management company, consumer, or

 

any other person with an interest in a real estate transaction

 

from asking an appraiser to undertake 1 or more of the

 

following:

 

(1) Consider additional, appropriate property information,

 

including the consideration of additional comparable

 

properties to make or support an appraisal.

 

(2) Provide further detail, substantiation, or explanation for

 

Although showings are rising, contracts

 

are being written, and purchase prices

 

appear to be increasing, appraised

 

values sometimes do not match the

 

contract price. You have a good offer

 

on your listing and believe you have

 

provided the seller with competent

 

information from your CMA, which

 

properly prices the property to sell at

 

the most probable sales price for the

 

subject property in the current market. Then, the appraisal comes back

 

lower than the original contract price.

 

You have been told that you cannot

 

talk to the appraiser under any circumstances because it is against the law.

 

Well, that is simply not true. There is no

 

prohibition against real estate brokers contacting

 

appraisers about a mortgage loan appraisal when they have

 

the appraiser’s value conclusion.

 

(3) Correct errors in the appraisal

 

report.”

 

Although this language does

 

address the issues that brokers can

 

ask an appraiser to consider, note

 

that it does not allow a full blown

 

“conversation” or “discussion”

 

with the appraiser. The implication

 

is that the flow of information is

 

essentially one-way, from the broker

 

to the appraiser. A broker can NOT

 

anticipate there will be any substantial “conversation” or “discussion”

 

about the appraisal or its

 

conclusions.

 

Dodd-Frank does not provide for any other

 

Brokers are allowed to contact appraisers and provide additional property information, including a copy of the sales

 

contract for purchase transactions. Brokers may not intimidate

 

or bribe an appraiser and an appraiser may not disclose confidential information about the appraisal or the appraisal assignment at any time. The language of Dodd-Frank is specifically

 

form of communication between the broker and the

 

appraiser.

 

Appraisers Are Subject to Increased Regulation

 

The housing market is certainly complex and so is the

 

appraisal process. The national housing market downturn

 

brought numerous regulatory changes to the real estate

 

industry, including the entire appraisal process and those

 

who provide appraisal services. The Dodd-Frank Wall Street

 

Reform and Consumer Protection Act was signed into law

 

by President Obama in 2010.

 

Dodd-Frank “sunsetted” the

 

Home Valuation Code of

 

Conduct (HVCC) and required

 

the Federal Reserve to amend

 

the appraisal independence

 

rules. The interim final rule

 

became effective April 1, 2011

 

and applies to all consumer

 

credit transactions secured by

 

a consumer’s principal dwelling. Fannie Mae and Freddie

 

Mac servicing guidelines now

 

reflect this rule. In addition,

 

state laws and regulations

 

require appraisers to comply

 

with the Uniform Standards of

 

Professional Appraisal Practice

 

Dodd-Frank contains provisions about the function and

 

regulation of appraisal management companies (AMCs).

 

AMCs remove the administrative processes of appraisal management from the lender’s control. For a fee, the AMC recruits

 

appraisers, contracts with them

 

to perform appraisals, manages

 

the appraisal process, pays the

 

appraisers and reviews their

 

work. The regulations prevent

 

mortgage brokers or real estate

 

agents from selecting or paying

 

an appraiser if the appraiser’s

 

report will be used for lending

 

purposes. Based on DoddFrank, AMCs have sometimes

 

instructed appraisers to significantly limit their interaction

 

with interested parties to the

 

transaction. This has caused

 

much of the confusion on what

 

type of contact and talk can be

 

10 Tips Brokers Can Utilize to Help the Appraisal Process:

 

w Don’t put restrictions on the appraiser in making an appointment to inspect

 

the property. If your MLS utilizes an appointment system, use it. You will be

 

notified of the appraiser’s site inspection.

 

w If an appraiser calls, be responsive and provide as much information as needed. Return the call promptly even if your listing has closed. You are the expert

 

source of info on your listing, and the appraiser may not be aware of the hidden

 

features or upgrades.

 

w Be as descriptive as possible in MLS about your listing. Include ample photos

 

and documents.

 

w Don’t use or reference tax records as your “source” of information. Do the

 

proper leg-work on your listing; it builds significant long-term credibility among

 

your peers and local appraisers.

 

w Distinguish “Above-Grade” Living Area from “Below-Grade” Living Area in

 

your MLS, particularly the quality of finish in “Below-Grade” Living Area, Attics,

 

Bonus Rooms, Decks, Porches, etc.

 

w Provide an “Appraisers Package” in advance and have it available at the

 

property when the appraiser is inspecting the property, or meet the appraiser

 

at the property so you can answer any questions, inform them of the unique

 

features of the property or neighborhood, and allow the appraiser the space

 

and time to complete their inspection (Appraisers Package could include: Plats,

 

Surveys, Deeds, Covenants, HOA Documents, Floor Plans, Specifications,

 

Inspection Reports, neighborhood details, recent similar quality comparables,

 

detailed list & dates of upgrades and remodels, photos, etc).

 

w Provide a fully executed copy of the purchase contract, including all addenda.

 

w Explain to the seller or buyer that the role of the appraiser is not to confirm

 

the sales price but to provide the lender an independent opinion of the value

 

of the underlying collateral. Provide the seller or buyer a copy of the brochure

 

developed by The Appraisal Foundation entitled “A Guide to Understanding a

 

Residential Appraisal,” available for download at http://www.realtor.org/appraisal/aguide-to-understanding-a-residential-appraisal – 2013-03-28.

 

w REALTORS® and consumers can be present during the appraisal inspection.

 

Make sure all parties allow the appraiser the space and time to complete their

 

appraisal inspection.

 

w Make sure the property condition (inside and outside) is the best possible for

 

the appraisal inspection, and inform the seller that interior and exterior photos

 

will be taken by the appraiser.

 

(continued on page 10)

 

INSIGHT May 2013 9

 

For many years the National Association of REALTORS®

 

has spoken out for an “independent appraisal process” for

 

licensed and certified appraisal professionals. In 2012 NAR

 

adopted the “Responsible Valuation Policy” outlining NAR’s

 

position on valuing and pricing property. This NAR Policy

 

can be found at http://www.realtor.org/appraisal/responsible-valuation-policy.

 

What Can Appraisers Discuss After the Report Has

 

Been Sent to the Lender/Client?

 

Once an appraisal assignment is completed and sent to the client, the Uniform Standards of Professional Appraisal Practice

 

(USPAP) prohibit an appraiser from discussing the results

 

of the report with anyone other than the client who ordered

 

the appraisal, or parties designated by the client. In order to

 

ask an appraiser to correct errors in the appraisal report, a

 

broker must use the client, typically the lender, as an intermediary. The client may choose to provide additional data to

 

the appraiser for consideration. The language from USPAP’s

 

 

There are many things brokers

 

and sellers can do to put the

 

property that is the subject of

 

the appraisal in the best position

 

possible for the most favorable

 

appraised value outcome.

 

 

“An appraiser must not disclose 1) confidential information; or

 

2) assignment [appraisal] results to anyone other than:

 

w persons specifically authorized by the client;

 

w state appraiser regulatory agencies;

 

w third parties as may be authorized by due process of law; or

 

w a duly authorized professional peer review committee except

 

when such disclosure to a committee would violate applicable

 

What Can Brokers Do to Help the Process?

 

First, recognize that the appraiser’s function is to develop an

 

independent and impartial opinion of the value of the property for the lender (the appraiser’s client) to determine what

 

the value of the underlying collateral is for the lender to base

 

their financial lending decision on.

 

There are many things brokers and sellers can do to put the

 

property that is the subject of the appraisal in the best position possible for the most favorable appraised value outcome.

 

The most important is providing as much accurate, current

 

and detailed information on the subject property as possible.

 

Most of that information can easily be provided through the

 

local MLS, which is not only beneficial to the appraiser of the

 

subject property, but equally beneficial when the appraiser

 

uses that same information as a future comparable. Potential

 

homebuyers also benefit from the information during their

 

search process. This is the first opportunity for the listing

 

broker to provide accurate, current and detailed information about the subject property as well as the broker’s unique

 

knowledge of the local real estate market through supporting

 

information and documentation on the subject property.

 

An example would be when the subject property has extensive “energy efficiency” amenities, “green” or other similar

 

“high-performance” characteristics. It would be appropriate that the lender is informed, in advance, that a properly

 

qualified appraiser who is proficient in appraising “green”

 

properties should be selected. Some MLS systems provide for

 

energy efficiency details and certifications that can be incorporated directly into the listing information as an integral part of

 

the listing data. Take advantage of this feature.

 

Another thing brokers can do easily to help the overall

 

appraisal process is to incorporate as many photographs as

 

the local MLS system will allow. Include not only a front

 

photo, but also a rear photo and possibly a street or other

 

neighborhood amenity photo, in addition to photos of all

 

the major rooms and all the special features of the property.

 

According to NAR, those listings with more detailed photos

 

of the property sell much more quickly than those which have

 

few or no photographs. An accurate, detailed MLS listing

 

is vital to all interested parties, including the appraiser. The

 

more details the better.

 

NOTE: As of March 1, 2013 there were 3,498 licensed and

 

certified appraisers in North Carolina.

 

NOTE: The Appraisal Subcommittee (ASC) of Congress has

 

been charged with implementing the Consumer Financial

 

Protection Bureau (CFPB), which gives consumers an information resource to help complainants determine the appropriate

 

legal authority to receive their complaint involving allegations

 

of non-compliance with USPAP or appraisal independence

 

requirements. Access the Hotline at http://refermyappraisalcomplaint.asc.gov/ or by calling toll free (877) 739-0096. v

It was a beautiful day in the neighborhood!

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Spent the weekend manning the model home and I have to admit, I was doing a rain dance for all the folks out enjoying the beach, makes for great house hunting weather!  Despite the fantastic weather, still had several very nice families wander through and kick off their official house hunts and in the breaks between, managed some registry research (good grief, THAT will make your brain bleed!).  Hope you had a wonderful weekend!

Horizontal stripes are no one’s friend, man!

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20130518-105651.jpg   I swear I had a cute (granted, not as cute to rival Princess Kate or Halle) bump going this am and I’m feeling this angle has me looking more large than I really am- but the two of us are manning the model home in Sneads Ferry (NC) today and tomorrow.  Stop by and say hi, get some groovy decorating ideas (designed by a former Trading Spaces star-I’ll even tell you which one!) and a hug or a belly rub for luck!

He’s got perfect timing!

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20130515-203716.jpg    Exciting news around the office and home is that I’m expecting a bundle of joy this fall!  It’s about the most WONDERFUL surprise ever after many years of thinking a family of my own was just not in the cards.  He’s quite possibly the most wonderful miracle surprise ever!  Naturally, he has excellent timing, due to arrive just after the busy real estate season.

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On the eve of Mother’s Day

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“In my dealing with my child, my Latin and Greek, my accomplishments and my money stead me nothing; but as much soul as I have avails. If I am wilful, he sets his will against mine, one for one, and leaves me, if I please, the degradation of beating him by my superiority of strength. But if I renounce my will, and act for the soul, setting that up as umpire between us two, out of his young eyes looks the same soul; he reveres and loves with me.” RWE

I’m being kidnapped for brunch tomorrow, which has me a little excited. Hope you and yours spend a wonderful day as well.

One more for the road: ” “Although the threads of my life have often seemed knotted, I know, by faith, that on the other side of the embroidery, there is a crown.” Corrie Ten Boom