Tag: maryland estate appraisaer

Enhanced Property Inspection Waiver

Fannie Mae has a new automated underwriting system called the “enhanced property inspection waiver” program. Fannie Mae’s no appraisal offer applies to refinance loans on single family homes or condos up to $1 million and Fannie Mae must have a physical appraisal for the same property with the same borrower in its database.

So where is the data or valuation coming from? Oddly enough it is our own reports that we send in through the Uniform Collateral Data Portal. This is a database where lenders enter appraisals for mortgages submitted to Fannie Mae or Freddie Mac; this was implemented just over 4 years ago. Imagine the large pool of data gathered by appraisers fed into this database that can now be used for developing automated appraisals. It is unnerving to think our industry has required us to give information to aid in our own possible extinction.

An argument is made to the effect that an additional program was needed to expedite the appraisal process due to the lack of appraisers in the industry and turn around time on reports are longer than expected. There are less appraisers in the workplace due to a large amount of appraisers hitting the retirement age and the minimal influx of new appraisers coming into the industry. This minimal influx is mainly due to current license and/or certification requirements. The Appraisal
Institute noted that the number of active appraisers has fallen approximately 9% since 2012 and expected a continuation in decline in the future. There has been lobbying toward the Appraiser Qualifications Board for a reduction on some of its college level education requirements in an effort to attract more people to the field.

Under the “enhanced property inspection waiver” program the loan applications that come through its automated underwriting system could increase to 10% for qualifying loans: formerly this was 3%.

This new program would be for “limited cash-out refis”. Fannie Mae’s director of credit risk, Zach Dawson, estimates that 25% of limited-cash-out refis could qualify for the new program. Loan amounts vary by region and the loan- to- value ratio cannot exceed certain limits.

As an appraiser in the field everyday I realize the importance of entering into a home and seeing with my own eyes the condition, the improvements, the deferred maintenance, working systems, presence of mold and/or recent dampness within a property. These are just a few items that could never be seen by dated data that was entered through an electronic portal years ago.

Everything is not always black and white or cookie cutter. Homes are like people, no two homes could ever be the exact same. Our current world is driven by technology without the need for interpersonal skills being admired or even needed due to programs assembling the most advantageous bottom dollar for big business. As appraisers we collectively enter and report on billions of dollars worth of of “big business” property, we state our findings, give valuations and provide support for the structure and integrity of this industry. Replacing our inspections/appraisals with a streamline program in an effort to save a few hundred dollars in a multi-billion industry in my opinion is like shooting yourself in the foot….you may inadvertently undermine your own interests.

Maryland Appraising

Maryland Appraising Appraising real estate in Maryland involves properties of all facets. Properties in Maryland range from waterfront, working farms, mountainside retreats, vacant lots, condominiums, townhomes and single family homes to name a few. Each county offers its’ own spectrum … read more

Appraising Real Estate in Baltimore City

Appraising properties in real estate is tricky business for real estate appraisers. The vast value range, emerging markets, government housing and rehabilitation projects are just a few things a Baltimore City appraiser encounters when navigating the proper choice of comparable sales when determining the appraised value of a Baltimore City property. With more Millennials and empty-nesters moving downtown, there’s a renewed interest in the urban living experience causing an increase in appraisal work.

Lending institutions are quite cautious when reviewing a Baltimore City appraisal. Often values differ block to block depending on location of the water, monuments, parks, etc. The distance between the comparable properties and the subject property within an appraisal are highly scrutinized. Part of this scrutiny stemmed from the Baltimore City flipping scandal. With such diversity in value within a small radius due to the density of homes allow a large pool of settled sales to choose from. It is unethical, criminal and against appraisal practices to inflate the values of properties.

HB 521, a bill passed by the state legislature in the wake of the so-called “flipping scandal” of the 1990s, created a database of property appraisals in Baltimore City. Since 2003, every home appraisal done in the city was supposed to be given to the Department of Housing and Community Development, to be kept in files in case investigators ever needed to track down and investigate suspicious appraisers and/or lending practices.

Charm City is a city that bounces back regardless of setbacks. There are more than 40 homebuyer incentives that people could potentially qualify for when buying a home in the Baltimore City. They range from $1,000 to $30,000. These are for primary residents, not investors and you can stack them if you quality for more than one. You can go to http://livebaltimore.com/financial-incentives to learn more.

It is not only traditional buyers that are getting into Baltimore City real estate, even developers are turning a number of historic buildings in downtown Baltimore into amenity filled apartments. 26 S Calvert Street features a rooftop deck and mini basketball court, and 10 Light Street is a building that Metropolitan Partnership is turning into 400 luxury apartments.

With the growing demand of real estate in Baltimore City this leads the appraisal community with a responsibility for quality appraisal reports within lender guidelines that follow uniform standard appraisal practices.

Charm City is becoming more charming each year with expansion, renovation and opportunity. Robinson Appraisal Group can help you with all of your appraisal needs. Our services include estate appraisals, conventional appraisals and FHA appraisals to name only a few. Our office does a multitude of reports for the Baltimore County, Baltimore City, Harford County, Cecil County, Carroll County, Anne Arundel County and Howard County areas. We look forward to helping you in the future with an appraisal for your Baltimore City property. As our Baltimorean counterparts would say, Thanks, Hon!

What is involved in appraisal?

What is involved in appraisal?

Wondering what an appraiser does when it comes to your home appraisal? What do they look for? How do they determine the value of your home?

Bottom line….it all depends on homes that have SETTLED in your area. With so many internet searches available about home sales, the one most important thing to note is the settled price. The predominant amount of websites reflect the price the property is being offered for, not the actual settled price upon closing. Assuming it will go for full list may inflate your assumption of your own home’s worth.

After the appraiser gathers data from your tax record, aerial view of the property and possible prior listing(s) the appraiser will contact you for an appointment. At this time they will retrieve the unknown information regarding updates, rooms, bathrooms, finished basement, exterior amenities/outbuildings and any unusual or special things regarding the property. With this information appropriate comparable properties that have sold in the market area can be chosen on the basis of similarities. Some of the similarities that are most relevant when determining market value value are the location, gross living area (amount of square feet above ground), acreage, age, condition, updating and amenities.

Upon inspection of the property the appraiser will measure the exterior dwelling and any possible additional structures (deck,barn,shed,patio…) deemed necessary for valuation. When inside the appraiser will compile a floor plan, types of flooring, overall condition and quality of construction. The information from the subject property (property being appraised) is compared to the pool of settled sales to determine the closest matches: the most similar properties will then be chosen upon likeness to determine market value.

The major phase of the valuation involves the application of the three approaches to value which include the Sales Comparison Approach, the Cost Approach and Income Approach. The three approaches are reconciled and the value (via most applicable approach)is selected as the final estimate of value.

The most relevant approach to determine the market value of a property in residential real estate is typically the “sales comparison approach”. This approach uses the characteristics of each settled property verses the subject property in a form where the characteristics are broken down line by line to give each item value. For instance, if your home has a fireplace and one of the settled comparables do not a +$3000 amount would be added to the settled comparable price to adjust for the absence of this amenity. The amount of fireplace value varies depending on price range of properties. Other line items include acreage, bathrooms, age, finished areas in basements, location/view,updates, amount of garages, outbuildings, decks, patios, exterior materials, quality of construction and (but not limited too) condition are all items valued in the report to determine the fair market value. There are typically 3 to 4 settled comparables used to determine the market value and possibly 2 more pending or active properties to reflect the current market and support the market value. Pending properties(due to the fact there is an offer) are preferred. Once all the settled sales have been adjusted for their differences (compared to the subject property) the 3 to 4 settled sales provide a range of value in which the appraiser then determines the market value from this range. The pending/active properties in the report then typically provide support for that choice.

It is the appraiser’s responsibility to adequately research the local real estate market and determine which comparable sales best represent the value characteristics of the subject property.

Current guidelines require a report to be in UAD form. To improve the quality and consistency of appraisal data for loans delivered to the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, at the direction of
the Federal Housing Finance Agency (FHFA), developed the Uniform Appraisal Dataset(UAD), which defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for fields within the report. An appraisal report in UAD causes some confusion to the reader of the report because of areas on the report that are coded for a computer to extract information. If any questions arise feel free to call your appraiser for clarification. Our office does a multitude of reports for the Baltimore County, Baltimore City, Harford County, Cecil County, Carroll County, Anne Arundel County and Howard County areas. Robinson Appraisal Group will be more than willing to answer any questions or provide explanation for any report performed by one of out staff appraisers.

The main responsibility of an appraiser is to provide an unbiased, comprehensive and expert opinion about a specific market value for real property. Regardless of whether you decide to sell, refinance, settle an estate or you are just curious about your home’s current value let us help to inform you on the most important transactions in your life!

Appraisal Terminology

Appraisal Terminology Abatement – Abatement is an official reduction or invalidation of an assessed valuation after the initial assessment for ad valorem taxation has been completed; the termination of a nuisance; a reduction in rent levels that a landlord charges … Read More..