While never one for New Year resolutions, I do love this time of year to reflect about where our industry has been; it's current state and what needs to happen to move forward.
Social media has been nuts the last couple of weeks with some appraisers seemingly clamoring for more information on multiple regression analysis (MRA). So what is the big deal? Fannie Mae has decided to implement a new analytics application, Collateral Underwriter (CU), available to assist lenders in making sure that appraisal quality is maintained by the lenders . You cannot scroll through some of the groups without seeing some new post asking for copies of regression spreadsheets or long threads debating the topic. There have been many of us touting the benefits of using it for years. It can be a very useful tool. I very much believe it is a tool that every residential appraiser needs to know about and be able to utilize at some competent level. But there is always a catch to anything worth doing, and MRA is no exception. Learning regression is a process and is not something one should tread into lightly.
"My, oh, my, the sky is falling. I must run and tell the others," said Chicken Little.
Drones Doing Appraisal Inspections?
"Yes Ma’am, that is correct. Next Tuesday at 9:30 AM. Our drone will be at your door at that time to do the visual inspection. Typically, it will fly around the exterior of the home first to measure and take photos. After it is done, the drone will need access to fly through each of the rooms in your home taking video and still shots of what it sees. Someone will need to be available for a few questions before the drone leaves. Will that work for you?"
I was at an industry sponsored Holiday luncheon the other day. A member of our State Appraiser Coalition was giving us an update on the petition that was distributed and delivered to Fannie Mae regarding Collateral Underwriter. To paraphrase, our coalition member said: Fannie Mae called because the Illinois Appraisers are Rabble Rousing again.
The Uniform Standards of Professional Appraisal Practice Standards Rule 3-6 requires each appraisal to contain a signed certification. To summarize portions of that certification, it states:
This topic is sure to elicit many opinions, both “fer & agin” regarding notifying your lender client about marijuana plant growing prior to completing an appraisal of a property upon which you observe this activity…especially if you see more than the MAXIMUM allowed in your state (see the chart in the article below).
I've had this discussion with Washington State appraisers after our initiative was successfully passed.
Here is what I want for Christmas. I want to hear from you.
As review appraisers, one of the issues that we see all the time is the failure to analyze highest and best use for a market value opinion related to mortgage lending appraisals. This makes sense to a large degree, because many appraisers believe that providing the "yes" answer relieves them of further analysis and communication. We wanted to address this topic and offer some insight as to why one may want to rethink their approach to this common issue.
There is an old adage that says knowledge is power. Never have I found another industry this holds more true. The more we, as appraisers, understand about a specific area, neighborhood, or subdivision the more accurate and credible report is able to be produced. Let’s face it, that’s why we are here… To provide accurate estimates of value. I want to encourage all of us to reach out to our fellow colleagues to discuss current industry changes, with questions, with that tough one you worked on last week.