Real Estate Analysis and Commentary.

As a real estate appraiser, I keep a close eye on the industry's pulse. And let me tell you, the recent National Association of Realtors (NAR) lawsuit settlement has everyone talking. Here's my take on what it means for us.

The gist? The NAR agreed to a $418 million payout to settle claims that their policies inflated realtor commissions. This could lead to significant changes in how agents are compensated, potentially impacting everything from seller fees to the way we value properties.

The potential impact? Traditional 6% commission structures might be on the chopping block. We could see more competition among agents, with a shift towards commission negotiation or alternative fee models. This might translate into lower closing costs for sellers, which could be a boon for the market.

But it's not all sunshine and rainbows. A race to the bottom on commissions could affect agent quality and service. It'll be interesting to see how brokerages adapt and how they ensure agents are fairly compensated for their expertise.

For appraisers, this is an interesting wrinkle. Our job is to provide objective valuations, but agent fees can sometimes factor into how motivated sellers are to reach a certain price point. A change in commission structures could lead to more realistic pricing and smoother transactions.

The future is uncertain. The real estate industry is notoriously slow to change, but this settlement could be a catalyst. It's important for appraisers to stay informed about new trends and how they might affect valuations.

The bottom line? The NAR settlement is a wake-up call for the real estate industry. It's too early to say exactly how things will shake out, but one thing's for sure: the way we've done business for decades is likely up for renegotiation. As appraisers, we'll need to adapt and ensure our valuations remain objective and relevant in this evolving market. - Created with the help of GEMINI 03/25/2024

The Rollercoaster Ride: How Interest Rates Impacted Real Estate Sales in 2023

2023 was a year of significant change in the real estate market, driven largely by fluctuating interest rates. From record lows to sudden hikes, the financial landscape presented both challenges and opportunities for buyers, sellers, and investors alike. Let's take a look at how interest rates impacted real estate sales throughout the year:

Early 2023: A Market Fueled by Low Rates

The year began with mortgage rates hovering near record lows, fueling a booming housing market. Homes were flying off the shelves, often with multiple offers and bidding wars driving prices to record highs. This surge in activity was fueled by first-time homebuyers taking advantage of affordable financing and investors seeking to capitalize on a seemingly unstoppable market.

The Mid-Year Shift: Rates Rise, Market Cools

However, the tide began to turn in the midsummer months. As the Federal Reserve took action to combat inflation, interest rates started to climb significantly. This increase in borrowing costs quickly impacted affordability, leading to a cooling of the market. The number of homes for sale began to rise, and the days-on-market increased as buyers became more cautious.

The Second Half: A New Market Reality

By the end of 2023, the real estate market had settled into a new reality. While still active, the market was no longer the feeding frenzy it had been earlier in the year. Buyers had more negotiating power, and sellers had to be more realistic about pricing their homes. The focus shifted from rapid appreciation to long-term stability.

Looking Ahead to 2024

Predicting the future is always challenging, but most experts agree that interest rates are likely to remain relatively stable in 2024. This should provide some stability to the real estate market, allowing it to continue its gradual recovery. While prices may not rise at the same pace as they did in 2022, the market is expected to remain healthy and balanced.

How to Navigate the Market in 2024

Whether you're looking to buy, sell, or invest in real estate in 2024, here are some tips to keep in mind:

• For buyers: Get pre-approved for a mortgage early in the process. This will help you understand your budget and make competitive offers. Be patient and don't rush into a purchase. The right property will come along at the right price.
• For sellers: Price your home realistically based on current market conditions. Be prepared to negotiate and be flexible. Consider working with a real estate agent who is experienced in navigating a changing market.
• For investors: Do your research and carefully consider your investment goals. Be aware of the risks and potential rewards of investing in real estate.

By staying informed and making informed decisions, you can navigate the ever-changing real estate market and achieve your goals in 2024.

Created using Bard 12/12/2023.

Changing Appraiser Profession Due to Higher Interest Rates for 2023

The appraiser profession is constantly changing, and 2023 is no exception. One of the biggest factors affecting the profession this year is the rise in interest rates.

Higher interest rates make it more expensive to borrow money, which can lead to a decline in home sales. This means that appraisers may see a decrease in the number of assignments they receive.

However, there are still opportunities for appraisers in 2023. Here are a few things appraisers can do to adapt to the changing market:

• Diversify their practice. Appraisers can expand their services to include other types of valuations, such as commercial appraisals or appraisals for estate planning purposes.
• Focus on niche markets. Appraisers can specialize in a particular type of property, such as luxury homes or historic homes.
• Embrace technology. There are a number of new technologies available to appraisers, such as automated valuation models (AVMs) and desktop appraisals. Appraisers can use these technologies to streamline their work and make their services more competitive.

In addition to the above, here are some other trends that appraisers need to be aware of in 2023:

• Appraisal modernization. The appraisal industry is undergoing a modernization effort, which includes the use of new technologies and data sources. Appraisers need to stay up-to-date on the latest trends and developments in appraisal modernization.
• Increased regulation. The appraisal industry is highly regulated, and new regulations are being enacted all the time. Appraisers need to be aware of the latest regulations and ensure that their practices are compliant.

Overall, the appraiser profession is facing a number of challenges in 2023. However, by diversifying their practice, focusing on niche markets, embracing technology, and staying up-to-date on the latest trends and regulations, appraisers can continue to be successful in the changing market.

Here are some additional tips for appraisers who are looking to adapt to the changing market in 2023:

• Network with other appraisers and real estate professionals. This can help you stay informed about the latest market trends and find new business opportunities.
• Get involved in professional organizations. This is a great way to stay up-to-date on the latest industry news and developments, and to network with other appraisers.
• Continue your education. The appraisal profession is constantly evolving, so it's important to continue your education and stay up-to-date on the latest best practices.

By following these tips, appraisers can position themselves for success in the changing market in 2023 and beyond. By Google Bard with some editing by Wayne L. Henry.

Going through a divorce is one of the most difficult and emotional experiences a person can go through. It can also be a very expensive process, especially when it comes to dividing up assets, such as real estate.

If you and your spouse are going through a divorce and you own any real estate together, it is important to get a divorce appraisal. A divorce appraisal is an unbiased and professional opinion of the value of your property. This information can be invaluable to you and your attorney during the divorce process.

There are many reasons why you should get a divorce appraisal. First, a divorce appraisal can help you and your spouse reach a fair agreement on the value of your property. This can save you time and money in the long run, as you will avoid having to go to court to have the value of your property determined.

Second, a divorce appraisal can provide you with documentation of the value of your property. This documentation can be very helpful if you need to sell your property or if you need to obtain a loan.

Third, a divorce appraisal can help you avoid disputes with your spouse over the value of your property. If you and your spouse disagree on the value of your property, a divorce appraisal can provide an impartial third-party opinion that can help you resolve the dispute.

If you are going through a divorce and you own any real estate together, it is important to get a divorce appraisal. A divorce appraisal can provide you with the information you need to make informed decisions about your property and to protect your interests during the divorce process.

Here are some additional benefits of getting a divorce appraisal:

• A divorce appraisal can help you avoid overpaying or underpaying for your share of the property.
• A divorce appraisal can help you negotiate a more favorable settlement with your spouse.
• A divorce appraisal can help you avoid costly litigation.
• A divorce appraisal can provide you with peace of mind knowing that you have a fair and accurate valuation of your property.

If you are considering getting a divorce appraisal, be sure to contact a qualified real estate appraiser. An appraiser can help you understand the process and can provide you with the information you need to make the best decision for your situation.

How Obtaining a Real Estate Appraisal Can Help a Homeowner With Appealing Their Taxes  Understand the assessment process. The first step is to understand how your property's assessment is determined. In most cases, the assessor will use a comparative market analysis (CMA) to determine the fair market value of your property. This analysis will compare your property to similar properties that have sold recently.
Get a professional appraisal. If you believe that your property's assessment is too high, you can hire a professional appraiser to provide an independent valuation. This appraisal can be used as evidence to support your appeal.
File an appeal. Once you have an appraisal, you can file an appeal with the assessor's office. The appeal process will vary from jurisdiction to jurisdiction, so it's important to check with your local assessor's office for specific instructions.
Be prepared to negotiate. The assessor may be willing to lower your assessment if you can provide evidence that your property is worth less than the assessed value. Be prepared to negotiate with the assessor and provide evidence to support your case.
Getting a real estate appraisal can be a helpful way to appeal your property taxes. By understanding the assessment process and getting a professional appraisal, you can increase your chances of successfully appealing your taxes.

Here are some additional tips:

Choose a qualified appraiser. When choosing an appraiser, make sure they are qualified and experienced in appraising residential properties. You can check with your state's appraisal board to find a list of qualified appraisers.
Be prepared to provide information. The appraiser will need to gather information about your property, such as its size, condition, and location. Be prepared to provide this information to the appraiser. Be patient. The appeal process can take some time. Be patient and follow the process that your local assessor's office has in place.
Getting a real estate appraisal can be a helpful way to appeal your property taxes. By following these tips, you can increase your chances of successfully appealing your taxes. Generated with the assistance of Bard.

Standardized Property Measuring Guidelines from Fannie Mae 04/01/2022

Appraisers are now required to use the Square Footage-Method for Calculating: ANSI® Z765-2021 (American National Standards Institute®)
measuring standard for measuring, calculating, and reporting above and below grade square footage(s) to determine gross living area (GLA) and
non-GLA areas of subject properties for appraisals requiring interior and exterior inspections with effective dates of April 1, 2022 or later on loans
sold to Fannie Mae.

All footprint sketches and floor plans must be computer-generated (not hand-drawn), indicate all the dimensions needed to calculate the above/
below grade and finished/unfinished square footage of each level and other areas such as a garage, and show the calculations to demonstrate
how the square footage was derived.

Reference:
https://singlefamily.fanniemae.com/media/30266/display#:~:text=Appraisers%20are%20now%20required%20to,areas%20of%20subject%20properties%20for

VaCAP has been informed of a Discussion Draft of a Bill introduced into the US House of Representatives that will directly impact every appraiser, appraiser trainee, appraisal firm, and appraisal management company..

 

From the discussion draft, the purpose of the Bill:

“To establish an independent agency to be known as the Federal Valuation Agency and real estate valuation standards and appraiser criteria, including promoting a fair, unbiased, transparent, repeatable valuation process, and for other purposes.”

VaCAP encourages everyone to read, analyze and think through how this will impact you and your business.  It does not matter if you agree or disagree with the content of the Bill, it is important to discuss the the content with all of your US Representatives. Our Representatives will be the ones who ultimately vote on this Bill and they need to understand what they are agreeing to. More importantly, how will this impact the public.

Ideally, having a face to face conversation is preferred, but realizing that is not an easy task for most, email is convenient and provides documentation of your opinions and observations. However, there is no guarantee your representative will actually see the email. Most have staff that filter and respond to email.

Go old school and send a letter. This is more likely to actually been seen and read by your Representative.

We realize some appraisers are still very busy and some have started to slow a bit. If you are able to have a face to face conversation with your Representatives, please follow up highlighting your conversation either by email or letter.

The reality is the more our Representatives hear about the Bill, the more they pay attention. What we don’t want to happen is this bill, or any bill for that matter, to be voted on by our Representatives that have no idea what they are voting on.

Find you Representatives here. https://www.congress.gov/members/find-your-member

You have a voice, please use it!

https://vacaponline.com/new-development-pay-attention/

ACI renewal 2022 or switch to Total?

ACI fees have doubled. Not happy about that. It has not crashed much lately but still does crash. The subscription has changed to a per computer yearly license even though I purchased over ten licenses ten years which was supposed to be a lifetime. I am still scratching my head on this one. I requested to speak to a manager because I feel I am getting stiffed. Alamode has more features such as total mobile and the new comps validation data integrator called "QuickSource," which seems like a good idea (wonder where they're getting the peer data from?) The bottom line is about the cost, and I can not justify paying over $1,799. The price is the initial elite membership discount, which goes up to $2,198 after the first year's discount hook; the stated prices a year for software that only gives customer support and updates now and then is highway robbery when you think about it. Windows 11 is the operating system that allows you to control the computer. They update the operating system regularly at no extra cost. The purchase price for Windows 11 with updates is $109.99 as of 03/17/2022 with no renewal fees or yearly subscription. Why do we have to pay 2k a year for renewals? If I estimate the lower fee I paid ACI over the years for 20 years, that's 13k, not to mention the extra cost for flood, location maps, and other add-ons. At the rate Alamode is going, I will be paying 40k for 20 years. Not cool. I know some would say comparing an operating system to an appraisal software is not fair, but I would argue it is fair because both monologize your business somehow. Yes, you can change software companies, but who has the time or wants to change software vendors when you are used to the one you are using. It would take a large change to make appraisers want to switch, which is why Alamode is offering to pay off your contract with a competitor because they know once they got you, that payoff will be made back ten folds (marketing 101). It is all starting to get on my nerves.

Signed, concerned appraiser.