I am so excited to announce that instead of blogging for the past several months, I've been writing my first EBOOK! The ebook is for appraisers wishing to learn more about appraising for FHA. The book has 465 pages filled with great information to help make your appraisal the best it can be for FHA. Go to www.appraisalgroupsocal.com to order your copy today!
Preparing an appraisal report for FHA is not as complicated as it once was. As far as taking pictures, one of the most important requirements that HUD makes is that any picture included in the appraisal report must be taken by the appraiser signing the report. Appraisers are not allowed to hire a trainee or assistant to take any photographs of the subject or comparable properties.
The only time MLS photos are allowed to be used in an appraisal report is when backing up an original picture taken by the appraiser. For example, if a comparable is located behind a security gate that the appraiser can not gain access to, the appraiser should include the picture of the gate with a MLS photo of the property in the appraisal report.
Subject photos should include the front and rear of the property at opposite angles to show all sides of the dwelling and should include improvements. The street scene should include a portion of the subject site and the grade of the vacant lot shown if proposed construction.
Comparable photographs must include at least one front view and should show compliance with Scope Of Work.
HUD encourages the appraiser to include additional photographs that represent positive or negative influence in value or deficiencies and/or adverse conditions. An example might be including a picture of evidence of infestation or exposed wiring.
Another example of including additional pictures as support would be if the appraiser could not view the attic because there was a large piece of furniture blocking the opening. In addition to commenting in the comment addendum of the appraisal, the appraiser should include a picture of the obstructed entrance to the attic as verification that the appraiser could not see in the attic.
And FHA appraisal are very similar to appraisals performed for other lenders. By investigating the requirements, appraisers can provide FHA with a accurate and complete picture of properties they are looking to insure.
On May 5, 2008 the Federal Housing Administration (FHA) through Housing and Urban Development (HUD) is launching an online appraiser application process that will replace the existing process of sending paper applications through the mail. This process may make the process of applying to become a FHA Roster appraiser much easier and faster.
Information on their website states that the cut off date for accepting paper applications is April 22, 2008 and that appraisers should wait until after the May 5th date to avoid the possibility of their application not being accepted. If applications were mailed any time prior to April 22nd, appraisers should not reapply and are encouraged to wait the eight to twelve week processing time, although the process should be faster after the implementation of the new system.
To find out if an appraiser has been placed on the active Roster, appraisers can go online the FHA website and find out. HUD does not send any correspondence if the application is accepted. A letter is sent and the reason identified if the application has been been denied or the appraiser is ineligible.
FHA Connection is a website that provides approved lenders and businesses partners, like Roster appraisers with direct, secure, online access to computer systems of HUD. FHA Connections allows appraisers to update their business information and to get their identification number. To gain access to FHA Connection, appraisers have to apply once they have been placed on the Roster.
Because the loan limits were temporarily raised for FHA insured loans, FHA Roster appraisers might become busier appraising for FHA approved lenders. The VC form, once required to accompany the URAR 1004 appraisal form, is no longer used and the requirements of an appraiser while appraising for FHA approved lenders has been simplified.
I am Certified Residential Real Estate Appraiser and FHA Roster Appraiser currently authoring a EBook on appraising for FHA insured loans.
In order to perform appraisals for FHA, appraisers must be on the approved FHA Roster. Appraisers must possess a current license/certification with credentials based on the minimum licensing/certification criteria by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation for each state in which they desire to perform FHA appraisals. Trainees are not eligible to apply to be on the Roster.
Registration procedures for appraisers who are not currently on the FHA Roster are as follows:
1. Submit proof of a valid state appraiser's license or certification with credentials based on the minimum criteria issued by the AQB for each state in which you desire to perform FHA appraisals.
2. Complete the Register Designation Application (Form HUD-92563) including references for line 18.
3. Not be listed on the General Services Administration's Suspension and Debarment List, HUD's Limited Denial of Participation (LDP) List, or HUD's Credit Alert Interactive Voice Response System (CAVIRS).
4. Submit copy of license(s)/certification(s) and Register Designation Application with original signature to HUD at:U.S. Department of Housing and Urban Development Office of Single Family Housing, 451 7th Street, SW, Suite 9270, Attention Valuation Division, Washington, DC 20410
HUD does not take faxes for applications and they recommend that you send your application via UPS or other mail service so you can track the package.
Appraisers can check the FHA Roster for their status and to make sure their information is correct. Appraisers will not receive a registration confirmation if approved. However, a denial letter will be sent from HUD to appraisers that are not approved. Appraisers noticing incorrect information should fax the corrected information to (202) 401-0416 .
If the appraisers license expires, they must provide HUD with proof of renewed license(s)/certification. An expired license will cause the appraiser to be ineligible to perform FHA appraisals.
For renewals to occur, the appraiser renews their license with the State Regulatory Board or SRB. In California, we have the Office of Real Estate Appraisers or OREA. The SRB submits renewal information to the Appraisal Subcommittee (ASC) on a weekly, bi-weekly or monthly basis. ASC updates the National Appraiser Registry. HUD interfaces with the National Registry and then updates their systems to reflect the renewals. Some states upload to ASC upon receipt of the renewal from the appraiser. Others, update on the renewal date of the license.
To check to see if your license has been updated, go to https://entp.hud.gov/idapp/html/apprlook.cfm . If HUD's website information on your renewal is correct, no further action is needed. If HUD's information is incorrect, you must contact your SRB to ensure renewal was processed and to ask when they submit their information to the ASC. If ASC's National Registry is correct but the FHA Roster is not, FAX evidence of updated status to HUD HQ at 202-402-0416 Attn: Home Valuation Policy Division.
HUD allows a thirty day grace period for systems to interface for renewals and there is currently a 10-12 week lag between the time they receive a new application to become a Roster Appraiser and the time that the application is either rejected or accepted.
And becoming a Roster Appraiser is really not that difficult. HUD even eliminated the examination.
With the fall of the real estate market in the country, here in Los Angeles, we have been hard hit. Business has been slow. Since the Feds introduced the Economic Stimulus Plan and HUD lowered loan limits, business is slowly picking up.
In an attempt to diversify into new markets, I applied to be an FHA Roster appraiser. After spending hours on the HUD and FHA websites and real estate industry websites and message boards, I realized that there was scattered information about appraising for FHA. Although the FHA website seems to be catching up with information for appraisers, it was difficult to find out basic information like if the VC form was still used.
This month, I attended a seminar sponsored by the National Association of Professional Mortgage Women, an organization that, as it turns out, has many members both male and female whose main focus is to provide education to industry professionals. The seminar featured several HUD employees who trained appraisers from California, Nevada and Arizona on appraising for FHA insured loans.
The class was amazing and the representatives from FHA were extremely knowledgeable and personable. I learned where to find the information I was looking for and what FHA looks for in appraisals.
The appraisers who actually worked for HUD wanted to let appraisers know that we are the eyes of FHA. We paint a picture for the agency so that they can make sure that they know the risk they are taking in insuring loans. If we miss something important, it puts HUD at risk. They are relying on us to make sure that they get all the information they need in the format they are asking for.
I am currently writing an ebook which not only includes MANY resource documents, it explains what HUD and FHA actually are, how to get on the list and how to perform a FHA appraisal. Keeping checking with me to find out when the book is finished.
On Friday of this week, I am going to a seminar on FHA appraising. I'm on the FHA list but have not had that much experience. However, in the past two weeks, I've gotten six requests for FHA appraisals so I am venturing to Las Vegas to get the low down from the big guys themselves. That is right, there will be five representatives from HUD to train appraisers and answer questions about the requirements for appraising a property under FHA. Many people do not even know that appraisers no longer need the VC form addendum and that for SFR appraisals, you simply need the 1004. Actually, you use the same forms for Fannie Mae/Freddie Mac loans that you do for FHA. However, the same requirements still exist to explore a residence thoroughly and comment in the comment addendum about it. After my class, I will update more.
Have you always wanted to know the process that an appraiser goes through in completing an appraisal report? No, appraisers do not just pick values out of a hat!! There are six basic steps that appraisers follow for every appraisal. These include:
1. Problem Definition
2. Appraisal Plan
3. Data Collection
4. Data Analysis
5. Final Value Estimate
6. Written Report
When we receive a request to perform an appraisal, appraisers generally define the assignment. There are four areas that an appraiser further investigates: type of value, type of property, effective date of appraisal and conditions. This is commonly referred to as "scope of work." The appraisal plan developed by the appraiser helps the appraiser organize the way in which he or she will approach the rest of the assignment. Collection of data includes the preparation for the visit of the subject and the actual viewing of the subject and the comparables. Next, appraisers organize all the data collected and discern between the credible and incredible information and ultimately decide which information will be used to prove the opinion of value. Step 5 is where the appraiser decides on the value. The final step is creating the written report which describes the entire appraisal process and supports the appraisers opinion of value.
Appraisers are required to adhere to a set of standards which define their role in society and describe the appraisal process. These guidelines are referred to as USPAP, or The Uniform Standards of Professional Appraisal Practice. Two groups govern USPAP and help develop the framework which appraisers work within: The Appraisal Foundation and The Appraisal Subcommittee.
The Appraisal Foundation is a private, not-for-profit organization established for educational and scientific purposes. TAF is made up of The Board of Trustees, The Appraisal Standards Board and The Appraisers Qualification Board. Between these three bodies, they develop, interpret, and amend USPAP and approve USPAP education. The Appraisal Subcommittee provides federal oversight of The Appraisal Foundation.
And because every appraiser in the United States is guided by the same standards, consumers can expect a high level of uniformity in the types and extent of information provided in appraisal reports.
To learn more about appraisers, appraisals and appraising, visit http://www.appraisersantaclarita.com |
This video clip was taken during my tour of a local manufactured housing factory. Our guide was discussing the piping tree that is installed under the carriage of each home. Enjoy!
The first picture is of the party house. Fleetwood builds custom units all the time. In fact, most of their orders are custom in some way. When they get a custom order, the sales department presents the request to the builders who create plans for the new unit. They can build to order when the plans have been approved. This home is a triple wide, meaning there are three seperate sections. It is a two bedroom, one bath home with a huge open floor plan. Walls and doorways have all been switched out. The second picture is of the kitchen and the third is of the living room. This home was over 3,000 square feet. In the forth picture, you can see a line of double wide units being finished. During this process, they are being cleaned, decorated and inspected. The last picture is one of their most popular model which has a beach house or even Craftsman feel. Still more pictures to come.
Alright, so as we continued on our tour, our guide showed us the drywall panels that are placed outside the frame of the house. Each panel is so heavy that I couldn't lift it. In the right top picture you see me holding the materials that is in the middle of the panels. This substance is fire retardant which is a key safety feature for this home. Next, in the secon set of pictures on the left you can see the window above the living area in this home. If you look at the left side of the window, you will see the frame and insulation as well as the dry wall on top. The forth picture shows one side of a two sided manufactured home. In this picture they were finishing the kitchen and the sub flooring. The flooring is actually sent to the site in a large roll and installed at the site. In the last picture, you can see the other side of the home. In my next installment of this series, you will see a picture of a custom 3 section manufactured home, or what we call "the party house".
So, the floor has been installed and now they start to create the walls.
As you can see from the first picture, a few walls have been erected and
the start of the bathroom put in place. In the next picture, the walls
have been installed and all the electrical placed inside the walls.
Every step of this process is monitored by inspectors. The inspectors
are so picky that they even count the number of staples that are used
to connect beams throughout the home. The company brags that there are
stricter standards for the manufactured home than traditional site built
homes. In the third and forth pictures, the rest of the walls are put in
and the insulation is placed inside the beams. Finally,the roof frame
is built. The last picture shows the deck off the back of the house
made of a plastic that looks like wood but is virtually weather resistent.
Check out the next post on more of the manufactured housing tour.
I have started making money promoting a product that I use myself. It makes me residual money (money every month that people I refer pay for the service). If you email me at dawn@appraisersantaclarita.com I will be happy to send you the free ebook on this amazing product. Kickstartcart.com offers a full range of stuff at extremely reasonable prices for you to set up a store on line and have your own shopping cart. It allows you to communicated with your clients through auto responders. It helps you manage your "list", making it easy to keep your clients up to date on what you are doing. After you use the product and love it, you can promote it, you make money... money... money. Again, email me for a free ebook on kickstartcart.
Another appraiser in my area referred me a client. He has an established business and likes to stay close to his office. He refers me when he gets a request for an appraisal that is out of the area because he knows I do appraisals in most of Southern California. The other day, I got a request for an appraisal in Lake Arrowhead, several hours drive from my home. I looked up the subject property in public records and did a brief search for comparable properties. Although business has been slow over the past six months, I know that referring this appraisal out is the right thing to do. Lake Arrowhead is a resort community and unique in many ways. When I was first appraising, I would go anywhere for a job. Now, more than ever, I realize my limitations and the advantage a local appraiser would have over me in this geographic area. Southern California is such a vast area. From the beaches, to the mountains, to rural residential to center city, the area offers an appraiser a opportunity to appraise so many different types of property and land uses. However, when I question my ability to perform an appraisal, it is apparent that I need to refer out.
Yesterday, my parents (who are also appraisers), my husband and I drove out to Riverside to see one of the largest manufactured housing builders in California. I won't mention them by name but it starts with a big "F". Anyhow, we got to visit the factory and see chassis to finish. This is the first of several posts I will write on the tour and how manufactured housing is built. I think when you realize how the building process works, you might realize how truely amazing these homes actually are. This is the chassis.
They use this chassis for both the single width (or park model), double, triple and even two story models. The two story models are stacked on top one another. These homes are built to withstand the weight and also to travel. Traveling down the highway to its destination is like a 6.3 earthquake. In other words, just to travel, these homes are built to withstand that type of movement. I think I would feel safe living in one of these in California!
Above is the floor and insulation.
They seal the bottom with a very heavy plastic that keeps out rodents, insects, moisture, etc. Then the insulation goes in. Everything is sealed with a foam that expands to further insulate. This picture above shows the bottom with the black film that is stapled to the foundation. You can also see the chassis and wheels. These models are meant to be placed permanently. The chassis is removed when it is installed and it could cost around $50,000 to move it again. Most people choose to keep these homes at their initial site.
Stay tuned in my next post for more on the construction of a manufactured house. I even have video!
I loved today. Not only did I finish up an appraisal report for a property I viewed this past weekend, but I got a referral for a job just 2 miles from my home for tomorrow. In appraisal terms, its a good week. I'm ready. Bring it on!
Yesterday I made a common mistake that appraisers make by not getting all the information before the appraisal. The broker called me to see if the value the homeowner needed was in range of the value of the property. Without seeing the property but looking at public records and MLS data, I knew that it would fall in the $430,000 to $480,000 range, which was where the client needed to be to refinance. Perfect, right? This client of the brokers is a “special client”, someone famous. That is one of the perks of living and working in Southern California. So, I had to deal with the client’s C.P.A., someone who was not familiar with the property. I set up the appointment with the C.P.A., arranged payment, and went to view the property. I shot my comps prior to viewing the property and everything seemed perfect. All comps were sold within 3 months prior to the report date, were within .5 mile of the subject property, were within 20% of the size of the property and the land and they were all built within the last five years. When I got to the subject property, I shot the pictures, measured and went to say thank you to the mother of the homeowner (mother of famous guy). She then told me that the situs was incorrect and that the extra bedroom downstairs was converted by the builder from a three car garage to a bedroom, adding about 220 square feet of living space and eliminating one of the three garages. I was stuck out in the field, with comps that were mostly smaller than the subject (it was already large for the area). Luckily I called my dad, another appraiser, who happened to be in his office and he found me a few more comps that were larger and would work better as comparables for my appraisal. In this situation, I was lucky because the value need was in range with the smaller comparables. However, if it had been the other way around, I would have been in big trouble with my client. Lesson #1, confirm public records data prior to viewing the subject property. I’ve been appraising three years and have made the mistake only a few times. However, it is a costly mistake that can lose the deal for an appraiser and the client.
When I was a neophite appraiser trainee in 2005, my dad sent me out on an appraisal in Pomona. The house was supposedly a 3 bedroom, 1 bath house with approximately 820 square feet of gross living area. I should have known something was asque when I actually measured the house to be 992 square feet of GLA.
From the outside, it looked adequately maintained and conforming to the neighborhood. After measuring the outside of the house, I went inside to make note of the features of the house. Living room, one bedroom, two bedroom, full bath, three bedrooms and on I went. Finally, I reached the kitchen. On the otherside of the kitchen was a door. I opened the door and walked into a small utility room. It was a rectanular room measuring approximately 25 feet long by 10 feet wide. The floor was vinyl. In the middle of the room, against one of the walls was two concrete steps up to what looked like an elevated closet on a pedestal. I opened to door to find “A TOILET”. That is right: no sink, no bath, no shower, no mirror, no towel rack. Just a toilet. 
This picture does not seem to do it justice. Oh wait, excuse me, I just noticed the waste paper basket. Do I count it as a .25 bath? The house was built in 1946 and so it is grandfathered as far as permitting is concerned.
I do not remember how we handled it. I was baffled. I knew the house had functional obsolescence because of only one bathroom and three bedrooms but wondered if the throne would contribute positively or negatively towards value.
What is your opinion? How would you have handled the throne? What crazy things have you seen out there?
Yesterday I attending my first Rotary Club meeting. I was invited by Connie Ragen Green of . Connie is my mentor and is helping me gain a presence on the internet to build my business. Besides being super intelligent and savvy, she is a really nice person.
The Club treated me for lunch. They meet at the Marie Callender’s on The Old Road in Valencia on Wednesdays at noon. What a terrific bunch of people. Before attending this meeting, I knew nothing about Rotary. Rotary International, I learned, is the world’s oldest service club organization. There are 31,000 clubs in 165 countries. The object of Rotary is to encourage and foster the ideal of service as a basis of worthy enterprise. Rotarians strive to live by what they call “The Four-Way Test”. Is it the truth? Is it fair to all concerned? Will it build goodwill and better friendships? Will it be beneficial to all concerned. And finally, their motto is “Service above self.”
In the room were business leaders from all over Santa Clarita. They had a few visiting Rotarians from other clubs as well. Members seemed to encompass all facets of life in Santa Clarita from private business owners to government employees to teachers, to politicians or other local government leaders. I was impressed by the number of women in the group and the apparent dedication of the members to their club and this community. I hope more people in this community understand the financial and volunteer contribution the Rotarians provide. Again, what an awesome bunch of people.
In the beginning I thought, this is going to be easy. All I have to do is take a few classes, get a little experience and pass an exam and I will be an Appraiser and make some easy money. What was I thinking? Starting a new career in my mid-fifties, had not taken any classes in years, and I am competing with much younger trainees, what was I thinking?
If you think becoming an Appraiser is easy, you are so wrong. School took me five months to finish the required 90 hours. Working all day and studying at night while keeping up my daily routines was difficult to juggle. I never thought about the expense of taking the courses needed for my license, or about the hours of studying, or taking the review course to prepare me for the State Exam. I have never studied so hard for anything in my life and the test was worse then I had ever imagined. Theory! Oh no, theory problems. And math - lots of math. I sat in that test room, in my small cubicle, calculator in hand and nothing personal allowed in with me. Not a good luck charm; not a cheat sheet; not even my watch. It was definitely not like taking the exam to renew my drivers license. In fact, the first time I took the test I failed and cried. What a failure I thought I was. Many of the topics that I studied were not even on the exam. Some of the questions were so hard and I wondered where in the world did the creator of this exam find these questions? That person certainly was never in any of my classes. But, I got back on the studying trail and passed the next time around. And all this studying and testing just for the privilege of becoming a Real Estate Appraiser - Trainee. Now for the tough part - getting my 2000 hours of appraising experience.
Actually, I lucked out in that area because my husband is a Certified Real Estate Appraiser, the owner of Accredited Appraisers, and was able to help me with my appraisal experience in addition to being an excellent and patient teacher. I worked in his office and did a lot of research for him. I answered the telephone and learned a tremendous amount of knowledge in my new field. Talking with the public and people in the loan industry is an article of its own. The phone calls that I received the most were from ordinary everyday people who thought that it might be easy to become an Appraiser and make some fast money. And they all had friends or family in the Real Estate field who would give them immediate business. Can you imagine what I told them?
This article was written and approved by friend, Certified Residential Appraiser Sandi Royce of Accredited Appraisers in Oxnard, CA
Dawn R Walker, Certified Residential Appraiser http://www.appraisalgroupsocal.com or visit me at http://dawnrwalker.typepad.com. Committed to delivering elegant, complete appraisal reports on time for residentail properties in the Los Angeles and sourrounding Counties. Working as a professional and with professionals in many industries. Constructing appraisal reports that exceed expectations and providing customer service you will recommend to your associates and family. I am the appraiser you want.
