Dusty "Flagstaff Real Estate Appraisal"'s Blog

By now, your've probably heard alot about the HVCC, which sprang out of a March 3rd agreement reached between the Attorney General of New York (Andrew Cuomo), Freddie Mac, Fannie Mae, and the Office of Federal Housing Enterprise Oversight (OFHEO) and is scheduled to take effect by next January.

In the settlement agreement, those parties agreed to address issues of appraisal coercion and independence in exchange for the Attorney General's office terminating its investigation.  The agreement stated that the HVCC would be the standard of conduct following by the parties, and would be complemented and overseen by a newly formed Institute.  This Institute, called Independent Valuation Protection Institute or IVPI would be funded jointly by Fannie Mae and Freddie Mac for a period of 28 months and would maintain a complaint hotline for appraisers, consumers, and other parties. 

The main goal of the HVCC is eliminating mortgage broker-ordered appraisals, prohibiting appraiser coercion, and reducing the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages.

At first glance, it may seem like an appraiser's dream, as both the HVCC and the agreement lead off with languange stating the need for quality appraisals completed free of any coercion on the part of the lender or any other party, for that matter.  But of course, you need to look further.  Just take a look into many of the business periodicals and online forums which clearly reflect anxiety about the agreement.  Many fear that the HVCC will hurt small businesses without really solving the mortgage industry's problems.  Other concerns include the possible downsizing or even dismantling of lenders' in-house appraisal departments, loss of work by appraisers whose business depends heavily on brokers and/or lenders, and increasing bureaucratic costs if appraisal management companies gain importance.

Well, all of the parties have some work to do.  If , the agreement instructs, they consider comments, criticisms, recommendations, etc., obtained during the comment period in good faith, then a positive win win outcome should emerge.  Until then, I along with the industry, await......

Sorry I haven't written in a while, but my beloved dog, XENA, was very ill and passed away this past Monday evening.  It was the saddest day of my life.  She gave my husband and I fourteen great years together and we miss her very much.  I am grateful we were blessed to have her in our life.  I'm also grateful for the lessons the animals teach us 'humans'.  The world needs more unconditional love and honesty.

Which brings me to my point.  Check out the FBI's website at

http://www.fbi.gov/page2/dec05/mortgagefraud121405.htm

which displays an interesting photo of a home in Detroit, inflated by flipping, that sold for $25,000 one day, and a whopping $250,000 the next.  You would not want to have been the buyer or the lender on this one!  Just wait til you see it for yourself.  While you're there, take a look at some of the other photographs "exposed" on the website as well. 

I am glad these dishonest appraisers were indicted and I'm glad to see that the Federal Government is stepping up enforcement of mortgage frauds involving inflated prices for real estate. 

Maybe they should have gotten a dog instead of a license!

Last month, the Flagstaff Women's Council of Realtor's asked me to speak at their monthly meeting.  The topic, "Persuading sellers to price a home for sale according to statistical information based on appraising methods", really showed me how serious they are about truly helping their sellers price their home right.  I have to admit I really put together some great information for them and they have provided feedback that they have been more successful with their listing presentations and in pricing properties. 

I have been asked to do several appraisals to establish a listing price and I appreciate the opportunity to assist the local realtors.  As part of the overall marketing strategy, an appraisal really will give the ultimate credibility to your asking price.  You need defensible and supportable documentation that provides an accurate determination of a property's value in order to provide an equitable solution to all parties.

Hello Again!   Sorry it's been awhile, but with the interest rates continually going up and down, alot of people are refinancing........and yes........I've had several REO appraisals to do too! 

The Arizona Daily Sun is reporting that after two years of double-digit increases, many local neighborhoods see values decline.  What's interesting, is the local assessor's office is reporting that the West side of town is down, but the east side is up!  That's exactly what I have been trying to tell people for months, that it all depends on what market area you are in.  So many people read the "doom and gloom" articles and then assume that it is city or state wide and that just isn't true.  What I'm finding is that alot of the newer subdivisions with an oversupply of homes are where valuations have gone down significantly and the more established neighborhoods are the ones holding steady.

Assessor's Office Appraisers try to compare sales of similar homes from the SAME neighborhood, based on data from sales affidavits, to get an idea of home market values.  They then aim for a full cash value that is about 80 percent of the actual market value, meaning the value of someone's home listed on their property valuation card.  Property tax rates are then adjusted so that taxing entities collect only what state law says they are entitled to.

 So....this year's essentially flat valuations mean tax rates may stay flat too.  New construction will help local agencies raise additional revenues without raising tax rates.

Happy New Year Everyone!   Did alot of you make some resolutions already?   How many have you kept or broken?   LOL!

Well, as for me, I made several important ones this year.  Some professional and some personal and of course, they are equally difficult of course! 

I made a vow to keep attending as much education as possible to stay on top of the Real Estate & Real Estate Appraisal Industry this year and stay appraised of what my local market is up to, so when out of state referrals continue to call me, I can give them up-to-date information at a moment's notice.

My personal goal this year is to finish two of my unfinished tasks, one of which I could use your help.  I did property management for over 25 years and decided that alot of new property managers as well as seasoned managers would LOVE to have a quick reference guide for those urgent decisions and details they have to handle everyday.  For instance, what do you do if you have a murder or death in your rental property?  Do you know the steps to take?  Or, what about the difficult troubled tenant who wakes you up in the middle of the night with bomb threats and is always in the local newspaper?  Yes, these have happened to me and I still remember thinking back then, "I sure wish I knew somewhere to look for answers to this!" 

So, here I am years later, the book is almost done and I have one section left unfinished, which is bizarre rental stories from other property managers and brokers and agents that would help others reading this quick reference guide.  But please, don't submit your story if you don't want it to be published and let me know if you want your first name and city mentioned or how you want to be recognized, if at all!  I have some people who even gave me their cellular phone number to publish, so if a future reader wants to call and ask questions, they can get ahold of him!  Now that is dedication!!  I can't wait to hear from you so I can finish this book !

Oh, and that second unfinished task is to complete the family scrapbook/cookbook to pass down to family members to enjoy in the years to come and that is moving along VERY SLOWLY.

In 2008, may you have Friends that care, Love to share, Health to spare, and Buyers and Sellers to get you THERE ...(to your own goals this year)!

Just wanted to take a moment to wish everyone a very Happy Holiday!  I hope this day found you with your family and friends which are much more important than our work, aren't they? 

Then, of course, we have the upcoming NEW YEAR.   What will it bring?   There are so many changes in the market, even FHA and VA, (long standing government programs) are back in full swing.  Well, depending on how long you have been in the business, you may have never written or presented a conctract with one of these two types of government financing.  Alot of people in real estate who have been around awhile share their awful experiences and how "difficult it was to close!"  That's really not true at all.  There are just some basics that HAVE to be done such as full documentation of everything including employment, pay stubs and the infamous W2's.  Self-employed borrowers have to typically show at minimum two years of their recent federal tax returns.  So, borrower's need to be prepared and have their recent bank statements and all their pertinent documentation ready and available.  That way, you keep the financing end of it very simple and it's a nice surprise when you don't ACTUALLY need all the documentation in the final stages.  You know the old saying, be prepared and you shall not fear!   The same goes with government financing........just have all your forms in order and it will be "a breeze!"

As for me, one of my new year goals is to obtain my FHA training to complete FHA appraisal assignments as the limits have been raised and another raise is proposed, so I can assist those obtaining this financing opportunity!

Here's to you and I wish you a PROSPEROUS New Year!

  Well, the past two weeks have really been eventful.   Just when I thought I had experienced about every housing type out there, I recently received new information I feel compelled to pass along.   I have done appraisals on several hybrids, (manufactured housing with stick built additions), and they are not atypical for our area as several people have them. 

   About a year ago, I had to do an appraisal for one that was converted to a single family residential property.   As a matter of fact, they even produced a letter from the County stating such and they were appropriately placed in the higher tax bracket.  I completed the appraisal, attaching a copy of the letter and the property sold a couple of months later.

   Well, in today's market, it's much more difficult to find financing on manufactured homes, let alone hybrids!   I completed an appraisal for one such propery who had been told by 4 different lenders since June of this year, that refinancing the property would be "no problem!"  However, in every single case, the final outcome was the loan was NOT approved.   So, after being informed of this, I decided to contact the powers that be and found out that a Manufactured Home is always considered a Manufactured home no matter what re-classification may occur by the local Assessor's Office.  It appears that once a Manufactured home is listed in the Fannie Mae and Freddie Mac database, that it must always be considered a manufactured improvement regardless if the property added thousands of square feet of livable area!  The only way that the manufactured property can TRULY be reclassified, is if it is removed from the property and the property owner has to sign an affidavit indicating such!  I also was told that once a re-classification is completed in our county, it can never be reversed, so now the poor property owner who thinks that they are improving their property for the better are really hurting themselves by paying the higher tax and decreasing their financing opportunities. 

  I would love to hear about any experiences you have had with "Hybrids" that have been "Re-classified".

This past Friday, I had the opportunity to attend Mr. Richard Hagar's class.  Mr. Hagar has decades of real estate experience and is now using his knowledge to instruct the lending industry, agents, prosecutors, investigators, and state agencies.  He consults with the Assistant Attorneys General, as well as provides litigation support in State and Federal cases regarding real estate and mortgage fraud.  He is also the co-author of the Washington Mortgage Brokers Practices Act (RCW  19.146).  I was so greatful for him taking the time to put together this class!

The all day course covered the following topics:

   (1)  What triggers a State and FBI investigation; (2) Who's being investigated for fraud;  (3) The names of people convicted in the area;  (4)  Defining real estate fraud, mortgage fraud, and lender pressure:   (5)  Learning how to make small changes in your business that will reduce your risk;  (6)  Understanding and recognizing a fraudulent transaction;  (7)  How computers are now being employed to locate fraudulent transactions by agents - learn how it works.

So, in general, the state and the FBI are investigating Real Estate Agents, Appraisers, and Mortgage Brokers and it is IMPERATIVE that you know what they are looking for!  I found out that some agents are making mistakes without even realizing it!  And...then they end up going to jail!  One gal was the top-selling agent for the past several years and she no longer has a license!!  To be honest, I couldn't believe what was going on in our industry! 

If you have the opportunity to attend any of his seminars...........make it a point to go!  You learn quite alot of valuable information and receive continuing education credit at the same time.  Fraud is becoming a major problem in many areas.  Numerous criminal investigators are underway looking at agents, appraisers and mortgage insiders.  This class provided factual information, examples, and knowledge on how to identify the common mistakes that professionals are making every day.  This is a great opportunity to learn where the boundaries lie. 

For information on upcoming seminars/courses:  see www.richardhagar.com

As you've likely discovered, selling your home yourself and not using a realtor is hard work.  Let me tell you how I can help you sell it faster and for the right price.

A professional appraisal can shorten your time-to-sale and make sale negotiations easier.  It can give credibility to your asking price and can effectively end haggling.  When you have a current appraisal on your home, prospective buyers feel confident in your residence and in their ability to secure the financing to buy your home.

A professional appraisal is an independent third party's opinion of your home's value.  When you show the home, the appraisal is a concrete selling tool, showing potential buyers that your are serious about your price and about selling.

I have several years experience appraising homes in Coconino & Yavapai county and I have a very good understanding of the local markets.  I'd love to discuss how an appraisal can help you sell your home more quickly.

 So, if you are determined NOT to utilize a realtor, which I always suggest first because Realtors are really marketing your home to all the other realtors to get your home sold, then I look forward to talking to you about your home and helping you price it right. And, if you decide to use a realtor, then I look forward to talking to BOTH of you!

     According to Fannie Mae (FNMA) which can be found at Internet site:  (www.efanniemae.com(, the following applies to appraisers.  "It is expected that the appraiser will utilize generally accepted appraisal standards and the appraisal report forms which require the appraiser to research, analyze, and report on the factors in the neighborhood that may affect the market value or marketability of the properties in the market area." 

     FNMA goes on to state that the appraiser is ultimately responsible for leveraging industry tools and data to monitor the market conditions to ensure that the appraisal reflects an accurate indication of value.  FNMA provides several possible sources for information to aid in the process to address market values and/or supply and demand.  These data sources include OFHEO (Office of Federal Housing Oversight) index (www.OFHEO.gov), NAR (National Association of Realtors) (www.realtor.org) statistics on changes in median prices and S&P/Case Shiller Index (www2.standardandpoors.com).  There are others available, but perhaps not on a national basis.  It is the appraiser's responsibility to utilize those data sources that are deemed to be appropriate and to utilize the information to develop an informed value conclusion.  The value conclusion would need to consider the current market and the potential of an over supply of dwellings being available and the possibility of value decreases.