3.6 Crunch Time

[autobot]

400 days on market that should be a hint but in all fairness some sellers won't budge and so the agent just hoped a buyer comes bye.

When I was doing house repairs that were being done during a RE Transaction we'd run across cases where there was some intra-family disagreement about selling the house in the first place. A solid majority of the houses I've at least called about are so poorly represented by the Agents I've got to wonder if the Seller is being pushed or Court Ordered to sell, but has told the Agent "just go through the motions, this sale ain't happening". Why would an Agent take such a case? Having Listings makes them appear more successful, even if those Listings aren't moving, and at least 1/2 of all RE Agents seem to be "hobby" not that serious. People don't like to say "I'm unemployed" or "I'm employed. I'm a part time janitor at a gas station."

 

[Sandra Koutsopoulos]

...and then we take ANSI measurements into account! Yesterday I queried AI about GLA in upper level loft. In reality, the floor went all the way to the outside wall which was sloped from 8' ceiling tippy top peak to the floor. I'm thinkin' ANSI says can't count floor space less than 4' wall height. NOPE! AI says it is now 5' minimum height to use as GLA. Well. That means living space in this lofty tube is 6.3' wide by 20' long! Not much practical furniture arranging or living space in living in that 'hallway'. Legal included the space 4' high or higher, making it about 9' wide=180 sf. AI now says 6.3' wide, so that reduces the space per AI to 126 sf. That's significant. I wonder what the agent will show on the MLS.

 

[OSU Beavers]

A-Frame and TeePee houses really took a hit with ANSI.

 

[autobot]

The problem with that idea is that sellers are trying to sell for the highest possible price, not necessarily someones opinion of market value. What if the seller thinks they can sell for $2 million and the pre-listing lender approval comes in at $1.9? The seller is not going to list for $2 million and advertise that loan collateral is approved at $1.9m.

It's the same reason why the GSE waiver value is not made public. In theory, the GSE could publish their estimate of market value for each property and say up front how much the loan can be. But they won't do that because then the valuation is probably interfering with the market.

One of the few true things RE Agents say are (in a fairly hot market) "don't list too high, all that will do is help sell your neighbor's house, your house will never be worth more that when its first listed, a bidding war when its first listed beats lowering the asking price over time...everytime".

IMO a concise, honest statement could be added if the Seller thinks some pre-Listing bank sponsered AI Appraisal is too low.
Examples:
"Traditional Appraisals put little value on additional 'vacant' land, but the two acres of this property are one of the few in this area that have passed Septic Perk with flying colors, and could support additional homes and is also approved to be subdivided. Also rare for this area and not in the Appraisal is the two acres supports robust Trifolium repens, AKA White Clover, prized by all grazing animals including deer and horses".
or
"Not noted in the Appraisal is that this house is situated on a quiet street that just happens one safe walking block in opposite directions from this region's main transit lines, walking west to 33A, B009 routes to downtown, and walking east to 99-01 to our sister city."

But a big part of my idea is Sellers would first get a CONFIDENTIAL bank sponsored AI Appraisal that would include "...and this is why" as well as "doing such and such would likely change the value of a re-Appraisal by this much". Current practice is for flighty Listing Agents, operating without any Adult Supervision, to try to win deluded clients by over-promising, resulting in longer Listing times and slow and painful mark-downs.

One of the main reasons Deals fall apart when everyone is very Sunk Cost into them is the Appraisal comes in low, which causes all sorts of chaos to both sides. Its likely the house was "worth it" to the buyer, for their own reasons that weren't recognized or allowed in the neutral bank's Appraisal. Better for a Seller to get Bad News before they list and have deals fall apart and their house starts to acquire Loser Stink. When I see a house that interests me and its fallen out of Pending, maybe a couple/few times, and I call the Listing Agent and they say "no fault of Seller, Buyer's financing fell through", then claim they don't have any of the Appraisal or Home Inspections done by Buyers, nor any done by Seller, I've got to assume the Listing Agent is lying and playing dumb about major problems, hoping to sucker the next victim into some Sunk Cost Fallacy bad decision. Hence my other crazy Real Estate internet idea "REDOX.com" (real estate dox), where people could list a house they want info on and fund a page and it would pay out tips for info from anonymous alias reporters, at first on the honor system but quickly moving into clout, reputation and past performance.

 

[Airstream]

One of the few true things RE Agents say are (in a fairly hot market) "don't list too high, all that will do is help sell your neighbor's house, your house will never be worth more that when its first listed, a bidding war when its first listed beats lowering the asking price over time...everytime".

IMO a concise, honest statement could be added if the Seller thinks some pre-Listing bank sponsered AI Appraisal is too low.
Examples:
"Traditional Appraisals put little value on additional 'vacant' land, but the two acres of this property are one of the few in this area that have passed Septic Perk with flying colors, and could support additional homes and is also approved to be subdivided. Also rare for this area and not in the Appraisal is the two acres supports robust Trifolium repens, AKA White Clover, prized by all grazing animals including deer and horses".
or
"Not noted in the Appraisal is that this house is situated on a quiet street that just happens one safe walking block in opposite directions from this region's main transit lines, walking west to 33A, B009 routes to downtown, and walking east to 99-01 to our sister city."

But a big part of my idea is Sellers would first get a CONFIDENTIAL bank sponsored AI Appraisal that would include "...and this is why" as well as "doing such and such would likely change the value of a re-Appraisal by this much". Current practice is for flighty Listing Agents, operating without any Adult Supervision, to try to win deluded clients by over-promising, resulting in longer Listing times and slow and painful mark-downs.

One of the main reasons Deals fall apart when everyone is very Sunk Cost into them is the Appraisal comes in low, which causes all sorts of chaos to both sides. Its likely the house was "worth it" to the buyer, for their own reasons that weren't recognized or allowed in the neutral bank's Appraisal. Better for a Seller to get Bad News before they list and have deals fall apart and their house starts to acquire Loser Stink. When I see a house that interests me and its fallen out of Pending, maybe a couple/few times, and I call the Listing Agent and they say "no fault of Seller, Buyer's financing fell through", then claim they don't have any of the Appraisal or Home Inspections done by Buyers, nor any done by Seller, I've got to assume the Listing Agent is lying and playing dumb about major problems, hoping to sucker the next victim into some Sunk Cost Fallacy bad decision. Hence my other crazy Real Estate internet idea "REDOX.com" (real estate dox), where people could list a house they want info on and fund a page and it would pay out tips for info from anonymous alias reporters, at first on the honor system but quickly moving into clout, reputation and past performance.

1. Most RE agents do a terrible job in their CMAs. They really don’t know how to evaluate property. The more experienced ones do better.
2. RE agents got away with bad CMAS when the market was really good. But when the market is more competitive they really over price. And they they don’t know how to drop it to get buyers to come. I use to sell real estate, and I did full appraisals for my listings. I would show a range of value. And I would tell those that want to list high to only do it for a short time (maybe a few weeks), and then when you drop it you need to drop it at least 5% or to the range I estimated the value at.

As to the 3.6 crunch time…I would say that waivers will become more predominant based upon AVMs. And this idea that traditional appraisals put little value on a quiet street is bogus. I don’t know where you are getting your information. AVMs maybe don’t. And there is a difference between excess land and surplus land. Surplus land doesn’t add much value. Excess land often does. BUT even excess land doesn’t add as much value as you think. People by nature are not developers. And anyone that does development knows they need to buy land pretty cheap to make money on it.

 

[autobot]

I'm not seeing where data such as cost and other details on items like new counter-tops would be included or asked for in 3.6.

Column D and sections 10.037 to 10.042 on Appendix A-1 and Appraisal Guild and Freddie example.
All looks pretty basic. In other YouTubes Audrey is ranting about how sellers will need to dig out past invoices for any improvements including make/model, receipts for materials, etc.
Is that true and would that be "only if the Seller wants their value added to Appraisal" or would lack of documents derail a 3.6?
I'm not seeing any of that. Is that because I don't know how to read Appendix A-1 and its hidden in code-talk computereze in columns E-W, and maybe there are drop-downs with nested drop-downs and all that is defined somewhere else, like "(Reference the MISMO Data Point Name column)" of column J???

Overall, 3.6 doesn't seem like much if the Freddie example is accurate, and even what Audrey's guest is saying. Separate comments for Exterior AND Interior condition? Oh the humanity. Measure and comment on EVERY room? Sir, I've worked with guys that do flooring, and they measure EVERY room and don't complain, even for a Free Estimate.

https://sf.freddiemac.com/docs/pdf/uad-sample-scenarios-combined.pdf?fbclid=IwY2xjawTwlqZwZG9mAWV4dG4DYWVtAjExAHNydGMGYXBwX2lkDDM1MDY4NTUzMTcyOAABHpGad-hYaKJBtWsG6FfxsBjcz1_K_q6sD-kn0zl74iwJAu9CXypdQq-hwecf_aem_L5ihU6dnWW-CL0D6sfx5Pw

collect the information, but instead of writing, oh, it's on a slab and it's two stories and it's got a a Mediterranean
16:00
style and it's got a a tile roof and there's a swimming pool, they're going the appraiser or the property data
16:06
collector is going to have that tablet and it's going to be all drop down screen focused.
16:11
Okay, but one of the critical things is we're going to get very granular with the data that's going to be collected on that
16:17
tablet. So, if I say updated kitchen, it's not just updated kitchen. There's going to be drop down menus.
16:23
You're going to talk about, "Yeah, I've got these special quartz waterfall countertops and they were installed in
16:30
2024 and I paid $2,800 for the materials and blah blah blah." We'll get to those
16:35
details in a second, but more importantly, the you used a 10 times more complicated phrase earlier.

 

[Airstream]

I'm not seeing where data such as cost and other details on items like new counter-tops would be included or asked for in 3.6.

Column D and sections 10.037 to 10.042 on Appendix A-1 and Appraisal Guild and Freddie example.
All looks pretty basic. In other YouTubes Audrey is ranting about how sellers will need to dig out past invoices for any improvements including make/model, receipts for materials, etc.
Is that true and would that be "only if the Seller wants their value added to Appraisal" or would lack of documents derail a 3.6?
I'm not seeing any of that. Is that because I don't know how to read Appendix A-1 and its hidden in code-talk computereze in columns E-W, and maybe there are drop-downs with nested drop-downs and all that is defined somewhere else, like "(Reference the MISMO Data Point Name column)" of column J???

https://sf.freddiemac.com/docs/pdf/uad-sample-scenarios-combined.pdf?fbclid=IwY2xjawTwlqZwZG9mAWV4dG4DYWVtAjExAHNydGMGYXBwX2lkDDM1MDY4NTUzMTcyOAABHpGad-hYaKJBtWsG6FfxsBjcz1_K_q6sD-kn0zl74iwJAu9CXypdQq-hwecf_aem_L5ihU6dnWW-CL0D6sfx5Pw

collect the information, but instead of writing, oh, it's on a slab and it's two stories and it's got a a Mediterranean
16:00
style and it's got a a tile roof and there's a swimming pool, they're going the appraiser or the property data
16:06
collector is going to have that tablet and it's going to be all drop down screen focused.
16:11
Okay, but one of the critical things is we're going to get very granular with the data that's going to be collected on that
16:17
tablet. So, if I say updated kitchen, it's not just updated kitchen. There's going to be drop down menus.
16:23
You're going to talk about, "Yeah, I've got these special quartz waterfall countertops and they were installed in
16:30
2024 and I paid $2,800 for the materials and blah blah blah." We'll get to those
16:35
details in a second, but more importantly, the you used a 10 times more complicated phrase earlier.

It is a very very very big mistake to think that cost is going to add dollar for dollar value. That is seldom true except for cosmetics. For example a new kitchen is going to add value, but it depends upon how badly the previous kitchen was. If you take a perfectly good kitchen and put in a new kitchen that suits your fancy you will get very little bang for the buck. YOU might like it better, but the buyer may not be that impressed.

If a homeowner tells me they spent 50,000 on a new kitchen, I will compare that home to a similar quality kitchen. PERIOD. The very first thing you will ever learn is the COST does not equal VALUE.

Where people do make money on kitchen remodels is when they take their present older style ktichen, maybe paint the cabinets, put a new sink or counter-top on that looks nicer and add nicer fixtures. That is primarily cosmetic.

 

[autobot]

anyone read this stuff better than I can?

where would I go to find out what it means in human terms?

 

[autobot]

It is a very very very big mistake to think that cost is going to add dollar for dollar value. That is seldom true except for cosmetics. For example a new kitchen is going to add value, but it depends upon how badly the previous kitchen was. If you take a perfectly good kitchen and put in a new kitchen that suits your fancy you will get very little bang for the buck. YOU might like it better, but the buyer may not be that impressed.

If a homeowner tells me they spent 50,000 on a new kitchen, I will compare that home to a similar quality kitchen. PERIOD. The very first thing you will ever learn is the COST does not equal VALUE.

Where people do make money on kitchen remodels is when they take their present older style ktichen, maybe paint the cabinets, put a new sink or counter-top on that looks nicer and add nicer fixtures. That is primarily cosmetic.

I'm not asking about if it should or could regarding any particular deal, just where the "granular" data everyone is saying the 3.6 demands gets entered.
I'm not seeing any fields for "cost of remodel and date completed" or "pic of receipts", just an "other comments" and the official example is very brief or not even filled out.

Yeah, I know there will be depreciation for a kitchen remodel, but they seem to be acting like you will need receipts for ANY value to be included, but the examples show only very basic "Fully Updated........Upgraded Countertops, Fixtures and Cabinets....Less Than One Year...Like new"

Regardless of depreciation, that could be worth $5,000 to literally "The Sky is the limit" and well over a million easy and beyond.

 

[Airstream]

I'm not asking about if it should or could regarding any particular deal, just where the "granular" data everyone is saying the 3.6 demands gets entered.
I'm not seeing any fields for "cost of remodel and date completed" or "pic of receipts", just an "other comments" and the official example is very brief or not even filled out.

Yeah, I know there will be depreciation for a kitchen remodel, but they seem to be acting like you will need receipts for ANY value to be included, but the examples show only very basic "Fully Updated........Upgraded Countertops, Fixtures and Cabinets....Less Than One Year...Like new"

Regardless of depreciation, that could be worth $5,000 to literally "The Sky is the limit" and well over a million easy and beyond.

1. You don’t need receipts.
2. We need to know WHAT has been done and the materials used.
3. Fully remodeled is a new kitchen, Updated kitchen would be new counters, painted cabinets, new fixtures.
4. The granular data is found when you mark the kitchen “remodeled” a window comes up and asks “age, quality of materials, type of materials.” This is also true for “updated.” The fields are dynamic and not static in the form. So let’s say that the kitchen remodel is 10 years old, used standard materials such as laminated counter tops and builder grade cabinets. For an old house build in the 1920’s that would be good to know when you are comparing it to another house built in the same time frame but it is only updated. That’s where one begins to make a condition or quality adjustments (most like condition in this case).

The bottom line is you don’t have to have receipts. No one is going to keep them for 10 years. And if it is a resale to the present owners the present owners may have zero idea. This is where the appraiser will look and given a general analysis. But it is good to know what has been done and when it was done.

I watched the video and my reaction was is this guy is a bit blowing smoke. Some of the things he says are true, but some are a bit exaggerated. For example, the agent being there. That’s fine, but not necessary if there is a list. And I don’t mind having the agent give me their sales comps (if they are good). In fact I often ask agents for their comps ESPECIALLY if it is an odd ball property. AND I WOULD NEVER take these stupid scanning programs with any credibility. They are crap and highly inaccurate.