Marketing Question

[bbr711]

A local lender has asked that I host a seminar to educate its LO's on the residential appraisal process. I'll have about 10 minutes for my presentation, then about 10 more for a question/answer session.

Having never done this, I'm very nervous, and I'm having a tough time convincing myself to go through with it.. But, I feel it's an opportunity not to be taken lightly, and, moreover, one not to be missed - it's a chance to establish myself with potential clients.

Anyone have any guidance and/or advice on this subject?

How should I approach such a thing??

- Focus on the URAR form and explain each of its parts?
- Focus on the Market Analysis only?
- Discuss differences in conventional and FHA loans?

Any insight/wisdom would be greatly appreciated!

Thanks - - -

 

[Charles Knutson]

Hi bbr --

Welcome to the forum!

I would focus on the appraisal process, with a brief mention of the differences between an FHA and conventional inspection (i.e., that FHA requires the systems to be in good working order).

I tell people that a good appraisal is a goldilocks process -- one comp that is bigger and better than the subject, one that is smaller and inferior to the subject, and one that is just right -- ideally on the same block, and all having closed within the past month. The further we get away from ideal comps, the more challenging and subjective the appraisal process becomes.

I also tell folks that top of the market properties are always toughest to appraise, because top of the market comps are always scarce.

I also explain that no matter what a property may be worth, if we can't make a convincing case with comparable sales, mortgage financing may not be available -- and cash buyers may be the only option.

Good Luck!

 

[Lawrence R.]

Try not to make it a USPAP seminar.

Keep it germane to the issues a realtor has...

Show them how appraisals help them, not hinder.

I always use a 100 sft per house times 20 houses at 6% if mis measured by the realtor costs them big money.

Now, you and I both know that is fuzzy math, as many houses 100 feet won't make a difference, but you will get their attention.

Realtors care very much about finding an easygoing, professional appraiser. They also care about making money and closing loans.

They probably could use a tutorial on absorption rates, and how listing prices are important in a down market(if you have one of those).

Have some good examples--pictures preferably of things that stick in an appraiser's throat... examples of sinking foundations, water damage, etc..throw in a pic of some ridiculous house to explain obsolecense


Explain why we need the contracts quickly to help expedite the appraisal, not because we want to be the contract police.

Explain why concessions need to be adjusted and how important it is to disclose them on the MLS.

Then, tell them I said to go jump in a lake.

Just kidding. Good luck with your presentation.

 

[Mztk1]

I would emphasize the need for honesty in appraisals, accurate reporting, and supportable conclusions. Since these are LOs I'd bring in guidelines that explain that the condition of the house, even small cracked windows, has to be reported accurately, and that listings and pending sales have to be considered as substitute properties in the declining market, then I'd take the presentation to how you measure the decline.

After that, I'd let them ask away.

 

[ghrousseau]

A local lender has asked that I host a seminar to educate its LO's on the residential appraisal process. I'll have about 10 minutes for my presentation, then about 10 more for a question/answer session.

Having never done this, I'm very nervous, and I'm having a tough time convincing myself to go through with it.. But, I feel it's an opportunity not to be taken lightly, and, moreover, one not to be missed - it's a chance to establish myself with potential clients.

Anyone have any guidance and/or advice on this subject?

How should I approach such a thing??

- Focus on the URAR form and explain each of its parts?
- Focus on the Market Analysis only?
- Discuss differences in conventional and FHA loans?

Any insight/wisdom would be greatly appreciated!

Thanks - - -

If it were me I would compile a list of the various investor guidelines (can be found on their websites), current FHA and Fannie/Freddie guidelines like distance of comparables, dates, DOM, prior sales dates, ect. I would also research and present Fannie, Freddie and FHA's current policies on declining markets. I would create a simple matrix showing guidelines that the LO's can keep with them .(you may put a footnote disclaimer at the bottom.) The reason I mention this approach, is many LOs end up having their appraisals conditioned to death for appraisal stipulations by underwriters for missing information. This type of presentation will make you look both knowledgeable in the appraisal arena, and current and up to date with investor, FHA, and Fannie/Freddie guidelines. Our company's biggest issue at this time with appraisers is not value issues, it is failing to address market conditions, excessive adjustments, dated sales, and a general sloppiness. Just my two cents.

 

[Richard Carlsen]

10 minutes. About as much time as most appraisers listen in USPAP class.

I agree however: Keep it basic. You might talk briefly about value, price and cost with value being a justified price and the appraisers role in the valuation process.

This is really a hard assignment but you can generate a lot of good will by giving them just one thing to remember.

Good luck.


____________________________

È più tettoia delle rotture sopra le preghiere risposte a che sopra le preghiere senza risposta.

 

[Tawfik Ahdab]

I would piggyback on Richard's advice and discuss the concept of market value versus cost and price and also discuss the components that make up the definition of market value.

 

[Tom Eichholz]

A local lender has asked that I host a seminar to educate its LO's on the residential appraisal process. I'll have about 10 minutes for my presentation, then about 10 more for a question/answer session.

Having never done this, I'm very nervous, and I'm having a tough time convincing myself to go through with it.. But, I feel it's an opportunity not to be taken lightly, and, moreover, one not to be missed - it's a chance to establish myself with potential clients.

Anyone have any guidance and/or advice on this subject?

How should I approach such a thing??

- Focus on the URAR form and explain each of its parts?
- Focus on the Market Analysis only?
- Discuss differences in conventional and FHA loans?

Any insight/wisdom would be greatly appreciated!

Thanks - - -

I once had a similar assignment with a group of Realtor's, but you can tailor your remarks for LO's: I was a guest speaker at their bi-monthly sales meeting and was given about 10-15 minutes. Some of my notes.

1.) Personal lntroduction: Name, Company Name, Appraisal Experience, Etc.

2.) Brief Explanation of USPAP (and the meaning of the acronym "Uniform Standards of Profes....," etc) and how it is applied to Appraisers And Why Established... (After the 1986-87 S&L Meltdown established to ensure Ethics, Competency, & Standards-is enforced by each State).

Followed by a brief explanation of FIRREA (1989)= Financial Institution Reform, Recovery, & Enforcement Act.

3.) Client/Appraiser relationship, & the need for lenders to have an unbiased, independent "check" on the market....Appraiser's Fee is NOT based on a percentage of value, unlike the Realtors, LO's, etc, but rather a flat fee to discourage collusion, rewards, etc....discuss Appraiser Penalties/Sanctions, etc.

4.) Some of what appraisers are looking for: "Value Influences" some that have big names, like "External & Internal Obsolescence", but with a simple explanation. In other words, are there any Outside Factors, or Inside Factors that influence market value? Give examples: External = A Nice house located on a busy street right next to an all-night Liquor Store (maybe not really so bad-got a few laughs); and Internal = Or access to the only bathroom thru a bedroom or vice versa, basically usually a funky floor plan/poor utility.

Comp Selection, basically a process of elimination: Similarity of Age, Style, Size, Distance, Proximity to Area Amenities, etc, etc ... Underwriters want (I call it) "Goldilocks Comps" (Bracketing) = One Comp Not Too Warm, One Comp Not Too Cool, & One Just Right!

5.) Explained the difference between what is considered to be mainly homeowner's maintenance & what is actually an improvement.
Gave a few minutes for Q&A:

What is replacing your 30 year old comp roof? Maintenance or Improvement?

OK then, what is replacing your dated countertops & tired kitchen appliances with granite tops & modern appliances (assuming not an overimprovement for area). M or I? (Maybe a little of both?!)

What is adding a 3rd bedroom & closet in existing useful space that was formerly a study (but not converting the attached garage to a bedroom!)?
M or I?

What is painting your house? M or I?

What is finishing your basement? Adding a 3rd car attached garage? M or I?

You get the gist...They loved it!

6.) Briefly explain Appraiser's use of 3 Approaches to Value (Don't say it's mainly SWAG).

7.) Lender/USPAP requirement for 12 month/36 months of Subject Sales history, illegal Flipping, etc.

8.) Ask for their help (in my case, was the Realtor's)...e.g. Complete & Accurate data descriptions in MLS listings, they should advise homeowner's of appraisal protocol-(or whenever possible they should be gone-so you can use your lock box key instead of answering a million homeowner questions-same as when they do a showing-gets a big laugh too!)

Finally asked the Realtor's to tell the homeowner not to lock the storm door (so you can get to the lock box), not to take the lock box inside the house if not secured, not set the alarm (so when it goes off you can wait for the police & then get interrogated for an hour or worse-so pay your speeding & parking tickets!), ask the nosey neighbor to NOT call the police when he sees you lurking around their house in broad daylight with a tape measure and a clipboard, and ask them to please put Spike in a cage or take him to the Pet Motel, tell their teenager(s) that someone will be in the house while they're still in bed around noon.

9.) Thank them for being such an attentive and nice audience. Pass out your business cards & ask for their referals to the lenders they use (or for you, to use you for their loan appraisal business).

Good luck!

 

[nauthead]

Serve them lunch, or at least coffee and donuts. Talk about the need for expanded narrative on market conditions in today's real estate environment. Explain to them the amount of time necessary to complete a thorough report. If you have time to prepare a market report that shows individual areas, market changes, number of sales, listings, REO's, etc, it would be worth the effort. Hand each person there a market report with with your name and number at the bottom, plus business cards.

 

[Bama Bayou]

Serve them lunch, or at least coffee and donuts. Talk about the need for expanded narrative on market conditions in today's real estate environment. Explain to them the amount of time necessary to complete a thorough report. If you have time to prepare a market report that shows individual areas, market changes, number of sales, listings, REO's, etc, it would be worth the effort. Hand each person there a market report with with your name and number at the bottom, plus business cards.

My bold.

I would not do that. I don't do the pizza and sticky bun marketing. My banker clients buy my lunch and pick up the tab for drinks.

I have done many of these types of presentations. Most become question and answer sessions in about one minute. Makes it easier.