Phil Crawford Podcast

[J Grant]

What were looking for first is whether the non-appraised properties are inflating the entire dataset. If they are, then is that attributable to the smaller subset (the waivers) among the non-appraised properties? And if the waivers are generally going off at a higher sale price, is it affecting the entire market segment?

No matter how else you would analyze you would still have to look at the entire dataset of "non-appraised" financed to form the basis of comparison with the smaller subset of waiver financed to see if there's any difference, and if so by how much.

Sales concessions and contributions are a separate issue due to the cash equivalency factor.

Chicken and egg - since the Waivers among non-apprised properties are not disclosed/identified, there is no way to run the comparison,

Having to call and check every time on numerous sales manually is not feasible.

 

[George Hatch]

There's no reason to look any further if the non-appraised transactions are going off at the same pricing as the with-appraisal transactions. Unless you want to.

Nobody ever got excited about the all-cash and low-LTV sales before. Not until now.

 

[J Grant]

There's no reason to look any further if the non-appraised transactions are going off at the same pricing as the with-appraisal transactions. Unless you want to.

Nobody ever got excited about the all-cash and low-LTV sales before. Not until now.

But you can not prove the WAIVER segment among non-appraised transactions is "going off at the same price" since you can not even identify them! And neither can anyone else, at any scale or consistency that makes sense.

All you did was a local median price study, and you lumped all the lower LTV loan properties together and did not ferret out specifically which had waivers and what their prices were.

 

[Surf Cat]

Nobody ever got excited about the all-cash and low-LTV sales before. Not until now.

But all-cash sales are labeled as such in the MLS. If waivers are listed as standard sales....that's well.... deceitful. Especially with all the clamoring for public trust and transparency.

We have to list the transactions of the subject property within the last 3 years, a year for the comparables, if you've previously appraised the subject property..... on and on.

The rules for thee but not for me syndrome. As I said it in an earlier post, this wasn't really well thought out.

 

[George Hatch]

But you can not prove the WAIVER segment among non-appraised transactions is "going off at the same price" since you can not even identify them! And neither can anyone else, at any scale or consistency that makes sense.

All you did was a local median price study, and you lumped all the lower LTV loan properties together and did not ferret out specifically which had waivers and what their prices were.

That's exactly what I said I did. I never claimed to identify the waivers; I just separated the possibles out from the total. I did the first half of the analysis but not the 2nd. I'd have to make 17 phone calls to see if any of them are waivers - chances are there's at least 1 or 2 among them. Then I can find it's respective comps among the high LTVs to see if there's a difference.

Tedious and time consuming but not impossible. Without the cooperation of the MLS systems.

 

[Mike Ault]

But all-cash sales are labeled as such in the MLS. If waivers are listed as standard sales....that's well.... deceitful. Especially with all the clamoring for public trust and transparency.

We have to list the transactions of the subject property within the last 3 years, a year for the comparables, if you've previously appraised the subject property..... on and on.

The rules for thee but not for me syndrome. As I said it in an earlier post, this wasn't really well thought out.

To complicate matters, we have to "analyze" those transactions for the last 3/1 years, not simply list them. Which means we need to gain some insight into whether those transactions were typically motivated and consummated by knowledgeable, well-informed participants acting in their own best interests. "My buyers agent & loan officer told me we didn't need to waste any money on that appraisal" wouldn't seem to fit into that category

 

[George Hatch]

But all-cash sales are labeled as such in the MLS. If waivers are listed as standard sales....that's well.... deceitful. Especially with all the clamoring for public trust and transparency.

We have to list the transactions of the subject property within the last 3 years, a year for the comparables, if you've previously appraised the subject property..... on and on.

The rules for thee but not for me syndrome. As I said it in an earlier post, this wasn't really well thought out.

First off, I have always reported the financing amount - or lack thereof - among my comps. So no, MLS listings aren't the primary source of that info. They never have been. By the same token, I have never attempted to identify the rate/terms of that financing. Which we're not even talking about that right now - we're just talking about which transactions were backed by a waiver vs weren't. That's not a cash equivalency issue.

If the talking point is that one of the primary rationales for requiring appraisals has been to prevent price creep then comparing the high LTVs which will often be dependent upon appraisals vs the low LTV/all cash transactions where there was no appraisal is a logical starting point. Sure, better to actually single out the waivers if we can do that - no argument there. But in lieu of the EASY button perhaps we can perform some case studies to see if non-appraised properties are even a factor in the prevailing pricing trends. That's all I was driving at with this comparo.

 

[Fernando]

You have to look at perspective of how one sees waivers.

To Appraisers, it's obviously bad. Less Work.

To Agents, good and bad. It's bad when waiver value doesn't come to contract price.

To Public, good and bad.

Last time I was at BOA, I asked about HELOC. Quickly the loan agent type my address and quickly came to an AVM value.
Max loan they could give was like 40% of the AVM value which is more than I need.
Yet, an appraisal still needs to be done. Ugh.
Good part is that I don't have to pay but if I take out a minimum HELOC amount, it will be waived. Banks have to make their money somehow.

If on other hand, if the Bank's AVM had low value that would be bad for the borrower.

 

[Zoe]

You have to look at perspective of how one sees waivers.

To Appraisers, it's obviously bad. Less Work.

To Agents, good and bad. It's bad when waiver value doesn't come to contract price.

To Public, good and bad.

Last time I was at BOA, I asked about HELOC. Quickly the loan agent type my address and quickly came to an AVM value.
Max loan they could give was like 40% of the AVM value which is more than I need.
Yet, an appraisal still needs to be done. Ugh.
Good part is that I don't have to pay but if I take out a minimum HELOC amount, it will be waived. Banks have to make their money somehow.

If on other hand, if the Bank's AVM had low value that would be bad for the borrower.

You were probably borrowing to invest somewhere else. Don't cry to me. LOL

 

[J Grant]

You have to look at perspective of how one sees waivers.

To Appraisers, it's obviously bad. Less Work.

To Agents, good and bad. It's bad when waiver value doesn't come to contract price.

To Public, good and bad.

Once a WAIVER is granted, it ALWAYS comes in at the SC price- because when a WAIVER is issued, the sale contract price is the default property value. .

If a waiver is not granted, then the order is sent for an appraisal.

Read up on them- a WAIVER is not the same as an AVM valuing a property.