Bartow 10 15 2009

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Real Estate Appraisal, Myth and Reality

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Bartow 10 15 2009

  1. 1. Francois K. Gregoire, IFA,Francois K. Gregoire, IFA, RAARAA State Certified Residential Appraiser #142State Certified Residential Appraiser #142 Myth and RealityMyth and Reality
  2. 2. Bartow - © 2009 Frank Gregoire2 PREPARED FOR:PREPARED FOR: BartowBartow Board ofBoard of REALTORSREALTORS ©©
  3. 3. Bartow - © 2009 Frank Gregoire3 aboutabout Frank………...Frank………... • Licensed since 1976Licensed since 1976 • Realtor® since 1977Realtor® since 1977 • Appraising since 1977Appraising since 1977 • State-Certified ResidentialState-Certified Residential Appraiser since 1989Appraiser since 1989
  4. 4. Bartow - © 2009 Frank Gregoire4 aboutabout Frank………...Frank………... • Real Estate License Law and AppraisalReal Estate License Law and Appraisal Instructor since 1977Instructor since 1977 • Member Florida Real Estate AppraisalMember Florida Real Estate Appraisal Board February, 2000 – February, 2008Board February, 2000 – February, 2008 • Qualified Expert Witness - PinellasQualified Expert Witness - Pinellas County Circuit Court, United StatesCounty Circuit Court, United States Bankruptcy Court, Division ofBankruptcy Court, Division of Administrative HearingsAdministrative Hearings
  5. 5. Bartow - © 2009 Frank Gregoire5 TODAYTODAY • AppraisersAppraisers • License CategoriesLicense Categories • Applicable LawApplicable Law • Applicable StandardsApplicable Standards • Applicable GuidelinesApplicable Guidelines • AppraisalsAppraisals • Myth and RealityMyth and Reality
  6. 6. Bartow - © 2009 Frank Gregoire6 TODAYTODAY • New DevelopmentsNew Developments • Fannie Mae 1004MCFannie Mae 1004MC • Home Valuation Code ofHome Valuation Code of Conduct (HVCC)Conduct (HVCC)
  7. 7. Bartow - © 2009 Frank Gregoire7 Appraiser - Licenses andAppraiser - Licenses and QualificationsQualifications • Registered TraineeRegistered Trainee • Licensed AppraiserLicensed Appraiser • State-Certified Residential AppraiserState-Certified Residential Appraiser • State-Certified General AppraiserState-Certified General Appraiser
  8. 8. Bartow - © 2009 Frank Gregoire8 Appraiser – Applicable Law -Appraiser – Applicable Law - RulesRules • Chapter 475, Part II,Chapter 475, Part II, Florida StatutesFlorida Statutes • Chapter 61J1,Chapter 61J1, FloridaFlorida Administrative CodeAdministrative Code
  9. 9. Bartow - © 2009 Frank Gregoire9 Appraiser – ApplicableAppraiser – Applicable StandardsStandards • Uniform StandardsUniform Standards of Professionalof Professional Appraisal Practice,Appraisal Practice, January 2008January 2008 Edition (USPAP)Edition (USPAP) • Incorporated intoIncorporated into Chapter 475, Part IIChapter 475, Part II • Incorporated intoIncorporated into Chapter 61J1, FACChapter 61J1, FAC
  10. 10. Bartow - © 2009 Frank Gregoire10 Appraiser – ApplicableAppraiser – Applicable GuidelinesGuidelines • Freddie MacFreddie Mac Seller/ServicerSeller/Servicer GuideGuide • Fannie Mae SellingFannie Mae Selling GuideGuide
  11. 11. Bartow - © 2009 Frank Gregoire11 Appraiser – ApplicableAppraiser – Applicable GuidelinesGuidelines • HUD 4150.2HUD 4150.2 Valuation AnalysisValuation Analysis for Single Familyfor Single Family One – Four UnitOne – Four Unit DwellingsDwellings • M26-2 ConstructionM26-2 Construction and Valuationand Valuation Policies,Policies, Procedures, andProcedures, and MethodsMethods
  12. 12. Bartow - © 2009 Frank Gregoire12 MYTH OR REALITY?MYTH OR REALITY? • Since the Borrower paid for theSince the Borrower paid for the Appraisal, the Borrower Owns ItAppraisal, the Borrower Owns It • Appraisers are Prohibited fromAppraisers are Prohibited from Discussing the Appraisal with the AgentDiscussing the Appraisal with the Agent • Appraiser is required to use Short SalesAppraiser is required to use Short Sales and Foreclosures as Comparable Salesand Foreclosures as Comparable Sales • Sales Price/SF is a Good or ReliableSales Price/SF is a Good or Reliable Indicator of ValueIndicator of Value
  13. 13. Bartow - © 2009 Frank Gregoire13 MYTH OR REALITY?MYTH OR REALITY? • Comparable Sales must be within OneComparable Sales must be within One Mile of the Subject PropertyMile of the Subject Property • Comparable Sales must have soldComparable Sales must have sold within the Past Six Monthswithin the Past Six Months • Appraisers Require Repairs to theAppraisers Require Repairs to the PropertyProperty • Comparable Sales must beComparable Sales must be ComparableComparable
  14. 14. Bartow - © 2009 Frank Gregoire14 NEW DEVELOPMENTSNEW DEVELOPMENTS • Fannie Mae 1004MC –Fannie Mae 1004MC – Market Condition FormMarket Condition Form • Documents ReasoningDocuments Reasoning for Date of Sale/Timefor Date of Sale/Time AdjustmentsAdjustments • Increases Cost ofIncreases Cost of AppraisalAppraisal
  15. 15. Bartow - © 2009 Frank Gregoire15 NEW DEVELOPMENTSNEW DEVELOPMENTS • HVCCHVCC • Restricts Selection andRestricts Selection and Retention of AppraisersRetention of Appraisers • Establishes Standards forEstablishes Standards for Appraiser IndependenceAppraiser Independence • Applies to Fannie Mae –Applies to Fannie Mae – Freddie MacFreddie Mac
  16. 16. Bartow - © 2009 Frank Gregoire16 HVCC - EffectsHVCC - Effects • Higher Appraisal FeesHigher Appraisal Fees • 64% of Realtors report increased64% of Realtors report increased appraisal feesappraisal fees • Fewer Loan OptionsFewer Loan Options • Increased Time to Receive AppraisalIncreased Time to Receive Appraisal • Over 75% of Realtors report longerOver 75% of Realtors report longer wait for appraisal – most say increasewait for appraisal – most say increase of 8 days or moreof 8 days or more
  17. 17. Bartow - © 2009 Frank Gregoire17 HVCC - EffectsHVCC - Effects • Delayed Interest Rate LocksDelayed Interest Rate Locks • Increased Use of Out of AreaIncreased Use of Out of Area AppraisersAppraisers • 70% of Realtors report higher70% of Realtors report higher instancesinstances • Lengthened Loan Approval ProcessLengthened Loan Approval Process • Possibility of Multiple Appraisals andPossibility of Multiple Appraisals and FeesFees
  18. 18. Bartow - © 2009 Frank Gregoire18 COMPETENCECOMPETENCE • what license do you hold, what is thewhat license do you hold, what is the number?number? • when did you first obtain your license?when did you first obtain your license? • are you a licensed or certifiedare you a licensed or certified appraiser, or are you a traineeappraiser, or are you a trainee appraiser?appraiser? • where are you from?where are you from? • when was the last time you appraised awhen was the last time you appraised a property in my neighborhood?property in my neighborhood?
  19. 19. Bartow - © 2009 Frank Gregoire19 COMPETENCECOMPETENCE • do you know any of the local Realtors ordo you know any of the local Realtors or Agents in this area?Agents in this area? • do you have access to the local Multipledo you have access to the local Multiple Listing Service?Listing Service? • please give me a general physicalplease give me a general physical description to enable me to recognizedescription to enable me to recognize you at the appointmentyou at the appointment
  20. 20. Bartow - © 2009 Frank Gregoire20 NAR EFFORT -NAR EFFORT - RESOURCESRESOURCES • H.R. 3044 – 18 Month MoratoriumH.R. 3044 – 18 Month Moratorium • REALTOR.ORG/HVCCREALTOR.ORG/HVCC • NAR HVCC Myths and Facts FlyerNAR HVCC Myths and Facts Flyer • Appraiser Active BlogAppraiser Active Blog
  21. 21. Bartow - © 2009 Frank Gregoire21
  22. 22. Bartow - © 2009 Frank Gregoire22 Francois K. Gregoire, IFA RAAFrancois K. Gregoire, IFA RAA State Certified ResidentialState Certified Residential Appraiser #0000142Appraiser #0000142 Gregoire & Gregoire, IncGregoire & Gregoire, Inc Realtor - AppraiserRealtor - Appraiser 727-344-3393727-344-3393 francois1@tampabay.rr.comfrancois1@tampabay.rr.com

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