Brookside Appraisals

Financial Reform Act

2010-07-24T05:51:00.001-07:00

It is amazing to me how things can get turned around so much in politics. The Financial Reform Act, which housed the Appraisal Reform Package, has turned around and bit appraisers in the butt. For those of you not familiar with this package, it included provisions to maintain protection for independent property valuations, support the use of independent appraisers, encourage "customary and reasonable" fee structure for appraisers and provide common sense guidelines for appraisal management companies, etc. I started noticing a fee change in my orders from one of the larger AMC's. After numerous calls and emails, plus declining work because of it (the fees are ridiculously low), I finally spoke with someone who indicated that a new policy has been placed into affect. Same fees for everyone. Now "customary and reasonable" should go by your area, shouldn't it? Apparently not, and there's no requirements on who/what is polled to get this fee. I was informed that I'm a top-tier appraiser which means I'll get lots of work. But that also means the lowest-tiered appraiser gets the same fee as I do. Does that make sense? And, on top of all this, do you think the financial institutions or the AMC's have reduced their fees? Probably not which means they are making more money on the backs of the homeowners and appraisers. Complaints from homeowners and Realtors have become numerous since the Home Valuation Code of Conduct was passed in 2009. Appraisers were travelling out of their area in order to work because of the AMC's low fees. Now, it's only going to get worse, and I can't say I blame them. Will things change down the line as more and more appraisers start to fight back? I don't know. But this is one appraiser who's finally had enough.

Appraiser's Need to Take Action

2010-07-10T05:57:00.000-07:00

There has been much discussion and debate about Appraisal Management Companies (AMCs) amongst the appraisal community, as well as the realtor community. Most are very unhappy with the turn of events since the Home Valuation Code of Conduct (HVCC) was put in place in 2009 by Andrew Cuomo. Lenders that sell off their loans to FannieMae or FreddieMac must go through a third party to hire an appraiser so that no impropriety takes place in predetermining the value of a home. AMCs have been around for a long time. I, myself, have worked with them for 15 years. Many have popped up since the HVCC was established. Because of the middle man, appraisers have had to work for lower fees, in some cases, lower than the cost to do business. Although the HVCC may disappear soon, AMCs will not. It is time appraisers take a stand. However, to do so, we need people in the position to fight this battle. Individual appraisers CAN AND SHOULD do something to help. We can join an organization that supports The Appraisal Foundation (TAF) giving them the support they need to work out the differences between AMCs and appraisers making a working relationship we can all live with.

When the HVCC first came out, realtors were up in arms because of the appraisers being sent from all over, not necessarily knowing their area. Work was dwindling and appraisers were trying to sustain a business and/or family. Realtors complained and the National Association of Realtors (NAR) fought on behalf of the realtors and have gotten a moratorium on the HVCC. Appraisers need this kind of fighting power and can only get it by joining an organization and letting them know what's important to each of us. I have only joined local organizations up till now. I am putting in a application to the American Society of Appraisers (ASA). It will cost me money each year, money that I don't necessarily have right now because of limited work. It is my hope that with each new membership, organizations will help increase our fees and workload making the annual dues worth every penny.

I ask each and every appraiser to join an organization that works for you. There are many out there. Check their chapters, education and benefits. Find one that makes it worthwhile. Instead of fighting amongst ourselves, finger pointing and name calling, we should band together and fight together. Hopefully, someone will hear us!

Supporting Local Business

2010-05-07T06:46:00.000-07:00

On Wednesday, Shop Putnam had their annual home show. I was hoping to stop in and see what local businesses were there, but couldn't get out of work. I'm very much a supporter of local business. I try to shop in my town and county whenever possible. As a local business owner, it is my hope that others feel the same way. And it's important to support the local businesses in neighboring towns, as well. Let's face it. In today's world, we're always running. Unfortunately, Putnam Valley is limited, but Cortlandt, Peekskill and Yorktown are right next door, and we should concentrate on them as well. I've recently had the opportunity to visit some of the new (to me anyway) restaurants in these locales. Over the past few weeks, I've visited Ravenna's, 12 Grapes, Birdsall House and Division Street Grill, all located in Peekskill. I have to say my two favorites are Ravenna's and Birdsall House, but each restaurant had something different to offer, which is great. And, as an added bonus, Division Street Grill is one of the restaurants available for gift certificates on restaurants.com. So you can purchase a $25 gift certificate for $10. If they have a special, you can get it for $2 or $3. It's nice that there are places with good food at good prices just around the corner. So next time you consider running to an outlet center or discount store, think about your local businesses.

Today's Market

2010-04-15T07:23:00.000-07:00

From what I'm hearing from most appraisers, things have been really quiet. Fortunately, for me, I've been relatively busy. Mostly refinance work, but there are sales out there, unlike 6 months ago. I recently appraised a co-op in Bronxville and in conversation with the broker, I learned that the area is undergoing bidding wars (significantly over list price). Not just in the co-op area, but single family homes as well. I thought, hmm, maybe just one broker's opinion or maybe just that specific area. We discussed how this will affect the market, wondering if anyone learned anything from the past few years. A couple of days later, I'm appraising a property in Putnam County and hear the same thing regarding a comp I was using. A bidding war. So now the question is "are brokers underpricing homes or are the number of active listings dropping to the point that buyers are forced to fight for the property they want?" Will this bring us to a happy medium where buyers and sellers will feel comfortable with the value of the house they are buying/selling? Or, will this start a rise in values that will cause more "unstableness" in the current market? In the past couple of appraisals I've done, I've seen tremendous depreciation statistics. More than any time in the past. Maybe it's just that these sales are catching up to us, but the value of property still seems to be way below what it should be.

Gross Living Area

2010-01-23T06:18:00.000-08:00

I recently had a homeowner complain that I had omitted a bathroom in the room count on the appraisal of her home. As this is a common question/complaint, I thought it was time to address this issue for anyone out there who might wonder how we establish the Gross Living Area of a Raised Ranch. Guidelines require that we utilize only the area of the home that is completely above grade, heated and finished in the same manner as the rest of the home. With the typical Raised Ranch, a portion of the lower level is usually below grade. Even if the garage is at grade level or the basement is a walk-out, the front section or a side may be below grade. This area cannot be counted in the overall Gross Living Area. It is, however, included in the finished basement and if an appraiser is using all Raised Ranches as comparable sales, it's like comparing apples to apples. Appraisers have told me this was started because some appraisers would use Colonial-style homes as comparable sales for a Raised Ranch. There are very few Raised Ranches that do not have a finished basement, so as long as the appraiser is being consistent and utilizing the same type of home, the end result is the same.

Unfortunately, as appraisers we are not always allowed to discuss the appraisal with the homeowner as they are not our client. This is another tricky issue that arises when there are questions or disagreements. Appraisers are only allowed to dicuss the appraisal with the entity or person that hires them. I had a hard time with this concept when I had my first appraisal done. I didn't understand why because it was my home, and in actuality, I was paying for it through my closing costs. It does not go by who pays for the appraisal, but by who hires us. I don't necessarily agree with this, but I must abide by USPAP (Uniform Standards of Professional Appraisal Practice) Ethics Rule. If you have a question or concern about an appraisal you've had done, go directly to the lender you have been working with. Ask them to provide the appraiser with permission, in writing, to discuss the report with you.

And last, but not least, it is not the appraiser's job to come up with a value that will get a homeowner their loan. It is our responsibility to determine OUR opinion of the market value of a home based on the information we have available to us. We are not provided with any specifics about the loan amounts or what "number" we need to come up with to make a loan work. An appraiser must remain impartial, independent and objective.

Charles E. Clauss, Sr.

2009-12-01T16:30:00.000-08:00

I titled this post because of my dad....that's his name....My dad passed away on April 9, 2006. The first 2 years, it was hard for me thinking about my dad no longer being with us. I missed him terribly. The last year, it's been easier, as I realized dying is a part of life. We all must face it at some point. My dad use to always say that I was my mom born all over again. I am in many ways just like my mom, but there are some ways I am soooooo my dad. He was very organized. I remember when my sister was planning her wedding, my dad, mom, sister and future brother-in-law went to look at the restaurant they were planning to hold the reception. When they got home that night, my dad started planning the guest list. It was a year before the wedding. That's me. I'm very organized. I do fly by the seat of my pants some times, but I believe in the saying "everything in it's place and a place for everything." The other night I was watching NCIS. It was a repeat about a WWII veteran who thought he had killed his best friend. During the episode, it showed him dancing with Kate (for those of you who are NCIS fans, you know who Kate is) to an old song. As I watched, I remember joking with my dad about stepping on his toes while we were dancing. You see, my dad loved to dance. At every wedding or special occasion my dad would dance with each of his daughters (there are 3 of us). We'd always joke about how we'd step on his feet. He was such a good dancer and we stunk!!!! Actually, he would trick us just to tease us. I couldn't fox trot to save my life. Whenever a wedding was in the future, we all joked that we'd have to dance with daddy and step on his feet. Yet, we all looked forward to that special moment of the night when we got to dance with daddy. No matter what or where, he'd find us to dance with us just once. The most precious moment I have is a picture of me and dad dancing at my wedding. The last wedding I went to (my cousin Amanda's) was bittersweet because dad couldn't come. He was too ill to attend. I didn't get the opportunity to dance with him, and I miss it to this day. What I wouldn't give to dance with my dad one last time.....

What's Next?

2009-11-16T15:51:00.000-08:00

The more I talk to people today, the more I realize that so many people are in a transitional stage in their lives. There are so many people out of work, and you don't realize how the trickle down effect really works. I ran into someone the other day that provides daycare. I met her 15 years ago at nursery school where she was picking up one of her kids. She'd already been in the business for awhile. Now she's affected by the recession because so many dads have lost their jobs. They're staying home taking care of the kids. I'm now working two jobs and going back to school hoping to find a recession proof job. Is there such a thing? According to statistics, health care related jobs and financial jobs are the way to go. As we were always taught, you have to die and pay taxes. No truer words were ever spoken. So many people are asking....what do I want to be when I grow up???? It's hard to believe that I'm still asking the same question......

Failing Prices

2009-09-27T06:14:00.000-07:00

A recent article in The Journal News indicated home prices were still falling in the Hudson Valley region. Actually, it indicated the Hudson Valley was falling more rapidly than the rest of New York State. It appears that Putnam County, Westchester County and Rockland County has seen major decreases in the number of sales as well as median sale price, based on statistics from the National Association of Realtors. With each new appraisal request, I run specific statistical analysis for each town and school district in which the property is located. I've seen stable prices in Buchanan and Montrose, yet a 17% depreciation in Peekskill.

I recently did an appraisal in Putnam Valley and found that from August 2008 to August 2009, depreciation was reflected at 16% and 9% based on average and median sale prices, respectively. Yet 1 month later, in September, the depreciation was reflected at 10% and 5%. This would indicate sales prices are slowing creeping up. It will be interesting to see what October will bring.

A Yahoo! News article posted that the 95th US bank closed due to the highest number of loan defaults in decades. Not to mention the highest unemployment rate in decades as well. And the statistics don't even include the small business operations of 1-2 employees that went under and can't even collect unemployment. Which brings me to another point. The government is out there helping banks and big businesses, but what are they doing for the little guy? The federal government decided to extend Unemployment Insurance for an additional 13 weeks for those who are still without jobs. Does anyone in the government realize that there are people out there that are individuals doing business as a corporation that get no help whatsoever? If you are self-employed, you are not entitled to Unemployment benefits, even though you pay into them. Do they realize that these people can't collect unemployment and don't have access to the deduced rate on Cobra? The Hudson Valley region is home to many of these people....plumbers, electricians, mason, carpenters, contractors and a lot of other blue collar workers....where is help for them?

Without the mom and pop businesses, this country would not be what it is today. Where are the small business organizations when they should be screaming for help for these people like other organizations are?

Patriot Day

2009-09-10T17:30:00.000-07:00

Tomorrow is Patriot Day, the remembrance of September 11th. It's hard to believe it's been 8 years since that fateful day. The worst tragedy of our generation. I remember days after, newscasters were commenting that for the rest of our lives, we would remember exactly where and what we were doing when the first plane struck the World Trade Center. They compared it to Pearl Harbor and how people always remembered that. I was sitting at the drive up window at the bank. In all honesty, terrorism was not my first thought when things started unfolding. I couldn't imagine something so horrific actually happening on American soil. When I got to work, I found out my friend's husband was working in Tower II. Unfortunately, the worst news came and he was killed. I also remember how everyone started treating each other with respect and kindness. It had been a long time since that happened. I remember the pictures and speaking to people who witnessed everything first hand. Hearing story after story of those who got there late, of those who walked miles to get home, of those who watched people jumping from buildings, watching the buildings collapse and of those who spent day after day waiting for news. My neighbor worked at one of the NYC hospitals that became a trauma center. I remember going to the city and seeing the temporary morgue set up. More than a year later, I was speaking with a woman who was going on a trip for the first time in 50 years. Her daughter had been pulled from one of the buildings at the last second before collapsing and now she was afraid to go on a plane. She started telling me her daughter's story and how it has affected her life, even though she survived. The whole country took notice and felt the pain even if they didn't live in New York, Washington or Pennsylvania. We need to stop and take notice, not just on September 11th, but every day of our lives. We need to support those men and women who are fighting for our protection and for our freedom. We need to take a stand against those who would see the United States of America fall. We need to remember those who lost their lives and those who were left behind....both the survivors and the families of those who were lost...not just on September 11th, but forever.....WE WILL NEVER FORGET!

2009-09-04T16:41:00.000-07:00

I was recently discussing with a friend things I could blog about. She told me to discuss things that are passionate to me. There are many things that I feel passionate about these days. Health care, small business economy and the unemployment rates, just to name a few. As for the appraisal industry, the current state of our industry is driving me crazy. I've spent the last 15 years of my life trying to be ethical and doing the right thing in order to put my head on my pillow every night and be able to sleep knowing I did the right thing. I've tried sooooo hard to do my job to the best of my ability, yet I still find that there are so many obstacles out there, even when you do the right thing, it doesn't necessary show. This week was a very difficult week. Sales are so limited in EVERY market area that it makes me wonder how the apprentice appraisers are doing their job. Without the experience I have obtained over the years, I can't imagine doing my job properly. Every job is difficult and I agonize over every one. Where we could find 3 or 4 houses in the neighborhood comparable to the subject we were appraising a few years ago, we're lucky if we can find 3 or 4 houses in the same town. I recently had the experience of having been "reviewed" by another appraiser on a job I did locally. In my previous blog I discussed the issue of appraisers staying local. It was obvious that the review appraiser was unfamiliar with the area. The first concern was that the property under review was a condominium. Had the review appraiser been from the area, it would never had been a question. I had to spend hours proving myself, when I was told the review appraiser was considered "local." It was one of the most frustrating experiences I have had to go through in the last year. Let me clarify something though. I've always thought it a good idea to be reviewed by other appraisers. It can give you insight as to things you take for granted. As an appraiser, you must be able to describe the property you are appraising so that your client can get a mental picture. It's very hard to do. You think you've explained everything because it makes perfect sense to you. Then the questions come and you realize it wasn't so clear. I welcome constructive criticism. No one's perfect and we can always use suggestions to help us do our jobs better. It all depends on from where and whom it comes. The other issue I had was one where the property was located in a subdivision with a private water system. No matter how many people I had validate this fact, the homeowner insisted it was a public system because they paid a water bill. The lender accused me of improper information, when in fact, the homeowner was paying their water bill to a private water company. It's become a very frustrating occupation. It use to be that you proved yourself over years showing your clients or bosses that you knew what you were talking about. That's gone with the new Home Valuation Code of Conduct (HVCC). The incidents that I spoke about were with an Appraisal Management Company (AMC) that I've worked with for close to 15 years. There's no loyalty or consideration today for long term employees or business associates. As a child, my parents worked for IBM. My dad started as a chauffer for Thomas Watson, Sr. For anyone familiar with IBM, he was one of the first CEO's in IBM. He went on to work for Thomas Watson, Jr. and then to manufacturing in Poughkeepsie and East Fishkill. That was a time when employers cared about their employees. We've come a long way, but is it actually better? Maybe the 50's and 60's were a different time, but employer's respected their employees and employees respected their employers. There was loyalty and devotion, and it was rewarded . Where are we today? Does anyone care anymore? It's a sad state of affairs. Maybe everyone needs to sacrifice in order to go back a little to a time that was more simple, but more honest and trusting. I miss the days where you could trust everyone. It was the norm. That's what I think anyway....

2009-08-24T05:37:00.001-07:00

HVCC

There's been a lot of talk lately about the new Home Valuation Code of Conduct and the impact it's having on the real estate industry. Appraisers, real estate agents and homeowners are unhappy with, what they feel, is an unfair practice affecting the market value of homes. It is interesting to see some of the comments that are being made. For those of you not familiar with the HVCC, the main objective is to keep the "lender" from dealing directly with the appraiser so as not to "influence" a value when appraising a home. In order to do that, Appraisal Management Companies (AMCs), which have been around for many years, are ordering appraisals for the lenders and mortgage brokers. They have a list of approved appraisers and assign the orders, maintaining a go-between the lender and appraiser. Appraisers are complaining because AMCs get a large percentage of the fee homeowners are paying, making it harder for appraisers to make a living. Appraisers, real estate agents and lenders are complaining because they feel AMCs are assigning orders to the cheapest appraiser and not to one who may know the area in which they are appraising. There is a lot of talk about "getting what you pay for."

I don't subscribe to that way of thinking. I don't believe, in the appraisal industry anyway, that you "get what you pay for." An appraiser's job is to establish their opinion of market value, not based on what you're being paid to do that. You are required, by USPAP (Uniform Standards of Professional Appraisal Practice) to perform due diligence. That means no matter what the fee you are receiving, you are required to do the work necessary to provide a credible report. I've worked for AMCs since beginning as an appraiser. Sometimes I loose money....that's part of being in business. But no matter what, I will perform my job to the best of my abilities to provide my client with a credible report.

As for appraisers accepting assignments in areas they don't know, I wholeheartedly agree with this one. I've been an appraiser for 15 years. I started out working Putnam County and upper Westchester County (Cortlandt Manor, Peekskill, Yorktown, Ossining, Somers, Briarcliff Manor, etc.). Once I mastered these areas, I moved further into Westchester County and up to lower Dutchess County (Fishkill, East Fishkill, Wappingers, Hopewell Junction, Beacon) and then a little further into Hyde Park, Rhinebeck and Beekman. I grew up in Putnam County...lived here, shopped here, worked here, as I did in Dutchess and Westchester county as well. I went to school in Westchester County and worked there as well. I chose these areas to appraise because I know them, and I know them well. However, an important factor to remember is that an appraiser can appraise anywhere, if they do the proper research, talk to experts who know the area and maintain the same standard they do when appraising in the areas they are most familiar with.

There is no easy fix for the current housing crisis. But, as I've always said, all I have is my reputation in this industry....if I loose that, I loose everything.....

MARKET CONDITIONS

2009-08-02T06:27:00.000-07:00

The New York State Association of Realtors latest statistics for April, May and June on existing single family home sales, as well as median sales pricing are available on their website http://www.nysar.com. Dutchess County and Putnam County shows a decline of 9.5 % from April to May, yet a 27% increase for Dutchess County and a 31.6% increase for Putnam County from May to June. Westchester County showed an increase of 21.2% from April to May and a 42.4% increase from May to June. Are these statistics reflective of the stimulus that lowered the interest rates for a short period of time to historic lows? Did the low rate give buyers a feeling that owning a home, even in a down economy, was doable? To put things into perspective though, since June 2007, Dutchess County sales have declined 28%, Putnam County 31.5% and Westchester County 49.5%.

Of the 59 counties in New York, 53 counties actually showed an increase in sales from May to June. It would lead one to believe that the lowering of interest rates encouraged people to get out and buy a house. Maybe they need to be there for more than a couple of months to really stimulate the housing market. Many say that once the housing market stabilizes, the rest of the economy will follow. Having low interest rates doesn't do much for our savings, but people would have jobs and that, I think, is more important.

Even the median sale prices were stable in Dutchess and Putnam Counties from May to June. Westchester County showed a slight decrease (1.4%), but that seems minimal. Over the last 2 years, Dutchess County showed a 25% decrease, Putnam County a 23.5% decrease and Westchester County a 27.1% decrease. Right now, our median sale prices are similar to what they were in 2002-2003.

The stock market is slowly creeping it's way upward and there are encouraging signs that businesses are doing a little better than anticipated. But the unemployment rate in our area is still so high. Is the business community showing better numbers because of the amount of people they've laid off and the significant decrease in payroll, benefits and costs associated with additional employees? Or are people actually getting out there and spending money? I'm no economists, and I guess time will tell. Until then, I wait with baited breath like the rest of a worried country.

DECK SAFETY

2009-06-24T16:52:00.000-07:00

There was a segment on deck safety on the morning news the other day which I found to be quit interesting and something important to homeowners everywhere. The statistic recited said that 50% of decks were unsafe. Decks have actually pulled away from homes or collapsed with people on them or under them. And more often then we think. The anchor spoke with a woman who was grilling on their deck when it collapsed. Not only did she suffer broken bones, but serious burns when the hot coals came down on top of her. Experts say the life expectancy of a deck is around 10-15 years depending on your location, and many decks were built before code requirements. There are, of course, things you can do to make sure your deck is safe for your family and friends. Check for rotted or cracked wood, the connections between the house and deck, the fasteners (bolts, screws, etc.) for corrosion or rust and make sure railings are secured. It is best to have it inspected by a home inspector, licensed contractor, building inspector or code enforcement officer, someone knowledgeable in deck construction and your local building requirements. With the number of injuries and deaths that occur each year due to deck failure, it is better to be safe than sorry.

Septic System Maintenance

2009-05-31T17:02:00.000-07:00

Our homes are the one of the most important investments we can make today. Even with the depreciation of real estate at the moment, it's one of the few things that will always bounce back. It's important to maintain our homes because it is the single most important investment we will make in our lifetimes. People ask me constantly what they can do to their homes to increase the value of their investment. Updates are important, but so is general maintenance. I've seen people put thousands into renovations, but forget the basics that keep their home safe and running efficiently for years. In our area, many homes have septic systems instead of sewers. If you're unfamiliar with septic systems, there are certain things you need to know to keep it working properly for years. I spoke with a local contractor who installs and repairs septic systems and he explained some important things to remember. Think about what you allow down your drain. Grease and fat are not something that should be drained down your sink. Always dump grease in a container after cooling and disposed of in the garbage. Go the extra step and wipe out any remaining grease that's left in the container, pan or dish. Limit the amount of bleach you use. Bleach and harsh cleaners kill the natural bacteria required for a septic system to work properly. Read labels on household and bathroom cleaners to assure they are save for septic systems. Even wasting water can be bad. Use water savers in your showers, sinks and toilets. There are many products on the market today that can be used monthly to help maintain your system. And MOST IMPORTANTLY, have your tank cleaned regularly by a professional service. If you suspect any problems, contact a licensed contractor knowledgeable in septic repairs and installation. Septic systems can last for many, many years if maintained properly.