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American Eagle Appraisal & Consulting, Inc. Lenders Compliance

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New - If you a are a lender or an appraiser, this is for you.

Appraisers can no longer perform a re-certification bringing forward a prior "certification date." If an updated certification is needed, appraisers must perform a new appraisal. They can not use the re-certification form offered in most appraisal software packages. The only time a re-certification can be done is to certify that the original estimate of value for the original date is still valid.

If you are a lender, please inform the appraisers doing work for you that they can no longer do re-certifications. Boards of Appraisal can sanction appraisers for violation of this change in law and this could effect your using your favorite appraiser. Pass it on. . .

New - 7/13/03 - How does a Realtor's CMA differ from an appraiser's report? Here's the answer -

How the Realtor differs from the Appraiser

From time to time, I’m asked questions about what an appraisal is or how we do an appraisal, or how an appraisal differs from a Realtor does.

I thought it might be topical to discuss the difference between a Realtor’s “Broker’s Price Opinion” (BPO) or a Competitive Market Analysis (CMA) and an appraiser’s estimate of value since many home owners think about putting their home on the market between now and the end of the school year.

There are several differences between the Realtor’s objective and the appraiser’s objective in appraising. Let’s look at the Realtor first. When a Realtor prepares to visit with a home owner, they look at three primary elements plus gather information about the home they might list. First, the Realtor looks up all the information they can find through public records about the subject property. The Realtor may visit the property before preparing the BPO or they may gather information without seeing the property. Either is OK depending on the Realtor’s familiarity with the subject area and subdivision.

Once the Realtor has information about the subject property, they look at the properties presently on the market. This is step #1. Their interest is to get a picture of the competition should the subject property actually go on the market. Step #2 is to gather information about properties that have sold recently. The Realtor wants to see how long they were on the market, what size they were (square footage living space), if they were multi story or single story and learn what amenities were attached to each sold property. The last step of data collection is to review what properties were on the market, but were withdrawn or expired. This is to get a picture of activity that did not take place. That is, why didn’t the expired properties sell? It could be that the properties were over priced for the area or the property was not in good condition at the time it was offered for sale, or perhaps the seller was not willing to negotiate below the asking price.

All this that the Realtor does is referred to as “looking at the market prospectively.” The property will be on the market and sell at some time in the future.

The appraiser is interested in looking at properties “retrospectively”. That is, the appraiser cares about the history of activity, not so much about the things that may happen in the future.

The appraiser goes through some of the same steps as the Realtor, but very differently. They look at the public records to gather all the information they can about the property to be appraised. This is referred to as the “subject property.” Through their sources they can see all the basics about the property plus the plat of the property, the flood map and an aerial photo if in Maricopa County. Once the appraiser has information about the subject property, size of the lot, size of the home, number of stories and know some of the amenities, they start looking at possible comparable sales in the area. The criterion is somewhat different from the Realtor’s search. The appraiser prefers to look only at the same type property. If the subject is a single story home, only sales of single story homes will be considered. If the subject is a multi story, then only multi story homes will be reviewed. The appraiser will try to go back in time not more than 6 months. They will try to find sales with similar characteristics such as same size home (within 100 square feet plus or minus), pool or no pool, similar size lot, and similar age. If the appraiser can’t find a minimum of three sold properties they will go outside the subdivision to other subdivisions that are similar in characteristics and price range. The Federal and State Law under which the appraiser must function dictate many of the things they can and can not do. On top of the things the appraiser can and can not do, there are additional guidelines depending on where the loan on the subject might end up. The appraiser should stay within one mile of the subject property and not go back in time more than six months. If there is a lack of data within the 6 months and one mile the appraiser may extend the criteria to find similar type properties, but must use sold properties found in the area before going outside the area for sales.

Once the appraiser has enough data and information about the subject property and sales in the area, they will visit the subject property. Depending on the type of appraisal they are instructed to do will depend on what they do at the subject property. I’ll discuss the different types of appraisals in the next article. If the appraiser is told to do a “full appraisal” they will measure the outside of the subject house, draw the interior room partitions or at least identify the room locations, take a minimum of three photos (front, rear and street) and note the quality of construction, the up grades and extras in the subject and other things that increase or decrease value. The term appraisers’ use is “buyer perceived value.” If a buyer would pay for it, the appraiser notes it.

Following the inspection of the subject property, the appraiser drives the area noting overall condition and care taken of other properties in the subdivision as well as the subdivision and takes pictures of any comparable sales they may use in the appraisal. The appraiser will usually have a minimum of 4 to 6 possible sales to review so that they will have at least three sales to use in the analysis of estimating the value of the subject property. Once the field work is complete, the appraiser reviews all the information and begins the process of analyzing the information gathered and writing the appraisal report. Only after all that is done can the appraiser tell you what the estimate of value is.

The appraiser does not care about expired listings and the appraiser only uses a current listing as an “extra” property in the report to assist in support of value. A listing is never used as a primary value determination property.

As you can see, the appraiser is looking retrospectively (history only) at the subject property and the data while the Realtor is looking prospectively (present and future) at the subject.

This is HOT!

New Product to Manage the Appraiser's Office

Dave Stone has developed a management program (AMOS) that literally runs the appraisal office. Briefly this is how it works:

There are 4 databases from which all the data is taken to produce a number of reports. You enter the clients you do work for, the appraisers associated with your company, Your company name (several if you do work under more than one name) just one time, and the orders you take in along with the information associated with the orders and the program provides a number of reports and notices.

It produces a work order to the appraiser, a full accounting of your accounts receivable (total and 30 day aged), invoices for each delivery, a notice to the lender when the subject appointment has been scheduled and when the lender can expect delivery, month end statements to all or a selected list of clients with outstanding balances. It also produces a complete list of all outstanding orders and their status, payroll for your staff appraisers, plus a number of other important documents. Oh, not all appraisers are paid the same split? No problem! The program keeps track of the appraiser's fee splits and computes the fee due them automatically.

To see if this product is right for your office, call Dave at 480-503-0008. He'll cover some of the criteria and requirements for utilizing this great product. If this program is right for your office, he will arrange for a demonstration and discuss the price.

Question? What is the appraiser on the Home page doing and how can it solve problems for me?

It was 11:43 a.m. on a Friday and the appraiser is e-mailing a completion certificate with photo, so funds can be released before the bank closed at noon that day.

Easy for us! And it’s all in the course of satisfying a client’s need!

At 9:30 a.m. on a Friday morning, our client was told they needed a final inspection (Form 442) and a photo, faxed or e-mailed, with signature, before noon in order to fund the balance of a loan. No qualified person could get to the property, inspect the "subject to" items, take the photo, drive back to the office, write up the completion form, download the photo, place it on a form, print, and then fax it all by noon that day.

Well, we can do it because we don’t have to go back to the office. We inspect the property, take a digital photo, write up the form and e-mail it with a digital signature all from the car at the subject property. Wow, does that save time!

We have internet-connect cell phones, laptops with appraisal software, and photo download equipment. All we do is convert it to PDF format and e-mail it over the internet right from the subject property, saving several hours and allowing the transaction to close on time!

If you could use an appraisal company like that, call us! We’ll work magic for you too!

Warning! Check references before you hire a technician to perform work on your computer or other items relating to computers.

Recently I had occasion to install an ISDN line and network several computers to a main hub. The technician I had been relying on for the past year assured me that converting my existing network and performing the "inside" work would be no problem! After the local phone company installed the ISDN line, my technician came to set up the computers and link them to the HUB he had me buy from him. I had given him a deposit that included the cost of the hub.

He started the job and after being in my office about one hour he said he needed some parts and would be back later in the day or first thing tomorrow. That was the last I saw him! He has never returned my phone calls or in any way attempted to contact me. I had to hire someone else who wanted to use a different type of hub but got me up and running within three hours! Moral of the story, don't assume that because you have a good working relationship with a computer technician, that that person can solve all your needs. Check references!

Send us an e-mail with your comments or to request information.

Address: 20403 N. Lake Pleasant Rd., Suite 117-410, Peoria, AZ 85382 Phones: V-602-881-0800; F-623-455-3370

Date this Web Site was updated: 07/18/07