MARCH  2012

REVUPRO LEADS THE WAY IN WEB-BASED APPRAISAL REVIEW

ELLIOTT® is able to meet the needs of its appraisal clients who need a fast and economical web-based appraisal-review product that addresses the mandates of recent mortgage industry regulations. RevuPro is not only compliant with the Uniform Standards of Professional Appraisal Practice, but it also addresses the requirements of both pre-funding and post-funding collateral-management mandates for commercial, as well as residential properties.

This multi-phase, appraisal-review system is run by experts in the appraisal industry. By design, the system cascades from the most basic to the most comprehensive, a feature that allows the lender to reduce administrative costs.

“RevuPro offers a comprehensive risk-management system that complements the lenders’ efforts to insure high-quality appraisals from their appraisal sources,” said George Williams, director of client services at ELLIOTT® & Company Appraisers.

For a preview of both passed and failed appraisal review samples using RevuPro, click on the following hyperlinks:

PASSED
../../services/desk_review_pass_sample.pdf

FAILED
../../services/desk_review_fail_sample.pdf

For more information on RevuPro, contact George Williams at (800) 854-5889 extension 3054, or george@elliottco.com. Qualified inquirers may receive a complementary RevuPro review of their latest appraisal.

APPRAISAL FOUNDATION RAISES REQUIRMENTS FOR NEW APPRAISERS

The Appraisal Qualifications Board, which works under the authority of the Appraisal Foundation, has strengthened the requirements for someone to become licensed in the real estate appraisal profession.

Beginning January 1, 2015, an applicant for a Certified Residential or a Certified General classification of appraiser will have to have at least a Bachelor’s degree from an accredited college or university. An applicant for Licensed Residential classification will need an Associate’s degree or at least 30 semester hours from an accredited college, university, junior college or community college by that date. All applicants for real estate appraisal certification or licensure will be required to undergo a background check.

Other more stringent rules involve supervisory appraisers. In order to employ and tutor trainee appraisers, one must, by 2015, have been a state certified appraiser for at least three years, and not have had any suspensions of his or her appraisal license within those three years.
LOCATION IS KEY TO CONVENIENCE STORE VALUATION

Nowhere does the cliché, “location, location, location,” applies more than it does in the valuation of convenience store real property. After all, these businesses are called what they are because of their convenience to residents, commuters and others who are generally willing to pay higher prices to shop in these stores because of the time and gasoline it saves them.

Obviously, size, condition, equipment, including whether or not gasoline tanks and dispensers are involved,are other factors that go into the pricing of convenience store property. At ELLIOTT® & Company Appraisers, we have a team of Certified General Appraisers, including those with the prestigious MAI designation, who have a thorough understanding of the nuances involved in determining the value of a convenience store location.
FORECLOSURES EXPECTED TO SPIKE 25% IN 2012

RealtyTrac has predicted a 25% increase in foreclosure activity in 2012 compared to what it was in 2011, as lenders clear their backlogs of troubled loans. Recently LPS Applied Analytics reported a 28% hike in foreclosures in January over the amount in December 2011.

Could another gush of foreclosures entering the market cause more home-price declines?

“More often than not, prices are determined by demand rather than supply,” stated Paul Dales, senior U.S. economist at Capital Economics, who, according to the Wall Street Journal, predicted an increase in demand for homes this year.

LPS Analytics reported earlier this month that the Phoenix area of Arizona had an “average foreclosure discount” rate of 4.5%, compared to 6.1% in Las Vegas and 7.1% in Miami. In some markets, the discount rate was higher than 30%, although LPS officials say the condition of the property might also lead to the discount.

“In places that might have a lot of foreclosures, the property might be fine,” said Jonathon Weiner, vice president of research and development at LPS Analytics. “It’s just a matter of people walking away from the property.”
LARGER BANKS PICK UP COMMERCIAL REAL ESTATE LENDING

According to a report in The Wall Street Journal, larger banks are ahead of their counterparts in disposing their troubled commercial real-estate loans.

Trepp LLC, a loan research service, reported that banks with assets of $20 billion or more had a delinquency rate on commercial real-estate debt of 6.3% at the end of 2011. In the first quarter of 2010 that debt percentage had been 10.3%. Banks with less than $20 billion in assets had a delinquency rate on commercial real estate debt of 5.8% at the end of last year, compared to 8.1% in the first quarter of 2010.

“The success by the larger banks at cleaning up their balance sheets signals a move toward stability in the broader property market,” wrote Eliot Brown in the Wall Street Journal article. “Indeed, many financial firms have picked up lending.”


INDEX REPORTS RECORD BREAKING NUMBERS FOR HOUSING AFFORDABILITY

Earlier this month, the National Association of Realtors (NAR) reported that housing is more affordable than it has been at any time during the 42 years it has been keeping records on the issue. Its Housing Affordability Index rose in January to 206.1, a record high.

“This is the first time the Housing Affordability Index has broken the 200 mark, meaning that the typical family has roughly double the income needed to purchase a median-priced home,” said NAR President Moe Veissi. “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.”

The NAR sees little fluctuation in home prices or mortgage rates in 2012, meaning the affordability rate would remain in record-high territory.
“If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth,” Veissi said.

NOTES OF VALUE

  • According to the Zillow Home Value Index, foreclosure re-sales accounted for 19.1% of all home sales in December 2011.
  • Lender Processing Services reported that, as of January 31, there were 6.082 million mortgages either in foreclosure or 30 or more days delinquent.
  • Pop singer Britney Spears is trying to sell her Beverly Hills home, this time for $2.9 million. She bought the Mediterranean-style estate in 2007 for $6.75 million and first put it on the market the following year for $7.9 million. She also tried to sell it in 2009 for $6.4 million and again the following year for $4.8 million.
  • The Los Angeles house where pop singer Michael Jackson died is back on the market for $23.9 million. The 17,000 square foot house in the Holmby Hills neighborhood was on the market with a list price of $23.5 million in 2010.
ASK MARTITIA

Question: Does USPAP allow an appraiser to reduce his fee to the client if the loan the appraisal was conducted for fails to close?


Martitia: No. The Ethics Rule of the Uniform Standards of Professional Appraisal Practice specifically states that “An appraiser must not accept an assignment, or have a compensation arrangement for an assignment that is contingent on the attainment of a stipulated result or the occurrence of a subsequent directly related to the appraiser’s opinions and specific to the assignment’s purpose."


Martitia Mortimer, Elliott's executive vice president, answers appraisal questions on a regular basis in Elliott Evaluation News.
QUOTES OF WIT & WISDOM

“I arise in the morning torn between a desire to save the world and a desire to savor the world. That makes it hard to plan the day.” – E.B. White

“Retirement at 65 is ridiculous. When I was 65 I still had pimples.” – George Burns

“Every day do something that will inch you closer to a better tomorrow."
                                                                            - Doug Firebaugh

“You can always tell a real friend. When you’ve made a fool of yourself, he doesn’t feel you’ve done a permanent job.” – Laurence Peter

“Give me golf clubs, fresh air and a beautiful partner, and you can have the clubs and the fresh air.”
                                                                                                                        – Jack Benny
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