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How do I report a report licensed MA real estate brokers who has exhibited a pattern of misleading and innacurate property information in their listings?  And what sanctions if any do you have available to influence them to be honest and ethical or be more careful and accurate in the future.

Typically what I see innacurate living areas and bedroom counts without a proper disclosure. MLS provides a convenient new button now to “Report a Violation” but is disinterested as accuracy is not their purview. It is not apparently not an MLS a violation to be misleading.

The main concern is obvious, lack of public trust. As an appraiser I have lived through when that happens and have seen the number of appraisers in MA drop from ~4600 in 2008 to ~2100 today which was, in part, attributable to the resulting regulatory fallout. We have been “new and improved” to death

So you know, I am sometimes contacted and asked why my appraisal has a smaller living area and bedroom count. In my case I personally measure every single or 2-4 family utilizing the ANSI Z765  method of calculating square footage. I cite that as the method and will provide a copy  if they want

I am aware that Real estate agents in other states have to measure and personally certify the living area of their listings. What would have to happen to make that a statewide requirement in MA. It would best serve the public trust if we were all on the same page when it comes to physical characteristics, wouldn’t you agree?

Thank you

Adam

While I don’t track Core Logic’s  “accuracy ” (I use quotes as I use the term loosely) I have been tracking the Zestimate on every property I have appraised (exept sales) since January. Zillow’s accuracy (within 5% which is generous)  as of today 5/15/2011 is 24%.  The notable inaccuracies boggle my mind as as they are as high as 42% too high for a Cambridge condo and 30% too low for a Newton Single Family.

Here is the FDIC trying to go after Core Logic. I won’t shed a tear.

FDIC News: FDIC Sues CoreLogic and Lender Processing Services over…

After I read the article in this link I thought well once again, you get what you pay for.  In Massachusetts we have 57% the number of appraisers that we had 2 years ago (+/-). Perhaps had lenders ordered actual appraisals there would have been enough work to keep the good ones. Good riddance to the bad ones and thanks for leaving!

We do not see these as requirements, we see them only a starting point and add whatever is necessary to arrive at a credible and supportable valuation, double checking everything before any reports ever go out the door.

Our clients tell us that our narrative and explanatory reporting style place us in a category of superior quality that is not readily measurable by the industry but is most important, especially with portfolio loans.  When an underwriter asks for further support the information is readily available in the work file and we quickly provide an answer to the question.

What I want potential new clients to know is that we have high internal standards for research, verification and analysis.  And only then do we begin the process of dovetailing market facts into the appraisal report.

Adam Wiener

2. Run “first cut” comparable reports to find the averages

3. Decide where the value falls compared to average

4. Run “second cut” comp reports and select and adjust comps

5. Value by weighted average of the adjusted sales price

These steps are typical of the research that I will do as an independent residential real estate appraiser.  I caution that if you do not first verify what you are valuing the results will not be accurate. It is very common for Assessor records and previous MLS listings to contain major inaccuracies. You have to verify which is why appraisers physically measure every property and look at the master deed and the stamped architect’s plans on every condo.

It is not uncommon to think you are valuing a 1,750sf Split Level only to find that it is really a 25’x40’ Raised Ranch with a 75% finished basement. The basement has no fireplace and only a combination laundry room lavatory with asbestos tiles. Yellowed acoustical ceiling tiles, old pseudo-wood paneling, the original gray carpeting and is on a level lot so it has small windows and no true walk-out. In other words it was really only a 1,000sf home with an extremely dated finished basement. Big difference.

Why are the records wrong?  That is the wrong question. The question is; what can I do because they are unreliable? There are 351 cities and towns in Massachusetts and I focus on eastern MA. You get to know your towns after a while.

The Departments of Housing and Urban Development (HUD) and Treasury released their Monthly Housing Scorecard for February on Wednesday afternoon according to Jann Swanson’s Mortgage News Daily article.

This monthly report is an attempt to encapsulate the Obama Administration’s efforts to stabilize the housing market and provide a snapshot of the status of that market.  It contains a round-up of information from both public and private sources.  The Scorecard is issued simultaneous with the release of the monthly report on the Making Home Affordable Program (HAMP).

FULL HAMP REPORT

According to the Scorecard, the housing market remains fragile as data through January paint a mixed picture of recovery.  On the sales front there was a little good news as sales of existing homes ticked up to 446,700 in January compared to 435,000 in December.  New home sales, however, dropped from 27,100 to 23,700.  The inventory of existing homes fell by slightly less than 200 thousand to 3.38 million while the supply of new homes was almost flat at 188,000.  There is a 7.6 month supply of existing homes compared to 8.2 months in December and a 7.9 month supply of new homes as compared to 7.0 months.

Over 3.6 million homes are currently vacant and held off the market for a variety of reasons. This is an increase of 45,000 since December.

Click here to read the full article

He or she has presented you with some relevant market information including current competitive pricing for use in setting a list price; however, I tell everyone in my family that it is a smart idea to get your own an independent appraisal. You do this to be sure that your price isn’t too high or too low for the current market conditions.  The market is imperfect and anyone can make a mistake.

Your appraiser has no bias or interest in how much your place sells for because appraisal fees are fixed and not contingent on the value.

An appraisal report is only a summary of the appraisal process. You only see the tip of the iceberg when you read an appraisal because the process includes accessing and analyzing reams of general and specific market data.

You get only one chance to price your home right. If you price it too high when you come down you never get full value, too low and you have left money on the table.

It is worth hiring an independent appraiser and getting a full appraisal as a form of insurance. It may also turn out to be useful for you to know what to do when you are in a negotiation with the right buyer.

AVMs are not reliable because they are automated.

The AVM process is flawed as it relies on unverified assessor records, out of date information and includes non-comparable properties.  In order to derive a value, the AVM engine relies on regression analysis which is a technique for modeling and analyzing several variables.  While this is an accepted part of appraisal methodology, it does not take into account the human element.  Adjustments are not made for key characteristics which impact value such as location, style, size, utility, quality, and condition.   To check current accuracy in January 2011 I began tracking comparing AVM values to our appraised values . The results are that AVMs are pretty close (within 5%) only 35% of the time. meaning you have a 2 in 3 chance at knowing your property value but 1 in 3 chance it will be off by as much as 42%.

THE ASSESSOR uses a mass appraisal process which includes regression analysis but relies on sales data up to 2½ years old.

Your January 2011 assessed value is based on an effective date of July 30 2010.  The value is then developed from sales that occurred during the prior 12 months beginning July 1 2009.   It is easy to see how assessed values become outdated and this often causes tremendous inequities between the assessed value of properties.

CMA reliability and accuracy vary widely depending on the experience of the Real Estate agent.

This is proven by the wide range of list price to sales price ratios and wide range of marketing time. The lack of a codified standard process, potential for bias and lack of any fee may render them less reliable.

In today’s market,  it is good idea to hire an independent appraiser to provide you with up to the minute market information that you need before you proceed with a sale or purchase.

Residential appraisal companies  specialize in providing a timely and affordable opinion of the market value single family homes , condominium units and 2-4 family properties completed by a licensed appraiser.    The appraisal report provides a non-biased and current market value using established appraisal theory accepted by national lenders.