Wow, can you believe that 2015 is over? For most Portland appraisers, it has been so busy that we can hardly remember the year. This is true for A Quality Appraisal as well.
In preparation for this blog post, I went back and skimmed all 45 of my blog posts for 2015. Like reading old appraisals, some are not as great as others in retrospect. However, here are the five that I consider to be my top appraisal blog posts of 2015.
1. Significance of R Squared in Real Estate Appraisal Linear Regression Now that statistics are becoming a normal part of real estate appraisal there are some persistent myths. One such misconception is that the R squared statistic can tell you how accurate the regression model is at predicting an adjustment. This blog post is a simplified example of why this logic is incorrect. A statistics instructor called me and asked if he could use this article in his class.
2. Value of Prior Sales in Real Estate Appraisal Sometimes it is easy to think that an older prior sale of the subject is irrelevant in a current appraisal value. However, prior sales of the subject property are historical evidence of how the market reacts to features, particularly useful if the subject is quite unique. This article shows one way that appraisers can use a dated prior sale to add support for a current value.
3. Why Appraisers Using Different Adjustments Can Reach the Same Value Opinion This blog post shows examples of how appraisers use qualitative analysis in the appraisal process and how that process can help lead them to the most reasonable value conclusion, even if the adjustments differ from other appraisers or are incorrect. This article also demonstrates how qualitative analysis can provide a less detailed appraisal product that appraisers sell to clients who do not need a full analysis or who do not require a preliminary number.
4. There may be no Comparable Sales but there could be Value This blog post is an attempt to dispel the myth that if there are no comparable sales, then there is no value or that appraisers cannot estimate a value. The example used in this post is PV solar, something that appraisers will be dealing with more and more in the future.
5. Portland Appraiser Upgrades to Motion R12 Computer I am one of a growing number of appraisers who uses a Windows tablet in the field rather than an Android or Apple device. Upgrading my Motion J3500 computer to the Motion R12 this past year was expensive, but also a great decision to keep current after five years with the J3500. This article explains features on the Motion R12 that make it a good choice for appraisers in comparison to the more popular and less expensive Surface Pro (also a great choice for some appraisers).
Did I leave anything out or do you want to join in the conversation? Let me know in the comments below.
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Thanks for reading,
Here is fun blog post to say, “Merry Christmas from Portland’s Appraisal Blog.” The singer in the video is comedian David Cassel in character as the Ukulele Bandito. I hope this song gives appraisers a smile and makes the stack of appraisals on their desk feel a little smaller.
Do you have a better idea for one of the song lines? I tried to keep the song clean and industry positive, but I would love to hear your ideas. Let me know in the comments below (and yes, they are working now).
Gary F. Kristensen, SRA, IFA, AGA
I rarely go off topic with my Portland Appraisal Blog. However, I thought this would be a fun exception. One of my hobbies, other than water skiing, is growing giant pumpkins.
This year, our two boys each helped grow their own giant pumpkins. The smaller of the two pumpkins grew to 974 pounds. After the local weigh off, we put it on display at the boys’ school. Once Halloween had passed, we removed the seeds and plan to give them to the school kids for a chance to grow their own. This blog post will serve as simple directions for anyone with those seeds to grow their own giant pumpkin next year.
Get a seed with good genetics. If you have one of my seeds, you've already done that. These seeds' genetics can be traced to the world's first pumpkin to break 2,000 pounds.
Select a spot in the yard or garden. The larger the area (to a point) with the more sun, the bigger the pumpkin will grow. A 25x25x25 triangle is ideal, but I’ve grown big pumpkins in areas that are smaller than 10x10.
Tip: Mix compost into your garden in the fall or early spring. Big pumpkins like lots of well-aged compost and crumbly soil that drains well. I add loads of mushroom compost to fix most soil problems.
Tip: Think about how you’re going to train the vine when selecting a spot (see #4 below).
Around April 15th, plant the seed pointy side down, just below the surface (less than one inch), in a mound of soil near one edge of the patch. Do not compact the soil. I start my seeds indoors under a grow light and transplant the seedlings to the mound (covered by a cold frame) a couple weeks later; but some of my biggest pumpkins have grown without the protection of a cold frame.
Tip: Soak your seed in water overnight before planting.
Tip: Protect your baby seedling from wind, frost, or early heat.
Train the vine to grow in the shape of a Christmas tree that is laying on its side. Imagine that the main vine is the trunk of the Christmas tree and the secondary vines sprout out of the main vine and grow to the sides. Any vines that sprout off the secondary vine are called tertiary (third) and should be removed. Tertiary vines will only drain energy from your plant. I use small barbeque skewers as stakes to hold the vine in the direction that I want it to grow.
Tip: Only train the vines (using extreme caution) in the afternoon when the plant is warm. Bending the vine can cause breaking or cracking. If the main vine becomes damaged, that could be the end of hopes for a large pumpkin. The vine can be trained with constant pressure by moving the vine a little each day rather than in one bend or motion.
Tip: As the plant grows, gently cover all the vines with garden soil to encourage secondary root production.
When the regular rain stops, you will need to water your pumpkin every day. Big pumpkins require plenty of water, but do not flood the plant. A giant pumpkin takes roughly the same amount of water as it takes to keep a patch of lawn green — and a giant pumpkin growing in your yard is far more exciting than just a patch of green grass.
The female flowers (with bulbs on the bottom) will become pumpkins if pollinated. They can be hand pollinated using the longer stemmed male flowers, or merely let the bees do the work. If you’re on pace for a big pumpkin, pollination will happen in early June and the flower will soon start to develop into a pumpkin.
Once you have a couple of pumpkins about the size of a basketball on the plant, select the fastest growing pumpkin and remove all the others. If you keep two pumpkins, the plant will be splitting its energy between both pumpkins.
Tip: The biggest pumpkins will usually grow on the main vine about ten feet from the stump, but big pumpkins can be grown on secondary vines. Our pumpkin grew on a secondary after the pumpkin on the main vine stopped growing (luckily, I had not yet removed the other pumpkins).
Tip: Don’t let the vine sprout roots into the ground within several feet of either side of the pumpkin. As the pumpkin grows, the vine needs to be free to raise off the ground and not break.
Tip: Don’t try to move the pumpkin. Small pumpkins are fragile like a tomato and damage to early skin can make them crack open when they get larger. Even the scratchy underside of pumpkin leafs rubbing on the baby pumpkin can damage its skin.
Tip: Protect your pumpkin from the sun. Some growers use a shade. I cover my pumpkins with a sheet.
Follow these steps and with a little luck, you will have a big pumpkin next fall. Parents are free to contact me if they have questions, want to show pictures (I would love to see them), need more seeds, or need advice on transporting your harvest.
There is a joke going around my appraisal office where we ask each other after viewing comparable sales, “Did we bracket the color?” This is funny to appraisers because bracketing has become a big issue in appraisal review.
Let me be upfront; I do support the concept of bracketing. I believe that if you cannot bracket a feature with something the same or similar (i.e. one that is better and one that is worse) on a comparable sale, then it is difficult to show convincingly that you have properly accounted for that feature in the appraisal. However, some residential lenders and appraisal management companies have taken bracketing so far that appraisers are waiting to be asked for an additional comparable sale to bracket the color of our subject property — thus, our in-office joke.
Today I pulled up to appraise a Portland, OR property and I could not believe what I saw; a camouflage-painted house complete with sexy silhouette accents. Fortunately, I was appraising a neighboring home. If I were appraising this home, bracketing the color might actually be a good idea (if it is possible) to determine what affect the color of this property has on its marketability.
The instinctive conclusion is that the typical buyer (or typical buyer’s wife) would be turned off by a home painted in this manner, and would require a discount to the price relative to the cost for repaint plus any financial incentive necessary for the buyer to make that repair. However, how do we know the typical buyer would be turned off if we don’t have any sales to support that? This market could have a strong segment of buyers that might be attracted to camo style paint and are willing to pay a premium for it (not likely, given the rule of conformity).
I once had an appraisal instructor tell a story about a house he appraised for the purpose of setting a list price. The house had been decorated in a kinky fashion. When he appraised the property, he estimated a reduction in price based on the perception that buyers would want to renovate. It turned out that the property was placed on the market, there was a bidding war, and the home sold for far more than the appraisal value estimate. These examples show why bracketing is important and should be at the heart of what appraisers do.
If you find this information interesting or useful, please subscribe to my blog. Also, please support us by making Portland real estate appraisal related comments on our blogs and YouTube videos. If you need Portland, Oregon area residential real estate appraisal services for any reason, please contact us. We will do everything possible to assist you.
Gary
If you ever find yourself among a group of real estate appraisers, you will usually hear someone recount a humorous tale. Typical home appraiser stories range from bazar things seen in homes to attack by animals. My experiences include goats and other farm animals living inside homes, nude paintings of the homeowners (reminiscent of the famous George Costanza Timeless Art of Seduction pose), accessing vacant properties by climbing through second-story windows, lots of cats, hoarder homes, shock by electric fences, animal feces in places it should not be, inspecting the interior of the wrong house (not my fault), tiptoeing around a backyard rabbit hospital so as not to disturb the cardiac patients, pursuit by homeowners who saw me take a comparable photo of their house, and run ins with all manner of animals including dogs, cats, bees, snakes, llamas, and horses.
One of my favorite yarns involves a narrow escape from animal attack. I was appraising a property in a rural area near Portland, Oregon about four years ago. A horse pasture was located at the rear of the property. I had been taking photos of the front of the house and decided to get a rear photo. Around the house I went, with an electronic tape measure in one hand, a tablet computer over my shoulder, and a camera in my other hand. To get the best photo of the house, I had to walk by a detached garage, past a vacant chain-link dog kennel, and into the pasture that included horses on the far side of the field.
The best spot for the photo was between the kennel and the pasture. I started to take a picture but turned around to see a large black horse on a deliberate and accelerating trot aimed directly at me. The horse was not galloping, but it was coming faster than I can run and its head was positioned in a most unwelcoming manner. Ears back and nostrils flared, the head looked more like an angry bull than the typical friendly horses I’ve seen on other appraisal assignments.
There was no time to run; I just had to get into the vacant dog kennel. I don’t remember if I cleared the fence in one leap or if I used a foothold. I just know that I made it at the moment the aggressive horse reached the fence. A moment later, I heard the sound of a snarling dog slowly moving out of a doghouse at the other end of the kennel.
After leaping over the only reaming safe side of the enclosures, I finished the exterior appraisal inspection. My computer was unharmed and so was I. While viewing the interior of the home, I pretended nothing had happened, but my heart rate did not go down until I was driving home. Now when I think back, I wonder if the owner had watched me from the kitchen window as I first escaped from their horse and then from their dog. If so, they probably got more laughs out of what they saw than I did.
Above is a side view of the Portland home I was appraising. In the photo, you can see part of the dog kennel behind the detached garage. The thing is — I never did get the rear photo of the house to use in the appraisal or to share in this blog. Consequently, I learned that appraisers should always ask homeowners to control any animals (even though they usually say that the animals are friendly) and appraisers need to make sure that distractions do not make them forget important things for the appraisal, including a rear photo.
If you have any humorous real estate appraiser stories, please consider sharing them in the comments section below this blog. If you find this information interesting or useful, please subscribe to my blog. Also, please support us by making Portland real estate appraisal related comments on our blogs and YouTube videos. If you need Portland, Oregon area residential real estate appraisal services for any reason, please contact us. We will do everything possible to assist you.