a la mode, inc. News for appraisers
a la mode contact information and current newsNews and information resources for appraisersGet help on a la mode products such as WinTOTAL, Mercury and XSites
 
Featured news — posted June 2, 2004
Appraisers coping with higher fuel prices with fee increases, better itinerary planning

Last week, we asked you to share with your fellow appraisers how you're dealing with historically high gas prices. Twice as many of you wrote to say that you're increasing fees and/or adding long trip surcharges, than said you're not modifying your fee.

But many of you are instead (or in some cases, also) paying extra attention to your field itineraries.

Included among the people who took the time to write were appraisers who are not driving to inspections unless there are at least two scheduled in the immediate area; restricting long trips to certain days of the week; or otherwise "grouping" jobs. You warned, though, that this is increasing your turn times, and may be leading to certain rural and outlying areas being underserved.

"I no longer accept assignments in adjacent counties," one appraiser wrote us. "Since other appraisers are taking the same step, some rural areas are now underserved. Lenders are reluctant to approve surcharges and thus in many cases we simply decline the assignment."

How the idea of a fee increase would be received was of course an issue on a lot of your minds. "Management companies are balking at this, but appraisers need to tough it out," one e-mailer said. "They are already taking too big a bite out of the fee." Echoing that sentiment, another appraiser wrote, "Don't feel bad for raising fees. Remember, we make less than everyone else in the industry and have more qualifications to perform our job."

Some of you pinned the blame for keeping fees from going up on the competition. "Here in southern California most cannot raise prices because appraisers are still undercutting each other," one reader wrote. "While [rising fuel prices] would have been an opportunity to get those fees up after a 10 year vacation from fee increases, appraisers start the undercutting as soon as volume slows down." Another writer, in Texas, had similar thoughts. "It's hard to raise fees when there is so much competition in the area."

Among those who did charge extra to compensate for fuel prices, across the board fee increases seemed to be as popular as trip surcharges. But some of you had some original ideas.

  • One of you said he offers a discount for assignments within five miles of his office.
  • One reader also incentivizes clients to send along more assignments close by, but soft sells it. "[I] tell the lenders that I have trouble absorbing the extra costs for increased gas prices, since I am a one person shop. Then I ask if they could possibly direct more assignments my way that are closer to my home/office. That way, my costs for fuel do not escalate as much, and they feel like I'm looking out for their best interests, too."
  • One reader wrote to tell us she pays more attention to route planning and "clustering" inspections, but complements that with surcharges for "yesterday" requests — the ones that need to be done ASAP.

A few of you have parked the gas guzzler and are driving the more fuel efficient vehicle to inspections (Civics and Jettas were, unofficially, the most popular).

How do you broach the subject of raising fees with clients? Let them know it's temporary (if it is), only applies to long trips, or only to "rush" assignments. That lets them know that either it's only a "defensive" measure until fuel costs go down, or it's something somewhat within their control. They can give you assignments closer to the office, or plan ahead better, and avoid the extra charge.

One appraiser suggested expressing the additional fee as a standalone figure. That is: "[Don't] say the fee is now $X00.00 but rather the increase is only $X.00. Smaller numbers are easier to sell and be accepted."

Overwhelmingly, those who have raised fees encourage you to be firm. "Some large lenders will not pay [the additional fee], so I don't work for them," one appraiser told us. "I have found that people who want quality work and who have been referred to me, or any other appraiser or professional for that matter, are generally willing to pay a premium for the service. Stand firm on your fee."

Our favorite response to higher gas prices is this one, from La Grange, TX: "I am an insurance adjuster and certified residential real estate appraiser. I have started asking my insureds and borrowers to bring their home to me. My neighbors don't like these big houses pulling up in front of mine, but it is saving me a lot of gas!"

Thanks to all who wrote!

Drag on home price acceleration begins

Thirty-nine of 220 ranked Metropolitan Statistical Areas (MSAs) experienced home price contraction in the first quarter of 2004, the Office of Federal Housing Enterprise Oversight (OFHEO) reported this week.

Overall, average U.S. home prices appreciated just 0.96 percent in the quarter, the first quarter of sub-1.00 percent appreciation since 1998. Year over year price growth was 7.71 percent, from first quarter 2003 to the most recently completed quarter.

"This moderation in the growth of house prices is welcome because continued price jumps like those of the fourth quarter last year would raise the potential for declines later on," said Patrick Lawler, OFHEO chief economist. Lawler noted that annualized, property values still outpaced increases in the price of non-housing goods and services.

Among states, Hawaii led the way with a 15.16 percent year over year appreciation in home prices. Utah was last at 1.95 percent. Among Census divisions, the Pacific area easily led both year over year (12.21 percent) and first quarter (1.96 percent) appreciation. The West South Central division, including Texas, Oklahoma, Arkansas and Louisiana, brought up the rear at 3.22 percent and 0.41 percent, respectively.

Nine of the top 10 MSAs for year over year home price appreciation were in California or Florida, and the other was Las Vegas. San Jose, California, though, appeared in the bottom 20. Austin-San Marcos, TX was last of 220 ranked MSAs with 0.47 percent growth year over year and an 0.12 percent contraction in the first quarter.

“Last year’s rise in borrowing rates may have stimulated fears of further rate increases, causing some prospective purchasers to move more quickly to buy than they might have otherwise last Fall,” said Lawler. “That sense of urgency apparently diminished last quarter after rates stabilized. It will be interesting to see what the effects of more recent rate increases are in the future."

OFHEO’s House Price Index is published on a quarterly basis and tracks average house price changes in repeat sales or refinancings of the same single-family properties. OFHEO’s index is based on analysis of data obtained from Fannie Mae and Freddie Mac from more than 27 million repeat transactions over the past 29 years. The HPI reflects price movements on a quarterly basis of sales or refinancings of single-family homes whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac.

HUD, Farm Service Agency appraisal requirements highlighted

The Department of Housing and Urban Development (HUD) revised its Mortgagee Handbook 4000.2, Application through Insurance, including some changes to the chapter on Property Appraisal and Valuation. Note that this is not the long-awaited revision of HUD's single family appraisal handbook.

Most of the changes are cosmetic, and serve to eliminate duplication across handbooks or to incorporate mortgagee letters — periodically issued policy directives — that have come out since the Handbook was last issued.

The revised handbook makes it clear that "the FHA appraiser is the on-site representative of the Mortgagee and provides preliminary verification that" a property is eligible for FHA insurance. And while "the Mortgagee is responsible for determining the eligibility of properties in flood hazard areas," it "relies upon the FHA appraiser's notation on the URAR form."

Meanwhile, by notice published in the Federal Register June 2, the Farm Service Agency (FSA) amended its appraisal regulations effective July 2. The new rule will allow loan approval contingent upon a later appraisal, once the applicant is deemed eligible. It will also set a threshold loan amount of $50,000 for an appraisal to be required at all.

  
News briefs
Easier, more convenient WinTOTAL updates
We've released more than 120 updates to WinTOTAL since its Athena iteration debuted in 2001, improving functionality, adding forms, and generally making it easier to manage your appraisal assignments. An update being released this week will save you online time and resources and make it easier to download and install future updates.

Our goal with the new Instant Customer Update (ICU) system is twofold. First, we're reducing the overall number of updates, while still adding as many forms and features as we always have. That's because we're going to package updates into "families" — our second goal. By grouping updates together, each update will likely have more included but be released less frequently. For example, when we released Apex for Athena, you needed to download and install six separate updates. The new system would group these together, saving you time and ensuring that you realize the benefits of similar updates at the same time.

The ICU system is very intuitive, especially if you're familiar with the system used by Windows XP®. In addition to a handsome new look, it gives you two new ways to easily install WinTOTAL updates.

You may choose to tell WinTOTAL to automatically download and install new updates. WinTOTAL will check for updates during "off-peak" times and install them without your having to do anything. If your computer is left on all night, this is a great way to save time. Alternatively, you may tell WinTOTAL to automatically download new updates and notify you when they're ready to be installed. This option is best for those who don't leave the computer on overnight.

As you well know, our ICU system is a huge timesaver because you never have to download "patches" from a website and then manually install them. We know you've got better things to do than worry about updating your software. This new WinTOTAL ICU system now makes downloading and installing new updates even easier.

LSI parent going IPO
Fidelity National Information Systems, a unit of Fidelity National Financial (FNF) which includes Pittsburgh-based appraisal management company LSI, filed to raise up to $500 million in an initial public offering.

The FNF information unit used to be majority owned by FNF and known as FNIS, but the parent bought 100 percent of the company recently and subsumed it under the Fortune 500 company's umbrella. FNF is removing the "N", calling the new company FIS, and taking it public again.

FIS bills itself as a leading provider of processing services, involved in the processing of nearly 50 percent of all U.S. residential mortgage files.

Top mortgage originators by volume
National Mortgage News is out with its top mortgage originators from the first quarter of 2004. Countrywide Financial easily tops the field with $76.2 billion in originations in the quarter. Washington Mutual, which had been first in the first quarter of 2003 but which saw business dip more than 45 percent year over year, came in third. Wells Fargo was second.

Chase, Bank of America, CitiMortgage — which is buying no. 18, Principal Residential Mortgage — GMAC Residential Holdings, National City Mortgage, ABN AMRO Mortgage and Homecomings round out the top 10. Cendant Mortgage, no. 11, also originated over a billion dollars in mortgages in the first quarter.

e-Newsletter archives



e-Newsletter 5/25/04
Federal court strikes blow for appraisers

e-Newsletter 5/18/04
Remove the Owner's Estimate of Value from the URAR?

e-Newsletter 5/11/04
On the good guys' side in the AVM debate

See full archives

Specials


With all the services we offer, we know that it can be time consuming to get separate bills at different times during the year. That's why we created two options to give you one renewal date and a single low annual price. This offer only happens twice a year, so you'll want to act fast!

Option 1 - Get it all with Elite. Elite includes all renewable a la mode products for one prorated price and gives you one renewal date, at a huge savings! Plus, you'll even get any new a la mode renewable products we release for the next year, FREE.

Option 2 - Consolidate your memberships. If you'd rather just stick to what you have now, but want one renewal date, then consolidation is for you. You'll have one renewal date and you'll also save a ton off the retail price that you would pay next year. You're even getting 12 months for the price of 11 by acting now. Call your sales rep, or 1-800-ALAMODE and ask about getting it all together.


Home | Corporate | Road Trips | Support | Find a Real Estate Professional
© 2004 a la mode, inc.·  1-800-ALAMODE
All rights reserved. Not responsible for maintenance or accuracy of outside links.