Shocking Facts About Appraisals!

Last month we had a guest speaker at our team meeting who has been doing appraisals in the Las Vegas Valley for more than 20 years. She has a stellar reputation in the industry, and usually comes to speak to us at least once a year to update us on appraisal formulas, how adjustments are made, the value of specific improvements to real estate in Las Vegas and trends in appraisal values.

But this time, a random question about how appraisers are chosen by the banks led to some shocking discoveries!

First: a little background. Because of the “mortgage meltdown,” the federal government passed specific laws requiring mortgage lenders to order appraisals through a “neutral” third party. Appraisal management companies were formed. These companies receive the appraisal order from the mortgage lender and then assign an appraiser from their “approved” list. The mortgage lender cannot ever speak to the assigned appraiser, and all communications must go through an online portal to the appraisal management company.

The general population, Las Vegas Realtors included, have been under the assumption that these appraisals were assigned in rotation to the next appraiser in line to preserve the integrity of the process. Not so!

The appraisal management company charges a fixed fee to the mortgage lender for each appraisal. When the management company receives an appraisal work order, they send out a “first come, first served” type email to all the appraisers on their list. From the responses, the management company then selects the appraiser that is willing to complete the appraisal in the shortest possible time for the lowest possible price!

So if ten appraisers respond with the same general timeline, the management company will then select the CHEAPEST appraiser. Say the appraisal fee the management company is charging the lender is $450. If one of the appraisers that responds is willing to charge only $200 and the rest are charging more, the management company gives the order to the least expensive appraiser and pockets the difference.

This means that every appraisal that is being done is being awarded to the appraiser that is willing to charge the least. YOU GET WHAT YOU PAY FOR. In most instances (though not all), these are the less experienced appraisers. (Well established appraisers like our guest speaker will not even sign up to be on the list with appraisal management companies!) In addition, because these appraisers are earning less per appraisal, they have to make up in volume for charging less, which means that they are less likely to spend the extra time to truly evaluate each subject property. They are also less likely to “reconsider” the value of an appraisal that is contested.

So it is no wonder that over the past couple of years homebuyers, sellers and Las Vegas lenders are more consistently experiencing “bad” appraisals that do not truly reflect current market value.

Two Sides to the Story - Las Vegas MMA

By Glen Tonnesen

This is off the topic of real estate, but the same principle holds true. There are usually always two sides to every story.

You know how you read an article in the newspaper and make up your mind right away based on the writer's perceptions?  I have read "The 7 Habits of Highly Effective People" by Stephen R. Covey, so I should remember the perspective of viewing both sides of the story.

 

I ran into this scenario when I read Adam Hill's article in the Las Vegas Review Journal on Friday morning.  His story told more of Dana White's side rather than Greg Jackson's side.  For those of you who do not know either of these gentlemen, Dana White is the President of UFC (Ultimate Fighting Championship) and Greg Jackson is the trainer of Jon Jones ,the light heavyweight champion.

 

Jon Jones was supposed to fight past champion Dan Henderson in what could have been the fight of the year, but Mr. Henderson suffered a knee injury and had to pull out.  No one wanted to fight Jones except for Chael Sonnen, a trash talking, tough and very dangerous foe.  Greg Jackson strongly advised Jones to pass on fighting Sonnen at this particular time, which he did.  It resulted in the first ever cancellation of an upcoming major card.  Dana White became incensed, and felt that the champion should rise to the occassion and fight whoever he puts in front of him. 

After reading that first article, I agreed with Dana White, Jones was letting everyone down.  It is a blow to our economy here in Vegas when something of this magnitude is shelved. All the other fighters on the card along with their camps and the tens of thousands of workers who would cater the event are out of luck. It brings alot of money to our great city, provides employment and (dear to my heart) allows locals to purchase homes in Las Vegas. 

 

But then I read Ed Graney's commentary in which he gives Jackson's side.  If you haven't seen an MMA fight, you are missing the best sports action today.  MMA brings us back to the Romans / Lions battles, except that no one dies, and the respect the fighters have for each other is evident at the end of the war.

But you have to be tough, fast, strong, smart and PREPARED to win in this game with so much at stake.  A bad loss can literally end a career both as an athlete and a contender who is offered the big fights.  Greg Jackson prepares his fighters for the opponents they will be facing next, and it takes a whole camp to do it, not just a couple of weeks.  They did not prepare for Sonnen, they prepared for Henderson.  Football coaches prepare  for the next team they will play and plan accordingly. Jackson did NOT want his fighter hurt because he was not properly prepared.

I along with Mr. Henderson am VERY disappointed that this card did not happen.  I love LasVegas and want to see it thrive, but sometimes s--t happens.  Just remember to look and listen at both sides before making up your mind, and please come and vist Las Vegas for all it has to offer.  

Top Four Golf Communities in Las Vegas

Want to know where to buy golf course property in Las Vegas? Serious golfers all have different criteria when it comes to what they want in a golfing neighborhood - it's not one size fits all. This list is only my opinion, but I think the four neighborhoods below offer a diversity of lifestyles and represent the best of each type of development: from livability of the community, to affordability of the housing, and last, but certainly not least, the quality of the course itself.

Anthem Country Club Listings – I will say right off the bat, that I am prejudiced about Anthem being the best golf community in Vegas. Our family was actually the first to move into it when it was brand new, and I can’t imagine living anywhere else. The atmosphere is more laid back/down to earth in Anthem than some of the other communities (think high desert quiet elegance rather than Palm Springs ritzy), and there is no particular age demographic. There is a state of the art fitness center, gourmet dining and stadium tennis facilities as well. Prices fall in the median range for private golf living, and the course itself is definitely championship quality. 17 out of 18 holes offer a spectacular view of the Strip, and the placement of the different tee boxes seriously challenge low handicappers, but also allow novices to enjoy the course too.

Lake Las Vegas South Shore Listings – Lake Las Vegas is without a doubt the most beautiful of all the golf course communities in the Valley. From the moment you enter, you will feel like you have entered a charming Tuscan lake-side retreat in the hills of Italy. The heart of the community is the Montelago Village with its cobblestoned streets, boutique shops, hotel, casino and dining. The community actively promotes special events – wine walks, beer festivals, concerts, etc. For many of the owners, a place in Lake Las Vegas may be a second, third or even fourth vacation residence rather than a primary home so there aren’t a lot of families. And it is located a bit off the beaten track. But the golf course is superb, and has been home to the Wendy’s Three Tour Challenge a number of times.

Spanish Trails Listings – Spanish Trails is one of the oldest private golf communities in the city, starting construction in the mid 1980s. A lot of high end local executives built custom homes in Spanish Trails at that time, including the iconic Steve Wynn and even the Sultan of Brunei. This is the only private course that boasts 27 holes of great golf, and many of the homes have fantastic scenic double fairway views. And there is plenty of challenge for even the best of golfers. (Take plenty of  balls for the Lake 9.) The clubhouse and facilities are smaller than some of the newer courses, but the ideal location close to the Strip and lush park like setting makes this a favorite with locals.

Rhodes Ranch Listings – Rhodes Ranch is the only community listed here that is not a private country club, though the elaborate gate guarded entry could fool anyone. The neighborhood itself is beautiful, with tree lined streets and lots of greenery. Plus they have a truly incredible community center offering everything from tennis to work out facilities and lounges, to their own private water park. This is a very family friendly neighborhood, and the pricing and monthly HOA fees are more affordable than the private country club communities. Plus they give discounts on golf for residents, and many charity events are held here. For the price and amenities, you can’t beat this neighborhood for a golf environment without the higher price tag of a private country club.