The “New Language” of Appraisal

The “New Language” of Appraisal

Guest Post Written By Bonnie Baldwin, Vice President of the Rose City Chapter of National Association of Independent Fee Appraisers (NAIFA)

The one true constant in our industry is change.  As real estate agents, you have a comprehensive understanding of your market, and you fully describe the properties you list, market and sell. You can identify the components for condition and quality as good, average and poor.  You can define a view and its perception in the market. And, you know how to read the grid section of an appraisal, and comprehend and identify with the comments.

As we all know, when you throw a stone in the water, you get a ripple effect, which in this case will be referred to as the Uniform Appraisal Dataset (UAD), the “new language” of appraisal. This ripple will require a new understanding of the definitions and terms utilized in an appraisal that will code the quality and condition rating of a property. There will be new codes and abbreviations for rooms below grade, view and location codes. One and two story descriptions of the design/style of a home will be a thing of the past; now it will be architectural descriptions only. 61 different fields on four different appraisal report forms will reflect these new changes.

The Uniform Appraisal Dataset (UAD) is the “big news” in the appraisal and lending world today. Fannie Mae and Freddie Mac have established a specific set of responses that all appraisers will be required to comply with for any appraisal being submitted to the secondary market. The intent is to support consistent appraisal reporting, regardless of the geographic location of the property or any localized reporting conventions, by clarifying vague data currently utilized in the typical appraisal report.  

Effective September 1, 2011, Fannie Mae and Freddie Mac are set to roll out the Uniform Mortgage Data  Program (UMDP) creating a uniform approach for receiving and handling appraisal data with the intent to improve the quality and consistency of appraisal data on loans delivered to the government-sponsored enterprises (GSEs). This standardization was mandated at the direction of the Federal Housing Finance Agency (FHFA) to improve operational efficiencies and to require appraisers, lenders, and appraisal management companies to conform to the new standardized requirements. HUD/FHA has also indicated they will be implementing the Uniform Appraisal Dataset later this year.

For more specific information about the “New Language” of appraisal, visit Fannie Mae’s website at www.efanniemae.com. Then, search for the Uniform Appraisal Dataset (UAD). Once there, click “UAD Field-Specific Standardization Requirements,” and print pages 34 – 37 for a useful reference of the codes and definitions. As a Certified Appraiser and Vice President of the Rose City Chapter of NAIFA, I encourage you to contact a Board Member or your NAIFA Appraiser at www.ifanw.com for additional information.

The “New Language” of Appraisal

The Offer of Compensation

Guest blog post written by Gail Hare, RMLS™ Executive Vice President

One of the core elements of a Multiple Listing Service is the offer of compensation. Each listing entered into RMLS™ shows the amount of the cooperating compensation in the BAC fields. This informs other MLS participants about their expected compensation before they try to sell the listing. Any change must be communicated in writing before an offer is submitted.

The cooperating commission is shown as a specific dollar amount or as a percentage of the gross selling price. The commission of the Listing Broker is never displayed. The total commission negotiated between the Listing Broker and the Seller is also never disclosed.

Dual or Variable Rate Commission

Some listing agreements have special terms if the Listing Broker also represents the buyer. Those terms state that total commission differs when there is no Cooperating Broker in the sale. This could affect the relative attractiveness of competing offers. Listings have a required field called “Total Commission Differs If Sold In House.”  This is checked YES to alert MLS subscribers about this condition.

Short Sale Considerations

Short sales present many challenges. The lender may require a reduction in the gross commission as a condition of approving the sale. The Listing Broker may use the Private Remarks to describe how any reduction will be apportioned.  If there is no notification by this or other means, Cooperating Brokers can reasonably expect the published compensation.

Remember!

Compensation and the division of compensation is not fixed or controlled in any way. Each Listing Broker independently decides the commission for each listing.

Disputes between REALTORS® regarding offers of compensation are resolved through arbitration and mediation.

For More Information

Read Section 6 of the RMLS™ Rules and Regulations to learn more about commissions, and Rule 3.25 to learn more about how short sales are handled. Please contact our Rules staff if you have questions. Call Vallerie Bush, Rules Administrator, at 503-872-8045 or Wanda Kennedy, Rules Representative, at 503-872 8084. They can also be reached by email at Rules@rmls.com.

The “New Language” of Appraisal

RMLS™ Rules and Regulations Process

By Vallerie Bush, RMLS™ Rules Compliance Administrator

In November of 2010, we conducted our second subscriber satisfaction survey. The goal was to gather feedback regarding subscribers’ impressions of our service. Results of the survey showed us that many subscribers had questions or confusion regarding our Rules and Regulations process. We hope to clear up some of this confusion in this article.

Informal Violations. First, informal violations are received several different ways; fax, email, telephone, the Questions and Comments section on RMLSweb, and sometimes in the mail. Once the complaint is received and reviewed, the listing agent is contacted to correct the violation. This is done via email or a telephone call with a time frame to correct the listing. If the listing has not been corrected within the time frame, the Participant Broker is copied when a second request is sent. The source of the informal complaint remains anonymous in this process. The number of informal violations processed for 2010 was 14,868 with the top issues being Personal Promotion, Invalid Owner Name, Incorrect Photographs, and Incorrect Property Type.

Audits. There are several in-house audits that are conducted on a daily basis. The following items are checked on listings:

  • Virtual tours for personal promotion
  • HUD violations
  • Appropriate first photograph
  • Public remarks for personal promotion
  • The BAC field for presence of compensation (there is no required amount or percentage)
  • The address field for extra wording that is not part of the address (i.e. private road, lot number, cul-de-sac, etc.)
  • The remarks section for conditions to compensation

After the audit, the violations regarding HUD, virtual tours, personal promotion and extra wording in the address fields are corrected by staff with a follow-up email to the listing agent. The other audits checked have emails sent to the listing agent to have the listings corrected in a timely manner. If the listing has not been corrected, the listing agent is sent a second request with a copy to the Participant Broker.

Computer Generated Emails. Computer generated emails are sent when a listing is saved and the tax ID number field is “not found” or when the school fields list “other” as the school. There are also computer generated emails sent when a listing has been in pending status for more than 100 days that ask to verify that the listing is in the correct status. There are a total of 4 emails sent out with the last one being sent to the Rules and Regulations email folder for follow-up. The listing agent can respond to the email with an explanation and the violation is then reviewed and discussed with the listing agent.

Formal Violations. Formal violations are reported using document #1452. A formal process begins with a letter sent to the respondent and the complainant. The respondent is given the opportunity to respond to the violation. The formal violation and the response are presented to the Rules and Regulations Committee to determine if a fine will be levied. The respondent has a chance to appeal the decision through a Hearings process. Unlike informal complaints, the source of the complaint cannot be anonymous. There were a total of 4 formal violations processed in 2010.

The RMLS™ Rules and Regulations Department has determined by using education and pro-active audits how to make RMLS™ the most valuable tool it can for its REALTOR® subscribers. We follow up on every question and report and welcome every opportunity to increase our database accuracy. Please send an email to rules@rmls.com or go to the Questions/Comments section in Toolkit on the RMLSweb desktop page (choose the Rules and Regulations subject) if you have any questions or concerns regarding data accuracy.

The “New Language” of Appraisal

RMLS™ Rules and Regulations Process

By Vallerie Bush, RMLS™ Rules Compliance Administrator

In November of 2010, we conducted our second subscriber satisfaction survey. The goal was to gather feedback regarding subscribers’ impressions of our service. Results of the survey showed us that many subscribers had questions or confusion regarding our Rules and Regulations process. We hope to clear up some of this confusion in this article.

Informal Violations. First, informal violations are received several different ways; fax, email, telephone, the Questions and Comments section on RMLSweb, and sometimes in the mail. Once the complaint is received and reviewed, the listing agent is contacted to correct the violation. This is done via email or a telephone call with a time frame to correct the listing. If the listing has not been corrected within the time frame, the Participant Broker is copied when a second request is sent. The source of the informal complaint remains anonymous in this process. The number of informal violations processed for 2010 was 14,868 with the top issues being Personal Promotion, Invalid Owner Name, Incorrect Photographs, and Incorrect Property Type.

Audits. There are several in-house audits that are conducted on a daily basis. The following items are checked on listings:

  • Virtual tours for personal promotion
  • HUD violations
  • Appropriate first photograph
  • Public remarks for personal promotion
  • The BAC field for presence of compensation (there is no required amount or percentage)
  • The address field for extra wording that is not part of the address (i.e. private road, lot number, cul-de-sac, etc.)
  • The remarks section for conditions to compensation

After the audit, the violations regarding HUD, virtual tours, personal promotion and extra wording in the address fields are corrected by staff with a follow-up email to the listing agent. The other audits checked have emails sent to the listing agent to have the listings corrected in a timely manner. If the listing has not been corrected, the listing agent is sent a second request with a copy to the Participant Broker.

Computer Generated Emails. Computer generated emails are sent when a listing is saved and the tax ID number field is “not found” or when the school fields list “other” as the school. There are also computer generated emails sent when a listing has been in pending status for more than 100 days that ask to verify that the listing is in the correct status. There are a total of 4 emails sent out with the last one being sent to the Rules and Regulations email folder for follow-up. The listing agent can respond to the email with an explanation and the violation is then reviewed and discussed with the listing agent.

Formal Violations. Formal violations are reported using document #1452. A formal process begins with a letter sent to the respondent and the complainant. The respondent is given the opportunity to respond to the violation. The formal violation and the response are presented to the Rules and Regulations Committee to determine if a fine will be levied. The respondent has a chance to appeal the decision through a Hearings process. Unlike informal complaints, the source of the complaint cannot be anonymous. There were a total of 4 formal violations processed in 2010.

The RMLS™ Rules and Regulations Department has determined by using education and pro-active audits how to make RMLS™ the most valuable tool it can for its REALTOR® subscribers. We follow up on every question and report and welcome every opportunity to increase our database accuracy. Please send an email to rules@rmls.com or go to the Questions/Comments section in Toolkit on the RMLSweb desktop page (choose the Rules and Regulations subject) if you have any questions or concerns regarding data accuracy.

The “New Language” of Appraisal

RMLS™ Rules and Regulations Process

By Vallerie Bush, RMLS™ Rules Compliance Administrator

In November of 2010, we conducted our second subscriber satisfaction survey. The goal was to gather feedback regarding subscribers’ impressions of our service. Results of the survey showed us that many subscribers had questions or confusion regarding our Rules and Regulations process. We hope to clear up some of this confusion in this article.

Informal Violations. First, informal violations are received several different ways; fax, email, telephone, the Questions and Comments section on RMLSweb, and sometimes in the mail. Once the complaint is received and reviewed, the listing agent is contacted to correct the violation. This is done via email or a telephone call with a time frame to correct the listing. If the listing has not been corrected within the time frame, the Participant Broker is copied when a second request is sent. The source of the informal complaint remains anonymous in this process. The number of informal violations processed for 2010 was 14,868 with the top issues being Personal Promotion, Invalid Owner Name, Incorrect Photographs, and Incorrect Property Type.

Audits. There are several in-house audits that are conducted on a daily basis. The following items are checked on listings:

  • Virtual tours for personal promotion
  • HUD violations
  • Appropriate first photograph
  • Public remarks for personal promotion
  • The BAC field for presence of compensation (there is no required amount or percentage)
  • The address field for extra wording that is not part of the address (i.e. private road, lot number, cul-de-sac, etc.)
  • The remarks section for conditions to compensation

After the audit, the violations regarding HUD, virtual tours, personal promotion and extra wording in the address fields are corrected by staff with a follow-up email to the listing agent. The other audits checked have emails sent to the listing agent to have the listings corrected in a timely manner. If the listing has not been corrected, the listing agent is sent a second request with a copy to the Participant Broker.

Computer Generated Emails. Computer generated emails are sent when a listing is saved and the tax ID number field is “not found” or when the school fields list “other” as the school. There are also computer generated emails sent when a listing has been in pending status for more than 100 days that ask to verify that the listing is in the correct status. There are a total of 4 emails sent out with the last one being sent to the Rules and Regulations email folder for follow-up. The listing agent can respond to the email with an explanation and the violation is then reviewed and discussed with the listing agent.

Formal Violations. Formal violations are reported using document #1452. A formal process begins with a letter sent to the respondent and the complainant. The respondent is given the opportunity to respond to the violation. The formal violation and the response are presented to the Rules and Regulations Committee to determine if a fine will be levied. The respondent has a chance to appeal the decision through a Hearings process. Unlike informal complaints, the source of the complaint cannot be anonymous. There were a total of 4 formal violations processed in 2010.

The RMLS™ Rules and Regulations Department has determined by using education and pro-active audits how to make RMLS™ the most valuable tool it can for its REALTOR® subscribers. We follow up on every question and report and welcome every opportunity to increase our database accuracy. Please send an email to rules@rmls.com or go to the Questions/Comments section in Toolkit on the RMLSweb desktop page (choose the Rules and Regulations subject) if you have any questions or concerns regarding data accuracy.

The “New Language” of Appraisal

The List

Written by Jo Becker, Education and Outreach Specialist for Fair Housing Council of Oregon

It’s the stuff of urban legends. It always comes up in fair housing trainings–be it classes I attended years ago as a sales agent or in classes I conduct for the Fair Housing Council now. Everyone’s heard of it; everyone wants to know how to get his/her hands on it. Some call it the “Red Light/Green Light” list; others have dubbed it with the classy moniker of the “No-No” List. That infamous, non-existent list of words one should never utter; a list that if ardently avoided would keep one safe from fair housing complaints or violations. I’ve got news for you folks; “THE LIST” is a myth!

HUD, the federal regulatory body with the power to enforce the Fair Housing Act, does not have such a list. We at the Fair Housing Council (FHCO), the authority on fair housing across Oregon and SW Washington, have never had such a list. What most people probably recall are lists that newspapers have published for advertisers to help ensure protection against a fair housing violation that would name them as well as the sales agent placing the ad. These media lists are often more conservative than we at the FHCO are, essentially because these publications are very sensitive to being slapped with a fine or lawsuit.

Realtors® have, no doubt, experienced multiple listing service computer programming that scans newly input listings for verbiage that may violate fair housing laws. Please don’t be intimated or put off by these electronic programs; they don’t know if you typed “white picket fence” or “whites only.” When you’re asked to review your listing, simply double check it and know that a living, breathing human will follow up to review it as well.

Now, the myth of the list has spawned many urban legends, which I would like to debunk and/or explain here.

Walk-in Closet — This is a common feature in many homes and is commonly understood to refer to such. So long as you don’t go on to imply that (or limit access to) someone who isn’t ambulatory can’t use the closet or live in the home, you’re fine!

View Property — Same as above. So long as you don’t limit access to the view property to sighted individuals, there’s nothing wrong with using the word “view” to describe a property with such an amenity. That is opposed to a case in which a landlord refused to tour an available unit with a blind applicant saying, “Why should I bother; you can’t see it anyway!” That, my friends, is discriminatory and illegal.

Mother-in-law Suite — Guess what, it’s fine so long as you don’t really mean that only a mother-in-law can live in the unit.

What about “near?” — Now, we’re getting into a more complex issue. It’s not uncommon to see promotional verbiage indicating close to shopping, transit, etc. This is fine. However, you begin to cross the line with fair housing law if you say “near the ABC mosque,” or “close to the XYZ church.”  Referencing religious or cultural sites—even though they are valid landmarks—may have what we call a “chilling effect” and can be illegal. Let’s say a synagogue or Jewish community center is referenced and the housing consumer reading it isn’t of that faith or ethnic background. They may feel that they’re not welcome there and this chilling effect can have an illegally discriminatory impact whether it was intended to or not.

Another touchy issue is referencing local schools.  National sales tests have found that schools are sometimes used as a proxy for where to buy a home. That is, some agents encourage buyers to look at and buy homes in school districts whose demographics are consistent with that of the buyer. White testers were told the virtues of predominately white schools (and by association, their neighborhoods); while minority testers were directed to predominately minority schools (and their neighborhoods); the exact schools agents told white testers to avoid. Simply listing the school district and schools that serve the area is fine so long as you do this with all of your properties.  Referring housing consumers to the district’s office or website for school stats and other information from which they can develop their own opinion in is a safe strategy so long as it is applied neutrally and consistently. Touting certain schools over others is less so, and we don’t recommend it.

Of course, any good list (if we were to create one) would include the following blatantly discriminatory statements:

  • “No minorities”
  • “African Americans and Arabians tend to clash with me so that won’t work out”
  • “Ladies please rent from me”
  • “Requirements: Clean Godly Christian Male”
  • “Will allow only single occupancy”
  • “No children”

All of these illegal statements (and many more) have been posted on the online service Craigslist. Housing providers that use illegally discriminatory statements such as these—and potentially the hosting website—are liable for having violated the Fair Housing Act. As is the landlord who told one of our staff that she had advertised “Christians only” for 20 years. It doesn’t matter where you advertise—newspapers, flyers, yard signs, verbal statements you may make to another agent or prospect, and yes even advertising online (even if it’s free!)—fair housing laws apply!

For questions about your rights and responsibilities under fair housing laws, visit http://fhco.org/ or call 503-223-8197 or 1-800-424-3247 Ext. 108. To schedule an in-office fair housing training program or speaker for corporate or association functions, contact me at JBecker@FHCO.org.

This article brought to you by the Fair Housing Council or Oregon; a nonprofit serving the state of Oregon and SW Washington.  Learn more and/or sign up for our free, periodic newsletter at www.FHCO.org.

Questions about your rights and responsibilities under fair housing laws?
Visit http://fhco.org/ or call 800-424-3247 ext. 2.

Questions about this article or want to schedule an in-office fair housing training program or speaker for corporate or association functions? Contact Jo Becker at jbecker@FHCO.org or 503-453-4016.