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Adjustments: What’s in Your Workfile?

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Adjustments are approached in different ways by appraisers everywhere.Changing Market Data, Trends, and Consistent Working Files All Affect Adjustments – Learn from the Experts in our Free Webinar on October 31stst 2 pm”Coordination: What’s in your working file?With Mel Black of McKissock, John Dingeman, Chief Appraiser of Class Evaluations, and Danny Wiley, Senior Director of Single Family Evaluations at Freddie Mac. We sat down with our host to go into more detail about what the free webinar will cover.

Buzz: What is your background in the appraisal industry?
Mel Black: I have been in the profession in one form or another for 30 years. I am Director of Assessment Innovation at her McKissock Learning. I was first licensed as an appraiser in 1991 and as a real estate broker in 1988.
Danny Wiley: I am the Senior Director of Real Estate Valuation for Single Family Risk Management at Freddie Mac. I have held appraisal-related positions since 1982, as an independent commission appraiser for over 25 years, and as AMC’s Chief Appraiser for 8 years. At Freddie Mac, he is responsible for the collateral risk management and valuation team. He is also responsible for innovation in collateral risk analysis.
John Dingemann: I am a licensed home appraiser and registered property tax agent. I am also a continuing education instructor for appraisers, evaluators, distributors, and loan originators. I am the Lead Appraiser for Class Valuation, one of the largest non-landlord owned valuation management companies (AMCs) in the country, and have held this role for several AMCs for the past nine years.

Buzz: What trends does Freddie Mac cover? What data do you think is reflected in the challenges that come with coordinating?
Danny Wiley: A recent trend is that the market is changing, and in some cases, rapidly. It is important that appraisers conduct proper market analysis and do not rely on outdated data in reporting market conditions and/or adjustments in market conditions.

Buzz: Today’s market data is changing faster than ever before.Thoughts on best practices on how to make adjustments based on market data in today’s market
John Dingemann: Markets are cyclical. Over the past decade, appraisers have been reluctant to apply market adjustments to sales in growth markets. After the market crash in 2008, we knew why. It is important to recognize that a zero dollar adjustment is an adjustment and any adjustment must be supported. Applying a supported adjustment, that is, an adjustment that reflects market behavior, only strengthens the value opinion. After more than a decade of growth and an unprecedented rise in real estate values, we are faced with a global pandemic in 2020 that has impacted consumer behavior and the real estate market in several ways.Remote The opportunity to work in and live anywhere has increased activity and demand and reduced inventories to record lows.

Buzz: From a GSE perspective, what specific data would evaluators expect to include in their reports and workfiles to support all these adjustments?
Danny Wiley: Freddie Mac’s policy specifically states that the use of unsupported adjustments is unacceptable rating practice. As such, it is expected that all adjustments (even $0 adjustments) will be reliably supported in the working file and accounted for in the assessment report.

Buzz: I’m constantly reviewing files, adjustments, reconsideration requests, etc. in class – what are the general do’s and don’ts?
John Dingemann: Technology is on our side, and so many appraisers have referred to digital data in their work files assuming it was always available. Data is being wiped off the internet for a variety of reasons. That reference simply points to a “404 URL Not Found” page. Digital storage today is readily available and inexpensive. Our technology providers like DataMaster can also store our entire working file, including the entire MLS listing and all photos of both subject and comparison properties. Leveraging technology and maintaining a working file that allows the appraiser (or appraisers) to recreate the appraisals is paramount.

Buzz: Why should appraisers attend this webinar?
Mel Black: This webinar assists appraisers in deriving adjustments based on market data, reminds appraisers of what reports and work files need to support their adjustments, discusses common myths and It’s meant to shatter the myth of untested appraisals. It provides statistics and background on trends Freddie Mac may be seeing and answers questions from the audience on relevant topics.

Thank you for answering these questions. Join us for a free webinar on October 31st.st 2 pm”Coordination: What’s in your working file?

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