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The Ultimate Guide to Instagram Hashtags for 2018

NanaGSmith Leave a comment

This is very informative information.

Did you know an Instagram post with at least one hashtag averages 12.6% more engagement than a post with no hashtags?

Hashtags are powerful. They can help your posts reach a target audience, attract followers in your niche, increase engagement, and develop a more positive and recognizable brand image.

Here’s the thing, though: with great power comes great responsibility (#spiderman).

Click here to learn how to use Instagram Stories, Carousels, Influencers, and more. 

Hashtags can skyrocket your business to new heights, but if used too frequently or without a clear strategy in mind, they become pointless and inefficient, e.g.: #happy #superhappy #ecstatic #jumpingforjoy #whatsanothersynonym.

We want your business’s Instagram posts to receive optimal engagement, so we’ve put together an ultimate guide for using Instagram hashtags in 2018. With this guide, you won’t just attract followers — you’ll attract the right followers.

Why Hashtags Are Important

Hashtags are essentially Instagram’s sorting process. With around 95 million photos posted on Instagram every day, it’s difficult for Instagram to efficiently deliver the right content to the right people. Hashtags help your post get discovered by viewers most interested in seeing it.

Krystal Gillespie, HubSpot’s Social Media Community Manager, explains the importance of hashtags this way: “Hashtags are like a funnel. For instance, #marketing is incredibly broad and attracts all types of posts. We’ve found #digitalmarketing or #marketingmotivation gives us a more specific, targeted reach. The audience searching for these hashtags are also trying to narrow their search to what we offer related to Marketing, so we’re actually reaching more of the right people.”

Essentially, hashtags are a better way to categorize your posts. They help you reach a target audience, and more importantly, they help your target audience find you. These users are more likely to engage with your post because your post is exactly what they wanted.

Top Instagram Hashtags

  1. #love
  2. #instagood
  3. #me
  4. #cute
  5. #tbt
  6. #photooftheday
  7. #instamood
  8. #iphonesia
  9. #tweegram
  10. #picoftheday

Adding one of the most popular Instagram hashtags to your post doesn’t necessarily mean you’ll see more interaction. Since the hashtags above are so popular, they are being used by millions of people, so your post will most likely be obscured by the competition. Narrowing your hashtag topic is important, but we’ll get to that next.

How to Use Hashtags for Your Business

1. Keep Your Hashtags Organized

To create an efficient hashtag system, you can use Excel or an Instagram analytics tool. If you choose an excel sheet, you’ll need to manually keep track of which hashtags you use, how often, and which ones correlate to your most popular posts. Over time, you’ll see relationships between certain hashtags and your most popular posts, and this can help you decide which hashtags work best for your brand.

If you have a more advanced social media team, you might want to consider a tool like Iconosquare, which automatically stores top hashtags and provides reports on which hashtags reach the most people.

For smaller businesses with limited budgets, Krystal Gillespie says that, “an excel sheet is the best way to start. Once you get more advanced I would highly recommend using a tool to track the data. A manual system can get overwhelming when you’re posting three times a day and using about 20 hashtags per post.”

2. Figure Out Your Magic Number

Most top brands — 91% of them, to be exact — use seven or fewer hashtags per post, so it’s easy to assume that’s the magic number for everyone … right? Krystal explains that this isn’t always the case: She told me HubSpot has been more successful with hashtags ranging in the low 20s.

The point is, you can’t know how many hashtags work best for you until you test it. For HubSpot, it took the team several months to find a number that worked best, and during our trial period, we ranged from seven to 30. Give yourself the same flexibility for trial and error.

3. Narrow Your Hashtags

There are two big reasons more specific, smaller-volume hashtags are better for your brand: first, you can compete in a smaller pool. HubSpot, for example, doesn’t typically use the hashtag #marketing because it’s too broad. If you search #marketing, you’ll find pictures of restaurants, inspirational quotes, before-and-after hair style pictures, and memes.

The randomness of #marketing leads me to the second reason specific hashtags are a good idea: as a user, I’m more likely to find what I need if I search for something specific, and when your business comes up for my specific search request, I’m more likely to be happy with what I found.

Krystal explains: “Keeping a hashtag close to the interests of your brand really helps. We try to use hashtags tailored for a specific topic and then narrow it down further — for instance, we’d use #SEOTips if our marketing post was mostly about SEO.”

Think of it this way: #dogs is more popular, but it has a wide demographic. If I search #goldenretrieverpuppies and I find your post, I’m more likely to engage with it because it’s exactly what I wanted.

4. Research What Other People are Hashtagging

An easy way to generate hashtag ideas is to make a list of your followers or competitors and research what they’re hashtagging on their own photos. It can also be particularly helpful to research what influencers in your industry are hashtagging — by definition, influencers are people with a large social media following, so they must be doing something right.

5. Test Out Related Hashtags

When you type a hashtag into Instagram’s search bar, Instagram shows you related hashtags in the scroll-down menu. Instagram also delivers related hashtags on the next page after you click on a hashtag. This is a simple way to create a longer list of hashtags to try out.

6. Follow Your Own Hashtag

Another way to use Instagram hashtags for your marketing purposes is to follow your own hashtag. Krystal explains, “On Instagram I actually follow the hashtag #hubspot so I can find anyone who talks about us and connect with them. As long as your account isn’t private, people will be able to find you via the hashtag.”

Following your own hashtag is an effective way to engage with other people talking about your brand and develop better relationships with them.

7. Create a Brand Campaign Hashtag

This is the trickiest item on the list, but if done successfully, it can pay off big time. Some businesses have successfully attracted followers by creating their own campaign hashtag. A campaign hashtag needs to be funny, clever, or at least memorable in order to work.

Campaign hashtags are particularly useful for promoting a new product or upcoming event, or even just inspiring people. Red Bull, for example, encouraged followers to post Red Bull pictures with a #putacanonit hashtag (see what I mean about clever?). LuLuLemon, rather than running a more traditional ad campaign, developed a positive connotation for their brand by asking followers to post real, active pictures of themselves with a #sweatlife hashtag.

How to Use Instagram Search Within the App

Now that we’ve covered the importance of using Instagram hashtags for your business, you might be wondering how to search for Instagram hashtags within the app, or how to use the search function to find related ideas. If you’re unsure of the technical process for hashtag searching, here’s how:

How to Search Instagram Hashtags:

  1. Tap and enter a general search term
  2. Scroll through related terms
  3. Choose hashtag that has decent search size and relates to your post
  4. Look at related hashtags that Instagram serves you on the hashtag’s page
  5. Click on a top trending photo for that hashtag
  6. Check out related hashtags on that post for more inspiration

Original full article is here

Industry Experts Agree: Housing Supply Too Low

NanaGSmith Leave a comment

Compete REA, Nana Smith selling agent, Nana Smith Stamford real estate

Last week, we reported on the lack of housing supply and how that was impacting the real estate market. Today, we want to let you know what other industry experts are saying.

Daren Blomquist, RealtyTrac Vice President:

“It’s kind of a seesaw right now between supply and demand. One of the reasons for fewer sales is not so much a lack of demand but a lack of supply, especially in the price range the majority of buyers were looking for.”

Diana Olick, CNBC’s Realty Check:

“Total sales are still running below expectations for the year. Don’t blame winter weather, though. Blame the lack of supply.”

Bill McBride, Founder of Calculated Risk:

“Inventory is still very low (down 0.5% year-over-year in February). This will be important to watch over the next month at the start of the spring buying season.”

Lawrence Yun, Chief Economist at the National Association of Realtors:

“Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels. Stronger price growth is a boon for homeowners looking to build additional equity.”

Realtor.com

“The National Housing Trend Report shows that inventory has decreased 10.9 percent year over year.”

And some experts are actually calling it a “seller’s market”

Forbes.com

“Tight inventory is a main reason the ball is still in the sellers’ court.”

Bill Banfield, VP of Quicken Loans:

“We’re a bit low on the supply-side which could force prices up for buyers, further hammering home that we’re in a seller’s market.”

Bottom Line

If you are debating putting your home on the market this year, now may be the time. The number of buyers ready and willing to make a purchase is at the highest level in years. Contact a local professional in your area to get the process started.

Confused about Collateral Underwriter?

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CU images

What is really happening with CU? How does it affect you?

My Appraisal Today FREE email newsletter can help.
I report the facts, plus my opinions on what it means for you.

CU Facts:
– Not all loans go to Fannie Mae – Freddie, VA, FHA, jumbo, etc. do not.
– Lenders are not required to use CU.
– Fannie guidelines, including CU, are the minimum. Lenders can add their own.
– Gradual implementation of CU’s web based interface, which has the list of the “20 comps” suggested by CU. This information is not available to AMCs or appraisers.
– Some appraisers get few or no appraisal warning message and some get on a lot of them, depending on their clients.
– A new Fannie Letter (dated 2-2-15) specifically tells lenders to manually review the appraisal warnings before sending any to appraisers.
– CU sends out warning messages for adjustments on only 6 factors: GLA, lot size, view, condition, quality, and location. For example: GLA adjustment for (comp x) is smaller than peer and model adjustment.
– CU warning messages for “data consistency”: the 6 factors above. Plus, CU also looks at consistency, not adjustments, for 6 additional characteristics: quality rating, condition rating, total below grade areas, finished basement areas, above grade bedroom count, and above grade bathroom count. For example: “The condition rating for (comp x) is materially different than what has been reported by other appraisers.”
– Per Fannie, there is no direct relationship between AQM and CU. However, Fannie uses data analytics like those seen in CU to find patterns of behavior. AQM decisions are not based on automated results. Humans are required.

Original Article Here

Collateral Underwriter- Too Much Too Soon

NanaGSmith Leave a comment
GREAT ARTICLE!

Collateral Underwriter- Too Much Too Soon
by David Braun, MAI, SRA
I would like to communicate some concerns and suggestions regarding the roll-out of the Collateral Underwriter (CU) scheduled for January 26, 2015. This is not an attack on Fannie Mae or the CU. In fact, these suggestions support the potential of the CU in improving the loan process and the end result of having quality mortgages.

Let me introduce myself so you can understand my perspective. I have been a working appraiser for 39 years. I have been studying statistics for over eight years, specializing in regression analysis. I have no degrees or formal education in statistics. I call myself and people like me “valuation analysts,” as I have one foot squarely placed in traditional valuation methods and the other in the statistical world. I have no axe to grind with Fannie Mae; I like many of the things it has done and dislike others. As an appraiser, I am highly attuned to its influence on how appraisers perform their work. I performed residential appraisals for the first 20 years of my career, and commercial appraisals the remainder of the time. In addition, I develop seminars and regression software for appraisers.

I have been using regression analysis in conjunction with appraisals and have run literally millions of scenarios of regression analysis in a laboratory setting to understand what it can and can’t do for appraisers. When the 1004MC form was introduced, Fannie submitted an email to appraisers dictating how to count the listings for the month’s housing supply (MHS) calculation. I published an article on the web indicating that the calculation method would often over-state the MHS by as much as 50 percent. I am not sure the folks at Fannie ever saw my article, but they did later retract the stipulated method, replacing it with a better one. The point being that as the old saying goes, two heads are better than one.

CU Upside
There are many potential upsides to the CU. Perhaps the most applauded by appraisers is that the CU is actively trying to identify the handful of unethical appraisers. Ethical appraisers would like to see the CU swat them like flies. I have personally seen appraisals where the comparable’s data were fiction. Unfortunately, many of the appraisers who tend to inflate values are sometimes encouraged by a few underwriters. The CU is going to make this unethical group of underwriters uncomfortable, as there is now a check and balance system in place. You can see I support the use of the CU for a lot of reasons. Let’s move on to some of the negative aspects, and what might be done to prevent them.

CU Downside
I have worked closely with underwriters over the years, and they do not pretend to be appraisers. They work with a simple checklist for review. I have personally been contacted from call centers in India who were the ones filling out the checklists. When the appraiser legitimately varies from secondary market guidelines there is a real problem explaining this to the holder of the checklist because they just don’t understand the guidelines well enough. Now imagine these same underwriters and reviewers looking at the CU program on their monitor. I don’t see how the CU is going to enable them to address the legitimate exceptions to the statistical analyses provided to them by the CU. The result will be an unacceptable addition of time and effort on the appraiser’s part to explain the issues. Some appraisers may simply throw up their hands, and modify their appraisals to meet the suggestions of the CU. This path of least resistance is the last thing that should happen, not to mention it will tend to erode the appraiser’s independence.
 
There is a myth among appraisers and underwriters that when the CU uses holistic regression analysis methods, the outputs will be infallible. Fannie’s training material clearly states that the CU analysis will produce some “false positives and false negatives.” This means that the outputted indications of the CU will sometimes simply be wrong. Right or wrong, the appraiser can expect to get a call from the underwriter/reviewer asking them to explain why the CU is suggesting something different than he/she reported. In terms of line-item adjustments rates (coefficients), regression analysis is just a tool that provides evidence, not proof. This can be demonstrated by scrubbing the same data with a different method, omitting a couple of sales, or by omitting or adding variables. When these things are done the coefficient in question may change significantly. Also, it is not unusual for a 90 percent confidence interval for a coefficient for the gross living area to range from as much as $40 to $70. This wide range is further evidence that the coefficient is only statistical evidence, not statistical proof.When there is a 90 percent chance that a coefficient will be within a specific range, this means that there is a 10 percent chance that the output is incorrect. From an appraiser’s perspective receiving additional evidence for a line-item adjustment rate after the appraisal and report are completed is counterproductive. Consider a house painter who is told to paint a room a certain shade of brown. However, the mother-in-law would be visiting soon and if she didn’t like the color he would be required to repaint the room a new color for free. The painter would say, if your mother-in-law wants to provide input about the color it must be done prior to my work, or I will have to charge for my additional work. If a client has any information for the appraiser, such as additional evidence of a line-item adjustment rate, they should provide it prior to the appraisal being performed, not afterward. If the appraiser performs adequate due diligence then he/she will have to charge extra to consider the additional information. I understand that Fannie Mae may have no intention for the underwriters/reviewers to require the appraisers to comment or provide additional support, however, if the CU provides it, the appraiser will almost certainly be asked to comment on it.

Jury of Your Peers
Many of the outputs of regression analysis are more reliable than the line-item adjustment rates. For example: identifying variables which have a relationship with value, identifying the random variance associated with a market, and final value estimates. These sorts of conclusions may be useful to underwriters.

The check that the CU will perform by comparing what the appraiser did to his peer group is problematic. This will penalize the very good appraisers who will be asked to explain why their conclusions are different from less experienced, inferiorly trained, or unethical appraisers. Considering a bell curve perspective, it is likely that you could divide appraisers into three groups, below average, average, and above average. This means that the majority of appraisers would be average or below. The implication is that the good appraisers should conform to the actions of the less credible appraisers. A reasonable answer from the good appraiser to the underwriter might be, “Yes, because I am a better appraiser than the overall pool of appraisers, I would expect my conclusions to often be inconsistent with the other appraisers.” Again, I am not saying it is Fannie’s intent that the underwriters will require an explanation from the appraiser, I am saying it will, none the less, be the reality appraisers are forced to deal with.
Here are a few suggestions:
• Do not report the comparison of one appraiser’s line-item adjustment rate to that of their peers to the underwriters. This information may be useful to Fannie, but is of no practical value to the underwriters or appraisers.• Postpone the underwriter’s access to any of the CU analytical outputs concerning line-item adjustment rates until both underwriters and appraisers have time to educate themselves on what the implications of those outputs are, and how they should be handled. Quite frankly, the appraiser could not comment on the CU analytical outputs without knowing the scope of work and due diligence that the CU used. This does not involve facts such as transaction and property data.• Fannie Mae should work with appraisal and mortgage organizations to encourage more related training. It is a simple truth that no system can be successful without the users being properly trained. Consider promoting standard certificates of “Valuation Analyst” and “Underwriting Analyst” that establish competency levels necessary to successfully take advantage of the CU system.

• Data that includes quantifiable rating systems for condition and quality of the improvements tremendously adds to the effectiveness of statistical analysis. This superior data, which was gathered and assembled by appraisers, must be accessible to appraisers. Appraisers have access to regression software, but not the superior data Fannie has collected from their appraisals. If one of the goals is to improve the quality of appraisals then it is not logical to withhold high quality data from the appraiser.

• Fannie and appraisers must accept that compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) is the best avenue to a credible appraisal and report. Fannie Mae would best be served by working with the State Appraisal Commissions and Boards to include additional USPAP compliance checks in the CU such as:

o Was the analysis of the highest and best use performed and reported?
o If applicable, was the land value analysis performed and reported?
o Was an applicable explanation reported for the omission of any of the major approaches to value?

I understand that USPAP compliance is the responsibility of the appraiser and the lender, not Fannie Mae. However, so is the reasonableness of the line-item adjustment rates, and the CU is providing analysis of them. Advanced holistic analyses are not necessary to predict the quality of an appraiser’s work who can’t or won’t meet the minimum requirements of USPAP. Any of the state agencies can list the prevalent USPAP violations that should be addressed.

Conclusion
The appraisal profession lacks a research and development arm which would develop things like the 1004MC form, better databases, and improved analysis techniques. I applaud Fannie Mae for moving forward to improve its business model. However, I believe the current plan to unroll the CU needs to be modified to reduce the potential negative aspects. The planned role out, could end up making Fannie Mae look like Don Quixote, and the underwriters and appraisers resembling Sancho Panza, if underwriters believe that the appraiser’s opinions should be similar to the outputs of the CU. If this happens, underwriters and appraisers will be fighting a lot of windmills. The truth is that the outputs of the CU are not statistical proof, they are only statistical evidence.

To minimize the chance of things going very wrong, the individual aspects of the CU should be phased in over a 12 to 18 month period allowing for more training regarding the implications of the CU’s outputs and how underwriters should best use these tools. Certainly, inconsistencies, inaccuracies, and data anomalies are examples of issues the CU should be flagging for underwriters. I am happy to answer any questions that Fannie Mae might have about my comments and suggestions.

About the Author
David Braun, MAI, SRA can be reached at david@AVTtools.com.www.AVTtools.com

This Zero-Emission Home Creates Enough Energy To Power An Electric Car For One Year

NanaGSmith Leave a comment

This just might just be the most beautiful zero-emission home we have ever laid eyes on. Snøhetta, a design firm in Norway, has created the ZEB Multi-Comfort House in Ringdalskogen, Larvik, Norway. The house not only runs solely on solar energy, but collects enough extra solar energy to power an electric car for one year.

house1

ZEB took 10 months to build and, according to Kristian Edwards, the lead architect of the project, a very intricate process was employed to ensure that the solar energy would be used at the highest efficiency.

house1

The result? A home with striking features like a tilted roof that is slanted at a 19-degree angle to accommodate the photovoltaic panels (the ones that provide electricity) and the solar thermal panels (the ones that provide heat and hot water). Edwards told The Huffington Post that the roof also provides a dramatic flair to the inside of the home. “It is perhaps the most striking element of the upper floor,” he says. “Relatively small bedrooms gain great volume, hugely beneficial to sleep comfort, light transmission and of course, a certain drama.”

house4

In the atrium, Edwards used recovered brickwork from a barn that was being demolished. “The recovered brick serves a thermal mass which passively contributes to balance temperature spikes,” says Edwards.

house3

There are currently no tenants in the home. However, Edwards says that there are plans in the works to have families occupy the space “in order to realistically test the building and system performance.” Feedback from visitors has been “generally extremely positive,” he adds.

house5

Despite it’s forward-thinking approach, Edwards says the goal of ZEB was to create a place that is welcoming and comfortable, with energy-saving features that virtually disappear into the background. “Our goal was to ensure that the house, whilst advanced, is predominantly welcoming,” says Edwards. “The outdoor covered atrium with a fireplace gives a welcome extension of the outdoor season that is fundamental to the Norwegian culture. This shows that the steps toward zero carbon housing need not represent a quantum leap in lifestyle, and therefore, makes it simpler and quicker to make the switch.”

house6

Original Article

 

Appraisal Tool for Lenders

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If this tool is that great why they would not let appraisers to use it to?

images

October 20, 2014

Fannie Mae Announces Appraisal Tool for Lenders

New Tool Provides Increased Clarity, Certainty for Lenders to Help Prevent Repurchases

Keosha Burns

202-752-7840

WASHINGTON, DC – Today, Fannie Mae (FNMA/OTC) announced that it will make its proprietary appraisal analysis application available to lenders in early 2015, allowing lenders to compare appraisals against Fannie Mae’s database of appraisal and market data. The company currently uses the tool, Collateral Underwriter™, to analyze appraisals when a lender delivers a loan to Fannie Mae. Collateral Underwriter will help lenders expand access to mortgage credit by providing increased certainty around repurchase risk.

“Our goal is to provide relief on appraisal representations and warranties in the future, and we will work with FHFA to do so,” said Andrew Bon Salle, Executive Vice President, Single-Family Underwriting, Pricing, and Capital Markets. “We want to be the business partner of choice for lenders by providing the tools and products lenders need.  Collateral Underwriter will help lenders build their businesses safely and strongly.”

Fannie Mae began receiving appraisals in electronic format from lenders in 2012, and built Collateral Underwriter to analyze that data.  Collateral Underwriter leverages Fannie Mae’s market data and analytical models to perform a comprehensive assessment of the appraisal.  The tool provides an overall risk score and detailed messaging to highlight specific aspects of the appraisal that may warrant further attention. Collateral Underwriter will be integrated with Fannie Mae’s Desktop Underwriter® software to seamlessly incorporate into a lender’s existing underwriting process.  Using Collateral Underwriter during the origination of the loan will allow the lender to assess the appraisal and address any issues prior to closing and delivery to Fannie Mae.

Collateral Underwriter is the latest addition to a suite of Fannie Mae industry tools, including Desktop Underwriter and Early Check™, that help lenders make loans with confidence.  These tools help lenders identify eligibility issues earlier in the process, providing more certainty that loans will meet Fannie Mae’s requirements.

Original Source is Here

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Growth and Development

NanaGSmith Leave a comment

For the next 30 days I have decided to keep a log of my appraisal
work day. Something like a  dairy.CREA, CompleteREA, Real Estate
I will be keeping a log of the good things that happened that day and will log what bad
things happened that day.

After 30 days I will compare what the good and bad things were. How many good things and
bad things happened during this 30 day period of time? I will notice whether
there are repetitious good and bad occurrences; if so I will take notice of
what they are and I will question why they occurred.

Hopefully, I can go on and do a quarter of the year as a next step.

My objective with this is to help with the growth and development of my business.

I argue YOU too to join me, partner with me in this endeavor. At the end of the
month we can compare all “good” and all “bad” which happened, brainstorm
together on how to eliminate the “bad” and have better “good” for the rest of
our business careers and lives.

Is it possible? Is it viable? I do not know, but I would like to try.

…and yes, I will be one day behind, so that the day should have passed, in
order to evaluate the particulars my business day.

Follow my blog to cheer up! Life is easier when one has a partner.

Nana
_______

The Appraisal Institute

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The Appraisal Institute has published guidance to help appraisers learn what evaluations are, when they are used and who can prepare them. The Appraisal Institute’s “Guide Note 13: Performing Evaluations of Real Property Collateral for Lenders” addresses how appraisers should prepare an evaluation for a lender and comply with the Uniform Standards of Professional Appraisal Practice (USPAP).crea, complete rea, completerea, stamford ct

The Guide Note states, “Federally insured lending institutions in the United States are subject to regulations regarding real estate appraisals. For lending transactions involving real estate, a lender must obtain an appraisal from a state licensed or certified appraiser. There are 12 exemptions from this requirement. For three of these exemptions, in lieu of an appraisal by a licensed or certified appraiser the lender may obtain an evaluation.”

Evaluations, per the Interagency Appraisal and Evaluation Guidelines, are market value opinions that may be provided by individuals who are not state licensed or certified appraisers. However, state licensed and certified appraisers may provide them, according to the Appraisal Institute’s Guide Note. The interagency guidelines also state that an evaluation must be based on a valuation method that is appropriate for a transaction rather than the method that renders the highest value, lowest cost or fastest turnaround time.

The Appraisal Institute’s Guide Note states that USPAP allows an appraiser to adjust the scope of work for a valuation assignment as long as the resultant value opinion is credible, given the intended use. When preparing an evaluation, the appraiser may consider narrowing the scope of work as appropriate.

According to the interagency guidelines, a lender may obtain an evaluation in lieu of an appraisal when the loan transaction: Has a transaction value equal to or less than $250,000; is a business loan with a transaction value equal to or less than the business loan threshold of $1 million, and is not dependent on the sale of, or rental income derived from, real estate and the primary source of repayment; or involves an existing extension of credit at the lending institution, provided that there has been no obvious and material change in market conditions or physical aspects of the property that threaten the adequacy of the institution’s real estate collateral protection after the transaction, even with the advancement of new monies; or there is no advancement of new monies other than funds necessary to cover reasonable closing costs.

Phone: +1 203 858 6727

Office: +1 203 212 3788

Complete Real Estate Answers, Inc.
27 Fifth Street, 2nd Floor, Stamford CT 06903

Nana G. Smith, Proprietor

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USPAP Standard Rule 1-4

NanaGSmith 1 Comment

 

Standards Rule 1-4

In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results.

(a)

 When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.

(b)

When a cost approach is necessary for credible assignment results, an appraiser must:

(i)

develop an opinion of site value by an appropriate appraisal method or technique;

(ii)

analyze such comparable cost data as are available to estimate the cost new of the improvements (if any); and

(iii)

analyze such comparable data as are available to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation).

(c)

 When an income approach is necessary for credible assignment results, an appraiser must:

(i)

analyze such comparable rental data as are available and/or the potential earnings capacity of the property to estimate the gross income potential of the property;

(ii)

analyze such comparable operating expense data as are available to estimate the operating expenses of the property;

(iii)

analyze such comparable data as are available to estimate rates of capitalization and/or rates of discount; and

(iv)

base projections of future rent and/or income potential and expenses on reasonably clear and appropriate evidence. 13 

Comment: In developing income and expense statements and cash flow projections, an appraiser must weigh historical information and trends, current supply and demand factors affecting such trends, and anticipated events such as competition from developments under construction.

(d)

 When developing an opinion of the value of a leased fee estate or a leasehold estate, an appraiser must analyze the effect on value, if any, of the terms and conditions of the lease(s).

(e)

 When analyzing the assemblage of the various estates or component parts of a property, an appraiser must analyze the effect on value, if any, of the assemblage.  An appraiser must refrain from valuing the whole solely by adding together the individual values of the various estates or component parts.

Comment: Although the value of the whole may be equal to the sum of the separate estates or parts, it also may be greater than or less than the sum of such estates or parts. Therefore, the value of the whole must be tested by reference to appropriate data and supported by an appropriate analysis of such data.

A similar procedure must be followed when the value of the whole has been established and the appraiser seeks to value a part. The value of any such part must be tested by reference to appropriate data and supported by an appropriate analysis of such data.

(f)

 When analyzing anticipated public or private improvements, located on or off the site, an appraiser must analyze the effect on value, if any, of such anticipated improvements to the extent they are reflected in market actions.

(g)

 When personal property, trade fixtures, or intangible items are included in the appraisal, the appraiser must analyze the effect on value of such non-real property items.

Comment: When the scope of work includes an appraisal of personal property, trade fixtures or intangible items, competency in personal property appraisal (see STANDARD 7) or business appraisal (see STANDARD 9) is required. 

Original content was published in The Appraisal Foundation site.

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Contact C.R.E.A.

Email: info@CompleteREA.com

Phone: +1 203 858 6727

Complete Real Estate Answers, Inc.
453 Webbs Hill Road
Stamford, CT 06903

Nana G. Smith, Proprietor

Web & Blog: CompleteREA.com (you are here)
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USPAP Standard Rule 1-2

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Standards Rule 1-2

In developing a real property appraisal, an appraiser must:

(a)

 identify the client and other intended users; 5

(b)

 identify the intended use of the appraisers opinions and conclusions; 6

Comment: An appraiser must not allow the intended use of an assignment or a clients objectives to cause the assignment results to be biased. 7

(c)

 identify the type and definition of value and, if the value opinion to be developed is market value, ascertain whether the value is to be the most probable price:

(i)

in terms of cash; or

(ii)

in terms of financial arrangements equivalent to cash; or

(iii)

in other precisely defined terms; and

(iv)

if the opinion of value is to be based on non-market financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraisers opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data;

Comment: When developing an opinion of market value, the appraiser must also develop an opinion of reasonable exposure time linked to the value opinion. 8

(d)

 identify the effective date of the appraisers opinions and conclusions 9

(e)

 identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal, 10 including:

(i)

its location and physical, legal, and economic attributes;

(ii)

the real property interest to be valued;

(iii)

any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal;

(iv)

any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature; and

(v)

whether the subject property is a fractional interest, physical segment, or partial holding;

Comment on (i)(v): The information used by an appraiser to identify the property characteristics must be from sources the appraiser reasonably believes are reliable.

An appraiser may use any combination of a property inspection and documents, such as a physical legal description, address, map reference, copy of a survey or map, property sketch, or photographs, to identify the relevant characteristics of the subject property.

When appraising proposed improvements, an appraiser must examine and have available for future examination, plans, specifications, or other documentation sufficient to identify the extent and character of the proposed improvements. 11

Identification of the real property interest appraised can be based on a review of copies or summaries of title descriptions or other documents that set forth any known encumbrances.

An appraiser is not required to value the whole when the subject of the appraisal is a fractional interest, a physical segment, or a partial holding.

(f)

 Identify any extraordinary assumptions necessary in the assignment;

Comment: An extraordinary assumption may be used in an assignment only if:

  • it is required to properly develop credible opinions and conclusions;

  • the appraiser has a reasonable basis for the extraordinary assumption;

  • use of the extraordinary assumption results in a credible analysis; and

  • the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions.

(g)

identify any hypothetical conditions necessary in the assignment.
Comment: A hypothetical condition may be used in an assignment only if:

  • use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison;

  • use of the hypothetical condition results in a credible analysis; and

  • the appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions.

(h)

determine the scope of work necessary to produce credible assignment results in accordance with the SCOPE OF WORK RULE. 12

Original content was published in The Appraisal Foundation site.

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