Welcome back.
Yeah.
Welcome back.
Value Nation presented by Nationwide Property
and Appraisal Services, LLC.
Michael Schwartz here with Charlie.
What's going on, man?
What's up, bro?
Good to see you again.
Glad to be back.
Let's get into it.
I think that the one big piece that people,
they either they want to talk about it,
or they just kind of they keep it in the back of their mind
is that appraisal is probably the make or break.
It's the biggest piece of the whole process,
especially in the purchase market, right?
Yeah, for a lot of people, especially the refi.
I mean.
Which right now, I mean, those are not existing.
But that's why you see, like you mentioned,
that the big right now.
Yeah, I mean, it's just.
Well, if you like market, I feel like it's booming.
We're in that part of the market right now.
Where everything is up and down, up and down.
We're in a down.
We're down right now.
But it'll be back around.
No doubt.
And I feel like we're in that natural downslide
for the industry in general.
For people who aren't aware, usually, historically,
typically the craziest time in the appraisal business,
especially is what from the months of maybe March
starts to ramp up.
April really gets going.
May really gets rolling.
And then summertime is nuts.
And this is about the time school's
starting up for everybody.
So this is kind of the natural time
when the purchase season kind of slows down a little bit.
Which is crazy if you think about it.
How much the purchase season coincides with nice weather,
even though some parts of the country have nice weather
year round.
And then also kids go to school.
So it's pretty rare, I would think,
for a family with kids to put their house up for sale
and move to a different school district, state, city,
what have you, while their children are in school.
Unless, obviously, there's situations
where a new job happens, divorce.
Hopefully not for anybody out there.
But divorce happens and things like that.
But it's not, hey, we've really been looking for a house
and we're going to move.
Although it does happen, but it's just not as common.
People really go gung-ho for it during the warm months
of the year.
No, you're right.
And around me in the DC area and Northern Virginia,
a lot of people obviously work for the government.
Or government contractors.
So huge transient kind of area.
So believe it or not, there's sections around me
where, yes, late summer, midsummer,
purchase market's slamming.
Everybody wants to get to a certain school district.
They want to make sure they're all settled in and ready to go.
But it's not uncommon around here, anyways,
that middle of school year, one of those parents
that works for XYZ government company,
they're getting re-stationed or repositioned into a new area.
And they got to go to Europe.
They got to go to the other side of the country.
And it's rough.
I've seen a lot of kids that are friends with my daughter
that have had to leave one move to London, England.
And it was a struggle.
You think Nationwide's looking for some relocation in Europe?
Hey, I was.
Let's go.
Let's tackle those European markets.
We need a Puerto Rico office.
You know, I went to Puerto Rico.
I think it was February.
I went to Puerto Rico.
I love it, though.
It's great.
It was a pretty cool trip.
I spent a lot of time over in the US Virgin Islands,
but then wanted a little change of pace.
So 60 miles, I think it is, from St. Thomas to Puerto Rico.
It's like 60 or 70 miles.
Excuse me.
And it was a cool trip, man.
We did San Juan and did pretty much that north side
of the island, but got there and went straight
to the rainforest.
So you know that that is the one protected rainforest
that is in the United States.
Because if you think about it, on a continental United States,
it's not a single rainforest.
But Puerto Rico actually does have the rainforest.
I'm going to butcher the name, I believe,
because I did not take Spanish.
It's like El Yonca, El Yonca.
It's either El Yonca or El Yonca.
But it was pretty cool.
We stayed in the Airbnb right outside the rainforest.
It's a national park, so they have a dedicated entrance.
You can drive in, and there will be trails and stuff.
You can walk.
And then also, we did kind of the hardcore one,
where you find this trailhead.
And this is outside the park.
You find the trailhead, park on the side of the road,
and just start going.
And it's about three miles up to the top.
And it's called El Toro.
I believe it's the highest peak in that rainforest,
and the highest peak on San Juan.
OK.
So at the beginning of the trail,
you're like, OK, a little bit of mud.
This is bad.
We could do this.
Easy peasy.
I got my walking stick, which I broke halfway up.
I don't know.
Yeah.
Well, yeah, it was.
Because shortly after that, it started getting muddier,
muddier, and muddier.
This trail is basically the washout from the top.
OK.
That's where you're walking up.
And there are parts of this where you're knee deep in mud,
and there's no escape.
You have nowhere else to go.
You could try your hardest to use the,
because it's so overgrown.
You're trying to hang on to fines and plants and stuff,
and keeping your feet off the side,
going around all the mud.
No.
You just got to embrace it.
We got to the top decently clean.
But then on the way back, we have three miles.
That took, I forget how long it took to get up.
It was like two and a half, three hours.
Man, you just got a running start,
and just slid straight down.
I fell so many times.
It was so much mud, just so much mud.
You should have seen my shoes.
We got back, and the place we were staying at
had this little river going by.
I was crouched down, cleaning out our shoes in a river
for an hour, probably.
Still, mud coming out.
You would put your shoes back on, and your socks would brown.
I'm willing to bet you're not the first person to do that.
No, no.
You probably didn't get very many weird looks.
But anyways, San Juan was a good time, too.
It was cool.
That's our pitch.
We should definitely pitch an office down there.
Maybe we could do an episode from down there.
Just saying.
I like the background, the sea behind us, the Caribbean.
I mean, then we're not using some stock background
with a palm tree.
We're actually there.
We got my neighbor's house over here.
With the solar panels?
Oh, solar panels.
Everybody thinks they're solar.
They are not.
It's actually, it's like a hot water heater type replacement.
There are pipes running through all those.
And it heats up the water that's in the pipes.
Yeah, I thought it was solar forever,
but you could see the pipes.
It's not.
Because solar panels would have been a nice segue to appraisal.
Even that, though.
I mean, it might be.
It looks like what I saw.
That adds a really good example to a point
I could maybe bring up later.
As far as, I got this done to my house.
Why didn't the appraiser?
These things cost $40,000.
How come that isn't represented on my appraisal?
Well, let's dive in on that, then.
I think we can definitely start in that arena.
Is that our first good segue right there?
Look at that.
It's just a natural flow.
You talk enough, and things just start flowing correctly.
So yeah, everybody, yes, you brought up a good point.
Someone spends X amount of dollars
to do an upgrade on their home, right?
Whether it's interior, exterior, or something
about solar panel, for instance, that's a big expense.
Because when it comes to the whole computer,
and the wiring, and everything they want to do.
And that's a whole other can of worms, too.
Just solar panels and solar.
So that's almost like a specialty,
if you will, for an appraiser to have.
They have to understand green properties and such.
That being said, everybody assumes
that it's a dollar for dollar increase in value, right?
When it comes to something like that.
And with solar, too, you also have
to think about the fact of lease versus own.
That's another big factor.
Because a ton of lease, a ton of solar
is hooked up to where you're what, like a 15-year plan,
20-year plan to pay it off.
So technically, you're leasing it.
So technically, you don't own it.
So if you sell the house, next people don't want it.
They come back and take their solar back.
So it's the argument, can you even justify giving it value?
It's part of the house whenever you don't own it,
when it can be taken away.
What if you stop paying on it?
No, that's a good point.
That is a good point.
I'm curious.
I really want to, we've talked about getting the Tesla
tiles for the roof on the house.
And because those things, it's not some giant solar panel.
It looks like a regular roof tile.
And you only need x% of your roof to be covered in them,
which is great because they're also crazy expensive.
And they limit areas, limit where
they're allowed to be put in.
HOAs get involved.
And ultimately, yeah, you want to own it
because you plan to stay there.
But I think we've already mentioned,
there's no guarantee you're going
to be in that home for the rest of your time,
the rest of your days.
So those things all come into play when an appraiser goes out
and they're doing their research and they're
looking at your property versus others that may or may not
have those little extras, those little add-ons.
So I think that a good calvo to have would be,
let's talk about how to get your home ready for an appraisal.
I think that's when you talk about things that,
misconceptions, things that people don't quite understand
about the process.
They understand some stranger is going to come around,
take some pictures, and then he's out after 20 minutes.
It's so funny talking about this.
Yeah, like what to do.
I've gone through the process.
I've done a lot of the hard stuff.
And now I get a call from an appraiser
trying to schedule an inspection.
What to do next?
What does that mean?
What do I expect?
Respond is step number one.
Yeah, yes, respond quickly.
Text the guy back.
Yeah, text him back, email him back, call him back.
Because I'll tell you what, it is a little introduction
to what we do because we are an appraisal management company.
We are representing the appraiser to the lending company.
We're representing the lending company to the appraiser.
And we've already worked maybe for a day, two days,
three days to get an appraiser to accept that assignment.
Say, yes, I'm going to accept this file.
I'm going to appraise this house.
We've come to an agreement on a certain due date.
So then when the appraiser reaches out to you,
if you don't respond back to that appraiser
for a couple of days, we're hearing from our clients
who are the lenders saying,
hey, why isn't this scheduled yet?
We've had this order for a while.
Realtors are probably involved asking the same question,
bugging the lender who in turn is bugging us.
So then we're bugging the appraiser
and the appraiser is like, hey, man,
I've already reached out.
I've left two messages.
Return their phone call.
Return, that's all.
That's all they're asking.
Yes, I understand not answering a number
that you don't know.
I'm bad about that.
Oh, yes.
What's your thoughts?
So your cell phone rings and it shows a number.
And you know, like now it shows what city it's coming from
for the most part.
I almost got the city's nailed down
on what spam comes from, but you know,
but even if it's like Kansas City model
and it's a number I don't know, I'm like,
if it's important, they'll leave it with spam.
Yeah, or they'll text you right after.
Yeah.
I'll be honest.
I think there's been a shift in the,
and it's probably just our generation
screwing up everything, but like even my wife's same way.
Phone rings, like if you call me,
like I'm not talking to you on the phone.
That's her thing.
Obviously me and you being in sales,
we have to talk on the phone.
See, I don't mind that either though.
I'm like that in my first life anyway.
So like you can get so much more accomplished
in a two minute phone call than you can in 10 minutes.
Yeah, absolutely.
But we always joke, we're like, if I actually call you,
then something's very wrong.
Like I'm in trouble.
I need you to answer the phone.
Charlie pick up now.
The car's in a ditch.
I hit another curb.
I flipped my Jeep.
It doesn't work.
It's the seventh this month.
What's with the curbs, I swear.
35 inch tires didn't roll over the curb appropriately.
We're getting off the rails.
But I hear you.
The texting, yeah, text, call a guy, email him.
A lot of times you will get from our company,
you will receive an email
with all the appraisers information saying,
hey, we are the AMC, we are.
We do that?
Yeah, customer service sends out an email.
Is this after they accept it?
Yes, after the appraiser accepts it,
then our customer service sends out an email saying,
we are the appraisal management company.
Trying here, man.
I tried covering up and everything.
That's embarrassing.
I tried to get it in one clear.
You gotta get mute.
I'm just, is there a mute?
Yeah, it's on your screen.
Wonder what this does.
Let me see here.
There you are.
Can you hear me?
Gentlemen, this is Michael's first time on Zoom.
Can you hear me now?
Believe it or not, yes.
So could you hear,
you couldn't hear me when I turned the volume down on the mic?
A little bit.
What a, eh.
Oh yeah, it actually does go out.
All right, we can do this for hours.
I'm like, it's a good chair, I'm gonna leave the door.
This is double-panning soundproof glass.
That's the classic.
So, all right, let's give the people what they want.
Let's give them, let's say.
Back to business, all right, so you've probably got.
You've spoken to the appraiser.
Yep.
Your schedule, you're in the book.
The inspection's gonna happen.
What do I need to do with my house next?
All right, so I would say,
first and foremost, you wanna,
let's talk about cleaning up the place, inside and out.
Now, I'm not saying like go out and spend thousands of dollars
on the landscape or anything like that,
but if you've got a half-fallen tree in your yard,
you need a little curb appeal.
Cause he's just gonna take pictures.
Let's get that branch out of the way.
I say we started off by beating one thing out there
and pounding it through this whole segment
is safety concern.
I think that's the biggest thing is
if anything looks like it could be a safety concern,
fix it, get it cleaned up.
And the way I try to explain the safety concern is,
say a five-year-old managed to get away
from their mom or dad, next door neighbor, right?
Mom and dad are growing and not paying attention.
Five-year-old wanders next door to your property
and is just wandering around.
And so picture them getting close to anything
that you think might be concerning.
Is a five-year-old, is there a possibility
of them finding a way to hurt themselves on that?
Your example, a fallen branch.
Five-year-olds gonna see that like,
ooh, ladder to the tree.
Let me climb this.
Yeah, let me climb this all of a sudden.
It's a broken branch.
The weight of that body gets up on that branch.
Boom, branch falls, child falls, injury, safety concern.
Safety concern, that's a good note.
It's a great point.
If you're like most people,
you have your little schedule for cutting the grass
and all those things.
Sure, safety concern when it comes to exterior stuff.
On the same note of cleaning,
let's talk about the interior.
Again, not saying, hey, go out and pay a maid
to come clean details.
No, nothing like that.
No, there's no getting up on a 12-foot ladder
to dust the shade over here.
No, let's not do that.
Just clean the place up.
You don't want large messes.
If you got animals, you don't want a ton of,
if your animals have accidents in the house,
you don't want any evidence of that around.
Right, right.
Piles of dirt in mud rooms.
Piles of dirt, yeah.
Food piled up on the counter.
Typical things.
Food stuck to the cabinets, things like that.
Because one of the big overall things
the appraiser's gonna be looking at
is quality and condition.
Quality is how the house is built.
So cleaning it up isn't gonna affect that,
the condition.
They're looking at the overall condition of the property.
And so it's gonna be a cumulative type thing.
Guess on one part of the appraisal,
they are gonna rate the condition of different materials,
different sections of the house, the walls,
the floors, the roof.
But overall, your house is going to get an overall rating
of what the condition of the home is.
And so more C1 through C6.
I've only seen one sixth,
about one being the best,
one being brand new construction.
Yeah, C1 is gonna be brand new construction,
never lived in.
Usually after that first tenant,
it goes down to a C2 right away.
C1, yep.
After the first year, six months,
it's considered a C2 property.
So if you fully update your home, top to bottom,
it's gonna be C2,
just because it's not a completely rebuilt home.
But that's a top two to three window.
Yeah, or three to four.
Or four, I mean, I think, yeah.
Four is good.
So if you see C5 on your appraisal, C6,
for a condition rating overall,
it is not a lindable property.
The loan is not going to get sold,
and repairs are going to need to be made
to make that purchase or rebuy happen.
Unless it is an as-is appraisal for renovation month,
then that's a different story.
That's a whole different ballgame.
Yeah, but why does he love to get us on some tangents?
Let's get back to business.
But you're right though,
there are multiple kinds of appraisals.
And now, when you're talking about a gut-rental job
for a two-value kind of report, sure.
I mean, these things are gonna have,
you're gonna see a five or six.
Yeah, if you're buying a fixed-rump property,
you're gonna wanna know what that is.
Well, any company needs to know what the value of it is now,
and then what it's projected to be once everything's done.
But anyways, yeah, so you're gonna clean up your house.
Get the food that's stuck off the cabinets,
if that's happened, you've got kids and stuff.
You don't have to shine everything.
You don't have to go all out.
You have a little wipe down.
Pick it up, clean it up.
I think that rolls into the next thing
where I think you kinda wanna stage your home,
but you're not staging it like you wanna sell it,
but declutter your home.
Exactly.
So the appraiser can see the walls.
The appraiser can see the floors.
The appraiser can get in and out of rooms easily,
into open closets.
And if it's FHA, that's a big piece.
These guys need to have access to the attic,
crawl spaces, everything.
And I know a lot of houses-
You need to get that stuff out of the way.
I know at least in my area,
a lot of the homes that were built in the 90s, 2000 range,
which is a large majority of the houses,
a lot of the access to the attic is a scuttle in the closet.
And a lot of times it's like a scuttle in the closet
in the master bedroom.
So you have to make sure that your closet
is cleared out enough
to where the appraiser can get up there.
And if the appraisers typically have a step stool,
maybe three feet,
because not every appraiser
is gonna be driving a truck around.
So I think about all that they will have
is a two to three step step stool with them.
So if you know that your ceilings are tall in the closet,
be prepared and hopefully you got a ladder.
So they can pop their head up there.
They don't need to climb up in there,
but they need to pop their head in the attic,
take a peek around, take a picture in there
and make sure there's no leaks or anything,
water visible.
Anything like that.
Random records or something like that.
But that is just if you're doing a government loan.
So FHA USDA.
Right.
Great point.
But just declutter the home, declutter.
Declutter, yeah, as much as possible.
Throw some stuff in the closet.
Just get it off the way.
Not the closet with the attic.
Not the closet with the attic, but no.
Not that one.
So you alluded to it earlier.
If it's broken, fix it.
You know, like a wall plate, simple things like that.
Light bulbs.
That's another point.
Open the, when you talk about staging a house,
open the blinds up, make it look inviting.
Throw some light though.
Oh my gosh, I just thought of something.
What?
I am your typical American borrower right now.
I am with all of you.
I have a confession to make.
I have an appraiser who's going to become my house.
What, right now?
No, actually, yeah, this is gonna be a live, no.
But no, I did, I actually talked about HELOCs.
I am going through the process right now.
I'm getting HELOC right now.
My exterior needs painting.
I need to get a new deck.
I need to do some things.
Some deferred maintenance, as we would say.
Deferred maintenance.
But I just realized something, man.
I have two major concerns.
So this is gonna paint the picture of what we're talking about.
So my house is, I keep my house pretty clean.
I'm kind of a neat freak.
As you can see behind me, it doesn't look too bad.
It's clear, you can see.
But I last, I think it was last summer
I still had to fix this stuff.
The spicky, so what you call it, you know,
back in the hose.
It was leaking pretty bad out the front
and I was just annoyed with it.
So I went to replace it.
So I got a new one, shut the water off.
I try to twist it off and the pipe breaks
on the inside of the wall.
Because it was on too tight, you know, so forth.
So I'm like, you've got to be kidding me.
So me not being smart and really thinking about the location,
I instantly was like, okay, so I go inside my house.
I was like, okay, so it's gotta be, that's where it is.
It's gotta be here above this.
And so I'm in my downstairs shower.
I cut a hole in the ceiling and I look up
and there's nothing there.
I'm like, oh no, what did I do?
And so I'm like, no, it's gotta be over here.
It's gotta be over here.
So I go to the other side of that wall,
which is my garage, same thing,
cut a hole in the top of the ceiling,
look up there and I'm like, what am I doing?
And then it like clicks.
In my downstairs bedroom, that's like by that bathroom
I initially cut it down, I was like,
there's a window right there, egress.
Like it's not gonna be in the ceiling,
it's gonna be in the wall.
Like what am I thinking?
So I go back to the garage and I do find it.
Cut a hole in the side of the wall in the garage
and the drywall, boom, there it is.
So I got to fix, you know, those snake bites are amazing.
I don't know if you've heard any plumbing work.
Oh yeah, I've used those myself.
Four, a similar problem.
Incredible, snake bites are such a good benches.
But I got all done, but I have not.
How many holes you got left?
I have not repaired one of those four holes I've cut.
Oh my God.
So this is gonna be a good example though.
The appraiser is not going to consider that a safety issue.
I may get some questions on the one above the shower
in the basement.
So now this is a, I don't know if the owners before me
added this on or not.
I think maybe it came with the house original,
but the ventilation in that bathroom is not top notch.
There's the, you know, it's got the fart fan in there,
but whenever you shower,
so the ceiling where that hole is kind of has a yellowish
tint to it from all the steam and the water vapor's
not having anywhere to go.
And so now there's a square hole right in the middle of that.
So I may get the question, you know, was there a leak here?
Was there something going on here?
Why is there a hole there?
I'm gonna have to explain the whole embarrassing story.
I just did.
And hopefully that suffices without the appraiser saying
home inspector needs to come out to confirm
that there is no water leak, no current water leak.
Everything's been resolved.
You better get that sucker closed up.
So yeah, it's a cosmetic issue,
but for the purposes of an appraisal to protect the lender,
they might want to know if there is an actual concern
for the home, seeing that I got those holes.
So that is a pretty solid example.
And the other thing I really got to do is some of my
smoke detectors died.
Oh, come on guy.
Nine volt batteries.
But no, they're old crappy yellow smoke detectors.
So like I need to replace the smoke detectors themselves.
But have you ever tried doing that?
Cause then you got to match up the bracket
that's already on the ceiling.
Oh yeah.
And you got to know which one to buy.
And it's like, sometimes they don't fit on the bracket
that's already there.
It's the hard ones.
So like, yes, that's a, I mean, that's a nuisance for sure.
But the really hard ones are when they're actually
all wired together into that, in the house.
So like why?
That's the way these are.
Oh are they?
Yeah.
So one goes off, another one goes off.
They all started going off.
Yeah, the whole house went up.
Those are the worst.
Yeah.
And it's like, that's why they put this off.
But I just, I might pop them back out.
Just for the, why do you,
no, no, I can't say that on this.
Can I say it on this?
You can't help.
You've got to fix it.
This is not like how to get around
the appraisal process.
Let's move on from it.
We'll get outside the box.
Fix it.
If it's broken, just fix it.
Little stuff.
Do you see the stuff I'm doing here?
See, it's not big stuff, but it's stuff you've got
to think about.
Cause you do need your smoke detectors.
That's the reason I want to bring that up.
You need your smoke detectors in the house.
If you, not all states requirement, require it,
but get a covered monoxide detector in your house,
regardless if it's required or not by your state.
Like it's, I have one in my hallway, you know,
right by the bedroom doors.
There's a plug, you know, in the hallway.
I got one of those plug-in ones that has a battery backup.
Boom, done.
I mean, it's something you should have anyways.
You don't want to go to sleep and not wake up
because your furnace is leaking
or something's going on in the garage
and all of a sudden you don't wake up
because it covered the monoxide.
Right.
They're like 20 bucks.
Get one.
All right, so we kind of touched on, you know,
getting in and out of rooms, right?
Easy access to rooms and closets and stuff.
That goes with decluttering.
Don't have any locked doors.
Make sure anybody in the house is aware
that an appraiser will be coming
and needs to photograph and go into all bedrooms
and bathrooms.
Yeah, you landlords out there and investors.
Yes.
You guys have some real problems with,
I'm a landlord as well.
I have rental property and it's tough
to coordinate with a tenant.
But yeah, they got to see all the rooms
or else they're going to go back,
have to go back out and they're going to charge trippy.
150 bucks right off the gate.
So speaking of, well, speaking of making things easy
for the appraiser and getting out of the way,
we are going to get out of your way for the day.
It was a pleasure.
Hopefully we shed some light on some topics
that you hadn't heard of
and you got to learn a little bit from us.
Charlie?
Yeah, absolutely.
I hope you guys liked what we had to offer for today.
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Always want to give a shout out to Jordan,
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She has to sit here and listen to us ramble.
Like, do you realize how much time we actually ramble
and then how much this gets condensed down to?
We kill a lot of her day.
I guarantee it.
Jordan's a saint for this, an absolute saint.
Right on.
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