I have, uh, I found a guilty pleasure the past couple of weeks.
And, um, I really don't even know if I want to admit this because like,
this is a safe place.
This is not a safe place.
This is going to be on the interwebs.
Welcome back.
Thank you for joining us on our podcast value nation presented by nationwide.
A M C we are going to continue our conversation that we were talking about
part one about basic principles, basic ideas, basic things to do when your
home is being appraised.
So we are going to pick right back up with that conversation.
Charlie, how's it going, man?
Fantastic.
Oh, you want to talk about basic or recording right now?
This would be perfect.
Um, so I felt like, like a Kardashian, you know, you talk about basic, like,
okay, so it's September, right?
And the commercials just got to me.
Like I finally had to go and have pumpkin spice latte.
I got my first one in yesterday.
It was now granted.
It was a cold brew.
So like I was juiced up ready for it, but it gave me tingles.
Like I'm, I'm ready for fall, bro.
The beginning of September.
I know.
And I swear I was like up and down, like telling my wife.
I'm like, I'm not going to do it.
I'm waiting till October one, just waiting and found myself sitting in
the car waiting for my daughter to finish her training.
And I'm like, Starbucks is right across the street.
And they got me.
They got me on that pumpkin phone.
See, I think I'd be different if I actually enjoyed the taste of pumpkin, but I am,
you know, one of the 2% of Americans, I think in this world, I actually,
I actually legitimately don't like pumpkin.
So I get to be extra on the hate side when it comes to everybody and their
pumpkin meat this time of year, because I don't like, I don't like pumpkin pie.
I don't like pumpkin spice, I'm not, I mean, I like a pumpkin muffin.
Like my family, my stepmom makes incredible, like pumpkin muffins
with cream cheese, topping and all that.
Ooh, yeah.
Oh yeah.
I mean like all, all our homemade stuff.
She, she is one hell of a baker and I mean, I could take maybe a bite of it and I'm
like, yeah, I could kind of see what you people like about this, but no, like no.
Two or three bites.
I'm just like, I can't take this taste anymore.
That cream cheese frosting on top.
The frosting, I will lick the frosting off the top of that.
Changes the game.
Exactly.
But I see, I thought you were rolling different direction with this basic thing.
I have a confession to make as well.
I have, I found a guilty pleasure the past couple of weeks and I really don't
even know if I want to admit this because like this is a safe place.
This is not a safe place.
This is going to be on the interwebs.
Interwebs.
I've watched some episodes of love violence.
I got it.
I got to throw it out there.
No, did you really?
I did.
Man.
Oh.
I don't know.
I don't know what episode I was, but it kind of hooked me, but they show them and
like when they're getting ready, they have like these little eye patch things, right?
Like, cause I mean, as a guy, you know, getting older, you know, I'm worried about
trying to keep the young looking face going.
So I got, you know, like some serums and creams and stuff, but they have these like
eye things that they put on their face and they're like, oh, I'm going to get
these eye things that they put on every morning.
You're supposed to help with the smell in the bags.
The fucking is, yeah.
So I totally did order a box of some and they came today and I had about an hour ago,
right before we started filming to see what it was.
It's like you put them in the fridge for a little bit, get them cold.
They're nice and refreshing.
Like it felt great.
Are they the reusable ones or are they the throw away ones?
They're the throwaways.
Yeah.
I came with like a box of 50 or something.
Yeah.
So look, I mean, yeah, again, this is going to be out there, but hey, two guys that are
traveling and you always got to be, you're on, you're on your game with your suit, with
your hair, the shoes, the face, the, the skin, the moisturizer.
You got to be honest.
You have to have it, especially when you're traveling too, because I mean, it's airplane
straight out.
Do you really, you got to stay on this?
Oh yeah.
Why?
So I'm behind the game here.
So I am behind the game.
100%.
Yes, you are.
But hey, welcome to the club.
Welcome to the club.
This is, I have like an eye cream, you know, that you got to put on, but that's just kind
of, it's paying the vibe.
I'd rather just stick those on.
Yeah.
20 minutes later, you know, you're like, peel them off, throw them in the trash.
Like I'm, I'm a new man.
This is a, this is a great way for people to see, you know, behind the
curtain of the traveling salesman.
Oh gosh.
We're putting it all out there.
I mean, maybe, maybe we can get a sponsor.
One big thing.
Uh, it just, I just feel like it needs to be said, but stay out of the way.
Like let the guy do his, or girl do it, do the thing.
Um, they'll be there for 15 or 20 minutes.
You know, big point right there.
We're coming back.
Finish, finish what you're saying.
We're coming back.
Just stay out, you know, just stay out of the way.
You don't want to be in the guys in their ear.
Um, you want them to, you want them to get out of your way just as much as.
The other way around.
So, um, but yeah, go, go with your thoughts.
Yeah.
15 to 20 minutes, typically, um, most of the time comes with writing the report.
Uh, but yeah, it's literally just walk and click.
Walk and click, walk and click.
That's a huge misconception though.
That's a big, big misconception.
I get that.
Um, I get as being, you know, obviously what we are middle man between the, the
in the transaction, I get a lot of complaints saying the appraiser just
mailed it in on my inspection.
They were barely at my house, maybe 15 minutes, 20 minutes.
Like they didn't even look at my home.
They were in and out.
Bang bang.
I'm not, I'm not happy with this.
I want a new appraiser to come out.
No, um, that is about the time it takes, depending on the size of your home.
No Karen.
That is official.
Hey, hey, hey.
What?
Hey, did I say that on camera?
Sorry.
All of you Karen's out there.
And I'll do that.
All you crazy cats and cool kittens.
Man, I had a huge crush on this girl.
Was she crazy?
No, she was actually very sweet, very, very nice woman.
One in a million, man.
Hey, she was good.
But anyways, um, unless your house is, and this is going to be, you know, a bigger
house, which is going to be a bigger inspection either where it has crazy
dimensions means in the measuring takes longer and there's more footage.
Yeah.
15 to 20 minutes.
I mean, they're there.
They circle the outside, use that to help the measuring process, go through the
inside while measuring, they're taking a photo of every room while they're doing
that, they are assessing the condition of your home, you know, if.
Clean up after.
Yeah. If your floors are worn out, your carpets are going bad.
If you've got scuff marks all over your wall, if you got holes in you, they are
looking at that as they go through and taking their pictures and taking into
account, you know, what materials your house made out of, what upgrades you've
made, they may talk to you for a short period of time, like you said, um, to find
out about upgrades, you know, when was the last time the roof was done windows,
et cetera.
And then, so that's all they need.
Cause the majority of the work, like we said, they're getting an overall
assessment of the condition of your home.
And so then they're going to go home and we're back to their office.
And that's, that's where the real magic.
Yeah.
That's where the magic happens.
So to help that magic and get you, um, the most, we'll just say value, if you
will, out of their appraisal, uh, big ticket items and updates that you've made
to the property, um, you know, we're talking windows, HVAC, new windows, new
HVAC system, um, you know, you can go on and on about big things.
Don't tell the guy you go ahead.
No, I was going to say, yeah, major components.
And I know, I know where you were going with this next point.
Continue, sir.
Continue.
So yeah, major components, um, like that, uh, you know, did you just redo the
entire kitchen?
Did you redo an entire bathroom?
Those little things are going to be helpful.
The guy's going to see it.
He's going to see the quality.
He's going to see typically you can see if it's, if it's new and shiny, uh, in
comparison to what else is out there.
But, um, that's just something to help these guys out and make sure that they
get you every piece of value that's possible, uh, in, in what you put into it.
Um, another piece, uh, that I think is important is, um, 99% of the people that
are, that are trying to, they're getting an appraisal done that are in the home.
You're not an appraiser.
Don't, don't give the guy that is inspecting your home, a list of
comps in the area.
Do you want, go ahead.
What else should you not give them?
Period.
Oh, you mean like a value?
Do not talk value.
Do not tell someone what you think your house is worth.
So typically, typically you were only going to be present once a refinance.
Cause on a, on a purchase, you're not going to be.
Right.
So especially at a refi, you know, it's on a purchase, there is a contract price.
So the appraisers aware that you've agreed to buy the house for that much.
You know, the market is dictating that.
So the appraiser likely is going to take that into account when searching for
comps, um, but on a refi it's, as we know, it's a blind deal.
How much is this house worth?
You've got to pull this market value out of, out of the blue.
What, what is it?
Do not mention what you need for the loan to work to get your loan
of value, do not mention what you think the home is worth.
Do not mention a value whatsoever.
That is grounds for the appraiser to say he is uncomfortable with the assignment
and would like it reassigned.
And that isn't on the appraiser at that point, because the appraiser
cannot be influenced in any way.
And by giving him a number that is causing influence.
Cause that there's no, we're all human.
The appraiser is not going to forget that.
So when the appraiser sits down and starts going through their actual comps,
they know in the back of their mind, what number you were looking for.
And it's, it's not right.
There's no influence in this business anymore.
So any anymore.
Yeah.
Are you like, I snuck better there.
I don't know.
It's a lot of time.
It's a lot of time I could tech the appraiser myself.
It was the wild west, you know, typewriters and Polaroids, but, um, but yeah.
That's why we're here.
Yeah.
So do not, do not mention a value, do not give them comps.
Um, just be there to answer the questions that they have about your home.
And then let's go.
So, so, so now the appraisals complete your lender gets the notification.
It's done.
Your lender emails you a copy within the first, I believe, like 72 hours or something like that.
They have 72.
Yeah.
I think most are 24, but they have 72 hours required to send you in 72 hours.
So you get your appraisal and we'll try to fly through this.
So, so what do you look for?
The first thing you need to understand is this is a market based appraiser.
This is based on market value.
Right?
It is not a cost appraisal.
And so this goes back to I installed these $40,000 water heater.
I still don't understand exactly why, why isn't, why, why isn't there
something showing I get $40,000?
Yeah, because, because I installed those, um, since I bought the apps, and I'll give you 2000.
I don't even know. I have no idea.
What do we come out of?
Everything is market reaction.
If this house is the only house in this whole town that has this,
how is the appraiser going to show if someone would be
willing to pay more for those than
the exact same house that doesn't have those?
That's how it's done.
If you make everything equal on homes and one home has those,
and it was, let's say, 300,000 and the exact same home
sold in the recent time frame for 280,
and then another one sold for 280,
then another one pops up that has those that sold for 295.
Now the appraisers are going to say,
okay, I got four homes here.
Two had those, two didn't.
All everything else equal.
They're getting about 15,000 to 20,000
extra for the homes that included those.
Then yes, you might get an adjustment on the appraisal
showing what it is,
but that data has to be out there.
It's like the MC Hammer thing.
You could have 24-karat gold toilets.
That guy was an idiot. He spent so much money.
But are you going to get extra on appraisal
if you're the one house in the state that has gold?
No, because there's no way to show
there's any market reaction for having it.
You're right.
That's the way to wrap your head around it,
price per square foot.
That's one that gets me every time.
It's like, hey, boy,
the homes in this neighborhood are going for price per square
foot of 200, but the appraisal comes out to be 180.
Why isn't it 200?
That's a backend number for appraisers.
Appraisers don't do a calculation on price per square foot
and then input a value.
It's a backend thing.
It's just a little box,
I think that automatically gets filled in
from the numbers that put on appraisal.
It's not even something to calculate.
Yeah, with the software and stuff that these guys have now
to complete these reports,
there's a lot of automation and some of that.
I can't speak for sure whether all of them are like that,
but I would assume the most are
because ultimately they're trying these software platforms
to try to save these guys a whole bunch of time, right?
Oh yeah.
To get these reports done.
So yeah, your point to square footage.
Yeah, I've said a lot of guys submit a rebuttal
when it comes to the value
because they didn't see enough value
or what they thought it was going to be.
And they're trying to sell it on square footage.
Price per square foot.
You know what?
This goes back to what I was saying with my example.
It's the best way I can say it for people to understand
why price per square foot doesn't matter on appraisal.
Price per square foot only can be calculated
and used in comparison when all things are equal.
All things are equal.
All things have to be equal for that to work.
You can't compare,
if you're looking at a property
that is a 1800 foot split entry,
with let's say three bedrooms, two baths,
and your current home is a 2100 square foot ranch
with four bedrooms and three baths.
And the ranch is going for 200 feet per square foot,
or $200 for square foot.
And your appraisal comes in and it's 180,
sticking with those same numbers I used before.
You're like, well, the other homes in this neighborhood,
you would have to adjust and do so many things
to that ranch to get it on an equal playing field
to that split entry, to make all things equal
and then see what the price per square foot.
Price per square foot assumes all things equal.
And it just, I know that wasn't the best way to explain it,
but if you just put yourself in that mindset,
this only works if all things are absolutely 100% equal.
They have to be for price per square foot
to be a somewhat accurate measurement of value.
Man, hopefully I just did, yeah, I mean, hey.
I mean, you might've lost some people there.
Yeah, I know, but that's something I'm very passionate about
is getting people to understand that.
Because a lot of time is spent on rebuttals
and the most common item that comes back
is price per square foot.
It's like, it's a new point
because all things aren't equal here.
You can't use that as a basis for saying
this appraisal came in lower than we expected
because of price per square foot.
There actually has to be comparables
that are similar to the subject property
that have sold for justifying what we're trying to do.
Now let's touch on that real quick.
When you're talking about a value rebuttal.
Now, you want, we're looking for,
the appraiser is looking at closed sales,
closed sales that are at the-
Recorded, done.
Right, yes.
Keys have been transferred.
That all sold at the price point and higher, right?
So let me give you an example.
You want $300,000 as a value for your home.
Well, it came in at 270.
Sorry.
Okay, well, if you're trying to get to 300,
you need to have comparables,
closed comparables in your market
that close on that price point and higher.
This is when you're submitting a value rebuttal.
Like there's gonna be adjustments.
There's gonna be, you know,
you might get a little bit more,
might be homes that close for a little bit more,
but after adjustments down for, you know,
maybe a new kitchen or maybe there's a new bathroom
or whatever can help adjust the value.
But the point being is that I've seen a lot of guys,
I've seen a lot of guys submit new comps
that were below what the original appraisal came in at.
Price per square foot.
Yeah.
So presenting a comp that is smaller,
but has a higher price per square foot.
So then the thought process is,
well, if we give them this comp,
then the adjustment to the gross living area
on the appraisal report to bring all things equal
is going to bump up, you know, the adjusted sales price.
All things equal.
Yeah, to being above what we got.
So it's gonna raise things.
But the problem is the report likely contains
three to four other sold comps
that are more similar in size already.
And so the appraiser is not going to go
and add a comp, especially to really,
what's the word I'm looking for?
Really to change the value, I guess, influence.
Influence, adjust.
Adjust the value based on the least similar property
out of the five or six that are already being compared to.
It's just not gonna happen.
So, but that's more something that gets dealt with
in our world that the borrowers,
if anybody is still listening,
who is not actually in the business,
that's more something that we deal with
that gets presented our way, you know, from the lending side.
But obviously sometimes, especially on refi's borrowers
are involved in their rebattles.
Right, and they're curious, they have questions.
I mean, don't get me wrong, there's loan officers
who they submit, there's a lot of education
that takes place by us educating the LOs
and or processors or who have you in the lenders.
Cause you know, a lot of them feel
that they could just throw anything on paper,
especially the value that they are desired.
And those things get thrown on automatically.
So these are things that we have to deal with on our end
to help educate everybody.
And so I think that,
I think that probably rounds out our, you know,
quick tips and quick-
What to do on an appraisal.
Give them a beer.
Don't give them a beer.
No, they gotta drive.
Yeah, they probably gotta drive.
This made me think, so my tool of the week this week.
Oh, dude.
Can you name that tool?
It's not a wrench.
It's a-
It's a bottle opener.
Bottle opener, I know.
This was one of our old swags here,
the old order pro USA, man.
I hate that word swag down.
Or is it swag, schwag?
No, schwag is something else.
Yeah, that's definitely something else.
Swag, your swag bags, like that's got a giveaway, you know?
These were a good hit, these bottle openers.
I used them for myself.
That's what I used when I used to part-time.
Speaking of, speaking of swag,
let's take this into where you could find us this month.
Cause we're right beside you.
Let's see.
This month, what are you doing this month?
I'm gearing up.
I gotta get all my suits redone for the MBA.
Oh, the MBA, that's right.
Well, before the MBA though,
we got September 26th to 27th,
the Serbian Lending Conference.
We will be represented there October 7th to 10th,
the big NAMM conference out in Las Vegas at Caesar's Palac-
I got pulled off that one.
Caesar Palacce, what?
That was my first ever nationwide show, you know?
You got pulled off of it?
You're not gonna be there?
No, oh my God.
Oh man, you'll be missed.
So-
That's the one that has the big,
that was the one that had the big rooftop party.
Yes, well, I mean, yeah.
Vegas, I mean, you gotta go Vegas.
We were just in Vegas and we did Cigar Cutters.
Our marketing department did a fantastic job
putting swag together.
Those things went like crazy.
And end of October,
end of the big conferences for the year.
As you mentioned, MBA annual, October 23rd to 26th
in Music City, Nashville, Tennessee.
Have you booked your hotel room?
I gotta do that, probably this weekend.
I looked it up.
All the ones that are with the show are sold out.
Oh.
Yeah.
Oh.
I know.
I was saying we just get an Airbnb.
What does the company think of that?
Like if we all just get like a three bedroom,
four bedroom Airbnb.
We've done it.
We've done it before, yeah.
So we'll talk about it.
Anyways, I'm excited, Nashville.
I've only been to Nashville once.
I'm excited to go to Nashville for-
Nashville's a blast, yeah.
We'll have a great time.
Catch me at Tootsies, baby.
Going down to Tootsies.
We'll be there.
That's the oldest, isn't that the oldest bar on Broadway?
Tootsies, that's like the original,
the original bar there.
Is it really?
Yeah, I think Tootsies is like-
I mean, it's a bunch of old stuff.
Nashville's got a cool party scene.
And that's the one that's like eight stories, right?
There's like a ton, like six different levels.
Kid Rock has one, it's like four levels.
Yeah, it's a blast.
They do like a different band on every single floor.
Jason Alvarez is huge.
Yeah, it's pretty cool place.
I'm excited.
So if you guys are looking for other ways
to see what we got going on, where we're gonna be,
go check us out on basically every social media platform
out there.
Oh.
Oh, Facebook, Instagram, TikTok.
What am I missing?
Twitter.
Yeah, Tweets, yeah, Twitter.
But go like and subscribe to us on YouTube
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Valu Nation, nationwideamc.com.
Nationwide, we're right beside you.
Right beside you.
I'm Jason Alvarez, and I'll see you next time.