Appraiser Income

Short-term rentals and Form 1007

Recently, Fannie Mae has received many questions about the Single-Family Comparable Rent Schedule (Form 1007). It enables the appraiser to document the estimation of monthly market rent for the subject property when completing an appraisal on a single-family investment property for conventional lending. It can also be used for condominium investment properties.

The Selling Guide allows lenders to use rental income for qualifying purposes under certain circumstances. Form 1007 is only required when rental income is used to qualify, and the subject is a one-unit investment property. The lender may also use the 1007 as the basis for reporting gross monthly rent at loan delivery. (See “Reporting of Gross Monthly Rent” in B3-3.1-08, Rental Income.) For refinances, the 1007 is used in combination with either tax returns or lease agreements, while for purchases, the 1007 may be used in combination with lease agreements or as a stand-alone.

One question we often hear is whether the 1007 should be used for short-term rentals (STRs). The Selling Guide is silent on whether an STR should be considered rental income. STRs differ from longer-term leases in several ways. The most obvious is the length of the agreement: STRs are typically executed on a nightly basis, similar to a hotel, while residential leases are typically structured on a monthly basis. Also, STRs typically involve not only usage of the real property but also personal property, such as furniture, fixtures, and equipment (FFE). STRs are typically executed with a terms and conditions agreement, not a lease agreement. The STR may include additional services such as food or housekeeping. 

Note: When appraising an STR for conventional mortgage lending, the appraiser must take care to only include the real property in the value, not the personal property or the business/going concern.

In light of these differences, it may make the most sense to think of an STR as a going concern and the income as business income rather than rental income. But, under our current policy, the decision of how to categorize the STR income is up to the lender. If the lender chooses to treat STR income as business income, then Selling Guide provisions for underwriting business income would apply, and the lender would not need a 1007. Conversely, if the lender chooses to treat it as rental income for qualifying purposes, then the lender must obtain Form 1007 where specified by the Selling Guide.

The 1007 was not designed for appraising single-family properties that are used as STRs. Specifically, the 1007 calls for the “Indicated Monthly Market Rent.” This means the appraiser needs to analyze competing properties leased on a monthly basis. It would be incorrect for the appraiser to use STR comparables and then multiply the nightly STR fee by 30 to estimate a monthly rent. Such an approach would fail to account for FFE, other services, vacancy rates, and business expenses.

In summary, while a lender may choose to request a 1007 for an appraisal of an STR, in fulfilling the assignment the appraiser must use rental comparables with monthly lease rates to support the “Indicated Monthly Market Rent.” Alternative definitions and methodologies are not acceptable. Form 1007 cannot be used to estimate the nightly fee for an STR.

(obtained from June Appraiser Update – Fannie Mae)

https://federalgovernmentjobs.us/jobs/Appraiser-766884500.html?id=571d22f6-5d31-49b5-9696-e5d758db29c2&utm_source=fgj&utm_medium=email&utm_campaign=agent

repost from: https://www.axios.com/2023/12/13/federal-reserve-interest-rates-meeting-decision

The Federal Reserve left interest rates unchanged at its final policy meeting of 2023, while signaling that 2024 could bring significant rate cuts.

Why it matters: The decision to leave rates unchanged in a 5.25% to 5.5% range for the third consecutive meeting. Officials indicated that the central bank is likely done with its historic rate-hiking campaign to tame inflation that has, so far, resulted in little damage to the economy.

• Officials have not ruled out raising rates again, but a tweak in its policy statement suggested rate hikes are done.
• During a press conference, Fed chair Jerome Powell also suggested as much, saying, “While we believe that our policy rate is likely at or near its peak for this tightening cycle, the economy has surprised forecasters.”
• Rate hikes “are not the base case anymore as it was 60, 90 days ago,” Powell said.

What’s new: Most top Fed officials envision cutting rates three or more times in 2024, according to new forecasts released Wednesday. The median projection was that in December of next year, the Fed’s target rate will be 4.6%, 0.75 percentage points lower than now.

• The median official envisions cutting rates by another full percentage point to 3.6% by year-end 2025.

What they’re saying: “Inflation has eased over the past year,” the Federal Open Market Committee said, in new language that acknowledges fading price pressures.

• The statement continued on to repeat language noting that inflation “remains elevated,” however.

The context: It comes as analysts and financial markets have increasingly prepared for the possibility of rate cuts early in 2024, which Powell pushed back on in a speech earlier this month.

• But at a press conference on Wednesday, Powell’s tone shifted. The Fed chair said there has been “real progress on inflation,” while the labor market has come more into balance.
• “These are the things we’ve been wanting to see,” Powell said. The natural next question, Powell said, is “when it will become appropriate to begin dialing back the amount of policy restraint that’s in place.”

Of note: Stocks jumped on the news of the prospective rate cuts next year. The S&P 500 rose by more than 1% and reached the highest level of the year.

• Meanwhile, bond yields dove lower: the 10-year bond yield fell by 16 basis points to 4.03% — continuing a sharp reversal after hitting 5% in late October.

Flashback: At its September meeting, the last time the Fed published formal forecasts, 12 of 19 top officials anticipated raising interest rates one more time this year. They elected not to do so in response to lower-than-expected inflation readings.

I am whishing all my fellow appraisers happy holidays & a Merry Christmas! This is the slowest I have seen it during my career as an appraiser, so it can only get better from here! It will be a good time to really buckle down and focus on your non-lender work for 2024. The most work I see is for divorce, bankruptcy and date of death / estate appraisal services.

The best way to get those types of orders is through relationships with local attorneys in your area. First you have to reach them and then you have to keep them. Then you also need to get the work from the individuals that order your appraisal services directly. They will find you over the internet on service websites, apps and search engines. You have to focus on showing up on these locations, preferably near the top of the list.

Next year I will be working on getting more posts and marketing advice out on Appraiser Income as well as opening the Appraisers Club again to help appraisers get more of the Non-lender work that is out there. But in the meantime check all your social profiles, search for your ‘city name’ followed by appraiser / appraisal and see if you show up on the first page of google and see what you can do to get your company listed on any ‘service provider’ websites that do show up on the first page of the google results.

Happy Holidays and Merry Christmas!

~ Bryan

In today’s digital age, online reviews play a crucial role in shaping consumer decisions. Yelp, a popular online review platform, provides businesses with a unique opportunity to harness the power of customer feedback. This article explores the numerous benefits of Yelp reviews and how businesses can leverage them to achieve success.

1. Increased Visibility and Trust : Yelp boasts a vast user base actively seeking recommendations for local businesses. By having a presence on Yelp and accumulating positive reviews, businesses can significantly enhance their visibility. Yelp reviews contribute to higher search engine rankings, ensuring that potential customers find your business easily. Moreover, positive reviews build trust and credibility, as consumers often rely on the experiences of others when making purchase decisions. Having a solid rating and positive testimonials on Yelp can differentiate your business from competitors and attract more customers.
2. Valuable Customer Insights : Yelp reviews provide businesses with valuable insights into customer preferences, experiences, and expectations. By analyzing reviews, businesses gain a deeper understanding of what customers love about their offerings and identify areas for improvement. This feedback helps in refining products, services, and overall customer experience, ultimately leading to increased customer satisfaction and loyalty. Yelp reviews also serve as a source of feedback on specific aspects of the business, such as customer service, ambiance, or pricing, enabling businesses to make informed decisions to meet customer needs better.
3. Free Marketing and Word-of-Mouth Promotion : Positive Yelp reviews act as free marketing for businesses. When customers leave glowing reviews, they essentially become brand advocates, spreading positive word-of-mouth about your business. This organic promotion can significantly expand your customer base, as potential customers trust the opinions and experiences of their peers. Additionally, positive reviews can be shared on social media platforms, further amplifying their reach and impact. By providing excellent products and services that result in positive reviews, businesses can leverage this powerful form of marketing without incurring substantial advertising costs.
4. Opportunity for Reputation Management : While positive reviews are valuable, negative reviews on Yelp also provide an opportunity for businesses to showcase their commitment to customer satisfaction. Promptly responding to negative reviews and addressing concerns demonstrates transparency and a willingness to resolve issues. By engaging with dissatisfied customers in a professional and empathetic manner, businesses can turn negative experiences into positive ones and rebuild trust. A proactive approach to reputation management on Yelp showcases a business’s dedication to customer service and its commitment to continuous improvement.

Yelp reviews offer businesses a host of benefits, including increased visibility, valuable customer insights, free marketing, and an opportunity for reputation management. By actively managing their presence on Yelp, businesses can harness the power of customer feedback to enhance their brand, build customer trust, and drive business success in the digital landscape.

WHAT IS THE LARGE BUSINESS AND INTERNATIONAL (LBI) DIVISION?
A description of the business units can be found at: https://www.jobs.irs.gov/about/who/business-divisions

Vacancies will be filled in the following specialty areas:
LB&I, Eastern Compliance Area

The following are the duties of this position at the full working level. If this vacancy includes more than one grade and you are selected at a lower grade level, you will have the opportunity to learn to perform these duties and receive training to help you grow in this position.

• Performs unique, often controversial, and precedent setting appraisals of real and personal property where the appraisal will have significant tax impact, affect large segments of taxpayers, and will involve intense public scrutiny, with potential to affect legislative change. Provides expertise to government attorneys on cases with probable litigation potential. Serves as expert witness in U.S. Tax Court or U.S. District Court.
• Personally performs appraisals and reviews appraisals prepared by recognized experts and authorities in the industry and other valuation specialists in the group. Conducts conferences with taxpayers, representatives, and experts to explain findings which are often vigorously contested. Prepares appraisal reports which represent the Service’s position and documents conclusions with accurate facts and arguments for unagreed issues.
• Examines and appraises extensive property holdings in estate portfolios of prominent, recognized business, entertainment and industry leaders often widely publicized and intensely scrutinized.
• Serves as a team member on CEP and large business examinations. Identifies and develops significant issues which may be unusual and unique, subject to interpretation and may be adopted as the Service position in all similar cases. Issues are often complicated by numerous layers of related corporations and partnerships, self serving contracts and legal agreements, creative financing and conflicting economic or business options and alternatives.

Do you want more appraisal orders? Are you looking to recession proof your appraisal business by getting more non-lender appraisal requests? Have you signed up to appraisal management companies and are still not getting any offers from the AMCs? Do you need a GOOD list with all the bad guys removed?

Fully updated for 2023 I have gone through the entire list, added a bunch of new companies and removed the companies that either went out of business or were acquired by larger AMCs.

If you are looking for the best list out there that is fully updated for 2023 with direct links to the AMC registration pages, look no further!

I know work has came to a screeching halt over the past few months and it is a great time to get registered with companies that are still sending out appraisal orders. Even though my offers have declined over 75% since lender rates have been increasing, I still get over 15 offers a week covering my market area.

Take the time now to get signed back up and / or verify you are signed up with the best AMCs out there.

You can get more information and place your order on this page.

– ORDER HERE –

Summary

This position is located at Department of Housing and Urban Development, Asst Secretary for Housing-Federal Housing Commissioner.

This opportunity is also open to Status eligibles under announcement 23-HUD-341. Please refer to that announcement for details on open period, eligibility, and how to apply.