Feb 2005

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“A publication for people in the mortgage industry”

                                                                                                                      Feb 2005                                                                         Issue #78

                                                                                                                                    1   • refinance appraisals
                                                                                                                                                                 2   • refinance (con’t)
                                                                                                                                                                     • top ten homes sold   3   •
                                                                                                                                                                                                    bachelor auction
                                                                                                                                                                                                    help wanted        4   •
                                                                                                                                                                                                                               menu of services
                                                                                                                                                                                                                               calender of events

                                                                                                                       Publisher...Jim Kirchmeyer / Research...Tom Kirchmeyer, SRA / Layout...raspberry graphics

                                                                                                                           How accurate are
                                    • 40 Gardenville Pkwy • Suite 100 • Buffalo • NY • 14224
                                                                                                                         refinance appraisals?
                                                                                                                    Inman News
           Toll free 1 (800) 771-5246 Phone (716) 558-2800 Fax (716) 558-0164

                                                                                                                       Some sellers discover when they list for sale
                                                                                                                    that their home isn't worth as much as it was
                                                                                                                    when they refinanced. Several factors can
                                                                                                                    account for this discrepancy. A refinance

     Menu Of Services                                   Dates to remember...                                        appraisal, like a purchase appraisal, should
                                                       Important dates missing? Email          reflect the current market value of a property.                  more subjective than purchase loan appraisals,
 •   Appraisal Management Services                      Jan 30-Feb 1... 8th ANNUAL MORTGAGE TECH Con.               But, its accuracy can only be measured in terms                  so they are more subject to error. When a prop-
 •   Relocation Appraisals                                 (J. Kirchmeyer will be attending)
                                                                                                                    of a specific time. Real estate markets are con-                 erty sells, the purchase price usually establish-
                                                           Hyatt Regency, Miami, FL
 •   Construction Appraisals                                                                                        tinually changing. If there are more buyers look-                es the market value. Market value is the price a
 •   FHA Appraisals                                     Feb 2-3... ABA                                              ing for properties like yours today than there                   willing and knowledgeable buyer will pay for a
 •   Desk and Field Reviews for Quality Control           Operational Risk Management Forum                         were when you refinanced, your property could                    property.
                                                          St Petersburg, FL
 •   Desktop Analysis                                                                                               be worth more now than it was then. However,                        With a refinance appraisal, the critical "willing
 •   Estate Valuation                                   Feb 10... NAPMW                                             if there are more properties on the market                       buyer" component of the valuation equation is
 •   Home Equity Valuations                               4th Annual Bachelor Auction                               today, your property could be worth less now                     missing. Even so, it's relatively easy to estab-
                                                          The German House, 315 Gregory Street, Rochester, NY
 •   Matrimonial Appraisals                               Info... Sherri...585-385-4400 x24                         than it was then.                                                lish an accurate value for a property located in
 •   REO and Loss Mitigation Appraisals                                                                               In addition to current supply and demand fac-                  a tract development, where plenty of similar
 •   Broker Price Opinions                              Feb 13-16... AMERICA’S COMMUNITY BANKERS                    tors, actual property values may have appreci-                   properties have recently sold. In neighborhoods
                                                          2005 Nat'l RE Lending Conference
 •   Automated Valuation Services                         Scottsdale, AZ           ated or depreciated since the property was last                  with a lot of variability in the housing stock,
         Complete and Limited appraisals                                                                            appraised.                                                       there's more guesswork involved.
                                                        Feb 20-23... AMERICAN BANKERS ASSOCIATION                     An appraisal done as recently as six months                       Without a purchase price, it's difficult to pin-
      (throughout the US) for all residential             ABA Nat'l Conference for Community Bankers
     properties including 1-4 family homes,               JW Marriott Desert Ridge Resort, Phoenix, AZ              ago could be out-of-date in a volatile market                    point a market value precisely. There's usually
           condos, PUD's, and co-ops.                                                                               place where values are changing quickly. There                   a range of value. Some appraisers tend to
                                                        Feb 20-23... MBA                                            is also an element of subjectivity in the                        appraise on the high side; others are more con-
                                                          Nat'l Mortgage Servicing & Conference Expo
                                                          Orlando, FL                       appraisal process. Refinance appraisals can be                   servative. This explains why two appraisers

                                                                                                                                                           • 40 Gardenville Pkwy • Suite 100 • Buffalo • NY • 14224
Page 4                                                                                                   Feb 2005
                                                                                                                                  Toll free 1 (800) 771-5246 Phone (716) 558-2800 Fax (716) 558-0164
(cont. from page one)
appraising the same property and using the                                                                                                                                      A Guide
same comparable sales data come up with dif-                Top 10 Most Expensive                                                                                            to Automated
                                                                                                                                                                           Valuation Models
                                                                                                                                                                                                               A Guide to
                                                                                                                                                                                                               Automated Valuation Models

                                                                                                                                                                                                               AVMs:1 1
ferent valuations.
    REFINANCER'S TIP: The mortgage broker who              Single Family Home Sales                                                                                        To order your copy or
arranges the borrower's refinance can influence                                                                                                                            for more information
the outcome of the appraisal. Borrowers usual-                in America - 2004                                                                                             visit our website at
                                                                                                                                                                                                               By James A Kirchmeyer
                                                                                                                                                                                                               Copyright 2004

ly refinance to lower the interest rate on their
mortgage, to consolidate debts, or to generate
                                                         1). Palm Beach, FL - $70 million, 33,000 sqft, 6
cash. The mortgage amount will need to be a
certain size to make refinancing worthwhile. If
                                                         acres. This oceanfront estate set a new price record for
                                                         a single family home in the USA. Purchased by Dwight
                                                                                                                                                                        Employee Spotlight
the property appraises high enough to support            Schar, developer and part owner of the Washington
the required loan amount, the borrowers refi-            Redskins. The seller paid $11 million for the property in
nance. If the property appraises too low, they           the early 90's - nice investment.
don't refinance.                                         2). Aspen, CO - $46 million, 15,000 sqft, 650 acres.
  Lenders have loan-to-value (called LTV) require-       Seller was Peter Gruber, producer of Rain Man and
ments. Most lenders won't lend more than 75              Batman.
to 80 percent on a refinance. If the lender has          3). Greenwich, CT - $45 million, sqft unknown, 80
                         an 80 percent LTV require-      acres. Gated community where residents have included
                         ment and you need a             Rosie O'Donnell and Ron Howard.
                         $250,000 mor tgage to
                                                         4). Palm Beach, FL - $41.35 million, 43,000 sqft, 6
                         make refinancing worth-         acres. Oceanfront estate purchased at an auction by                                                                  Ken Taylor, Dave Nantz, Lisa Lebow
                         while, your home will have      Donald Trump. Previous owner went bankrupt.                                                                            TJ Burleson, Jeannine Langston
                         to appraise for $312,500
                                                         5). Aspen, CO - $27 million, 13,000 sqft, lot size

                                                                                                                      HELP WANTED
                         ($250,000 divided by            unknown. Older estate that buyer purchased, only to tear
                                                                                                                                                                        OFFICE: Baltimore Appraisers!
                         .80). Often mortgage bro-       down the existing structure, sell of some of the land, and
                         kers check with apprais-                                                                                                                       PHONE : 410-592-1195 Fax: 410-592-1123
                         ers before they order the                                                                                                                      E-MAIL:
                                                         6). Coral Gables, FL - $26.85 million, 12,641 sqft,                                                          
                         appraisal to see if the         7.5 acres. New Dade County (Miami) record for highest
property is likely to appraise for a certain price.      price paid for single family residence. This buyer also          Tired of                                    
If the looks like the appraisal could come in low,       already tore down some of the structure to rebuild/reno-        m a r ke t i n g                             
the mortgage broker might hire an appraiser              vate.                                                           yourself and
who has a reputation for appraising on the high                                                                          collecting                                         This month we are spotlighting 5 appraisers
                                                         7). Los Angeles, CA - $26 million, sqft unknown, 157            past appraisal fees?
side. This will maximize the chances of the loan         acres. Near Beverly Hills. Owner sold property for 4                                                           from our Baltimore MD office. Dave Nantz, our
                                                                                                                           Why not let us do it for you?                manager, has been appraising for over 15 years
being approved: the borrowers get the loan they          times what he paid for it from Merv Griffin in 1997.
                                                                                                                         Kirchmeyer & Associates is looking for         and is a well known appraiser in Baltimore and
want and the mortgage broker gets paid.                  8). Manalapan, FL - $24 million, 27,000 sqft, 2.5               staff appraisers in the downstate NY           surrounding counties. Dave assigns all of the
   It's risky to push the appraisal to an artificially   acres. Seller bought estate in early 2004 for $19 million       area. If you are a good appraiser that has     appraisals to his staff and helps with reviews and
high price, particularly if the borrower is over-        then 'flipped' it for $24 million in the same year. Maybe       high standards for service and quality, why    client support. Our staff appraisers cover most of
                                                         someone should check into this one??                            not come to work for one of the best           the state of Maryland and in the counties we do
leveraged. A high appraisal may enable the bor-                                                                          appraisal firms in the country?                not have staff, Dave Nantz has a great working
rowers to pull cash out of their property. But if        9). Los Angeles, CA - $22 million, 8,600 sqft, 3                  Kirchmeyer is expanding and has              relationship with our subcontractors.
prices decline, the homeowners may end up                acres. Gregory Peck's former residence of 30 years, sold        appraisal volume in this region! Come join        If you have any questions about the Baltimore
selling for less than the amount owed on their           in 2004 by his widow. Mansion built in 1925.                    our fast-growing company and be a part of      region, please call the office and say hello! In
mortgage.                                                                                                                our TEAM.        Benefits include paid vaca-   order to be your Baltimore appraisal company of
                                                         10). Los Angeles, CA - $21 million, 20,000 sqft, 2.5
                                                                                                                         tions, 401k, etc, but mostly VOLUME.           choice, we strive to offer you the best in customer
   THE CLOSING: A high appraisal can leave sell-         acres. Purchased by the new LA Dodgers owner, Frank
                                                         McCourt.                                                                                                       service! Our turntimes are typically as quick as
ers with a false impression of their property's                                                                                For information, please email...         you need them to be and the quality of the prod-
value. Only the market can determine what a                                                                                               uct is only the best per our high standards.
buyer will actually pay.

  Page 2                   For all your appraisal needs in all 50 states call                           Feb 2005      Page 3                                                                                                    Feb 2005
                                                      at 1-800-771-5246

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