RAC Member Gregg Mitchell Provides Market Overview to Omaha Realtors

Source: Omaha Area Board of REALTORS

The leading Omaha, Nebraska appraiser and RAC member Gregg Mitchell speaks to a packed house on market conditions in what has become a must-attend annual event for Omaha Realtors.

To read more about the event and Gregg’s views, go to the Omaha Area Board of Realtors publication Focus (page 3).

RAC goes Hollywood, conveying what we are all about

Ok, not Hollywood. But we’ve got a story to tell.

Over the past several years it has become apparent that RAC needed to get the message out: not only are our members the best relocation appraisers in the business (we literally wrote the book on relocation appraisal), but our members are the best residential appraisers in North America. With the significant depletion of experienced, high quality appraisers since the onset of the financial crisis, RAC members fill the void by specializing in complex residential properties including relocation, litigation support, testimony and reviews.

We really want you to know that.

The video project was spearheaded by RAC member and former president Jim Goodrich with help from members Suzanne Bloyed and Jonathan Miller – and invaluable contributions from current RAC president Michael Cook. The presentation conveys who we are and the benefits of becoming a member of RAC.

– Exposure to new clients and new sources of business
– Aligned with a highly regarded appraisal brand
– Interaction with well experienced residential appraisers
– Education opportunities including conferences and events
– Leadership opportunities to help professional growth
– and many more…

CoreLogic: Dallas home prices up 11% in March

Texas is one of five states seeing home prices higher than before the recession. (CoreLogic)

Dallas-area home prices were up 11 percent in March from a year earlier, according to a new report from CoreLogic Inc.

The Dallas-area gain was about the same as the 11.1 percent nationwide increase, CoreLogic said Tuesday.

A shortage of homes for sale in many markets – including North Texas – is fueling large home price gains.

“This supply and demand imbalance continues to drive home prices higher, even though transaction volumes are lower than expected,” CoreLogic economist Mark Fleming said.

The biggest annual home price increases in March were in Riverside, Calif., 20.9 percent, and Los Angeles, 17.1 percent.

“Colorado, the District of Columbia, North Dakota, South Dakota, Texas and Wyoming all surpassed their previous home price peaks in March 2014,” CoreLogic said. “In all, 23 states and the District of Columbia are at or within 10 percent of their peak home price appreciation.”

Not surprising considering the undersupply many

market segments have been experiencing in North Texas.

— Michael S. Cook, MAI, SRA

RAC Board Member Ernie Durbin, SRA, CRP Named to Appraisal Practices Board (APB)


RAC member Ernest “Ernie” Durbin, SRA, CRP, was elected for a three year term to the Appraisal Practices Board of the Appraisal Foundation.

The Appraisal Practices Board is described on the Appraisal Foundation web site as follows:

The APB was officially formed by The Appraisal Foundation Board of Trustees on July 1, 2010. The APB has been charged with the responsibility of identifying and issuing opinions on Recognized Valuation Methods and Techniques, which may apply to all disciplines within the appraisal profession. The APB will offer voluntary guidance in topic areas which appraisers and users of appraisal services feel are the most pressing.

Ernie is also on the RAC board of directors and a never-ending resource of new ideas to RAC members and the industry in his quest to help appraisers become more efficient, making his election to the APB a perfect fit.


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With A Membership of the Best Real Estate Appraisers in North America…

MSC Poitrait 2-2014

You can’t enable change in an organization without a strong leader. RAC has one in Michael Cook, our current president.   Like the predecessors in his position, Michael is a successful and experienced appraiser who was drawn to RAC for many of the same reasons many long time members were:

I am a member of RAC for two reasons. I like being associated with the best residential appraisers in the nation and I like the opportunity it provides me to learn from them and the organization.

RAC’s collective knowledge is an essential asset in a world where high quality appraisal expertise is becoming harder to find.

RAC members have adapted and are now utilizing their appraisal expertise for more than relocation appraisal. Their services now include the valuation of complex residential properties, litigation support, testimony and appraisal review. This expansion of our membership’s services offers our members and future members more learning opportunities. It also affords RAC the opportunity to be of service to a variety of other users of valuation services.

Here’s the full story.

We look forward to Michael’s leadership in 2014!

Low Inventory Has Become The Status Quo for Housing


One of the key characteristics of the US housing market in 2014 has been limited supply of inventory. That lack of supply is placing upward pressure on housing prices as demand persists.

Long time RAC member, appraiser and current Secretary/Treasurer Gregg Mitchell, SRA of Mitchell & Associates of Omaha was recently quoted in The Omaha World Herald describing the events that brought us to this condition:

Mitchell described the last two years as an exceptional rebound period where record low interest rates and pent-up demand spurred sales. The spurt peaked last spring and was followed by unsettling national events such as the federal government’s partial shutdown and a rocky rollout of Obamacare. With winter now past and interest rates still low, Mitchell said, activity should pick up.


Here is what he expects for 2014:

“We are really seeing a surge in demand and we’re going to see prices move this spring,” Mitchell said.

Communicating Appraisal Results: Tips For Improvement


The appraisal process is one of the most important and often one of the most misunderstood
aspects of relocation. Gargano outlines in great detail how appraisers can be more effective
in communicating their results to the primary stakeholder they serve.

By: James R. Gargano, Jr., IFAS, CRP

The ability to communicate effectively is the cornerstone to any successful relationship,  whether it be between spouses, parent and child, teacher and student, coach and player, or between an employer and employee. Simply stated, most relationships are negatively
impacted when productive communication channels are not fostered. It is no exception to the Relocation Industry, as it relates to the Appraisal Process. The following items represent keys toward accomplishing the effective communication of the appraisal process.

1. The Accomplished and Savvy Relocation Appraiser Recognizes That he/she is  Communicating an Appraisal to Multiple Parties.

Various Segments of the appraisal analysis should cater to each potential reading segment. As stated within the Definitions & Guidelines of the Worldwide ERC Appraisal Form, the intended user of the appraisal report are the appraiser’s client and the employer. A vast majority of corporations also allow their individual transferees to review the appraisal. The intelligent and
accomplished relocation appraiser recognizes that his/her appraisal report potentially is going to be reviewed by a variety of users. The writing style and content of the report needs to recognize that each user may have a differing level of understanding for appraisal methodologies. Certain elements of the report should be geared directly to the relocation management company and/or corporate client needs, while other content should be aimed at the transferee.

For example, the relocation company and corporate client may desire more analytical elements, such as absorption studies/supply-demand analysis, detailed commentary ofs décor and appeal, and a keen understanding of the rationale for the application of a forecasting adjustment. On the other hand, the transferee is potentially interested in more specific information related to the actual home. Including a detailed list of the transferee improvements made during the term of ownership, affirms to the transferee that the items were, in fact, considered in the overall valuation, (regardless of the actual contributory value of the improvements applied by the appraiser toward the anticipated sales price).

Additionally, when the transferee offers market data for consideration in the appraisal analysis, a thorough discussion should be dedicated toward explanation when such a property is not utilized as a primary value indicator. Offering detailed explanation as to
the omission of transferee-offered market data, will give the employee a better understanding of the rationale behind the search criteria utilized in locating the most valid comparable data.

Furthermore, dedicating a section within the report detailing the positive and negative marketing aspects of the subject property and/or marketplace, may offer valuable insight to the transferee as to the overall rationale of the anticipated sales price.

2. The Professional Relocation Appraiser Avoids the “Form-Filler Syndrome”.

Quite a few appraisers fall prey to this condition, leading to a predictable and “robotic” style of writing. Appraisers in general need to be more creative, analytical, and descriptive in their appraisal presentation. The accomplished appraiser attempts to reinvent his/her style periodically. Generating the same type of analysis year after year, is not a trait of a dedicated relocation appraiser. Simply checking the boxes of the form, and adding little detail and substance to the areas of the appraisal form, does not add value to the appraisal process. In general, clients tend to appreciate a more detailed and descriptive analysis, adding substance to the adage that the appraiser truly represents the “eyes and ears” of the client.

Along those same lines, the accomplished relocation appraiser avoids the use of “canned commentary” throughout the body of his/her appraisal. Each transferee needs to feel that the appraisal being performed on his/her residence specifically addresses the location and physical attributes of the home. Commentary concerning market conditions should never be based purely on seasonal expectations. There have been many instances when particular markets actually are robust between November and January -the heart of the holiday season. Similarly, the beginning of the Spring Market does not automatically translate into an active market environment. Markets also can be quite fluid in many regions of the U.S. A market that was considered active 30 days ago, often can become saturated quickly. Regardless of the particular time of year, the analysis of the “pulse” of a particular market must be supported by quantitative data.

Special attention should be given to the commentary utilized to describe the Listing and Comparable Sales data. Many clients have expressed a desire to have appraisal reports incorporate greater detail in this area of the report. Simply repeating what already has
been clearly outlined in the comparable grid sections does not add any value to the analysis. Telling the reader something more specific about each property, can make the appraisal report far more valuable to the corporate client, third-party reviewer, and the
transferee. Another area of the report which can provide an excellent source of information is the section for photographs. Generous use of photographs, with detailed descriptions can tell the reader about the positive and negative aspects of a particular property. For instance, detailing the décor elements of the individual interior rooms can substantiate further an appraiser’s suggestion to address the items of personalization.  Additionally, taking photographs of various positive or negative site characteristics can be a valuable reference to the reader.

3. The Professional Relocation Appraiser Understands & Cites the Worldwide ERC  Relocation Appraisal Guide

Published by Worldwide ERC, and created with the input and skills of many of the most talented appraisers throughout country, this guide should be sitting on any good appraiser’s desk as a constant source of reference. Using the guide as a specific source, can provide needed clarity and substantiation for an appraisers methodologies.

In addition, the dedicated appraiser, regardless of experience level, should also occasionally take the time to read and review the firs page of the Worldwide ERC Appraisal Form. The definitions & guidelines section of the form serves as a comprehensive refresher of the primary elements associated with the relocation appraisal process. Furthermore, it is a constant reminder of how different the mechanics and concepts of a relocation appraisal are, in comparison to mortgage related appraisal forms.

Corporations and third-party companies should consider including the first page of the Worldwide ERC Appraisal Form as part of the materials presented in a relocation information packet to transferring employees. By reading the definitions & guidelines section of the appraisal form prior to the initiation of the appraisal process, a transferee can gain valuable understanding of the parameters upon which the eventual anticipated sales price will be based upon. How many times have we heard in the appeal process of a transferee claim that the condition, modernization and/or upgrading of their home is anything but “average”. By reviewing the guidelines of the appraisal report, one would realize that an “average” classification simply refers to a rating which describes an attribute as generally typical for the particular marketplace. For instance, a newly constructed, upper-bracket residence, still can be correctly be classified as “average”, based upon Worldwide ERC guidelines, if it is located within an area/marketplace of similar residences.

4. Skilled Relocation Appraisers are Proactive in their Appraisal Presentation –

Addressing ambiguous items of a particular appraisal directly within the body of the report, can avoid a lengthy appeal process. There are many instances in a relocation appraiser’s career when an appraisal assignment can be classified as anything but “cookie-cutter”. Further explanation is required to clearly state the position of the appraisal opinion.

Primary issues that can cause a reviewer grief is the treatment of additional rooms, (what is actually a “site improvement” and what constitutes “finished space”); gross living area; and attic space. As noted in the previous section, the appraiser should be familiar with
the Worldwide ERC Relocation Appraisal Guide. This source is very clear in the proper treatment of these areas. Conformance to the guidelines outlined in this source, creates an “appraiser protocol” that should be followed to avoid serious inconsistencies between
appraisals, and in turn, alleviate the confusion and anxiety level of the appraisal reviewer.

For a wide variety of reasons, there also may be instances when a property is a unique appraisal subject. Clearly state the unique conditions of the subject property, and discuss in a direct and open manner what rationale was used when locating comparable data for the property. On the surface, the reader may not understand why a certain set of properties were used as comparables in an appraisal. For instance, there actually may be a very good reason why an appraiser uses a home that is physically or is in another
location as a comparable in a particular assignment. The appraiser needs to clarify the primary search criteria used, and why a particular property was relied upon in the analysis.

An adherence, or better awareness of the previous steps, can help the appraiser to communicate more effectively within an appraisal report. Many appraiser’s are more “technically-oriented”, and possess the necessary skills to produce a credible estimate of the
anticipated sales price. However, further emphasis needs to be placed on the writing skills necessary to convey with creativity and detail the elements supporting the estimate of value.  As the appraisal process represents one the most important components of the entire relocation process, the continued improvement in this area needs to be a requirement of the entire appraiser community.

James R. Gargano, Jr., IFAS, CRP is a Partner and Principal for Bomba Gargano Valuation, Inc., a full-service appraisal firm, with a specialty in Relocation.  Mr. Gargano is the Secretary for RAC, as well as serving as the organization’s Admissions & Membership Chairman from 2003-2007.  He was also honored as RAC’s 1st Annual Report Writing Contest Winner. Mr. Gargano served on Worldwide ERC’s Mobility Editorial Advisory Committee in 2005-2006.

(Reprinted with the permission of Worldwide ERC from February 2006 issue of Mobility).


Valuation Logic Provides The “Ah-Hah!” Moment


RAC member Tim Lynch, CRP writes in:

“Received the WERC directory earlier this week and noticed that it was about the same size as last year’s directory. However, upon further investigation, I noticed that there were 30 more pages for the brokers and 27 fewer pages for the appraisers in this year’s directory as compared to last year’s directory (did not include pages including listings outside the US).

There are likely several reasons as to why this occurred but I did not look into it any further than the actual page count.”

The flurry of discussion erupted between RAC members from Tim’s quantification of something fairly abstract: was it worth it to be in this directory?

Some of the most basic valuation questions outside of a property can provide an “ah-hah!” moment like this. The ability to provide that simple moment is often the product of significant valuation experience, something all RAC members have in common.

E & O Insurance and Coverage of Your Prior Appraisal Work


Our RAC members had a spirited round of discussions about E & O insurance that covers prior work. Their names were redacted to protect the innocent (kidding). Here are some of the ideas and themes that came up:

When shopping for a new policy, the biggest concern an appraiser is whether prior work is covered. Every carrier is different and this is clearly something to ask for. Here are some comments from RAC members:

When you retire you need to acquire what is called “tail coverage” to allow continuous coverage that may be brought after your business has ceased. I would question your provider when changing policies to find out who will represent you for past work completed prior to changing insurance providers.

The problem with changing e/o providers is that the new provider may not warrant your historical appraisals. When retiring you may need to consider a policy that covers you for the past several years as well.

You (may) need to keep copies of ALL of your policies as the claim is against the policy in place at the time the report was prepared.

A few thoughts about picking an E & O carrier (RAC doesn’t endorse specific companies):

I think [firm name] is great. You can get them on the phone and ask them questions and they are happy to provide an opinion at no charge. In my area they have offered free seminars with CE credit. The premium has stayed the same for years. If I ever have a problem, I believe they will defend me. In contrast, I think some other companies might just pay out and cancel my policy.

If you have a claim you are dealing with the carrier directly. In our experience the carrier is far more important than the agency.

(I) know that they dedicate resources specifically to the appraisal industry.