Mary Cummins, Real Estate Appraiser, Real Estate Appraisal, Los Angeles, California, Mary Cummins.

Mary Cummins is a real estate appraiser in Los Angeles, California with 38+ years of experience. Cummins provides real estate appraisals for banks, lenders, mortgage brokers, Appraisal Management Companies (AMCs), lawyers, Courts, factors and private parties for lending, lawsuits, probate, estate planning, divorce and all types of litigation. Cummins provides 1004, 1073, 1025 and other form reports, narrative reports and historical appraisals besides real estate research and appraisal advice.

Showing posts with label insurance. Show all posts

Thursday, February 27, 2025

Appraising Damaged Homes and Properties in Disaster Areas, Fires by Richard Hagar notes by Mary Cummins

richard hagar, mary cummins, orep, real estate appraiser, real estate appraisal, post fire appraisal, fire, disaster, appraisal, insurance, palisades, eaton, altadena

I just took the webinar "Appraising Damaged Homes and Properties in Disaster Areas" given by Isaac Peck's OREP and Richard Hagar SRA. Hagar is a real estate appraiser and a professor of real estate. The class was extremely informative and practical. I can't recommend it enough if you will be doing post fire appraisals. If you're a member of OREP, the link to the video is down below. It was 2:45 but the time will fly by. Hagar is a good speaker who keeps you interested in this very relevant and important issue. There are a lot more free videos by Richard Hagar in OREP which I also recommend. Below is the brief summary of the class.

"Serious natural disasters occur with some frequency in the United States−hurricanes, floods, and most recently, the wildfires in California.

These events create a need for appraisal services as homeowners and insurance companies work to assess the damage and rebuild afterward.

In this webinar, Hagar shows appraisers how to provide appraisals for insurance companies for a single property damaged by fire, windstorm, tree fall, flood, or landslides; and how the methodology changes when dealing with more widescale destruction due to fires, hurricanes, flooding, and tornadoes.

This live webinar will cover:

- How Appraisals (and Values) Change after a Disaster

- Assessing Repairable or Catastrophic Damage on a Property

- How the Insurance System Works and What they Need

- Data Problems and Sources after a Disaster

- Things to be Cautious of; Contamination and its Impact on Value

- How to Obtain This Business"

My comment: When most people think of Los Angeles they think of earthquakes and wildfires. That's why they call us the shake and bake state. Over the last 40 years I've appraised all those types of disasters. Over the last 20 years I have done a higher amount of post fire appraisals for owners and insurance companies. With droughts, climate change, denser housing and more people living in wildfire areas that trend will only continue to increase.

I asked if I could share the slides link and didn't hear back. I'll post the link if Hagar says yes. The slides are fantastic! Every issue and everything he says are in the slides. They just replied. They didn't say yes or no but sent me the link again after I asked so I take that as a yes. You should really watch the video also. They just said no so I removed the link to the slides. They said you can purchase the webinar and see the video and slides. I would definitely do that. Well worth the money.

If you are trying to get post fire appraisal work, contact the following companies and organizations.

Attorneys: Contact the lawyers running adds for fire victim lawsuits.

Insurance companies: Contact the main insurance companies in California.

County tax assessor: They will be needing appraisers to handle all the property tax appeals.

FEMA: They will also be needing appraisers

US Corps of Engineers:
Homeowners: Update your website, social media to state you do post fire appraisals. Make sure you can be found in search engines. Run ads.

Quick note. Use the General Purpose Report or the Appraisal Institute form. Do not use UAD or basic Summary report. Appraisal is not for lending purposes. You need the cost approach.

One of the slides was about the value of homes that survived the fires when all their neighbors and community burned down. This is the text from that slide.

"NOT DESTROYED JUST CONTAMINTED

Every home on the block is destroyed or unlivable, except your subject.

-Fire, flood, landslide, air contamination, mold

Your unburned/flooded subject is likely contaminated, at a minimum every exterior surface, oil, and likely any space where air and/or water were able to penetrate.

-crawlspace, attic, cold air returned for HVAC

Maybe interior surfaces including carpet, floors, sheetrock, inside the walls, and insulation

Currently, that house will have a minimal value. The buildings may have lost 35-90% of their value: the land has likely lost another 35-90% of its value. Why? Typical buyers are scared of the unknown.

Your subject is likely uninhabitable until some contamination company provides the "All Clear."

What if the house has no electricity or water access?

Massively complex appraisal assignment."

My comment: Currently there are no homes that survived the fires while their neighbors did not that sold after the fires in the Palisades. The ones that were for sale expired or were cancelled. Some are for sale but they are farther away from the fire zone so aren't as affected and haven't sold. Some stayed listed for another month post fire but no offers. Private parties are not currently interested in these homes. Only developers will be interested and able to afford to buy them. Some have no access as homes that burned fell down the hillsides blocking roads. Some have no utilities. Some need toxic ash, soot remediation. Even after toxic contaminants have been removed from the home, the entire neighborhood is one big toxic waste dump. Those toxins will seep back into the home. It will take at least 12-18 months to clear the debris. It took longer after the 2018 Woolsey fire. The current fires burned many more homes so it'll take even longer.

Anyone who buys the homes that survived will have to pay all cash as loans will be impossible as will fire insurance. All cash sales are generally 10-20% less than financed transactions. If a developer buys a property, they expect 20% return on investment. That return on investment is calculated as the difference in final sales price of restored home minus the price of property purchase plus cost to rebuild, restore, remediate and all related sales costs such as commission, title, escrow. This means we're looking at a minimum deduction of 30-40% of pre fire value if the home wasn't damaged. That doesn't even include the reduced value due to stigma. Anyone who buys a fully restored home will still have a problem finding very expensive fire insurance. They may have to pay all cash which is another reduction in value. It will take years until the values recover in this area just like after the Woolsey fire.

This is funny. Someone asked the question "what do you do when there are no post fire land sales?" I said to myself "there are post fire land sales!" then Hagar said the exact same thing. You will find post fire land sales as land listings and home listings. They are listed in both categories. Some are listed as just fixers or "build your dream home." There are quite a few post fire land listings in Altadena and Palisades. I post the listings and sales every week here.

The webinar went into the requirements to rebuild burned homes. If over 50% of the property is destroyed, the owner/builder will have to comply with current building requirements. In California that means you must have solar. In wildfire areas, that means you must have fire resistant roof, siding, limited eaves, no vents... In hillside areas, that means you will have to build a much more substantial foundation. All of these things will cost a lot more money than your fire insurance policy will give you. Sadly if you are on PCH ocean side and burned down, you may not be able to rebuild at all due to tide levels, setbacks... Don't even get me started on the Coastal Commission. That will add another two years to the process.

Hagar mentioned the fact that resources, construction materials and labor will be very limited which will drive up the price and slow down the process. Happens after every fire and disaster. On top of this we will have the new tariffs. Your insurance will definitely not cover the cost to rebuild. This is why so many have to sell. It's better than the alternative of losing the home to foreclosure or not having money to find a new home.

These are just a very few items I found interesting from the webinar.

Here is a link to the Webinar Recording but you needed to have signed up for the class to see it I think. Generally they move the videos into the orepeducation.org site.

https://attendee.gotowebinar.com/recording/886913803578013103

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.

Mary Cummins, Mary K. Cummins, Mary Katherine Cummins, Mary, Cummins, #marycummins #animaladvocates #losangeles #california #wildlife #wildliferehabilitation #wildliferehabilitator #realestate #realestateappraiser #realestateappraisal #lawsuit real estate, appraiser, appraisal, instructor, teacher, Los Angeles, Santa Monica, Beverly Hills, Pasadena, Brentwood, Bel Air, California, licensed, permitted, certified, single family, condo, condominium, pud, hud, fannie mae, freddie mac, fha, uspap, certified, residential, certified resident, apartment building, multi-family, commercial, industrial, expert witness, civil, criminal, orea, dre, brea insurance, bonded, experienced, bilingual, spanish, english, form, 1004, 2055, 1073, land, raw, acreage, vacant, insurance, cost, income approach, market analysis, comparative, theory, appraisal theory, cost approach, sales, matched pairs, plot, plat, map, diagram, photo, photographs, photography, rear, front, street, subject, comparable, sold, listed, active, pending, expired, cancelled, listing, mls, multiple listing service, claw, themls, historical appraisal, facebook, linkedin

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Mary Cummins of Cummins Real Estate Services has been in real estate since 1983, over 35 years. She is licensed by the Bureau of Real Estate Appraisers. Mary Cummins was an agent and broker licensed with the California Department of Real Estate selling residential income, commercial buildings, raw land and homes for Merrill Lynch Realty in Beverly Hills and Westside Properties in Los Angeles before concentrating on appraisals. Mary Cummins currently provides real estate appraisals, expert witness testimony, historical research, legal real estate research for mortgage brokers, banks, lawyers, factors, insurance companies, financial consultants and private individuals. Mary Cummins was born and raised in Southern California. Cummins attended Beverly Hills Good Shepherd Catholic School and Beverly Hills High School. Besides being on the Dean's list, Mary Cummins was a top ten national swimmer and competed on the men's water polo team. Mary Cummins began college at the age of 15 attending the University of Southern California on scholarship, majoring in Psychology/Sociology. http://www.animaladvocates.us http://www.facebook.com/AnimalAdvocatesUSA

Wednesday, February 19, 2025

Appraisal of Fire Damaged or Destroyed Properties for Insurance Purposes by Appraisal Institute by Mary Cummins

Attended the Appraisal of Fire Damaged or Destroyed Properties for Insurance Purposes webinar given by Charles Baker, SRA, AI-RRS with the Appraisal Institute. Webinar description: "The urban fires which swept through much of Los Angeles recently have resulted in significant losses of life and property. Economic loss estimates are in the range of $135 to $150 billion but could easily go higher. It is estimated that around 10,000 structures have been destroyed. In the wake of these fires there will be a huge need for timely, accurate, and professionally prepared real estate appraisals for insurance purposes. The Southern California Chapter of the Appraisal Institute will present a two-hour webinar addressing this topic. The webinar will provide participants with vital information on the appraisal process."

Really good class covering important issues related to post fire appraisals. Charles included a few case studies which were really informative. #charlesbaker #appraisalinstitute #postfireappraisal #marycummins #realestateappraiser #fireappraisal #realestateappraisal #insurance #casualtyloss I included first six slides. Slide deck will be available at Appraisal Institute.

Fire appraisals are basically just regular appraisals with more of a concentration on cost approach if the building has been destroyed. If the home has been totally destroyed, forensic analysis is needed to "reconstruct" the building. You can use original plans, old photos, MLS listings, old satellite images, Google street view, Bing satellite maps, Building and Safety records and other sources to reconstruct the building. Then you reconcile the sales comparison, cost approaches and income approach if appropriate for the final pre-fire, post-fire, cost to replace or whatever value was requested.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Saturday, February 15, 2025

Real Estate Appraisal Fire Inspection in Pacific Palisades Fire Zone by Mary Cummins

Mary Cummins, fire inspector, fire inspections, real estate appraiser, real estate appraisal, pacific palisades, los angeles, california, pre fire value, post fire valuation, insurance

Back in Pacific Palisades burn area in Los Angeles, California. Mary Cummins. Mayor Karen Bass said the EPA finished all inspections in Pacific Palisades. That's not true. I met property owners and EPA inspectors today. They still have a lot more to do. I also noticed not all properties had EPA inspection signs. #palisadesfire #marycummins #losangeles #california #losangelesfires #pacificpalisades

None of these photos are from clients' properties.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Thursday, February 13, 2025

"Altadena is not for sale!" What's the Alternative? Foreclosure, Bank Sale, Homelessness, Monetary Losses? by Mary Cummins Real Estate Appraiser

altadena, gentrification, mary cummins, eaton fire, land value, insurance, los angeles, california, home, house, value, fires, destroyed, black, latino. Photo of Mary Cummins doing property inspection in front of home burned in 2025 Los Angeles fire.

UPDATE: I just did some research on this "Altadena is not for sale" group. It was started by Melissa Michelson who doesn't even live, own or rent in Altadena. She lives in Alhambra. She states the purpose of the group is to "send developers a message: we are not leaving, we cannot be bought. Altadena is not for sale in the hopes of inspiring them to be strong and not fall for developers’ offers, which will forever change the historic make up of Altadena."

Turns out these activists are harassing and attacking homeowners who need to sell their property. Some homeowners are older with no money or insurance. They must sell their land so they can afford to live and eat. They are also attacking contractors. They suggest people should leave negative reviews for any contractors who have signs in Altadena offering their services. They're even attacking real estate agents. They go so far as to state that it's illegal for anyone to offer property owners less than the value of their property as of the day before the fires even if the home burned down. That's insane. The properties are currently selling for a lot less than that because they are just burned land. They are advertised on the MLS and with signs for less that pre fire values.

These activists are actively hurting Altadena property owners. That does not help Altadena, property owners or residents. Can you imagine people who don't even live in the area, who aren't victims of the fires are attacking the actual victims of the wildfires. The ones who are selling didn't have insurance or didn't have enough insurance. They need to sell so they can have a place to live and food to eat. Thankfully no one is doing the same nonsense in the Palisades.

ORIGINAL: "Altadena is not for sale!" is the rallying cry from some ~~Altadena residents~~ activists. Some activists don't want fire destroyed properties to be sold to developers to rebuild. They fear the neighborhood will change and become "gentrified." What is the alternative? Should properties stay vacant for years? Should homeowners lose their properties to foreclosure and lose all their investment? Some people clearly haven't really thought this through. I personally believe the people yelling this are probably renters and not homeowners. They also don't know the true history of Altadena.

*(After getting racist hate comments an FYI. I'm Latina. My family is from Mexico. I'm not a "colonizer." Lower income whites also lost their homes in Altadena. It wasn't all Latinos and Blacks. The ones yelling "Altadena is not for sale!" are indeed not the property owners. Some aren't even renters. They're just uneducated racist people who love to spew racist crap.)

Altadena has been changing for many years. It originally belonged to Native Americans. Spain stole their land through conquest starting around 1492. Mexico then owned the land after the Mexican Revolution in 1820. California later became part of the USA after the Mexican American War in 1848. The original Altadena pioneers were farmers. The area was later turned into home development starting around 1880.

Some areas of Altadena and the rest of the US had "whites only" covenants. This meant no Blacks, Mexicans, Jews, Indians, Asians ... could buy or own the properties. Starting around 1940 Altadena started to decline as residents moved to newer nicer areas. Around this same time Courts started to uphold the Fourteenth Amendment making deed restrictions unconstitutional and unenforceable. Soon after antidiscrimination, anti-segregation and Fair Housing Acts followed and anyone could live in any community they could afford. This coincided with what was called "white flight" from some older less expensive areas. This is also called "reverse gentrification" which correlated with property decline and property value declines. All types of lower income people moved to this area because it was now more affordable.

Real estate all over the world goes through cycles from growth, stability, decline to revitalization and repeat. Some call the last stage "gentrification" which is now a dirty word in real estate. It's just a real estate cycle when properties in the area are improved and values increase. It has nothing to do with race or culture. From 1940 to 1990 Altadena was still in decline. As home prices increased in surrounding areas people were pushed out of for example more expensive Pasadena into less expensive Altadena. This caused the revitalization stage to begin. Over the last 20 or so years homes and the community have been improved and values have risen. The makeup of Altadena continued to change.

People who make less money have less money and buy and own less expensive homes in less expensive areas. Whites make more money than Blacks, Latinos. The reason is socioeconomic factors and not race. The makeup of Altadena began to change as property values rose. The current census shows the current population is 41% white, 16% black and 28% Latino. Years ago there were more blacks because area was less expensive. Many years ago it was all white. All areas change over time. And to the people spreading the fake conspiracy theory that the Eaton fire was arson to push black people out of Altadena, stop, just stop. Latinos and whites who are the majority also lost their homes.

Property values have been increasing. The median home is now $1.3M. If you bought the median home with average down payment, your mortgage would be $7,200/month. Property taxes would be about $1,400 and insurance $550 for a total of $9,100/month. You'd have to have a gross income of about $30,000 a month to be able to afford that home today. This is why the population has been becoming more white again over time. People buy what they can afford. Blacks and Latinos have been willingly selling their homes to white people for huge profits. The people who complain about home price increases are tenants and not homeowners.

If the median home was worth $1.3M and burned down, you are only left with the land. Land in the area was worth about 70% of the total value before the fire. We have a high land to total value ratio in Southern California. Before the fire that $1.3M home had a land value of $910K. After the fire the land is worth a lot less. The main reason is no bank will finance a loan right now on burned land. There is no fire insurance. That means you'll have to pay all cash. All cash transaction mean a discount of 20% or $728K land value. The land still has to have the debris removed, foundation dug up, top soil removed, toxicity tests on the soil... The utilities also need to be restored to the property and entire area. A lot of the supporting facilities have been destroyed not to mention damage to the streets, signs... This will take 18 months to two years minimum to repair. Time is money because of holding costs. The property will also have stigma for years to come which negatively affects property values.

At this point with clean up costs and all cash purchase only a developer would be able to buy the burned land. They expect a 20% return on investment after all costs and fees. Building homes is a job just like a police officer or teacher has a job that pays wages. This means the land is now worth $546,000. That's about what the recent burned lot in Altadena just sold for. The ex homeowner can sell their property, pay off their mortgage and either rent for a while or buy a new less expensive home, condo.

If the owner of a burned home has a mortgage, they still must pay the monthly mortgage and property tax even if the home burned down. Property tax is .0125% of assessed home value per year. People can have it reassessed after the fire if it burned down. If the homeowner had fire insurance, they could use that money to pay off the mortgage or build a new home. Most fire insurance policies don't give you enough money to build a new home. The depreciated value of the median home before the fire was maximum $350K. Median home size in Altadena was 1,721 sf. Insurance companies generally give you about $100 to $200/sf in Altadena for your home or $172,100 to $344,200. New homes cost more than that to build. I'd say it's about $250/sf today and up to $400sf if you're on a slope or want very good quality. That's $430K to $688K to build a new home. That could be more than double what insurance will give you. Unless you've got a ton of cash sitting around you can't afford to build a new home. You also have to pay for a place to live for two to three years in the meantime besides paying your old mortgage and property tax. No one can afford that. Most can't even afford that in the Palisades fire area.

This is why most homeowners of burned properties are in a very tough position. Unless you have a ton of cash you can't afford to rebuild your home. If you had no fire insurance, you're in an even worse position. I'm sure all of those without fire insurance didn't have it because they couldn't afford it. They at least didn't have mortgages. If you have a mortgage, you must have fire insurance to protect the lender. Generally the fire insurance money is used to pay off the mortgage to the lender. That's why lenders force people to have fire insurance, to cover the bank's investment.

This brings us back to "Altadena is not for sale!" Why the hell not? Do you expect the homeowners to have enough money to pay for their old mortgage, property tax, rent for two to three years and the cost to build a new home? Most in the area can't afford that. This is not a very affluent area based on income. Only developers can afford to buy the land today. The only alternative would be foreclosure by the bank. The bank would then sell it to a developer. Then the homeowner could lose everything. If the homeowner had no loan, the lot would just sit vacant bringing down property values in the neighborhood. The homeowner still has no home in which to live and must pay property tax.

I believe the only people yelling "Altadena is not for sale!" are renters or clueless idiots who don't give a shit about the homeowners. They probably only care that they no longer have a cheap place to live and must pay more or live elsewhere. Maybe some were just living for free with grandma who bought the home many years ago when it was far less expensive. Anyone who cares about the homeowners will tell them to do whatever they want with their own home to protect their investment and money. A lot of the people who lost their homes were older and have no desire to go through three years of construction and stress. Let the homeowners do what is best for them.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Tuesday, February 11, 2025

Palisades Fire Zone Real Estate Appraisal Inspections by Mary Cummins Real Estate Appraiser

Mary Cummins, fire real estate appraiser, fire inspection, insurance, damage, assessment, valuation, pacific palisades, los angeles, california, property tax appeal,

In the Palisades fire zone again for work. At least it wasn't raining today like last time. I met an elderly lady at World Central Kitchen. She broke down crying saying she lost everything so I gave her a hug. Such a sad situation for everyone. #worldcentralkitchen #marycummins #realestateappraiser #palisadesfire #losangeles #california

None of these photos are from clients' properties.