Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
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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

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