Appraisal Nightmares – No End In Sight.

08/01/2016
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18 thoughts on “Appraisal Nightmares – No End In Sight.”

  1. iMO a major issue causing the backlog are the AMC's. If appraisers didn't have to deal with their turn time after inspection they could get more appraisals done Example- an order is negotiated with a due date of the 30th. The appraiser visits the property on the 15th. The AMC now expects the report on the 16th even with a due date of the 30th. Some AMC's will start reducing the fee if the report is turned in after the 16th. Because of these artificial due dates, fee reductions and additional report requirements, the appraiser can only inspect 1 property per day. It would be really tough to take on additional inspections because of the AMC 24 hour after inspection requirement. The appraiser could take on more work if they didn't have to produce a report in 24 hours. It's more efficient to do several inspections on the same day but not possible under the current AMC requirements.

  2. Dan says:

    Have lenders order appraisals sooner instead of waiting until the last min to see if all the other things are ok. Loan to value would be the first thing I would want to know when lending plus can the borrower pay it back

    1. Matthew Smith says:

      This is so true… both Realtor and lenders wait to the last minute to order the appraisal. They are more worried about getting the housing inspector out first. They waiting for an appraisal to come in can quickly slow a deal down… not to mention if the property doesn’t appraise at the sale price, which can just as easily kill a deal.

  3. David says:

    More AVM’s only make sense to someone who learned nothing from the last meltdown. The problem is simple supply and demand. The current pay for an appraisal is not enough to attract new people into the profession. Until appraisal fees are enough to make the profession appealing to new appraisers the problem will continue to get worse.

  4. Kim Moya says:

    I have been a licensed realtor for over 15 years and I was an licences appraiser for 5 of those years. I took the past 5 years off to raise my son and now that I'm ready to get back to work, I find out that I have to start from square one with my appraisal licence. It will take me no less than two years and thousands of dollars to go through the training and apprenticeship necessary that I've already completed once before! That's IF I can find a supervising appraiser to take me on which is proving to be a challenge. I hope they can make some changes to the licensing requirements so people like me can get back into the field.

  5. Rich Below says:

    The solution is actually very easy. Money. That's it. Appraiser's have been fleeing the industry for years, and no one wants to come in. Why? My dad made about $350 for a 1004 in the mid-1990's. Today, I still have people asking me to appraise a home for $340. We went through a period where AMC's trying to get people to appraise a place for under $200. Everyone wants a good appraisal, but no one wants to pay for it. And nowadays it takes even longer to get an appraisal done because there are so many more hoops (some of them good) to jump through. How long does it take to do a good appraisal? How long to inspect, research and analyze comps, talk to the agents – some of whom won't take your calls and emails – shoot the comps, get the 1004MC done, write the report… 8 hours? I probably spend over 12 on most of my report. Let's see…. $350 / 12 = $29/hr, but then I've got to cover the cost of owning a business on top of that. Folks, there isn't a lot left after all the expenses. Why would anyone want to be an appraiser? I'll make less money at Starbucks, but at least I'll get benefits, free coffee, and no one is going to try and sue me after their unqualified buyer defaults on the home I appraised for a reasonable value. And I don't have to work 2000 hours for nothing or next-to-nothing to get in to the business. And don't evern get me started on drive-by's. Do you know what the difference between a 1004 and a 2055 is? About 20 minutes less work and a whole lot more risk to the appraiser. The entire process is the same as the 1004, except I don't enter the house. That's it. Why am I going to give someone a discount for that? M-O-N-E-Y. Pay realistic fees. That's it. More people will enter the appraisal field and we won't have this massive backlog. If I was to add anything to that, it would be, create an easier way to get trainees to get their training without having to become slaves for a year or more, and without lowering the standards.

  6. Rich Below says:

    And this is typical – "NAR, Rannie/Freddie, and the regulators should be getting together to talk about a solution." How about the appraisers? How about including appraisers in the discussion, since we have a unique insight in to the problem? It doesn't feel like we're your partners, it feels like we're your whipping boys.

  7. Angie Foss says:

    This video nails it on the head. It takes someone like this to pave the way for change. Good info & solutions!

  8. Joe Johnson says:

    Solution? Stop coercing appraisers to rubber stamp your ignorant, incompetent or fraudulent "prices". I get it, you realtors and lenderds can't wrap their minds around that price DOES NOT equal value. Crazy is as crazy does. Are you happy now??? Did you get what you wanted?? Is this what you had in mind when you ran off all the best appraisers for telling the truth??

  9. Joe Johnson says:

    Before the elimination of the Savings& loans came around, lenders would order the appraisal at the BEGINNING of the loan process because if the value was not there, or there were issues with the subject property, they could address them up front. That system worked like a charm. If the subject property wasn’t worth what some realtard demanded, or there were repair issues that needed to be addressed, we all had time to hammer these issues out before the mortgage folks wasted their time and money processing a loan that will never happen. Or, you can salvage a deal that would otherwise never happen.

    But No. When the idiots that think that willing buyer + willing seller = market value, get your rear end to an appraisal class or 10, an then maybe just maybe you can make intelligent opinions as to the value of the subject. The sad fact is, NAR and MBA, and their members have steadfastly REFUSED to become educated about all things market value. Reason why? They can claim “well I didn’t know, the appraiser did it” BS, then order another another appraisal from Skippy McNumberhit, and now they can get their commission check. Anyone who challenges that, is Lender McNumberhit. Who cares about the buyer or seller.

    But, the dipsticks in the RE and mortgage industry are convinced they know value better that a state certified appraiser are certain that they know more about market value than a state certified appraiser.

  10. Joe Johnson says:

    The solution is simple. Have the realtors and mortgage brokers take an appraisal course with their pre licensing education. Hold them accountable for coercing, blackmailing, blackballing or any number of illegal activities that is common practice, because it’s easier to blackball and appraiser than getting off one’s behind to be a profession that is acting in the best interest of their client. It’s easier to remain purposely ignorant and then point the finger when the facts get in the way of the RE/LO and their comission check.

    1. Competition Benefits Consumers says:

      Joe Johnson, the solution IS simple. Appraisers are responsible for their actions. If they are so weak that they cannot refuse an unreasonable request and instead go out and find another customer, they should not be appraising. Your statement is a farce. Further more, better underwriting of appraisals would have solved the whole issue instead of the catastrophe which is Dodd-Frank / AI.

      1. Tim In Fla says:

        All the protections afforded appraisers by Dodd-Frank would work, if the CFPB was funded and regulations could be enforced. Recently I was told by a AMC panel manager for a large lender in response to my protest when I refused to do something I knew was a violation. “We can get another appraiser to do this, our business model to follow the path of least resistance”. I haven’t heard that since before the meltdown. To Joe’s point; 1. Underwriting of mortgage loans began the downward spiral when automated underwriting came into being. Its hard to find a experienced underwriter who will work for peanuts as compared to compensation levels they had 20 years ago. Currently, there are job postings for underwriter positions that seek; high school graduate, 2 years appraisal experience as trainee level or experience in reading appraisals. That’s it ! 2. AMC Reviewers are compensated based on production. They have a scant 10 minutes or so to review an appraisal and many times these reviewers lack the experience compared to the appraiser who completed the report. 3. The NAR is not about to get involved in the alleged “lack of appraiser issues”, they now offer “Certified BPO Specialist” programs. Standard forms, Standards of Practice Handbook (think USPAP for Realtors), and separate E&O. The suggestion was made to the AQB that completion of this certification by a Realtor and field experience doing BPO’s should satisfy the experience requirement for appraisal certification. So an alternative provider of valuation services would be a real estate agent. Great ! 4. In an open an free market appraisers would be able to to market to and obtain new and better clients. The AMC coalitions want to make sure they maintain the market share they have now. They will. It doesn’t take too many staff appraisers with 3 trainees under them to cover any particular market area. Its the same play book they had in 2003 – 2008. Why go looking for a local appraiser when we have a one that already has demonstrated they will “play ball”, willing to work for discount level compensation and reports in such a fashion that it meets the particular scope of work requirement. (Which is whatever the suits at the secondary market investors deem important). The whole valuation industry is heading for complete automation and in house valuation providers. Until the next debacle is upon us (which will be sooner than later). AMC and bank lobbyist have a lot more dough and time than independent appraisers representation. They will get their way pure and simple. For me, I’m at the 26 year mark and appraising for mortgage lending is about 20% of my professional activity. Mostly, that is for direct lenders with no AMC pass through shaking me and borrower down for a couple hundred bucks a throw. but it took me 18 years to build that side of the business. It can’t be done quickly. So many appraisers are just working through their “exit strategy”; crank em out, as many as you can while you can. Whatever they want give it to them. Make all the dough you can and leave this profession before it leaves you.

  11. Matthew Smith says:

    On thing no one has brought up still is that there are still a lot of AMC companies out there that will in some cases take up to a week trying to shop an appraisal order around, in the hopes of getting an appraiser to accept their ridiculous low fee for the order. Fair and reasonable fees are still not the norm in most ares when it comes to appraisal fees. Then there are all the request form the AMCs review panels, for things which is many cases are items already addressed in the report, but the AMC is not paying for a appraiser to review reports… just someone they may have trained 8 hours to simply look over appraiser reports. Low fees for years have driven good appraisers out of the market for the past 10 years, and now everyone is made that it takes 3 weeks to get an appraisal. It wasn’t even 20 years ago, that a typical appraisal would take at less two weeks to get back to the client. Just something to think about.

  12. Dora Griffin says:

    You are more than correct. Where is NAR? NAMB? Solution, I have one; ordering apprasials should be like anything else you buy. It should be available in the local market from known quality providers. Mortgage brokers and every other originator should be able to order appraisals directly. That would provide income for the best appraisers which would result in more people wanting to be an appraiser as a vocation. At the moment who needs it? Appraisers work for next to nothing as costs go up since AMC's get a slice of the pie. AMC's are nothing but a profit line for banks. What a mess.

  13. Dean Kelly says:

    What needs to be done is appraisal fee’s need to be separated on the HUD Settlement sheet. Banks pay the AMC’s for there service while appraiser get paid a reasonable and customary fee. What is currently going on AMC’s shop for the cheapest appraiser that will complete the order the fastest. Why is it that Amc’s never want the appraiser to include there invoice in the appraisal? The answer is simple they do not want to disclose to the customer what the appraiser was paid. As long as the banks have there AMC’s for profit centers nothing will change and turn time will just get longer. ____ rolls down hill and we all know who is on the bottom of the pile.

  14. Jerry says:

    How about just paying the appraisers more. I have NO BACK-LOG.. I HAVE NO BACK LOG.. I AM A CERTIFIED APPRAISER. WHAT BACK LOG ARE YOU TALKING ABOUT? I can take much more work. Oh, the cheap work, you want to pay me $270.00 for a 3000 sq.ft. house on 15 acres in Auburn, CA.(Wells Fargo)..I refuse to work for that price. I understand now, The back log is for the cheap appraisals that nobody wants. How about shopping around (realtors/brokers), finding a mortgage company that uses a AMC that pays more to the appraiser and has no back-log! The back-log is only for cheap appraisals. I call all of you out on this one!! Would this be easier (call around on turn times) then say “changing and industry”… Well, real estate agents are getting older, how about dropping the state licensing requirement…. How about that one! Appraiser deserve a chance at making a living. Just like you do! Compare the cost for an appraisal completed in 1990 (25 years ago) and today!!! Wells Fargo paid me $375.00 per appraisal, now they pay $270.00 per appraisal. I had a house back then, now I can only dream of owning!

  15. Tyson Schwabelman says:

    Perhaps part of the problem lies at the feet of the appraisers. Just like the numerous appraisers who fail to understand how economics within real estate markets actually work, many here fail to see that appraisers are paid what the market dictates. With all due respect, the fair market value of a home is what the market says it’s worth. If multiple parties offered above your appraisal price, you’re either ignorant or arrogant.

    You’re being offered $300 for an appraisal because the market dictates as much. You don’t like the price? Apparently plenty of others do. If the majority of appraisers stopped accepting low-ball offers for jobs, the price would increase. You’ve flooded the market with supply, now you see the effects.

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