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Appraisal Issues, MBA, NAR, National Associations
NAR Fights Back. Appraisal Debacle!
theREsource.tv - Monday November 23, 2015
I have been an appraiser for 27 years, and as an appraiser, I am paid for my opinion. It is my opinion, that real estate agents do not know how to valuate property, and when the appraisal value is low it is the appraiser fault. A real estate agent that knows the neighborhood, the market, and how to valuate real estate will never have a low appraisal. Agents start taking appraisal classes and learn how to valuate property.
Amen brother. I have a college degree in RE appraisal, 35 years of experience in mortgage lending (loan officer), staff appraiser for a top 10 (at the time) national lender, an ex-wife who was a top producer as a loan originator, I can tell all of you from the front lines.
Until the select few that run the RE industry are exposed and imprisoned, nothing will get better, it will only sink to new depths of opportunity for the thieves who look to steal where the stealing is easy–the real estate market. Just think, if there were no referees in the NFL, NBA, NHL, NCAA, how easy would it be to win bets, if you could control the referees? Think about it.
Appraisers are registered as Financial entities and are not exclusive to the Real Estate Industry, although they are required by NAR to pay dues for MLS access (as in RTW union dues). The “Out of Area” appraiser works both ways. There are appraisers that rarely work their own areas due to AMC’s not wanting to pay C&R fees or due to LO’s and Agent conflicts. The problem is nobody’s on the same page when it comes to compensation. Lobby NAR, so they can lobby the Fed’s and the States to have Appraisers make commission instead of fees. Then we’ll all be on the same page. Yea that will work, right?
43 years in this crazy business. Frankly, it worked better before the states got involved with a license, but, of course, it took several years to develop a client base. Then came the 10 words you never want to hear "I'm from the government and I'm here to help you"… right. Then comes the AMC's. They inform the appraiser that they want 5 comps, three listings, a 48 hour turn time and, of by the way, we are going to keep 30% of your fee. I dont think so… If they are paying chump change, who do you suppose is accepting the work other than the chumps? That is why you have appraisers that know nothing about the area they are working. Oh well, government creates a problem then they step in to "fix it". Same old stuff. Good luck you young appraisers. The good news is that so few are coming into the business, those that hang in will have more work than they can do. That is until UAD makes us all obsolete with computer generated values.
Phil – IF the writing is on the wall (UAD computer generated models generating values), then I believe it's in this industrys best interest to go ahead and make that call NOW. There is so much WASTED time and money throughout the appraisal procedure that this step just needs to be eliminated and replaced with a click of a button. What benefit exactly are we getting by hiring appraisers whos value (sorry…OPINION) is just going to be criticized & in some cases ridiculed; their work is being reviewed, doubled and then triple checked for appropriate adjustments, and then after all that they are given a list of "more" appropriate comps or adjustments as determined by Big Blue or Watson or some other UAD generated model and then have to defend their OPINION?…and all this for LESS than they were getting paid 5, 10, 15, 20 years ago? Name 1 other job anywhere that YOUR PERSONAL OPINION is criticized and then deconstructed on a hourly basis…how long do you expect any appraiser that values his professional opinion to put up with this?
No, AMC’s do not go by a rotation when assigning orders. They hunt down the lowest fee, then demand the fastest turn time. Not that turn time matters, once a report is submitted it may be a week before we get those revision, additional comp, please address stuff that is already in the report because we are just monkeys doing a word search and have no idea what an appraisal is requests. Then 3 days later another request to add the borrowers middle name and then another 3 days later a revised purchase agreement.
Then the lender gets the report, and they want something else addressed that is also already in the report. Its not our turn time that sucks, its the middle level leaches that feed off of the work of hard working folks on the street.
Oh, yeah, did I mention that the AMC’s send the assignments to the lowest possible fee they can get some chump to accept, no matter where they are from or how qualified they are? The lower the fee the more they can skim off the top.
Absolutely a tough industry for appraisers today. I did want to note that not all AMCs are bad. As a 10 year veteran of the industry, I decided to start and appraiser friendly AMC with two 20+ appraisers. No shameless plugs – I won’t even mention us by name, but I wanted to comment to let you all know that many lenders are now vetting AMCs partially based on their appraiser relationships, and our appraiser-first model seems to be catching on like wildfire. There are AMCs out there who respect appraisers and pay above C&R. I think this will be the growing trend as long as the appraisers in the industry demand it.
I was in Dallas in the early 80s when this all began. It was not the appraisals that got us in trouble, it was a few bad people who colluded to defraud. Most of them were eventually caught, tried and put in jail. But, as is typical, rather than focusing on those specific bad people, the gov't decided to over-regulate everyone. In the housing run of 2000-6 the problem was not the appraisals … it was the over-heated market. You can't blame the appraiser for putting a price on a property when there are a dozen buyers waiting in line to buy at that price. If I recall correctly, that's kind of the definition of market price. Again, there were some bad apples who broke the law. Not as many as we would have liked were actually held accountable. But, then came the WHOPPER of OVER-REGULATION … Dodd-Frank!!! Just like it will take completely cleaning house in Congress to ever have any hope of a simplified tax code or term limits, it will take a complete overhaul to rid ourselves of this over-regulation.
I had an apprentice when the market went bust and we got AMCed. Had to let him go because I couldn’t work more hours for less and then split it with someone. I then just shifted to doing sales and rentals to no accept the lowered fees. Now I cherry pick what appraisals I do because of the 38 page reports and the crazy requirements with the odder properties. I do rentals, investing, consulting with sellers, investors, buyers and attorneys to fill in the income. I can’t imagine graduating from college and saying,”hey, let’s be an indentured servant and make less in more time than at a restaraunt”.
I am a certified appraiser for 16 years. I am making less money today than I did 14 years ago. With all the added forms required, the AMC’s taking their cut of the fees, I am probably making less than $10/hour. I sometimes wonder if its worth it. Only 8 more years and I can retire !
I have a client that did a cash out refi on his ppty thru Quicken. They appraised it for $240000 wit an appraiser from Detroit Michigan. The ppty is located in Sahuarita Az. Appraiser measured over 2400sf, County has 1100. All additional sf was not permitted. Property is worth about 50-60% of appraisal. How do I tell my client?
Brian Bokor because SOMEONE still has to go look at the property to report the condition and SOMEONE still has to be on the hook (E&O) insurance, when the loan goes bad who are they going to blame, themselves????
Din’t think you wanted to read that.
Where were the appraisers when the industry was hit with and trying to challenge HVCC? Mortgage professionals led the rally with some participation from the real estate community, and crickets from the appraiser side. They were hiding under rocks..that’s where.