MOST INVESTORS DON’T ALLOW THE USE OF TRAINEES.
LENDERS WANT MORE APPRAISERS, AMCs WANT MORE APPRAISERS, FEE APPRAISERS WANT TO BE ABLE TO HIRE TRAINEES.
Investors are imposing lots of requirements on the lenders that sell them loans, including not accepting reports signed by trainees and supervisors. Every investor seems to have different requirements. If the lenders don’t do it, they won’t be able to sell their loans to specific investors.
The “good old days” when Fannie set the requirements with a few lenders adding more are gone.
There are a few portfolio lenders (don’t sell their loans) or lenders who work with investors who will allow trainees, but they are very few.
THE ONLY WAY TO FIX THE APPRAISER SHORTAGE IS TO ALLOW THE USE OF TRAINEES WITH THE SUPERVISING APPRAISER INSPECTING THE SUBJECT AND THE COMPS.
THE ONLY WAY THIS WILL HAPPEN IS IF INVESTORS ALLOW THE USE OF TRAINEES.
I have never heard of any time that lenders did not allow the use of residential trainees. This is the only way to handle the huge cycles of residential lending.
We too often forget the boom and bust of lender requirements for mortgage loans. Just a few years ago brokers could order appraisals and trainees could sign on their own. The 2008 mess is still being cleaned up. Lenders are afraid of loan buybacks. We will just have to wait.
All appraisers started as trainees, even before licensing. They were not called “trainees” but they needed to be trained and educated.
I am a California Certified Residential Appraiser, INACTIVE DUE TO LOW FEES.
I disagree that lenders ever wanted trainees on an appraisal. It has been my experience my entire career that lenders always want the senior appraiser to sign inspected, along with the trainee, and frankly (in my own opinion) they would rather the trainee name not even appear on the report. It is simply not financially feasible to drive around with a trainee for 2 years, getting them the experience they need to get Licensed or Certified. I think I should get paid an extra $100 or more, just to have one tag along with me, frankly, but of course that is not how the independent appraiser market operates. It’s all reverse low ball bidding to get the job these days. Local mortgage contacts (obtained over a lifetime career) mean zero anymore. THERE IS ZERO INCENTIVE TO TRAIN ANYONE, IN FACT, IT COSTS MONEY, AND THEY LIKELY WILL JUMP SHIP AFTER OBTAINING THEIR OWN LICENSE IN 2 YEARS, since the only way they got the job as a trainee appraiser, was to work for nearly free for 2 years. IT COSTS MONEY TO TRAIN, WITH NO REWARD, ONLY COST.
There is also no money in residential appraising anymore, and it is only those who are truly desperate for work that will consider taking a job for $200-$300 an appraisal, when we used to get $400 7 years ago, before everything went up in price (liability insurance, rent, gas, staff, MLS, etc, etc) and the economy tanked. MY BEST ADVICE TO ANYONE THINKING ABOUT BEING AN APPRAISER. RUN FAR, RUN FAST, MY YOUNG FRIEND. THIS IS A TOXIC RUINED INDUSTRY. The sad thing is, by the time the industry realizes this, the older experienced guys will be retired, and as prices rise, the quality appraisers are already gone, and you will still be getting rotten shody work, until prices get really high and people start to consider training to become an appraiser. This takes many years and lots of education money….
Yeah thats a very good point any company will never compromise with the customer services by assisting a trainnee.
And i dont think they will gone find soon if they will not allow the tranee to fix appraisal services.
I thought I would add my 2 cents. First, I started in the early 1980s with a single family shop and two years later starting training as a commercial appraiser. I noted over the years a major sea change in how appraisers are viewed. With single family work, most view us as a “unnecessary evil” (sales agents, loan agents and most times buyers/sellers” don’t want us).
If you study the history of commercial appraisal work, Elwood was an employee of an insurance company (ins cos made a large percentage of commercial loans). They (the insurance companies) were very concerned about value because of risk (money they needed to invest to carry capital for the insurance reserves while not loosing it to bad loans).
Since that time we have had the S&L crises and mortgage meltdown and in both cases the government bailed out the bad lenders or at least no one went to jail – life just pretty much kept going. You will note that while we still are in a economic downturn most of what was lost is back. Given that there will always be a bailout, why do we need appraisers to reduce risk ? … that is pretty much our function is to reduce risk to someone who should be concerned about the money they are lending or a buyer/seller paying a market price, etc.
If what I say is true, then it should be no surprise that the users of appraisals (who likely don’t think they need it), would want it as fast and cheap as possible as long as they get the “right value”.
There is not a shortage of appraisers. The AMCs would love to use a trainee who took a 6week class and became a Registered appraiser….does that sound like a AMC or bank Talking. Fees have started to rise to decent levels so AMCs and bankswant to change the rules that sounds backwards to me. A person with 6weeks of training with high school diploma doesn’t have the knowledge to appraise a $50, 0000 house!!! The banks and AMCs want as many appraisers in the industry as possible, their not worried about competence! !!! Greed!! There are over 100, 000 appraisers now….AMCs see prices starting to rise….
Tim said it again. Anne, me thinks you are overwhelmed by crocodile tears if you think anybody, including our self appointed leaders, seriously wants more appraisers. It is going to take more than clients agreeing to let trainees appraise. There is only a red herring in that no trainee stuff.
My view is not that anybody wants more appraisers . They want cheap appraisers in their pockets and my guess is that low/slow pay, quickie/hurry up and moronic hassle, hassle in the name of the illusive concept of quality puts appraisers right where the clients want them to be.
The problem is multifaceted, but it won’t even start to heal until the old guard of appraisers is gone. Our problems are perpetuated because this appraiser independence has not yet been the model for appraising long enough.
This structure will work, but there is no room for management companies to pinch the fees and even without the management companies, fees will need to be increased. Over the past 12 years I have taken 2 newbies and brought them to certification. I went through every home with them, and participated in building the entire report. The Appraiser signs, the trainees contribution goes in the addendum. I think this is actual training. Not turning a dozen newbies loose with no supervision. That said, it is not going to happen with management companies in the middle. My last trainee received her certification 4+ years ago and I haven’t dipped another toe. The effort to provide proper training results in more time spent then doing the report alone. Therefore, to pay the college educated trainee anything, cover overhead, and still make a living will require the end of the management company business model. It’s an unnecessary parasite whose time is up.
I would like to thank you for the efforts you have put in writing this site. I’m hoping the same high-grade website post from you in the upcoming as well. Actually your creative writing skills has inspired me to get my own site now. Really the blogging is spreading its wings quickly. Your write up is a good example of it..Check
Whats more pithetic is the 2008 mess was not caused by trainees. Stopping trainees from doing work and having a supervisor overlook would be more beneficial to all and in reality, bears no harm to the lenders in any way. I think lenders should start looking at their own procedures instead.
What shortage? – If a client were to throw out a good paying fee in our area on one of those sites where the 1st one that claims it gets it, its gone pronto. Most appraisers here are in their 30’s. I do know a guy who brags about sending out relatives to do inspections of 2055 exteriors- they are not even trainees, yet the inspecters are supposed to be Certified. Maybe that is who is getting all the 2055 work around here.
I’d recommend the profession diminished by one – that guy. What jerk and what an embarrassment to us all who work to make the profession “professional.”
I agree with Edd. Not only is the guy committing fraud but he’s not smart enough to keep his mouth shut about it. Report him to your state board. We MUST start policing our own profession because these hacks are giving us all a bad reputation. I admit I’ve been reluctant to report bad appraisers myself. My state (NH) will allow anonymous complaints; they like to have a report and an outline of the its faults included. Not sure how you prove what this guy is doing, though.
You don’t have to prove it. That is the burden of the State investigators. Thye may ask you to help point to the evidence and I bet Taco knows where is and who is.
Thanks to Karen for seeing the silver lining. Let me turn the topic slightly to the left and I am not talking the political left.
If I understand Ann’s post, the reason for the shortage is the cyclical nature of the real estate industry. We certainly just recently rode to the bottom of a “big hill’, so it is silly to deny that appraiser attrition is a consequence that gained momentum on the way down.
But, I think the universes of making a living and being a profession are oppositional in appraising. I am convinced that USPAP doesn’t actually reflect what clients really want. No doubt any client who is asked would unequivocally insist they encourage ethical integrity and competency in appraisers, but here we are with our residential mortgage appraisers working for incredibly cheap fees turning out quickie pretend appraisals on encrypted Fannie forms. Many appraisers cite those problems in addition to non-sensical review hassle and scope creep as the reasons they dropped out.
My belief being that actions speak louder than words, my conclusion is that secondary mortgage market clients don’t really want what we define as USPAP compliance thereby placing the appraiser who sincerely adhere to USPAP and best appraisal practices between a rock and a hard place.
If I am correct, simply changing the rules so that trainees can do easy stuff with supervision will not change much. The clients in secondary mortgage work are just “going through the motions” and until appraising pursuant to the full Monte of USPAP is valued by clients bringing trainees in isn’t going to happen.
We might make it happen faster if we refused their cheap and fast stuff sooner rather than later.
Look at it another way. Let’s say you were asked to make a presentation before a group of college graduates to inform them of the benefits of considering a career as a residential appraiser. What would you tell them if you were being 100% honest? Let’s say some students start asking some questions.
Q- How much money can an appraiser make?
Q- What are the prospects for advancement?
Q- Sick time?
Q- Overall benefits?
Q- Liability of doing the job compared to other jobs with similar pay scales & education?
Q- Costs of maintaining a license?
Q- Future stability of the field?
Q – Would you recommend the job to a good friend or family member?
When you put it that way, we’re all crazy or fools to be appraisers. LOL
It has been a great career for me overall. I love the freedom of being my own boss. My husband gets great benefits with his job, so I’m very fortunate there. It allowed me to be available every day for my son until he went to college. But no, I wouldn’t recommend the profession to him. He works for me now as my assistant: setting up reports, pulling tax cards, maps, deeds, MLS reports, etc. but he has no interest in being an appraiser. He thinks I work a ridiculous amount of hours and he’s right. It’s my own fault that I don’t take vacations. I am really trying to get a better work/life balance…
One thing I don’t worry about any more is job security. The shortage of appraisers and, more importantly, competent appraisers, has taken care of that.
There is no shortage of appraisers. There is a shortage of competent appraisers.
The answer is not more responsibility for trainees. Having the “master appraiser” look at the subject and sign the appraiser is not the answer since the fees are not high enough to warrant those sorts of time consuming requirements. Since I was a commercial appraiser, I probably should not be posting a comment here but fees are still only half of what they were when I got into the business in the late 1960’s, the documentation requirements are greater and the liability is far greater. Until this situation is corrected there will be a perpetual shortage of appraisers.
The fact is that clients simply do not value the work product of appraisers to pay the appraisers a fee that recognizes the current requirements and knowledge needed to do a decent job. Clients only want a work product in the file that will satisfy the regulators. Where can you find a young ambitious college graduate with knowledge of micro and macro economics to work for the income that an appraiser can earn. Of course, the ability to write may be even more difficult to find.
How soon can I get the appraisal, what is the fee, and will the appraiser come in with a “realistic” value. These are the requirements of most clients. Until this mentality changes, there will always be a shortage of competent appraisers. This will occur about one week after hell freezes over!
“Clients do not value the work product of appraisers to pay the appraisers a fee that recognizes the current reuirements and knowldege needed to do a decent job.” Exactly. And in the reasons behind that, and the realities that flow from it, is the whole ball game. Thank you, Mr. West.
Appraising as a profession has been seriously deteriorating during these “post crisis” years. Anyone who can has left and more will continue to leave; with anyone looking at the present and future trends of this “profession” declining to enter.
Low pay and stunning liability, no control, a vapid vacumn between those doing the work and those sliping it through to the secondary market without due diligence, has made the avalanch of ineffective rules a joke. Trainees’ work unwelcome? Now why would that be? Perhaps a sudden surge to ensure greater accuracy in these difficult times? Who in the business thinks that unique and unlikely possibility?
But worry not. The steady shift to computer appraising long in progress is not unplanned. And the system is protecting itself from obvious inadequacies by requiring higher downs, cherry picking borrowers, passing on losses to shareholders and tax payers while banking their bonuses and wringing their hands over the appraisal mess. Guess whose hands are on the computer keyboards. Guess who will be banking the bucks. Guess who will no longer manage to own their own homes? Guess who will reap unemployment in the housing industry? What else is new and different?
The “no trainee” stuff stalling and stunting development of quality new appraisers is just the latest in the obvious trend, surprising no one paying attention.
And having more inexperienced people floating through a dying profession makes things better how? Oh yeah. The blanks on those forms still have to be filled in. And rest assured, they will be. Faster, cheaper, with less hassle from those once respected skilled appraisers of many years’ experience.
Brokers opinions of value, anyone? Is cheap too costly? Get it tomorrow taking too long? How about real estate assistants’ opinions of value? Oh heck, just press the button.
Without going into the pros and cons of AMCs, we must realize that new appraisers were historically trained by firms who desired to grow. That may have been in service specialties like coverage area or niche work but is most always tied to volume. With the nationalized AMC model, local appraisers are simply hired on the fact that they have a license, E&O policy and a pulse, therefore as soon as they are licensed, they usually opt to work from a spare bedroom. There is no advantage for them to work under a fee split arrangement. Firms who desire not only to grow in volume but also to develope strong specialties and reliability will find this more difficult if they become only training mills to enter the profession. Most appraisers are only willing to go through the headache of training someone if there is some kind of longer term benefit to them.
I agree that the inspection process is one of the easier things to teach, therefore it is not a major factor in increasing the risk to supervisory appraisers. It may be viable to consider trainees for inspections and experienced supervisor mentors to oversee the market research, analysis and conclusions. If a seasoned appraiser sends a trainee to do inspections and works with them in compiling a report, their liability is exactly the same.
If investors don’t make some provision for the future, developing a new appraiser into an asset may become all but lost.
Just why should we rely on seasoned appraisers to mentor trainees? We seasoned versions are complicit in the rather profound problems this profession has found itself in.
As I recall AMCs were very much the result of us complaining about mortgage broker pressures and our inability to stand up to it. HVCC expired, but by then the lenders had discovered we would work for 1/2 or less of what we used to and that they could keep part of the appraisal fee if they were smart. I can guarantee you that paying appraisers more is not high on any lender’s agenda. Golly guys if we can’t or don’t train trainees then someday they can point to a shortage of appraisers as being the hold up in lending for houses and the government will in a heartbeat make us obsolete for mortgage loans.
We need formal schooling now.
I fully agree that our complaining was a major cause for the proliferation of the AMC model, however I am not fully convinced that more education is “the” solution. That is not to say I’m against more education but I believe the problems we face is more of a business model issue.
Professional conduct and ethics are directly related to our liability while education has more to do with competency. It would seem logical that both liability and competency are needed to promote a strong and capable profession.
I have every confidence that relevant experience, especially that guided by trained, skilled and sincere supervisor will help build competence, but in the case of appraising I do not agree that it has at all been the “best teacher.”
We must produce better prepared appraisers to interpret and analyze the information and interactions they are confronted with. And as business persons we don’t do too well either. The choice to have a business dominated by AMC work is predicated on volume, and volume translates to cheap and fast. We do that because we want an income that is a living and we can’t get AMCs to pay us a decent fee. If that isn’t a scope of work issue, I don’t know what is. Although I’ve never seen it admitted in any scope of work, implied of necessity in any cheap and fast work is very limited research, verification and analysis.
Through all of this chatter we as a profession can’t define what quality in appraising is and in the vacuum the AMCs have decided that it is filling in all of the blanks on the forms and following the Fannie guides. And they hire people in Bangladesh to make sure we do it right.
I do recognize that creation of a demonstration report may be something that defines ultimate quality, but it is not uncommon for those to require months or even years to complete and that is unquestionably impractical in any appraising context I know of.
Before we bring one more trainee into this mess we had better decide what the heck we are doing, how to do it well and what is important and if we can’t get it done with what the AMC allows let ’em go elsewhere. That is as much ethics as it is business. What it emphasizes is professionalism over greed.
If there is a shortage of appraisers, that quite simply can be traced to fees. Don’t we still believe in the free market (well semi-free). If lenders were paying $1500 for a standard residential appraisal under current requirements, there would be no appraiser shortage. There would also be lots of people working to get their licenses. It takes a while to get in to the business, but as the fees go down, appraisers get out of the business and others decide not to get in. If or when the fees increase adequately – older appraisers will stick around a little longer and new ones will start working to get in. The free market system can be messy, especially when it is impeded by artificial influences (like AMC’s), but it still works – it just takes a while. Paying artificially low fees will drive appraisers out of the business and create a temporary shortage of appraisers. The only true fix is for supply and demand to come back in to balance with higher fees. (unless of course appraisers are not truly needed and go the way of the buggy whips).
I think you are incorrect on a couple of different fronts sorry.
1. Many of the lenders I work for do allow trainees to sign, as long as the supervisory appraiser certifies that they have inspected the subject and comps. Otherwise, the trainee’s work can be still be stated in the addendum and count towards 400 hours of licensing experience. BUT, the number of trainees will not increase significantly until they are allowed to inspect on their own! As the Appraiser Coach said, the limiting factor for me is time, how many hours can I really spend driving around in one day?
2. As others have said, rules alone will not increase the number of trainees. The fees need to go back up in order to make the split worthwhile. The current system is not sustainable for most appraisers to make a decent living, let alone hire help. Although AMCs do have their place, the majority of AMCs are nothing but parasites that add zero value to the process.
Finally, I would be curious to see numbers regarding loan losses caused by faulty trainee inspection. I would guess it is a fraction of one percent. This is a typical of America in 2013. You have a problem (inflated appraisals). It can be solved by simple enforcement of existing laws (USPAP). Nobody has the desire or stomach to enforce the laws, or if they do, they don’t have the funding. So people implement new laws (no more trainees) to give the impression that they are taking action. They should be ashamed of themselves.
Could it be that Fannie is using the AMC’s to create the appraiser shortage as a way of finally being able to do away with us
I’m not typically a conspiracy theorist but I can’t help but think that most lenders and the GSEs would be a lot happier if they didn’t have to deal with appraisers. Many see us as an obstacle to doing business.
Karen, I absolutely agree with the conspiracy theory and have thought this for years. We have all been nibbled to death by multiple ramifications of this process and we are now close to its culmination, I believe. I’d be interested to hear what you think of my submission here under cp.
The demise of the appraiser has been predicted for at least 20 years and has not come to pass….yet. It’s not for lack of trying, though. Unfortunately, appraisers aren’t organized as a profession and can’t compete with the banks and Realtor lobbies. I remember calling my congressman about an appraisal issue many years ago and the aide in his office actually told me that the banking industry had a lot more clout in Congress so that would be the way the congressman voted. Gee, thanks.
I do believe the govt. and lenders would get rid of us in a heartbeat if they could. That’s one reason I’m positioning myself to do only private work in the future.
The circumstances convince me that Fannie has become nothing more than an extension of the lending industry and the lending industry has proven that it is adept at and devoted to growing an extension from what was once a regulatory gateway.
Appraisers, as Karen observes, are an obstacle, an intentional obstacle to banking intent on doing things for it’s own benefit in a way that is harmful to others. But, appraisers have only been lending gate keepers since FIRREA, which came about in the early 90s. Prior to that we were part of the lending “team.”
I don’t think we appraisers are comfortable in our relatively new FIRREA role and I don’t think most of us can successfully comply with USPAP in letter and intent and run our businesses. That uncomfortable role is a further reason to remove trainees from primarily mentor training.
Our profession functions very differently from any other that I know of. Every profession solves problems, but they do so for the client’s benefit. So practitioners in those professions are advocates for the client. We of course are forbidden to advocate the client’s position and are supposed to “tell it like it is.” But here we are with standards modified slightly from those in effect if you belonged to an organization “back in the day.” Of course “back in the day” we were part of the banking team, “eyes and ears” if you will.
It is naive to believe that secondary mortgage lenders are going to let an appraiser be an obstacle if they have decided to make a loan, but they will use and are using us to complete their files so they can avoid regulatory sanction and incidentally have someone with insurance to blame if the loan goes belly up.
We independent fee appraisers are truly on our own and each of us solves our isolation differently. Most secondary mortgage appraisers are doing their best to survive financially and comply with USPAP. My view is that it doesn’t work very well particularly since the lenders involved are aware that we are financially vulnerable and that AMCs have enhanced that vulnerability.
Nobody, but nobody is going to fix this for us. It may be a conspiracy, but what ever, it is real and it is our problem and so far we have done nothing effective to solve any of it.
Edd makes excellent points and I agree with every one. But the whole system of training new appraisers is broken and needs to be overhauled. The current system expects an appraiser to spend a couple years training her future competition with little compensation. When the trainee finally gets their license and can sign reports, they think they’re ready to go out on their own and off they go. Based on some of the downright awful reports I’ve read lately, they are not being trained in anything other than filling out forms to make the lender happy….and they’re not even good at that. It makes me shudder to read some of this crap.
Personally, I would never take on a trainee unless it were a family member. Just because you are an appraiser doesn’t mean you should train others. I take this profession very seriously but I don’t think I’d be a particularly good teacher for a newbie. I’ve had a few potential trainees “shadow” me and I was astounded at how basic the education has to be in the beginning.
The solution is multi-faceted. One thing that needs improvement is more classroom appraisal education that includes practical applications such as: 1) learning how to properly fill out an appraisal form and produce a report that is USPAP compliant; 2) knowing which forms and/or narratives are used for what purposes; 3) how to verify a comparable by public records and a party to the sale; 4) inspection protocol (what to say and not say, what questions to ask, how to present yourself, what to take photos of); 5) the importance of writing and spelling correctly; 6) what underwriters and reviewers will be looking for in reports….basically a class that teaches a person how to be a trainee. It would give them and their supervisor a jumpstart in the training process.
Well said Karen.
I think classroom training up to and including report drafting and publication is essential to taking our profession forward and for preparing trainees for practice. Other professions have realized that for themselves and we are at the point we can no longer deny it.
Accountability and comptence are still extremely and obvious weak points in our profession and why they haven’t been addressed more aggresively is a question I may never know the answer to.
I am aware of the resistance of many to formal education. I don’t understand it, but I know it is a factor in the profession. What I don’t understand is the foot dragging by many industry leaders. Am I blind to some benefit to leaving the system as is? I think it is simply dysfunctional and self destructive.
Part of the problem is that so many appraisers work alone and are isolated from their colleagues. They just don’t know what they don’t know. It’s scary, really.
Most appraisers don’t belong to a professional organization, don’t go to meetings, and may only see other appraisers at classes. I can’t think of many other professions that operate this way.
I think you hammered this thing straight on, I would say that the AMCs would not be doing this cheap and fast junk if their clients (the lenders) were not tickled pink with it, and stepping even further into the muck, there is Fannie at the bottom of it. But we appraisers do pride ourselves on our independence. And that seems to include the right to shoot ourselves and the profession in the foot, no matter what anybody says. We daily cut off our noses to spite our faces and call it good business practice.
Beyond the staff appraisers functioning in AMC management, there is no question appraisers have been complicit in the cheap and fast syndrome and still are. As long as that continues we still have too many appraisers and any shortage of appraisers, as you point out, is simply demand from the fasty/cheapy gallery.
Each of us should charge what we think is appropriate and stick to it like you do, but I think the minimum residential Fannie form mortgage appraisal fee is $1,000.00 unless it is really simple, simple, simple cookie cutter stuff that is a no-brainer.
Lack of trainess is just a symptom of cheap and fast and we need to treat the problem. Bang ’em back Sonny. Help us make this into a job and profession that we are proud of doing and can make living at.
Edd, I absolutely agree with you in regards to reasonable fees ($1000.00 )for appraisal work, we are the front line and hold a big resposiblilty and liability on our shoulders, that is to our homeowners and lenders. Yet, we are the lowest paid service in the RE industry. Our govt and politicians have made such a big stink out of past over inflated values in this industry, they pointed finger numerous times, and yet, they dont recognize the most valuable role an appraiser plays in this industry when it comes to compensation and independence. Placing an educated and correct market value on what is the largest investment of an individuals life can not be replaced by computers itself…appraising a home takes many variables to consider and account for. Simply put, you can not come out of med school and expect to independently do heart surgery on a patient. Appraising is similar to some extent, it is a practice you continue to learn. Almost every assignment and home is different and challenging. It is a practice, not allways a repetative cookie cutter job. After 12 years of appraising, i still find new and changing challenges to learn and complete. I dont believe, after this recession and housing fall, any computerized method would effectively replace the valued and well trained Appraiser. The one and only issue with this industry is a lack of clout, pull and unity, therefore, I dont think things will ever change for the better.
glenn The only possible preolbm is the underwriter could carefully review the appraisers work and see if they made some mistakes. This should not be a preolbm for you. I would not get real excited. You probably did make a good purchase, but the appraiser may have also made a few mistakes and the real value may be more similar to what you paid.I see no way this is a preolbm for you.The bank will not make you a higher loan based on the appraisal.November 11, 2011 | 12:57 pm
Ann: You are correct. The only way we are going to see a turn around is if we see lenders and regulators allow trainees. However, I would say that the best way (meaning the most appealing to business owners) this can happen is to allow the trainee to inspect and go for comp photos. I have trained several appraisers and most of them are able to do a very good job measuring, observing, recording, etc. within 5-6 months. The liability still needs to rest on the shoulders of the supervisor, but inspecting (though a very important part of the process) is not rocket science. With technology where it is (digital voice recorders, digital photos, and even digital video cameras) there is no reason why supervisors should not be able to send out well-trained ‘trainees.’ In an area like I cover (very rural), a great deal of time can be wasted just driving to and from the subject and getting comp photos. If I were to train again, I would look at where my new employee could save me the most time and effort. That would be mostly in the inspection and comp picture stage. I used to be able to allow 3 employees to go 3 different directions in the morning. In the afternoon, we were all back in the same office and I was on my feet looking over their shoulders and directing the process as we put the report together. Now, I must do every inspection personally. Makes no sense if I have trained my appraisers correctly and I am still liable for what they do in the field. Here are some other ideas on the subject: http://www.theappraisercoach.com/?p=477 and http://www.theappraisercoach.com/?p=617
Unfortunatly, the amc’s and lenders are the true cause of the diminishing number of appraisers in this business….and it will continue to shrink….but, the appraisers themselves are the true cause of diminishing fees. As a cerified appraiser, I am working with a number of AMC’S and with an overflow of orders. I gained a firm menality to firmly refuse to accept anything less than what im worth, and I it looks like this positive thinking is paying off. I do believe the amc’s recognize and respect this. I am receiving a large number of calls for work from other “cert appraisers” whom are also overloaded……the bad thing is they are accepting this additional work at ridiculous low fees $225, $250 , $275 and asking for 50 % compensation from the hired appraiser… its all about the greed. Another conversation with several amc’s reps whom i have a good long term relationship with revealed to me how they work appraiser and their fees….during a busy season, they will track down all the low fee sucker appraisers in the area to do the work at a ridiculous low fee, and as one said, they get them all the time….(I couldnt believe it, but the rep really said that)…..any left over orders or overflow goes to the other appraiser such as I whom will only accept the right fee $375 – 400 $550- 600….. and with this, I can offer my assistant a decent 65-70% split with any overflow, which I have had plenty of for the past 4 months now! I find it obserd to know I am getting paid almost double for the same work these sucker appraisers are accepting. Dont get this business.
We got a great appraisal! This was laelrgy due to the fact that our appraiser specializes and appreciates green building so he hunted down similar green homes around our area. Make sure you interview your appraiser before you get him-her to do the appraisal! Make sure that (s)he knows how to evaluate green features and that (s)he can search for other homes with alternative building methods. This is important. I will post my appraisal once I get the last bid so you can see how it’s done (or e-mail me and I’ll send you our appraisal). I want to help as many people I know build green.
Sorry Ann, I have to say you forgot some really important things. Things that must precede permission for trainees to sign appraisals, which I agree is sort of a dumb prohibition, particularly in the face of the cheap & fast terrorism this profession faces daily. Appraisers need a panoply of better conditions before I would even recommend that anyone consider this profession with any intention of completing assignments for lenders. Here are five priorities that need immediate attention:
1. Higher fees. Appraisers who know what they are doing are worth at least $100.00/hour and any appraisal that is being done from “scratch” will consume a lot of time. They’ll just have to get used to it and we have just got to stop giving our education, experience and value to the process away. Rush jobs are worth way more. Why should we let our existing customers wait or work 24/7 so a lender can compete to make a loan unless we are well compensated?
2. Turn times that fit the subject, market and the appraiser’s work load. If they want overnight or even two days they can get Zwillow or the Assessor to tell them what the value is.
3. Absolutely no reviews by anyone who is not certified as an appraiser and who is competent in the market in which the subject is located.
4. No scope creepies or crawlies. None.
5. The appraiser must have equal input into the terms of engagement.
Basically appraisers must have self respect and insist on respect from their clients. Trainees are our future, but we need to fix these things so trainees never face a future similar to our recent past and present. Please don’t let the cycles have the blame, the lenders and the mortgage appraisers let this mess happen.