Jonathon Miller’s original recent article on Bloomberg and follow up article replying to very negative appraiser “trolls”. Most of the appraisers did not read the
Guess What’s Holding Back Housing? – Original article
Jonathon Miller’s Original posting was on Bloomberg and got lots of appraiser comments, many of them very negative and defensive
During the U.S. housing boom, real-estate appraisers acted like deal-enablers rather than valuation experts. Indeed, inflated appraisals were a key ingredient in the erosion of mortgage-lending standards that led to the housing bust. Now we are seeing the opposite — low appraisals — with unwelcome consequences for the housing market.
A recent working paper by the Federal Reserve Bank of Philadelphia looked at the impact of the HVCC rules on the outcome of appraisals and mortgages, touted as the first empirical analysis undertaken since the agreement was enacted.
The study looked at the frequency of low appraisals, in which the appraised value was less than the contract price. A low appraisal doesn’t necessarily equate to low quality but it could be a concern. The highest percentage of low appraisals occurred around May 2009. This was not only the peak of the housing-market collapse, but also when the agreement first went into effect, easing the pressure on appraisers by mortgage brokers and banks to “hit the number.”
Lone Wolves: Appraisers Fighting Everyone, Including Appraisers
Follow up posting after lots of appraiser ranting
There are many great people, incredible talents and solid organizations within the appraisal profession. But in my opinion only 20% of the industry are truly competent professionals and the remainder are merely varying degrees of form fillers.
I have been an appraiser for 28 years and it is apparent that the industry is dying a death of a thousand knives. One of the key reasons for this slow death is the lack of national leadership and the extreme fragmentation since most appraisal shops are comprised of a single or just a handful of professionals. I’d also like to offer that the majority of our profession seem very willing to make unsupported negative inferences on reviews of a colleague’s work such as appraisal field reviews or troll columns like mine.
To read the full article and the appraisers’ comments:
I have been following Jonathon Miller for many years. He is very savvy and is widely quoted in the media – local and national. Plus, he has a Most Excellent blog.
I agree with Miller regarding the lack of competent appraisers. It is not the appraisers’ fault. The problem is the lack of adequate training and poor education after appraisal licensing. Fee appraisers were expected to train new appraisers. But, it takes a lot of time. Also, poorly trained recently licensed appraisers were allowed to train new appraisers. The recent change to AMCs and UAD have made residential lender appraisers focus on “filling out the form” to fit guidelines and criteria that do not have much to do with getting a credible and accurate value. In fact, the restrictions can result in being hassled if you try to use comps and analysis that are appropriate for the appraisal. Many appraisers just give up and give them what they want.
I don’t know of any other trade, job, or career where participants constantly “bad mouth” each other. The only reason I can see is that their appraisals are reviewed. Appraisers are used to being criticized and look for “problems” in other appraisers’ work.
I don’t think you can take the financial rewards out of the equation. Until there is reasonable fees for the work done, the profession will be in a decline.
OK, we all have a dog in this fight. It is interesting to hear about all the concerns and formulas for elevating our profession. I do believe we are making progress in the areas of education, attrition, and involvement. While we will never sit in a circle and chant “Kum-by-Yah”, we all recognize the need of a common voice and a voice of reason. There is a movement of State Coalitions growing through a small group of people that care. Unpaid, with no interest in personal gain or political power, they are doing the work we should all be participating in, and not bitching so much. IF, as a profession, we do not reach out to help those that want to be better, and to those that are struggling to remain successful, we will NOT be the better for our profession. Only 20% competent? I think not. Only 20% that really care? Maybe…..
Mr Miller and I are seeing different things. Most appraisers that I see are hard working competent people doing the best they can under extremely difficult circumstances. Most realtors are under pressure to sell,sell sell.Most do not make that much money. Most realtors are helpful but have been burned by the slow down in sales. After 28 years doing appraisals I find the business interesting and rewarding. It is disturbing that appraiser bad mouth each other.As for 80% being incompetent that is hogwash more like 80% are competent
I agree with Mr. Miller’s view that only 20% of appraisers are competent. I have been a real estate appraiser in the New York City metropolitan area for 37 years and have never seen the amount of backstabbing going on amongst appraisers. I have been an Instructor for the past 17 years and many think that appraising is a get quick rich scheme. Luckily, the 2015 AQB guidelines will come into play and I expect a lot more appraisers (especially trainees) will exit the industry. The stories that I hear regarding the training (or lack thereof) from many of these fee shops is unbelievable, anything from making up the comparables and not letting the trainee identify themselves as performing the “significant appraisal assistance”. Just my two cents worth.
Solution: Be a positive supportive real estate professional – daily. If an appraiser calls for help, take 15 minutes to listen, help, and offer a solution. Complete an appraisal and/or software course in town that will improve your abilities and profession. Refer a fellow appraiser for an assignment that you feel uncomfortable with. We are all connected 🙂
I concur with the lack of leadership
I could only enter the title, state boards are littered with leaders that would not be a leader in combat. The back biting starts with them and goes up and down the chain. Florida’s board has made millions in fines and attending one of their meetings shows clearly a desire to elevate their position to being better appraisers than the rest of the people in the field. Recent USPAP instructors noted a lack of complaints so they have unleashed the hounds to find as many as they can with their DBPR Investigators. That board I imagine is similar to others, I will commend the Georgia board which holds those complaining liable when proven wrong. The State boards mission should be to support a dying profession not kill it. It was reported in one of NAR’s reports several years ago that in most counties in Florida that in many areas 80% of the loans that failed did not even have an appraisal they were done by AVM’s. I have never seen an AVM provider disciplined.
You know I follow you and have never even offered a challenge to your thoughts and comments, but tell me how making the observation that the profession lacks “competent appraisers” escapes the label of “bad mouthing” one another?
Whether I agree with your conclusion or not is hardly the issue, it is that we desperately need to fashion a solution and implement it.
So, what about effective education and training, post or ante getting your license? I would opt for college (but then I have that already under my belt) because I have a hard time finding an appraiser who understands the almost complete abstractness of the notion of value.
Yes, you are correct. I shoulda at least provided something postive!! Maybe that us “old timers” are the best. Hire us to do your appraisals ;>
Mr Miller and I are from the same mold. I have been in this thankless business since 1988 and my father has been doing them since 1969. I am beginning to think the new ‘appraisers’ are actually Realtors with another license, they can’t say anything positive or supportive. You won’t hear a Realtor say anything close to ‘good job’. I have noticed in real estate blogs how evil and angry they sound when responding to an article that is intended to be helpful. The appraisers today are subject to extreme hard pushes to make value which usually means to go out of the area and/or use a different style of house. It doesn’t help that I am in Illinois which pretty much has the market cornered on corruption, which by the way, is where the National Association of Realtors started and still calls home (birds of a feather?) nuff said, now we know who we are dealing with.
I have been dealing with the scum of real estate enough that the business is this:
The Realtors have manipulated the real estate business to where they have no accountability or liability but strive for total control.
If it doesn’t appraise, they will force the lender to find another who will, then tell the lender that they will no longer send there clients to them for mortgage financing if they continue to use the real appraiser. Been there, got the calls from lenders confirming this behavior.
After the new appraisal and deal is closed, your due diligence to check on why it is so out of whack from the rest of the market gets you, ‘Well it appraised out’. That way cha-ching no liability no accountability, its all the appraisers fault if something happens later on down the road. What threats? What pressure? He didn’t HAVE TO do that, yea right.
The most recent USPAP comments period, I suggested that in the reporting of the appraisal to include the Broker and Brokerage to possibly determine if there is a behavior pattern from some of these Realtors, I’m betting that there is. If they are going to blame and go after appraisers they need to go after the Realtors too (they get all the money, they may as well finally get some of the credit for the disaster).
Our industry is getting more and and more like Realtors, everybody is out to get everybody else and the rules are only the rules sometimes and he who can throw the biggest fit/apply the most pressure, is right, regardless.
I am seeing a bubble will again burst in this industry before long, bad ideas are running wild and they have the ‘appraisers’ to do it. It won’t be long now. I just hope they see the source for what it really is and it isn’t myself, Mr Miller or any other ‘real’ appraiser.
‘It just isn’t any fun anymore’, is what I hear from those of us who have been around a while and do the job right.
Looking forward – Why in the world would anyone want to be an appraiser. If you do the job right, most everyone hates you and will do everything possible to destroy you. If you do what they want, you may not be doing them very long and waste a lot of time and money getting in the business and then again in litigation, by the way, the Realtors you ‘helped out’ will NOT have your back or be anywhere around when your deep dark crevice is in the sling heading for the proverbial fan.
Just saying, and Mr Miller is right.
Thanks Domer for your thoughtful insights. And thanks to Ann for sharing my experience. I actually called most of the appraisers who emailed and commented with snark on the post. When I called (the internet is a wonderful thing) they were very nice and were in sync with my views. They largely took issue with the language of the post and the appearance of unfairly attacking the industry. Blind rage took over from there and they never read the Fed piece or the entire post. Our industry has been beat up for much of the past decade because we have no voice so perhaps this was the last straw for them.