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Where Did All the Good Appraisers Go?

Where Did All the Good Appraisers Go?

By Hamp Thomas, Institute of Housing Technologies

Excerpt:

As appraisal fees go downward, quality is going in the same direction. The best appraisers, who have invested years and years in building their careers don’t want to work for a company that they have to check in with every 12 hours, and get treated like a school kid in the principal’s office. An untrained and unlicensed person on the other end of the phone is making their schedule and deciding who gets paid what. And guess what – it’s going to get worse… The best appraisers are finding other types of appraisal work (that values their craft), and the appraisers that work on mortgage loans are often the newer licensees or trainees. If all this Reform we’re talking about is still hoping for higher quality appraisals for use in mortgage lending, we’re in deep trouble. The best appraisers are leaving mortgage appraising as fast as they can.

Appraisers get together and discuss how “bass ackwards” all this “reform” is, and why something that is so logical has been stretched far enough that the government is biting; hook, line, and sinker… If you want a higher quality product, you have to pay more. Look around. Do the best doctors get paid more? How about the best mechanics? The best architects? The best teachers and speakers? The best attorneys? People seek out the best and they are in such great demand, they command higher fees. This is nothing new, it’s just the way the system is supposed to work. So why do we think that appraisals should be different? The lenders, and government officials, and AMC’s think appraisers can be paid less, be required to do more work in each report, and then the quality of appraisals will go up? Come on, this is not rocket science. In most cases, when you add a middleman to any process the price goes up and the quality goes down. Ask Walmart…

http://www.housemeasures.com/ArticlePages/Where-Did-All-the-Good-Appraisers-Go–.html

My comment: AMCs, and the lenders that hire them, see all appraisers as the same. Why not go for the lowest fee? Yes, there are direct lenders who care, and big lenders who have “special lists” of experienced and well trained appraisers, typically for high end homes or people who are top bank customers. Those appraisers are paid much more than the appraisers who compete on fee.
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10 Comments
  1. Ditto to the above comments! My two daughters took my advice and are as far away from real estate as they can get, and I’m so thankful RE did not enter their little minds! The older one (52 Y.O.) is a teacher in the District of Columbia, and the younger (50 Y.O.) is an MD Vice President of a pharma. company – never to worry about the above!!!! Gracias a Dios!!!

  2. After 30 years in the business, I decided that I had enough. With all that experience and two college degrees, I was making less than my neighbors with a high school diploma. My annual income was about the same during the past decade. Even employees at a fast food restaurant get a raise every year. So I closed my shop, and opened up another business. I am making the same or more money, but enjoying myself much more.
    I actually feel that the mortgage industry has a plan to chase out the experienced appraisers. The new appraisers are willing to work for less since they have less experience. When the housing market picks up and there is a shortage of appraisers, then the mortgage industry will complain that it is taking too long to get an appraisal done. They will claim that the lack of competent appraisers is causing a bottleneck in the recovering economy, and lobby Congress for not having to use appraisers at all. They will pull up some type of statistics that show that AVMs are just as good for most loans, and for the few other loans – well, that risk is just part of the business. So, if you are still doing tract home mortgage loans, then your days are probably numbered.

    • This is a comment from Ronald Napier. He was unable to cut and paste it, so I am submitting it for him!!

      1. There is a rule somewhere about reviewing statistics. Many of us run stats going back 2 years
      up to the current date. “That” tells us what’s happening, and any Trend. Not the appraiser declaring a
      a trend. With all the Stats included in the report, I rarely get a phone call about it or the values.
      2. Just because Brokers keep trying to raise the prices, does NOT mean there is a trend upward. The
      stats, and current to 6 month stats tell us that. Two months upward does not make a reliable trend.
      3. Just because the Broker’s investor client has spend gobs of money “Rehabbing” a property, does
      not make it worth that nor that he may get it all back. The “Stats” will show us that. Many alleged
      professional brokers don’t even calculate from stats, that “buyers were not paying for the additional rehab”.
      4. Some areas are/were running “flat” for months, with No + or – appreciation.
      5. The requirement to check stats, due dilligence, and all the new obligations placed on us, has made
      many appraisers and their choice of values, much better than before.
      6. Loan Officers and Brokers need to “read” a whole report, not jump to the value estimate.
      7. Yes, I see some. With the advent of many AMCs now grabbing onto the “newer appraisers”, their
      are many poor quality appraisers working.

      PS: As the industry is worried about a shortage of appraisers and lack of training, I would suggest
      the Bankers, AMCs, and Mortgage bankers begin a school, and pay for the in depth training of appraisers
      “after they’ve passed” the initial requirements for licensing.

    • This is an email sent to me by Colleen Patterson. I am posting it to my blog for her.

      Read with interest “Where Did All the Good Appraisers Go?” I left in 2012 after 26 years as an appraiser in four states, most recently Anchorage, Alaska. The work made no sense to me any more when I began to be more concerned with big bank computer requirements than evaluating complex properties in seriously peculiar local and national real estate markets.

      So far I have seen no one give voice to the opinion I have held since I watched how things went as we tried to piece together the shards after 2008 and hoped for a structure to prevent recurrence in future. Seems to me the disappearance of truly independent quality appraisers is not unplanned and will not be regretted by the powers that be.

      The opinion I’ve evolved is that the big players want appraisers gone. Period. Good appraisers, bad appraisers, low fees, high fees, not their agenda. They need forms to process loans. Within that, computerized “data” will fill the forms routinely rushed through a computerized process by untrained clerks. Lenders’ interests will be safeguarded with higher downs and credit scores underwritten with government insurance of buyer performance sending the risk to the taxpayer, of course. So we are seeing a decline in quality appraising? All the more reason to support the well-on-its-way computerized reality.

      Results : banks skim the cream, middle/ lower end real estate markets contract, wealthy proceed as usual, and those delaying, questioning, dangerous – to – the- deal real estate appraisers get out of the way.

      Years of huffing and puffing about organizing appraisers to make sense of the current muddle is not taking us anywhere. What is coming next is not that hard to see given what has come already.

      A more crucial question? What can be done to prevent another housing/financial cataclysm as bad or worse than the warning we so clearly were given in 2008?

  3. Looks like everyone pretty much has it pegged, no respect, low fees, distrust, dealing with check box chimps that have no clue as to what they are asking, just a script to request for revision after revision not to mention we need more comps that aren’t there but we need them anyway. Does anyone get the feeling we are the only ones who know what we do but have to answer to a history degree that never leaves the office that thinks like a realtor, what difference does it make, the style of home, condition or location as long as it closes and their name isn’t on it (no liability but high pressure).
    If they don’t provide a national document (HUD,VA,FNMA,FDMC) that supports their request for revision I tell them it is going to be another $300. That is the only thing they understand.
    Where are the good appraisers going? Over 40 yrs and my father is retiring. I am pushing 30 yrs in this activity and hope to be a Walmart greeter. Get your s**t and get out!

  4. After 22 years in residential appraising I’m hanging it up and sending myself out to pasture. I never worked for AMCs, but paid the price in a gradually dwindling client list. Thank goodness for Trust – Date of Death appraisal work; that’s kept me going in the last few years. I can’t imagine this would be a good business going forward; given incomplete Federal legislation that only confuse, middle men that drive down wages and quality, and AVMs slicing away at your work load.

  5. Solution: Diversification = Happiness + > $
    3+ years ago, our company started trending away from residential/commercial mortgage work. We now have <5 clients each. Since then, our income has increased. This year, it doubled!
    Q: What do YOU want your life to look like? My next goal is Fridays off 🙂

  6. Anonymous, that is exactly how I feel only I think hookers get more respect. After 41 years in what was once a profession, the lack of respect is my biggest disappointment. Years of education, SRA designation that means nothing, just to be treated with distrust by incompetents and paid what I earned 15 years ago for twice the work, by those managing my time and business for me. It is no longer a profession, it’s a job. I will retire soon otherwise I would be moving on to something else. I discourage anyone from undertaking the huge investment into this career.

  7. The residential appraisal profession is dying. We are building our own coffin with data provided the “big entities”. I have been appraising 14 years. There was a time when I thought it was a good profession. Now I realize I wasted my time. The “big entities” will use the data we provide to construct valuation models and change the rules to benefit themselves. What college graduate with a good marketable degree would work as a residential appraiser? This has happened before. Has anybody ever heard of “buggy whips”?

  8. 29 years of building an honest business and the gov’t decides now I need a pimp. (AMC)
    When you compare an AMC and a pimp, they are pretty much identical except for the fact that a pimp may sometimes smile at you. The end result of this transaction has the same outcome whether it’s the AMC or the pimp. Somebody is getting s……………….

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