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The Value of Evaluators

Another great article from the Illinois appraisal regulator

Excerpts:

The argument to promote evaluations as an alternative to appraisals was driven by rural lenders who feared a shortage of appraisers might slow down closings. That was it. That was the main beef. A simple supply and demand issue for banks in the boonies… twenty years ago! An evaluation was regarded as “a generally simpler assessmentmonkeys see hear no evil
of real estate market value.”

Evaluations versus Appraisals (2012) —
The most recent incarnation of the Interagency Appraisal and Evaluation Guidelines emerged in December of 2010. Section XIII provides the suggested content of a evaluation…“a generally simpler assessment of real estate market value.

(BPOs cannot be used for evaluations.) A valuation method that does not provide a property’s market value or sufficient information and analysis to support the value conclusion is not acceptable as an evaluation. For example, a valuation method that
provides a sales or list price, such as a broker price opinion, cannot be used as an evaluation because, among other things, it does not provide a property’s market value.

1-1 GOOD AT final rev newslet

If you want to know what the feds meant by “a simpler assessment”, go ask them. I’d love to hear that explanation myself.

Many AMCs, while eager to take on the evaluation function, fail to understand who is ultimately responsible for the entire program. (Their clients, the lenders)

Banks cannot hand‐off liability to AMCs like a hot potato just because they can’t be bothered managing their own evaluation program. If an AMC makes a mess of the bank’s
evaluation program, the responsibility of the failure falls squarely back on the bank.

Turning an evaluation into an USPAP compliant appraisal takes far less effort than trying to cobble together a cadre of competent and reliable evaluators to provide something that by state statute,must fall short of an appraisal.

My comment: This is an issue that has been around since the early 1990s. What does an evaluation mean? Cheap and fast. Banks want them. AMCs would love to provide them. I have no idea who would do them and what they look like. I have no idea how a licensed appraiser would do them as they must be USPAP compliant.

Seems easier to me just to do an appraisal. Maybe a shorter appraisal that is not 30 pages long with 9 comps and pages and pages of explanations!! Now that is a very practical idea. Just go back to the past pre-HVCC and incredible scope creep since then.

Click here to read the full newsletter article.

Appraisal client requests for clarification

AppraisalPort Weekly Poll Analysis – client requests for clarification
By Steve Costello, AppraisalPort Product Manager

I receive a lot of e-mail from appraisers commenting about the time they spend working onstress - hitting head on keyboard requests for clarification on appraisals they have submitted to their clients. That prompted me to post two polls related to these client requests.

“What percent of your assignments result in a request for clarification from the client?
The results were a little different than expected with nearly half (45%) of the 4,691 respondents stating that they only get a clarification request 0%-10% of the time. That is actually lower than expected based on what I hear from appraisers directly.
The second most popular answer was 11%-20% of the time with about 19% of the vote. The number of votes continued to get smaller as the percentages increased (13% chose 21%-30% while another 8% answered 31%-40%).
After that, things take a bump up. Nearly 15% of the appraisers responded that they get a request for clarification on more than 40% of their appraisals. I can see where that level of requests could make it difficult to get the new work completed on time.

“How often does your client requests information that is already in the original submitted report?”
In other words, we are asking how many of the above requests for clarification were un-necessary because the client already had the needed information.
This was a popular poll with 5,632 responses and the overwhelming answer was “often” with 60% of the vote.
About 27% responded that they “rarely” run into this situation while only 1% said it “never” happens to them.
Another 12% answered that this “almost always” happens.
So it looks as if we have a fairly large number of appraisers being asked for additional information that is already contained in the report.

My comment: nothing new here but I do like the analysis of the data. I love working for my estate clients. The dead people never request any clarifications (except maybe their executor contacts me when I have the wrong subject property address) ;>

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