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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, Fannie ANSI requirements, mortgage rate forecast, mortgage origination stats, etc.
Q&A with Mark Verrett, Chief Innovation Officer at Accurity Valuation
Excerpts: WRE: How can appraisers adapt to meet the profession demands?
Verrett: I think there are several ways to adapt to these challenges. The first is to work toward diversifying your practice away from 100 percent mortgage business niches. Our firm is a leader in green valuation, rural valuation, valuation consulting and litigation support and we help our offices diversify into those spaces. However, this solution isn’t for everyone….
To directly take on the challenges facing appraiser relevancy in the mortgage space, significant change is required. Appraisers need to unite to create a like-minded national voice that is not rejecting proposed changes for the profession, but rather working with stakeholders (regulators, lenders, clients, etc.) in conceptualizing, testing, tweaking, and ultimately modernizing the appraisal process on the mortgage side.
The appraisal community has a tough assignment in their role in this modernization. To be useful in the discussion, we need to challenge ourselves to be creative and open-minded, yet diligent in maintaining or, even better, improving the quality of the valuation being produced. I think it is extremely important for appraisers to listen and understand the needs of their clients and to creatively develop solutions that meet those needs.
Worth reading with some good ideas. To read more, click here
My comment: Accurity has franchisees and some very savvy appraiser officers and directors.
Covid-19 Residential Appraisers Tips on Staying Safe
For Covid Updates, go to my Covid Science blog at covidscienceblog.com
Appraiser Covid Survey Results April 2020
To read more of this long blog post, click Read More Below!!
Covid-19 Residential Appraisers Tips on Staying Safe
Automated Valuation Models for Appraisals
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Is the Appraisal Profession Dying?By George Dell, MAI
Excerpts:
Yes. Appraisal as we know it is dying.
Can it be saved? No.
So what should I do? What should “we” do?
The data has already been gathered. The analytics software is free. The pictures have already been taken. “Let’s Make a Deal!”
Analysis requires judgment. Human generalization is enhanced by computation. Complete data can be enhanced/cleaned as well as “confirming a comp.” A point value is an inherent part of a predictive value distribution. A documented, reproducible result is the most credible, believable answer.
My comments: I believe that human appraisals will still be needed. There are times that a human appraiser is needed to interpret results, and “go beyond” the data for Highest and Best Use, Unusual properties, etc. Lenders will move to computerized risk management, once investors will accept this. Most residential lender valuations will not need humans as the value of an individual property in investors’ portfolios is not critical. Of course, when the market inevitably crashes, there will be no appraisers to sue to recover some of the lost money. Maybe our E&O premiums will go down.
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com To read more of this long blog post, click Read More Below!! |
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What if you don’t want to do desktop bifurcated appraisals or do the very tough appraisals that don’t work for AVMs? Or wait, once again, for the lender market to finally come back.
There are many forces trying to get field appraisers out of doing full valuations for mortgage loans. Automation and Artificial Intelligence will increase this trend, as it has done in other professions. For example, Quicken software dramatically decreased demand for manual bookkeepers. Once lenders can determine which properties will work well with an AVM, and they will, there will be fewer human appraisals.
Recently, several appraisers emailed and called me saying their non-lender work would go down due to fee competition from desperate lender appraisals. Yes, this does happen in downturns, especially when it first starts going down fast. Estate appraisals are easy, and this market is affected. Plus other non-lender markets.
What is the answer? The only answer I know is to do litigation support. In my area, there are very few residential appraisers who will testify in court. When they go up against an MAI who does 1-2, or fewer, residential appraisals per year, they win. Good demand, repeat business, fees much, much higher than any other type of appraisal business, respected as an expert. Almost the opposite of AMC appraisals.
Why are residential appraisers very reluctant to do Expert Witness court testimony? Fear of the unknown I guess. I did them in the past and had no problems with testifying as an expert in court or in a deposition.
Next month in my monthly paid newsletter, I will have an article on Litigation Support and Court Testimony. I have been writing a lot about doing non-lender work. There are lots of options, but this is by far the most profitable with very little competition.
A Response to: Mortgage Industry Expert Wants to “Eliminate” AppraisersBy Abdur Abdur-Malik
Excerpts: Rather than read the article and shrug, I decided to email the reporter who conducted the interview. I copied a number of the website’s editors and also the industry “expert,” the interviewee herself. Their contact information was available via a simple Google search, so below is an unredacted copy of the email I sent:
My comment: Well written and worth reading. Nothing new, but not the typical appraiser whining and/or ranting. Lots and lots of appraiser comments.
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com To read more of this long blog post, click Read More Below!!
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Can the Appraisal Profession be Saved?By George Dell, MAI, SRA
Excerpt: What does it mean “Can the profession be saved?” Does anyone else care except us?
The second question first. Who might care? Clients who have developed a trust for you and who are comfortable with the traditional ways of doing things. There is a group of us and of them who like doing things as always. It’s comfortable, requires little change, and is a ‘safe’ way of doing things.
But who might not care? We can break these down into two subgroups: 1) those that dislike our getting in the way of their deal; and, 2) those who genuinely want something different, more modern. For now, let’s dismiss the first group, and consider those who do want a better product, a better service.
What do you think? Post your comments!!
Covid-19 Residential Appraisers Tips on Staying Safe For Covid Updates, go to my Covid Science blog at covidscienceblog.com Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!! To read more of this long blog post with many topics, click Read More Below!! NOTE: Please scroll down to read the other topics in this long blog post on floating homes, the past, colonial homes, mortgage origination stats, Covid tips for appraisers, etc. ========================================== |
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How do we value a brand new house in an old neighborhood?By Ryan Lundquist
Excerpt: Tip #5. The wrong one & modern homes: Just because something is brand new does not mean it’s going to fetch top dollar. If it’s the wrong type of house for the neighborhood, buyers might actually pay less for the property. It’s like when someone builds a plain earth-tone stucco tract home in a classic area with Tudors and Bungalows. Despite being new it might actually sell with a price discount if it doesn’t have any hint of era charm for the neighborhood. On the other hand there are modern homes popping up all over Sacramento (CA) and beyond that seem to defy this idea. These homes definitely don’t blend into the neighborhood at all in terms of design, but they’re still fetching high prices. Keep in mind though modern homes tend to carry wide appeal, so they are often able to break the mold of the neighborhood and still command a price premium because of their style. In short, modern homes are not vibeless tract homes, so it’s not really the same thing.
Click here to read the other 4 great tips plus some interesting comments!!
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Google Street Views – First Big Update with Lots More Big Data!!Excerpt: The car-top rig includes two cameras that capture still HD images looking out to either side of the vehicle. They’re there to feed clearer, closer shots of buildings and street signs into Google’s image recognition algorithms.
Those algorithms can pore over millions of signs and storefronts without getting tired. By hoovering up vast amounts of information visible on the world’s streets-signs, business names, perhaps even opening hours posted in the window of your corner deli-Google hopes to improve its already formidable digital mapping database
My comment: Fascinating article. Check it out. I use Street Views a lot, but sometimes the images are fuzzy and are hard to figure out. Looking forward to improvements, but on the minus side, more data available that field appraisers provides now.
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36 Appraisal Organizations Send Letter to Party Leaders of House Committee on Financial Services and Senate Committee on Banking, Housing and Urban Affairs on “No Appraisal” WaiversExcerpt: 36 industry groups are attempting to prevent the Fannie Mae and Freddie Mac (GSE’s) from issuing appraisal waivers by sending a letter to the chairs and ranking members of the Senate Banking, Housing and Urban Affairs Committee, and the House Financial Services Committee addressing its concerns. AI recommends the halt of the waivers until the GSEs can demonstrate that the proposed program does not harm the consumer, is properly monitored, and integrates proper safeguards to prevent fraud.
We are writing this letter to raise concern over the new appraisal waiver programs recently implemented by Freddie Mac and Fannie Mae (the ” Government Sponsored Enterprises.”) We believe these programs will create unnecessary and unacceptable risks for taxpayers and homeowners, and they come at a time when markets are at all-time highs – when risk mitigation should be tantamount. We ask you to call on the Federal Housing Finance Agency (FHFA) to prevent the Enterprises from implementing the appraisal waiver programs until they can demonstrate the appraisal waiver program:
My comment: Worth reading. Read the names of all the organizations that sent the letter. I can’t remember when so many appraisal organizations agreed on anything!! |
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Where to contribute to help people affected by Hurricane Harveya la mode Software’s Relief Efforts
From Dave Bigger’s (Founder, a la mode) recent email:
We’ve already set up our systems to defer payments for those of you in the storm-hit areas on the Gulf Coast. We’re also ready to help anyone drastically affected rebuild in any way we can – whether it’s replacing damaged Distos, laptops, printers, or anything else, we’re here.
If you know appraisers, agents, mortgage pros, or inspectors who need help, let us know and tell them to call 1-800-ALAMODE or email relief@alamode.com.
We are working on several relief projects, and we encourage you to join us. Read the announcement here.
Yesterday, we also donated $100,000 to the Greater Houston Community Foundation’s Hurricane Relief Fund. We chose this organization because they’re local, working with many boots-on-the-ground non-profits. They’re in rescue mode – focused on essentials like water, shelter, medical emergencies, and supplies. But our $100,000 is designed to just “prime the pump” for the broader real estate industry, including other technology companies, to step up as well.
We all need to act quickly, and show our commitment to our colleagues. Donate like we did to the Greater Houston Community Foundation’s Hurricane Relief Fund via our pass-through website, www.alamode.com/harvey . (When you donate through our site, you won’t pay credit card fees. We’ll cover those.) By coming through our portal, your donation will be grouped with other real estate professionals and vendors, showing solidarity as an industry. Every gift makes a big difference – $10, $50, $100, or more. Our goal is to gather enough funds within the real estate industry to at least match our donation, and preferably many times more. |
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Overworked and underpaid appraisers?Excerpt: While most sectors of the industry managed the increased demand with few hiccups, the appraisal services segment of the industry did not fare as well. The uninterrupted appraisal demand throughout 2016 and into the first quarter of this year led to chronic fatigue that spread throughout the appraiser population.
This led to a number of service level issues, including missed deadlines, longer than customary turn-times, increased revision rates, unresponsiveness and higher appraiser fee demands, to name a few.
My comment: Low AMC fees are always a problem. But the “overworked” comments are out of date for my area. Low fee appraiser price competition has really heated up in the past few months. When I quote my standard fee from 2016 for estate work or don’t reply within a few hours or am not available to go out tomorrow, I don’t get the assignment. Earlier this year, prospects were glad I called them back. AMC fees are way down also.
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