Will the last appraiser turn out the light?

By on February 7, 2019   /   AMCs, AVMS, future, george dell, mortgage loan volume, statistics, USPAP, weird properties, zillow   /   Leave a comment
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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.

Appraisal Business Tips 

Humor for Appraisers

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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The Future of Residential Lender Appraisers

By on January 29, 2019   /   AMCs, appraisal business, Appraisal fees, future   /   Leave a comment
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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.

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Raise appraisal deminimus to $2 million or $5 million?

By on January 17, 2019   /   appraisal business, Appraisal fees, deminimus, desktop appraisals, george dell, humor, lender appraisals, threshold   /   Leave a comment
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Should we raise the deminimus to $2 million? Or $5 million?

By George Dell
Excerpt: To simplify this discussion, let’s note two facts:  Appraisers can perform ‘evaluations’, normally using the same scope of work as an unlicensed “evaluator”.  What’s the difference?  It appears to me that there is one key difference.  The question is then:  Which part of the service is not required?  Is it the integrity/ethics, or the performance (such as using the right data and analysis)?

It appears to me that since unlicensed persons can charge less, have less tax/fee burden (for licensing, education, and errors/omissions insurance- the less ethical, less responsible ‘evaluator’ can always outbid the licensed appraiser every time.

Read the full blog post and appraiser comments. What do you think? Add your comments.

My comments: Interesting analysis by George, of course!! Credit unions are proposing to raise the commercial deminimus to $1,000,000. I didn’t know they made commercial loans. Guess they forgot about the commercial crash in the late 1980s.
As long as Fannie and Freddie (and their investors) require res appraisals, it won’t have a big effect on residential. The FIRREA deminimus in 1989 was $200,000. No effect on much of anything, even though we thought the Sky Was Falling.

The usual Mortgage Cycle: Good Business = lower requirements. Bad Business = higher requirements.

 

Appraisal Business Tips 

Humor for Appraisers

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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MLS Manipulation: appraisers watch for it

By on September 20, 2018   /   Appraisal fees, MLS, mortgage loan volume, Podcasts, real estate market, unusual home, weird homes, zillow   /   Leave a comment
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The broker who extorted “The Jills” exposed an industry secret: MLS manipulation is widespread

Excerpt: When One Sotheby’s agent Kevin Tomlinson was charged with extorting Coldwell Banker star brokers “the Jills” over manipulating the Multiple Listing Service, it exposed what many agents claim is a common practice in the industry. This one, however, was particularly egregious, market pros said.

My comment: nothing new for appraisers. When I googled “MLS manipulation” lots of links came up.

Appraisal Business Tips 

Humor for Appraisers

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 9-28-18 blog post with many topics, click Read More Below!!

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7-5-18 Newz//Busy or Not?, Prices Dropping, Appraiser Hot Dog Stand

By on July 5, 2018   /   AMCs, appraisal business, Appraisal fees, fees, lender appraisals, real estate market, USPAP   /   Leave a comment
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Who’s busy and who’s not?

Varies widely around the country. Maybe it depends on housing affordability? See articles below. But, it is really hard to say what causes the geographic variation for appraisers.

Many areas have seasonal variations, but now we are in the traditionally strong summer months, so it is clearer that some areas have less appraiser work.

How do you tell if it is down? AMCs dropping fees. Fewer emails, phone calls, etc.  Other appraisers complaining.
What about steady to increasing biz? Decent fees, turning down work, etc.

Changes in turn times and fees when biz slows down

Appraisers just don’t seem to understand that AMCs work for lenders and try to do what they want.

Why do AMCs/lenders want faster turn times?
AMCs work for lenders. They are competing on turn times primarily, like they always have. Business is very competitive and is declining.

Value pressure?
Is there more value pressure from some of your AMC clients?
Some lenders want to close as many loans as possible and keep profits from dropping.

Why do AMCs drop fees?
Direct lenders have their own fee panels don’t send out bid request to lots and lots of appraisers. Their fees don’t change dramatically. They have never focused on changing appraisal fees frequently. AMCs need lower appraisal fees to keep their profits up, just like you do. I have always thought of AMCs as very large appraisal companies that mostly fee out all their appraisals.

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Why do appraisal clients complain

By on June 21, 2018   /   appraisal business, Appraisal fees, marketing, mortgage loan volume, real estate market, rental market, weird properties   /   Leave a comment
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Why do clients complain?

By George Dell
Excerpts: … As you might guess, there are issues with general sloppiness and just plain errors. But the gloomy, uneasy complaints are about two basic issues: 1) poor selection of comps; and, 2) lack of “support” for adjustments. Let’s look at each of these two issues, and what might be solutions. Why do appraisal clients complain?

Comparable Selection

We have been taught to select sales which are competitive, similar, and therefore comparable. Unfortunately, those three words are used circularly to define each other. USPAP is of no help either. Although the word “comparable” is used dozens/hundreds of times – it’s never defined.

No wonder we have problems. This one word, this one concept – so central to the “process” of valuation – no one seems to know what one is! (Except me: You can trust me – I know a good comp when I see a good comp.)

For lots more interesting comments, click here:

Appraisal Business Tips 

Humor for Appraisers

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 6-21-18 long blog post with many topics, click Read More Below!!

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5-3-18 Newz//Federal Enforcement of USPAP? Public Restroom App. Unusual Houses & Buildings

By on May 3, 2018   /   appraisal business, Appraisal fees, appraisal waivers, Fannie, hybrid appraisals, Mortgage applications, mortgage loan volume, state appraiser regulators, Strange homes, unusual homes, weird homes, weird properties   /   Leave a comment
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How Lenders and Appraisers Can Work Better Together Through Increased Transparency

By Wes Costello
Excerpts: The relationship between lenders and appraisers has never been quite right. The association was scared by improprieties of the few that led to a fallout of the many, with each party retreating behind walls of mistrust and perceived regulatory requirement. Recently, communication is civil but has been described as resembling two parties of a legal arrangement who speak to each other on an as-needed basis….

Anyone who has directed appraisal management knows that they are only as good as the appraisers they partner with. This makes it vital to value each member of your appraisal panel as an integral partner in your company’s business.

My comment: Well written and worth reading, plus the comments, of course. The author is a Senior Vice President of Quality Management & Collateral Risk at AnnieMac Home Mortgage… He is a Pennsylvania Certified Real Estate Appraiser.

Public Restroom App by Charmin: Find Clean Bathrooms!

Excerpt: A clean nearby public bathroom can be hard to find. But not all restrooms are created equal.

With SitOrSquat we put clean public toilets on the map. Literally. Clean locations have a green “Sit” rating. Less desirable ones have a red “Squat.”

So, the next time nature calls and you need to find a nearby restroom, SitORSquat will help you know where to go.

My comment: Thanks to appraiser Jerry Walsh for this great tip. He has used it for years. I am downloading it today!! I coulda used this 40 years ago when I started appraising in rural areas….. Better than The Bushes or Behind A Tree ;>

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Is Appraising Dying? Appraisals Replaced by Computers?

By on January 25, 2018   /   appraisal business, Appraisal fees, appraisal management company, Appraisal Standards Board, appraisal waivers, bpos, desktop appraisals, evaluations, george dell, hybrid appraisals, Mortgage applications, mortgage loan volume, square footage, waivers   /   Leave a comment
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Is the Appraisal Profession Dying?

By George Dell
Excerpts: Yes. Appraisal as we know it is dying.
Can it be saved?  No.
So what should I do?  What should “we” do?

To answer these questions, we need to look at causes and conditions. Some of these are obvious.
– Judgment is good; Analysis is better.
– Human generalization is excellent; Computation is fast…

So what can we do? If we cannot be saved. If computers are faster. If we have complete data. If we too have software.  If we too can provide results instead of opinions…  Leads to an obvious question: Can an experienced appraiser do these things as well as, or better than those others?

Worth reading at:

Appraisal Business Tips 

Humor for Appraisers

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 hybrid appraisals, bpos, waivers, mortgage origination stats, Covid tips for appraisers, etc.

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What Causes Appraisal Revisions?

By on January 18, 2018   /   AMCs, appraisal business, Appraisal fees, appraisal how to, appraisal management company, hybrid appraisals, Mortgage applications, mortgage loan volume, USPAP   /   Leave a comment
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Most Common Errors and Requests For Appraisal Revisions

Excerpt: Over the years, as the Chief Appraiser for a national Appraisal Management Company (AMC), my team has seen many unique appraisal assignments and experienced many interesting requests for revisions. Of course, we’ve seen our fair share of requests to provide an additional supporting comp or two, or to address how the subject’s opinion of value that is over/under the indicated Predominant Value of the Neighborhood impacts value, too.

While we see those common requests for revision regularly, the most common requests for revision, are of the much simpler or generic variety. Additionally, those requests seem to be easily avoidable with just a little more patience by the client in the ordering process and from the Appraiser in their own report production and QC processes. Here is a list of our “Top 5” revision request items that we see on a regular basis:

1. Correct the spelling of the borrower and/or seller’s name.
Note: This error revision runs at a 50:50 pace. Half the time the error was initiated on the customer’s part when they placed the order while the other half is an Appraiser input error.

Read 4 more common requests plus almost 30 comments (somewhat controversial article) at:

My comment: I have to carefully check names on every one of my non-lender appraisals. For unknown reason I have typos on names. People don’t like it when their names are misspelled ;>

Lender and AMC revision requests(Opens in a new browser tab)

Appraisal Business Tips 

Humor for Appraisers

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 scope creep, USPAP, hybrids, appraiser independence, mortgage origination stats, Covid tips for appraisers, etc.

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UsPaP – A Few More Obvious False Appraisal Assumptions

By on January 17, 2018   /   Barry Bates, USPAP   /   Leave a comment
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By Barry Bates

The appraisal client is always the intended user.

A lovely concept out in the ether somewhere, but hardly ever the case in practice. The client (who engages the appraiser) is a lending technician or AMC drone; the intended user is an underwriter, servicer or portfolio manager. (This assumes the fact that only about 10% of appraisals are ever done for anybody other than a mortgage
company.)

Pretending that they’re the same person (based on the legal concept of a corporation as a person, which facilitates all kinds of evil) allows the left hand, which is handing out cash, to avoid confronting the fact that the right hand is removing money from the borrower’s savings account.

USPAP is intentionally not specific

Finally, the old TAF argument in support of USPAP that its lack of specificity
is only the result of trying to avoid “micro-management” of the appraisal process is just what we former Army wiretappers used to call “cover noise”. It screens from hearing the fact that as it stands, USPAP can be used either to exonerate or
execute an appraiser on political motives regardless of the issue at hand. That’s
why more procedural detail is needed, not less.

Appraiser Judy fails the geocompetence test when she gets a citation from
her state for not having a subscription to local MLS. Yet when appraiser Willie
walks when he fails to check online sources or MLS after the property owner assures him the property is not publicly listed for sale. This same thread of delusion seems to run throughout USPAP, undoubtedly promulgated by crusty old MAIs. If any carbon-based life form tells you something, it’s okay to believe it’s true without any further investigation. Just throw in an extraordinary assumption, even though it’s invalid because it’s impossible or unreasonable.

Another reason for more specificity is the utter failure of the HVCC /Dodd-Frank AMC experiment. Instead of being coerced by a mortgage broker,
today’s appraiser is systematically coerced by onerous documentation
requirements, intimidating email, multiple requests for reconsideration and
arbitrary blacklisting. Appraisal quality is depressed by AMC expropriation of what
was once 50% of a normal appraisal fee. Moreover, residential fees in general
haven’t changed for 20 years.

2 GREAT ways to get into appraisal trouble. Tales From Barry Bates

 

Appraisal Business Tips 

Humor for Appraisers

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!!

 

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