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Opening an appraisal business

Discussion in 'Running an Appraisal Business' started by donniebravo, Mar 24, 2012.

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  1. normando

    normando Senior Member

    10
    May 2, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I was in similar situation in that I got tired of commercial work. I didn't like working on a file for at least a week. I preferred the "slam bam thank you mam" in residential work. I see property and finish it in 1-2 days. So I produce at least 1 report a day and earn near 5 digits monthly. It's still hard work because I have to juggle my workload and meet a general deadline. I like working on my own. If you go on your own, you need to have a stable source of orders so you should contact well paying lenders/AMCs.
    Right now, the mortgage rates have increased, thus orders are fewer but I still have work. I just can't be as selective as before and I look at this time as a break. Be prepare for ups and downs in this business.
     
  2. Lakefront boater

    Lakefront boater Member

    0
    Jul 9, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Michigan
    This is the best advice and it's from yourself (who else knows best?)

    The MAI will put you in another league and your bosses advice was probably closer to what will happen to the residential side of things than many of us want to admit, especially post UAD many prognisticators are saying it's writing on the wall.
     
  3. matt381

    matt381 New Member

    0
    Jul 7, 2009
    Professional Status:
    Appraiser Trainee
    State:
    Indiana
    I know I'm a Nubbie and I'm not trying to ask a dumb question, which there most definately is by the way, but I do not understand how the residential appraisal business can cease to exist. I understand some lenders use AVM's but I do not see how the AVM's would be possible without us. Aren't we the ones that collect the data to be entered into the AVM? Why do some of you think the residential side of appraising is doomed? (I'm genuinely asking not being smart)
     
  4. Lakefront boater

    Lakefront boater Member

    0
    Jul 9, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Michigan
    MLS's report the closed sales, there a few companies which actually own the platform that provides many local boards it's MLS platform. Paragon is an example of an MLS platform used all over the place (LSI, Corelogic are involved in the MLS biz in a great big way).

    The data can be put into a model and updated as so forth, it's not far fetched at all. None of us can tell what the future will be but the possibilities are there and the probabilities are gaining odds.
     
  5. fractal7221

    fractal7221 Member

    0
    May 26, 2011
    Professional Status:
    Banking/Mortgage Industry
    State:
    Pennsylvania
    FIRREA would have to change its stance on AVMs before that happens. I wouldn't be surpirsed to see something like CVRs take over one day down the road. With the speed at which computing and processing power is increasing, its only a matter of time before computers can better process all the relevant marekt data faster than a human can. Though an actual person will still be needed at the helm for the intangibles for a while.
     
  6. normando

    normando Senior Member

    10
    May 2, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I have been in business for a long time and I have heard so many times that AVMs will replace appraisers. The technology is still not there yet and you still need an appraiser to view a property to accurate determine value.
    I prefer to look at the property first and then seeing the whole picture, I know which comps are suitable and given more weight. Computers can't do that.
    Also, appraisers can not be outsource so lenders need us. As an appraiser, I prefer to appraise in tract areas on level terrain (so much easier). Instead when you have hilly terrain, it's more difficult with useability of land and views.
    Appraisers are still the best computers in analyzing properties.
     
  7. David Wimpelberg

    David Wimpelberg Moderator Staff Member Moderator

    77
    Mar 30, 2005
    Professional Status:
    Certified General Appraiser
    State:
    New York
    A big issue has been, and continues to be, high LTV ratios. As long as people are borrowing the maximum amount of money they possibly can, lenders are going to need as precise a valuation as possible. This affects whether or not the loan will be made, whether PMI is needed or not, if a higher loan rate is appropriate, etc. An AVM with a 10%-20% +/- range isn't going to suffice...and I'm being kind; I've seen PLENTY of AVMs outside of this range.

    If people were only borrowing 50% of the property value or less (for residential properties), I might think differently.
     
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