Adapt or Die?

[xmtpedprl]

The only adapting appraisers really need to do is stand on the firm ground that what we do for a living is create legal documents that can, and often do, come back to haunt us.

If appraisers really took that concept seriously, like lawyers do, then there'd be no issues as to the validity and financial rewards of this business. The problem is that few act in a manner befitting a genuine professional legal document developer, and have devalued themselves (and the trade) as a result.

We create legal documents, and that alone should scare the daylights out of most people, and therefore impel them to raise fees, not lower them.

Perhaps one day this will yet happen.

Dave...

 

[Mike Phillips]

To claim that "trainees" are the problem is never an unpopular comment here. <snip>

That is because it is true.

Like it or not, appraising is a subset of the residential sales side of the RE industry. When the vocation took its first step toward becoming a profession with licensing/certification the "old rules" remained intact. By old rules, I am referring to (1) low barriers to entry and (2) the independent contractor concept, in particular.

In the world of residential RE sales, the concept of "many gophers working for brokers" works - it serves the "public good." When the property owner receives the highest proceeds in terms of cash at closing the "public good" is served.

Apply those concepts (1 & 2) to a sector of the industry like appraising and what you end up with is the mess we have today. What we have right now is many appraisers appraising at the highest price they can manufacture and doing it fast and cheap.

You have appraisers who have the financial capacity and character development to hold the line and those who don't. Many appraisers have no opportunity cost above about $15-$20 per hour. The law of supply and demand is working perfectly - it hasn't missed a beat.

MP

 

[Dan/Fla]

1st George as you may have notice; if your opinion was unpopular those people did not speak up here. I agree like many others have stated before me, I liked your comments. And agree with them.

Mike I need to figure out how to get on that email list. I used to go more often to the FREAB meetings more than I do today, and learned from seeing those type cases in person. I agree that list made me smile, knowing our board is still correcting the problems. However the failure to make the estimated taxes, I have found it easier and believe it our not cheaper to pay the penalty and taxes than pay for the quarterly report processing. But I am current on my taxes.

I too am looking forward to see the figures of how many Appraisers & Trainees do not renew in Nov.

As to Sandy’s comment “our clients want cheap and fast products period.” Sorry Sandy I do not agree at all with you. Maybe I am naïve but I believe that the only ones who want cheap and fast are the AMCs. I believe their clients pay a fair price and want a quality product for that price. With the amount of money lost by banks and others with market down turn. Will require and expect a better product in the future. I already seen this in my business. Though true the amount of business volume I have been doing is down, but since I am one of the ones who will not lower my fees, my bills are being paid, though I did have to give up my Cruise at beginning of the month. What is really amazing to me is if what you say is true. Why did I get an assignment for a full inspection on a property where when inspecting for my bank paid fee of $350 the access person told me a young lady already appraised about a week ago. I talked to the girl at the bank after inspection when she called to confirm inspection I told her and she asked if I wanted to see the other report for reference, she sent it ay there was an invoice for $235 and only 1 name appraiser in report a man. If they only wanted cheap and fast why pay for a second report? The other more direct problem with fast and cheap appraisers out there is; I am going to need to raise my fees again to cover the increase cost of E & O some of these fast and cheap appraisers cost all of us.

 

[SANDY]

Putting the emotional comments aside-I see this business/profession as full of folks that are either blind and/or deaf to what the current reality is. Too many old timers on here is my guess-this ain't the good ole days boys and girls. The writing is on the wall and has been for a long time-adapt or die!
Normally people that see that their gas guzzler products have fallen out of favor start changing the production line to make different products that consumers want. It's as simple as that-there is and will be less and less market for the poundage that the old fashioned appraisers are used to producing and much of the weight is due to USPAP despite the sow changes. Now I am not proposing to change USPAP to only require less poundage in all appraisals-just let us play on a level field with the realtors and other half baked products out there that the lenders want. Let the lenders decide what product thay want to use and let us provide any one of them without requiring us to carry around the USPAP baggage. I am 100% sure that even as a trainee I can provide a heck of a lot better BPO or cma than most realtors. I would think that you experienced appraisers would jump at the chance to go up against a realtor but on a level playing field.

By the way-I hope I am wrong about the fast and cheap aspect but it sure doesn't look like it's going to change anytime soon! Some may be able to putt putt along for awhile until enough appraisers quit and demand for poundage comes back but only those with long staying power.

 

[Mike Boyd]

I do not agree that appraisers have caused "The Mess" we are in. Loan agents working on commission caused the mess prompted by "profit at any cost" mortgage brokers, mortgage bankers and even bankers and savings & loans AS WELL AS REAL ESTATE AGENTS. Think about it: who is it that writes on an appraisal order.........MUST HAVE A VALUE OF $zzz,zzz?

Certainly, we can turn down those orders but who among us could always afford to turn down work? This is especially true if you are just starting out and trying to build a practice. When a property is listed at a price and a buyer agrees to pay that price and there is an entire array of people depending on that price, what young appraiser has the confidence to say...."All of you are full of XXXX. " Very, very few. Most will try to find a way to support that price. This carries over to refinancing. The very same pressure is applied except for a buyer and a real estate person.

During the bubble years, it was difficult to come in low as there were always comps to support any reasonable value. Who were WE to say these buyers were all wrong? There was plenty of evidence to demonstrate increasing values. And, our job is not to forecast
bursting bubbles. Our job is, and was, to estimate what that value is on the day of inspection. Nothing more, nothing less. How many of us adjusted upward for date of sale? Not me and I know of no one that thought they should. (and it would not have been allowed by lenders, anyway.) The comps were there to support increasing values through inflation.

So, get off your high horses! There are too many appraisers now because the market fizzled. In the mid to late 80s, there was a shortage of appraisers and that is when the lenders started coming up with all these BS drive-bys, AVMs and when the AMCs were born. ( or should I say, aborted)

Trainees are not the issue as each trainee must have a fully licensed/certified appraiser review and sign with him or her. I think most are trained properly by competent and ethical fully permitted appraisers. There ARE exceptions but they are just that: EXCEPTIONS, not the rule.

Some of you **** and moan because your state licensing boards do not investigate and prosecute your complaints in the manner that you would like. WHY do you think that is? Is it because they are also incompetent or understaffed or under funded? I think not! Again, there may be exceptions but I think it is because they are not on search and destroy missions as I suspect many of you are that do review work.

Tend to your own business. Do a little marketing of your services. Get around to offices that order appraisals and meet those people. Find niche markets and get trained to fill that niche. Get on the FHA roster. Get on the VA panel. Set goals on a weekly basis then do whatever it takes (legally and ethically) to meet those goals. Never....take your eye off the ball. This is not a 9 to 5 job 5 days a week with a month off for vacation as well as government holidays, free medical insurance and time off to have babies. This is a genuine, highly competitive business! Set your priorities to succeed or get out of it.

 

[Mr Rex]

The flood gates are closing. I ran into a NC Appraisal Board member at the courthouse the other day (1 member lives in my County, 1 lives in the next County over, and I see him quite a bit as he is a peer and competor). During the conversation about the glut of appraisers he mentioned that only 2 folks had sat for the Trainee exam so far in 2008.

 

[Webbed Feet]

<..... snip.....>Comments in the reviews I do are taking the form of boiler plate.."MLS photographs used in this report are taken from MLS sources without attribution or explanation." I doubt anything I point out in a review is taken very seriously, however. That is the problem.

Mr. Smith,

Then there is only one logical question.. Why are you not filing board complaints regarding all of those real estate appraisals?

Webbed.

 

[Webbed Feet]

<...... snip.....> Who were WE to say these buyers were all wrong? <....... snip.....>

Mr. Boyd,

I did it all the time. One might as well ask who are we to maintain our ethics?

Webbed.

 

[CURT VAN HOOSER]

I do not agree that appraisers have caused "The Mess" we are in. Loan agents working on commission caused the mess prompted by "profit at any cost" mortgage brokers, mortgage bankers and even bankers and savings & loans AS WELL AS REAL ESTATE AGENTS. Think about it: who is it that writes on an appraisal order.........MUST HAVE A VALUE OF $zzz,zzz?

Certainly, we can turn down those orders but who among us could always afford to turn down work? This is especially true if you are just starting out and trying to build a practice. When a property is listed at a price and a buyer agrees to pay that price and there is an entire array of people depending on that price, what young appraiser has the confidence to say...."All of you are full of XXXX. " Very, very few. Most will try to find a way to support that price. This carries over to refinancing. The very same pressure is applied except for a buyer and a real estate person.

During the bubble years, it was difficult to come in low as there were always comps to support any reasonable value. Who were WE to say these buyers were all wrong? There was plenty of evidence to demonstrate increasing values. And, our job is not to forecast
bursting bubbles. Our job is, and was, to estimate what that value is on the day of inspection. Nothing more, nothing less. How many of us adjusted upward for date of sale? Not me and I know of no one that thought they should. (and it would not have been allowed by lenders, anyway.) The comps were there to support increasing values through inflation.

So, get off your high horses! There are too many appraisers now because the market fizzled. In the mid to late 80s, there was a shortage of appraisers and that is when the lenders started coming up with all these BS drive-bys, AVMs and when the AMCs were born. ( or should I say, aborted)

Trainees are not the issue as each trainee must have a fully licensed/certified appraiser review and sign with him or her. I think most are trained properly by competent and ethical fully permitted appraisers. There ARE exceptions but they are just that: EXCEPTIONS, not the rule.

Some of you **** and moan because your state licensing boards do not investigate and prosecute your complaints in the manner that you would like. WHY do you think that is? Is it because they are also incompetent or understaffed or under funded? I think not! Again, there may be exceptions but I think it is because they are not on search and destroy missions as I suspect many of you are that do review work.

Tend to your own business. Do a little marketing of your services. Get around to offices that order appraisals and meet those people. Find niche markets and get trained to fill that niche. Get on the FHA roster. Get on the VA panel. Set goals on a weekly basis then do whatever it takes (legally and ethically) to meet those goals. Never....take your eye off the ball. This is not a 9 to 5 job 5 days a week with a month off for vacation as well as government holidays, free medical insurance and time off to have babies. This is a genuine, highly competitive business! Set your priorities to succeed or get out of it.

Bravo Sir!

 

[PJK03]

Long, but should be read twice

I do not agree that appraisers have caused "The Mess" we are in. Loan agents working on commission caused the mess prompted by "profit at any cost" mortgage brokers, mortgage bankers and even bankers and savings & loans AS WELL AS REAL ESTATE AGENTS. Think about it: who is it that writes on an appraisal order.........MUST HAVE A VALUE OF $zzz,zzz?

Certainly, we can turn down those orders but who among us could always afford to turn down work? This is especially true if you are just starting out and trying to build a practice. When a property is listed at a price and a buyer agrees to pay that price and there is an entire array of people depending on that price, what young appraiser has the confidence to say...."All of you are full of XXXX. " Very, very few. Most will try to find a way to support that price. This carries over to refinancing. The very same pressure is applied except for a buyer and a real estate person.

During the bubble years, it was difficult to come in low as there were always comps to support any reasonable value. Who were WE to say these buyers were all wrong? There was plenty of evidence to demonstrate increasing values. And, our job is not to forecast
bursting bubbles. Our job is, and was, to estimate what that value is on the day of inspection. Nothing more, nothing less. How many of us adjusted upward for date of sale? Not me and I know of no one that thought they should. (and it would not have been allowed by lenders, anyway.) The comps were there to support increasing values through inflation.

So, get off your high horses! There are too many appraisers now because the market fizzled. In the mid to late 80s, there was a shortage of appraisers and that is when the lenders started coming up with all these BS drive-bys, AVMs and when the AMCs were born. ( or should I say, aborted)

Trainees are not the issue as each trainee must have a fully licensed/certified appraiser review and sign with him or her. I think most are trained properly by competent and ethical fully permitted appraisers. There ARE exceptions but they are just that: EXCEPTIONS, not the rule.

Some of you **** and moan because your state licensing boards do not investigate and prosecute your complaints in the manner that you would like. WHY do you think that is? Is it because they are also incompetent or understaffed or under funded? I think not! Again, there may be exceptions but I think it is because they are not on search and destroy missions as I suspect many of you are that do review work.

Tend to your own business. Do a little marketing of your services. Get around to offices that order appraisals and meet those people. Find niche markets and get trained to fill that niche. Get on the FHA roster. Get on the VA panel. Set goals on a weekly basis then do whatever it takes (legally and ethically) to meet those goals. Never....take your eye off the ball. This is not a 9 to 5 job 5 days a week with a month off for vacation as well as government holidays, free medical insurance and time off to have babies. This is a genuine, highly competitive business! Set your priorities to succeed or get out of it.

Mike, I can tell by the way you write that you are an honest man.