How can we compete with this?

[c w d]

They lost millions with an appraisal in every sub-prime loan package. Now they are ordering BPO's to find out what the homes are really worth.

Considering the amount and frequency of pressure still present for appraisers to hit a target I seriously doubt our clients care what a home is really worth. For them it is about two things: 1) Packaging the loan for resale to the secondary market & 2) Increasing profit margins.

#1 Is all about getting an opinion of value that hits the target. Without it they don't have a loan for which they can resale.

#2 There are 2 ways to increase profit margins: Increase fees, decrease costs. The market is very competitive. They can't overtly increase their fees. So, our clients are left with one alternative, reduce costs.

 

[SANDY]

Stone:

Yep we've been through this before but mostly without the slings and arrows. Sorry to see you resorting to that instead of your usual well defended opinions. We all know that no matter how skinny USPAP may or may not allow our appraisal "reports" to be-the additional responsibility put on appraisers especially in the development of the appraisal makes it impossible for us to compete against these products. Not to mention the risk associated with producing a perfectly USPAP compliant skinny appraisal from a so-called peer or state board. The poundage does not necessarily have to be in the reporting but it sure bettter be in the development and non-appraisers don't have to carry that USPAP baggage around.

Given the current circumstances the market is in and no matter how incredible it is---- poundage is out-fast and cheap is in!

Ya'all can spit in one hand and hope in the other for the changes to be made to prevent the use of these products but ya know which one is gonna fill uf first. Don't kill the messenger-- oh what the heck go ahead and vent about what needs to be done blah blah but eventuallyuntil it changes ya gotta deal with reality.

 

[Lawrence R.]

where to start, where to start.

1. Markets differ, but in mine, about 70% of the real estate market is below the de minimus, so they don't need anything to make a loan work, and a BPO is much cheaper when an appraisal isn't required.

2. A BPO is NOT, and has never been more reliable than an appraisal...I am talking about all the bad appraisals stacked up against all the bad BPO's.
Don't be so self loathing to think that there are only 14 good appraisers left.

3. A BPO can be done contingent to an outcome, the realtor wants more BPOs, he gives them what he thinks they are looking for.

4. A BPO is just that, it is a broker's price opinion, and on anything under the de minimus, that is above and beyond what is required.

5. My guess is, if you asked a person in the know, you would hear that Brokers give "good customer service", and as of another recent thread, we all know what that means.

6. If I were paid on production, and had a choice of paying 350 dollars for a "product" that I had no guarantee, either expressed or implied--or paying 38 dollars for something that in the past has ALWAYS met my needs/expectations....what do you think I would choose?

7. And just for the record, many brokers are skilled at coming up with reliable opinions about likely selling prices...but they still aren't fit to sit in judgment of my work. (no more than I want to sit in judgment of their contracts)

8. BPO's SUCK!!! Goodnight!!!!!!

 

[jturner01]

Sandy,

This is exactly the kind of thinking that has gotten us into the situation that we are in now. Well everybody else is doing it, is no longer going to cut it. We need to take a stand to improve it, let the people know of the things and injustices that are going on, and being perpetrated on the American people for changes to take place. Why should we take the blame, cut back our regulations so that we can have this problem every 20 years or so and the tax payers (us) pay for it??? Greed is a sin for a reason.

The industry needs some fine tuning. My understanding is that in a fedrally related transaction only a licensed appraiser can complete an appraisal. Enforce the laws we have before making more. And definately less regualtion is not a good thing, This is why it is getting harder to become an appraiser as well as a Broker on the Sales side.

 

[Stone]

Stone:

Yep we've been through this before but mostly without the slings and arrows. Sorry to see you resorting to that instead of your usual well defended opinions. We all know that no matter how skinny USPAP may or may not allow our appraisal "reports" to be-the additional responsibility put on appraisers especially in the development of the appraisal makes it impossible for us to compete against these products. Not to mention the risk associated with producing a perfectly USPAP compliant skinny appraisal from a so-called peer or state board. The poundage does not necessarily have to be in the reporting but it sure bettter be in the development and non-appraisers don't have to carry that USPAP baggage around.

Given the current circumstances the market is in and no matter how incredible it is---- poundage is out-fast and cheap is in!

Ya'all can spit in one hand and hope in the other for the changes to be made to prevent the use of these products but ya know which one is gonna fill uf first. Don't kill the messenger-- oh what the heck go ahead and vent about what needs to be done blah blah but eventuallyuntil it changes ya gotta deal with reality.

Slings and arrows, huh? Didn't seem like that to me.

You've continued (and continue) to throw the term "poundage" around as if the rules we work under are just dead weight keeping us from doing our job. I purposely didn't respond to several of your "poundage" drop-ins because we had been through this before.

I'm sorry to continually see an "appraiser" not get that the "poundage" is a little more than just a weight on her back. It means that you and I look at our professions quite differently.

Interestingly, part of your argument has previously been that old-timers just aren't on the cutting edge and don't understand how the business is moving. What makes that interesting is it sounds exactly like what some "old-timers" used to say at classes when I first got in. "I don't need all of that USPAP nonsense, I know what it is worth" and "yeah, we all know that is how it is supposed to work in theory, but in the real world..."

The only thing missing from comments like that is the term "poundage".

So, again, there isn't any reason why you can't set up a quick, easy shell document with a very limited SOW that would meet the needs of these cheap and fast clients. You can do it right now with maybe a half-days work. After you get it set up, you could crank out these suckers all day if you chose and be compliant. However, what you want is to not be held responsible as an appraiser.

Of course, the real answer is to create and/or enforce rules prohibiting lending institutions from using BPOs in their decision making process. Not competing with them would take some of the pressure off of appraisers to be fast and cheap.

 

[Couch Potato]

Yes they are very similar to an appraisal except without any liability from the agent, and they usually have to come up with 3 seperate values "as-is Low" "as-is High" "Suggested list price" and "repaired value" if needed as well as "repaired list price". All for $38.00. I recently looked at a series of BPOs preformed for a large lender and they wanted 3 closed comps and 3 listings as well as the whole market analysis, number of direct sales in competition, number of listings, declining market analysis, monthly percent of decline, etc.

I don't think I could do this for less than $350.00....

Just what makes you think they have no liability? :new_all_coholic:

 

[panappr]

Just what makes you think they have no liability? :new_all_coholic:

Sorry, I'm not an attorney, but of all the BPO forms I've looked at they seem to be in a directive format, there are no certifications or disclosures, liability disclaimers, etc., just signature and telephone number. I'm curious too, how much liability (if any) do these evaluations carry. The agent I know who does these, says no liability what so ever, maybe she is living in delusion???.

Here are some for review? I like the Chase one best.

http://www.reoexperts.net/forms.aspx

 

[SANDY]

Lawrence r's post is worth the read. Stone-poundage does not mean a report filled with irrelevant data it means that those that use our services do not seem to be leaning toward wanting more relevant info, they seem to be leaning toward a more lean quicker product for the collateral side. Whether that is advisable or not can be debated ad- infinitem and has been on this forum for a long time. But it has not changed the trend despite the current situation which is what amazes me. Speed and greed still prevails. At some point in time one has to sit back and ponder whether one can actually survive by hanging on to the ole ways of doing things whether those ways are better or not or at some point do you have to do what you gotta do to survive. Many---I guess way too many appraisers have already made that decision to do what it took to survive and compromise quality and even their ethics. It's too late to try to turn the clock back now except for some here that are near retirement and have made their money. It's easier for them to post day after day how high their ethics are and how they are hangin onto to their poundage products with great pride. Good for them but there are way too many appraisers out there that have bills to pay, kids to put through school etc... to be able for them to afford to take the high road. You can't regulate, catch or punish them all so for right now, this profession is mostly in shambles and the reasons for it are not necessarily worth re-hashing without their being any realistic chances for real changes. Not worth the effort debating even unless there are some realistic prospects on the horizon-we thought the hvcc might be it but it doesn't look like it now. The whole system needs to be dismantled but that isn't going to happen despite what has happened.
This lean and mean USPAP compliant sow may or may not exist but let's say it does-There is still way too much risk associated with performing these appraisals from state boards that may or may interpret a fully compliant sow as not being compliant. I would like you to respond to my statement about the development requirements for an appraisal and how they can be met by an appraisal product that could compete with a BPO. Let's talk specifics-which standards could be eliminated in the development of an appraisal.

 

[SANDY]

any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature; and

How about this one-can I skip it like the bpos and avms do?

Maybe a sow statement like-I did not research or consider any of the above items in this appraisal will cover me huh?

 

[Mr Rex]

Sandy, you can do a USPAP complaint desktop in about 20 minutes. Go in your software, find one of the pre-printed Desktops, and give it a try and a rest. You can take a few extra minutes on the first one to make sure it meets Std 1 and Std 2.