Future Of The Industry

[Mike Seward]

The Sr VP of a large regional bank wants to have lunch later this week to get my views on the future of the appraisal industry. I'm thinking about talking about the implications of UAD,CU, 4 year degree for Cert Res, etc.

I'll be 70 in 6 months and have been doing this for 18 years, so I'll discuss my personal situation, too.

What are your thoughts about the future of the appraisal industry?

 

[Joe Flacco]

I think the industry is changing. 15 years from now it is going to look totally different.

 

[J Grant]

I hope you get a chance to speak about fees and TT from AMC's and how that is making doing a good job/devoting enough time to a report challenging, as well as the role of attracting and keeping quality people in the field on res lending side.

As far as a future, do clients want quality reports done by people spending time anlazying local markets, or what amounts to little more than an AVM done on a URAR form and signed by an "appraiser"? Because the only way to do a report in enough speed is to do it with little or no thought or analysis or live interviews as far as verification or taking the pulse of a market. And doing reports in volume at speed is the only way to make a living when low fees are in place. So it's a circular argument that always will come back to fee and lenders are the ones in control of that ( since some lenders now insist the AMC , be it owned or affiliated pay good fees and others do not )

 

[normando]

I see hope for our future. The barriers and low pay to become an appraiser should discourage the next generation of appraisers. Don't worry about UADs and such. It will deter more potential appraisers. About 10 years ago, there were too many appraisers. Now there are less actively working appraisers. With more housing being built and low mortgage rates for years to come, business should be good. I notice my workload has been steady while pushing my appraisal fees in higher trend and I'm calling the shots with what I want with my clients. I get new AMCs contacting me and I'm mostly ignoring them because I don't like to take new clients. Yet, with each new client I raise my new appraiser fee higher to see if the client will accept it. I haven't felt so comfortable being an appraiser as I can remember.

 

[Terrel L. Shields]

The key issue is compensation commensurate with the amount of work. Compare the size of a report to that of 18 years ago. The liability. The cost. What and why is there "value" to the banks in having the cheapest fee and fastest turn times? Does quality ever count?

I think for some of us, we felt like we have been sidelined for "easy" jobs (surely some assignments are easy??) yet expected to do the difficult ones cheap. I used to do those hard ones cheap with the unspoken assumption that I would get reasonable fees on the EZ PZ ones. So now the quickees are going to younger, less expensive appraisers while the "old heads" are "break glass in case of emergency" and expected to be the old experienced Macedonian soldiers who go in and show Alexander's young troops how it is done. If they want to equalize the field, they could. Let the "newbies" do a few complex ones and if they refuse...then give the easy ones to the old guys and see if the newbies don't make the effort to take increasingly difficult assignments. They are getting a bye. And playing appraisers against each other even in the face of increasing short supply of appraisers.

Which reminds me. I just sent an email this afternoon to a bank client who owes me for a land / mineral appraisal I did in January...that sucks too. Ask the banker why they don't collect the appraisers fee up front like they are supposed to do.

 

[offtherecord]

The key issue is compensation commensurate with the amount of work. Compare the size of a report to that of 18 years ago. The liability. The cost. What and why is there "value" to the banks in having the cheapest fee and fastest turn times? Does quality ever count?

I think for some of us, we felt like we have been sidelined for "easy" jobs (surely some assignments are easy??) yet expected to do the difficult ones cheap. I used to do those hard ones cheap with the unspoken assumption that I would get reasonable fees on the EZ PZ ones. So now the quickees are going to younger, less expensive appraisers while the "old heads" are "break glass in case of emergency" and expected to be the old experienced Macedonian soldiers who go in and show Alexander's young troops how it is done. If they want to equalize the field, they could. Let the "newbies" do a few complex ones and if they refuse...then give the easy ones to the old guys and see if the newbies don't make the effort to take increasingly difficult assignments. They are getting a bye. And playing appraisers against each other even in the face of increasing short supply of appraisers.

Which reminds me. I just sent an email this afternoon to a bank client who owes me for a land / mineral appraisal I did in January...that sucks too. Ask the banker why they don't collect the appraisers fee up front like they are supposed to do.

I would agree that compensation is a tremendous problem. But lenders could care less. They want to know why they cost so much and why do they take so long?

 

[normando]

I only want to do the EZ PZ ones but come to think of it, it doesn't often happen. You need all the stars to align. A property can be average condition in a tract area but all good comps are remodeled. The house from the outside looks typical but then you find out you have an accessory unit. A property is in a unique location in a tract area. I try to anticipate the problems before taking the orders but each one is different which makes our job interesting and why AVMs will never be as good as us. On I see a "complex" appraisal or a condo, I want higher fee but it seems like there's always an appraiser willing to take it at the standard fee. I have one good client and I usually get my fee. However, there are times when you don't want to take a certain appraisal regardless of fee. I give them a reasonable high fee hoping it wont be accepted. Please don't accept it. Don't. Don't. Don't. If accepted, I'll do it as a "favor" for the client. I'm a man of my word.

 

[Terrel L. Shields]

They want to know why they cost so much and why do they take so long?

Usually the lender isn't concerned with quality and has little sympathy for appraisers who causes delays even when he knows the appraiser is under strict reviews and possible sanctions. Worse the AMC isolates the players from that lender- appraiser relationship which we once enjoyed. By becoming faceless names it was easier to pressure the appraiser without shame.

 

[Zephyr999]

IMO what would be interesting is to learn the big banks views on the future of the industry .. rinsing and repeating the same information they're already aware of is not new news, right? Nor will it likely influence change, IMO.

 

[Elliott]

Order something expensive for lunch. Tell him if Trump is elected, real estate appraisals will still be required because he understand real estate. If Hillary is elected, she'll go to AVMs or Zillow for valuations because someone paid her $1 million for a speech, but she'll still keep all the staff of FHA, FNMA, and VA