Hybrid and Desktop Inspectors

[jay trotta]

It would appear to me (DW) this is a Task, per definition of a Floor Plan;
In architecture and building engineering, a floor plan is a technical drawing to scale, showing a view from above, of the relationships between rooms, spaces, traffic patterns, and other physical features at one level of a structure.
Dimensions are usually drawn between the walls to specify room sizes and wall lengths.

Per Certification and Limited Liability are we now, Legal Experts on floor plans?

 

[George Hatch]

I have a friend who managed a RE brokerage locally and she told me many agents did BPO's for this reason - the fee stank, but it gave them an opportunity to market to the properties around it they just did a BPO on a neighbor, they are the market experts, they'd be happy to drop by and give a CMA etc - end goal is to procure listings or buyers

Inserting them into the appraisal elevates the status of the RE agents or REALTORS, and weakens status of appraisers. In the eyes of an owner or buyer, it just looks like the appraiser was too lazy to inspect or the RE agent is "better" at it, so that is why they are there instead.

This debacle is a failure of USPAP. USPAP does not require an inspection, but it could make inspecting a property for appraisal use/purpose part of appraisal practice. Instead, inspections are treated as a grey area, if they involve an opinion they are considered part of appraisal practice, if no opinion then not.

Note that the appraiser will not be having interaction or contact with the third party inspector, lest the conversation bring forth an opinion from the inspector -

Disagree. The appraisal standards are aimed at all appraisal practice, not just appraising real property for GSE transactions. It is up to the users (like FHA or the GSEs) to call out their additional requirements which will apply in addition to the minimums in USPAP.

Some assignments involving proposed construction or buildings which have been burned out or demolished CAN'T be inspected because they don't exist as such as of the effective date. Some assignments don't have physical access to the site, let alone the improvements.

If you think of it in the abstract, the extent of inspection couldn't be defined off a single benchmark even if we wanted to. Some users will require *more* than what we normally do in an inspection so the user will have to add their extras anyway. In terms of appraisal standards as a concept, if it's even possible for some assignments to be done with less and some with more then there is no "standard" among them that we could cite by way of requiring it for all real property appraisal assignments.

TLDR, it's up to the users to decide what additives they want in the workproducts they use. It is not up to the appraisers to tell them they cannot order or use a desktop due to it being categorically inadequate. If you're angry that the GSEs and the lenders are allowed to use these alternate products, then the fix for that is not to attempt to dork USPAP for the sole benefit of SFR appraisers and at the expenses of all other forms of real property appraising. Your problem is with your users exercising their alternatives; it isn't with the appraisal standards not-prohibiting those alternatives.

 

[J Grant]

Disagree. The appraisal standards are aimed at all appraisal practice, not just appraising real property for GSE transactions. It is up to the users (like FHA or the GSEs) to call out their additional requirements which will apply in addition to the minimums in USPAP.

Some assignments involving proposed construction or buildings which have been burned out or demolished CAN'T be inspected because they don't exist as such as of the effective date. Some assignments don't have physical access to the site, let alone the improvements.

If you think of it in the abstract, the extent of inspection couldn't be defined off a single benchmark even if we wanted to. Some users will require *more* than what we normally do in an inspection so the user will have to add their extras anyway. In terms of appraisal standards as a concept, if it's even possible for some assignments to be done with less and some with more then there is no "standard" among them that we could cite by way of requiring it for all real property appraisal assignments.

TLDR, it's up to the users to decide what additives they want in the workproducts they use. It is not up to the appraisers to tell them they cannot order or use a desktop due to it being categorically inadequate. If you're angry that the GSEs and the lenders are allowed to use these alternate products, then the fix for that is not to attempt to dork USPAP for the sole benefit of SFR appraisers and at the expenses of all other forms of real property appraising. Your problem is with your users exercising their alternatives; it isn't with the appraisal standards not-prohibiting those alternatives.

I did not say USPAP should require inspections on every appraisal, I said USPAP should clarify that when an inspection is done for an appraisal, the inspection is part of appraisal practice.

 

[George Hatch]

I did not say USPAP should require inspections on every appraisal, I said USPAP should clarify that when an inspection is done for an appraisal, the inspection is part of appraisal practice.

You can only clarify that which is true to begin with. "Appraisal Practice" is a defined term and what these individuals are doing doesn't meet it. And a 3rd party inspector is not acting as an appraiser and is not expected by anyone to act as an appraiser. There is no requirement in USPAP for an inspection in an appraisal, no standard of practice for an inspection, and the inspector has no responsibility for how any aspect of the appraisal is performed.

When I inspect I am doing so for the sole purpose of understanding what it is I'm trying to value; specifically, I am engaged in the problem identification phase of the appraisal process. That isn't what these 3rd party inspectors are doing; they have no intention of valuing the property. They're not being asked that question. The question they're answering is "what is this property like?", not "what is this property worth"?

The same of which holds true when an appraiser inspects a property for the purpose of valuation they are not held to the same expectations and standards that apply to a professional building inspector. Just because we're walking through the property doesn't make our role the same as that of a civil engineer or other technical construction expert. Nor do we assert such.
Like I keep saying, your problem isn't with the content of appraisal standards; it's with what the regulators are allowing the GSEs and lenders to get away with using. Which BTW is similar to what OTHER types of users are also allowed to get away with using.

 

[George Hatch]

Something else to consider: Sooner or later the states are going to want to license those inspectors which will lead to identifying standards of practice for them, separate and completely different from the standards in USPAP. These individuals are going into people's homes, so the state will have an interest in their criminal histories and their competency when performing that role. Some of these states may even put these people under the jurisdiction of the state boards that regulate building inspectors. A sort of building inspector lite qualification of some kind.

Then you're *really* going to have a hard time characterizing what they're doing as appraisal practice.

 

[J Grant]

Something else to consider: Sooner or later the states are going to want to license those inspectors which will lead to identifying standards of practice for them, separate and completely different from the standards in USPAP. These individuals are going into people's homes, so the state will have an interest in their criminal histories and their competency when performing that role. Some of these states may even put these people under the jurisdiction of the state boards that regulate building inspectors. A sort of building inspector lite qualification of some kind.

Then you're *really* going to have a hard time characterizing what they're doing as appraisal practice.

If people doing inspections for appraisal purpose get licensed, fine by me ! Then USPAP will have to decide if what they are doing falls or does not fall under USPAP,

I would rather have the inspectors licensed . Either an inspection is a skill, or it is not. Either a mistake made during an inspection has a ramification, or it does not. Let inspectors for appraisals have some form of basic license where they do not need to be trainees with goal of becoming appraiser . Plenty of people would want that limited role and be happy with it.

What I see with these inspectors is the lenders /AMC's doing the same thing as with appraisers - trying to get the work done cheap, but still expecting quality and reliability Expecting a person to inspect a house for an appraisal for a loan of $400,000, and paying that inspector person $75 is absurd.

If inspecting is a skill, and it needs reliable people doing it, then pay the inspector properly $150- $200 for each one., Of course is the appraiser also gets paid properly for their end it will not be cheap to get an appraisal done that uses an outside inspector. So what ?.

This obsession with cheap is screwing up the appraisal profession and screwing up valuations and now screwing up inspections, A consumer takes out a home loan once every 3-10 years, and some less than that. Since they rarely do it, whether they pay $100 or $200 more or less is not going to make a difference to their financial well being.

The lack of consistency around inspections makes no sense . If a borrower puts down more $ an inspection is not needed, but if they put down less, inspection is needed - on the same house !!

If an inspection and driving the comps is suddenly not important, then let the appraiser hire a person for those tasks, and drop driving the comps as a requirement to speed things up, an appraiser can decide on a case by case basis if they need to drive a comp.

 

[Overimprovement]

Here is what I still do not understand. Someone will have to provide a floor plan. That entails going to every room on every level, finished or not. Why NOT include pictures as a requirement? Someone will already be right there in every room! Have them take 2 minutes and walk around the exterior as well. Seems like such an easy way to get so much more useful information...

 

[J Grant]

Here is what I still do not understand. Someone will have to provide a floor plan. That entails going to every room on every level, finished or not. Why NOT include pictures as a requirement? Someone will already be right there in every room! Have them take 2 minutes and walk around the exterior as well. Seems like such an easy way to get so much more useful information...

No ," someone" - as in a third party, does not need to be there at the property to provide a floorplan. Either the owner will do it themselves (or with appraiser directing them, ugh ) over an app on iphone, or the appraiser finds a Floorplan on MLS or buried in a cave. Same for the photos. Gonna be fun !

 

[George Hatch]

If people doing inspections for appraisal purpose get licensed, fine by me ! Then USPAP will have to decide if what they are doing falls or does not fall under USPAP,

I would rather have the inspectors licensed . Either an inspection is a skill, or it is not. Either a mistake made during an inspection has a ramification, or it does not. Let inspectors for appraisals have some form of basic license where they do not need to be trainees with goal of becoming appraiser . Plenty of people would want that limited role and be happy with it.

What I see with these inspectors is the lenders /AMC's doing the same thing as with appraisers - trying to get the work done cheap, but still expecting quality and reliability Expecting a person to inspect a house for an appraisal for a loan of $400,000, and paying that inspector person $75 is absurd.

If inspecting is a skill, and it needs reliable people doing it, then pay the inspector properly $150- $200 for each one., Of course is the appraiser also gets paid properly for their end it will not be cheap to get an appraisal done that uses an outside inspector. So what ?.

This obsession with cheap is screwing up the appraisal profession and screwing up valuations and now screwing up inspections, A consumer takes out a home loan once every 3-10 years, and some less than that. Since they rarely do it, whether they pay $100 or $200 more or less is not going to make a difference to their financial well being.

The lack of consistency around inspections makes no sense . If a borrower puts down more $ an inspection is not needed, but if they put down less, inspection is needed - on the same house !!

If an inspection and driving the comps is suddenly not important, then let the appraiser hire a person for those tasks, and drop driving the comps as a requirement to speed things up, an appraiser can decide on a case by case basis if they need to drive a comp.

IRL it doesn't matter to anyone other than appraisers if you or I go broke due to changes in user preferences for appraisals. We don't matter and what we want doesn't matter. If we can find a way to make a living in the business that's great, but our well being is solely on us, not on these lenders. We sell oranges, not God's favor.

The name of the game in business is to identify and exploit your opportunities, to sink or swim based on your own efforts and initiative. Not to expect those opportunities to be given to you just because you're special.

 

[Overimprovement]

No ," someone" - as in a third party, does not need to be there at the property to provide a floorplan. Either the owner will do it themselves (or with appraiser directing them, ugh ) over an app on iphone, or the appraiser finds a Floorplan on MLS or buried in a cave. Same for the photos. Gonna be fun !

There is NO photo requirement, correct? Or did I miss that in the specifications? I've never done a traditional desktop so I may be off on my thinking WRT photos.

My understanding is appraisers will NOT be the ones required to do or walk an owner through a floorplan. If it is, sounds like quite an easy pass, yes?

WHOEVER and WHENEVER the floorplan is done, photos could be taken at that time. Maybe in some markets they are common, but here, <1%. They will be getting done at listing, or once appraisal type is selected.