Crappy Hybrid Inspection

[Mike Ault]

I think there a quite few appraisers and home inspectors who do hybrids. At the very least real estate agents. Why do so many posters think the quality of the inspector is low?

For the same reasons we expect the quality of food we receive through the drive through to be low. Fast, convenient & low quality comes immediately to mind for such fare. Few people who work at such places intend to make a career of it, and it shows.

 

[Carnivore]

So has any of you completed one for money? If so how much, because what I am reading the pay is low for fast delivery.

Here is what I know and don't know: Someone does an Inspection. I don't know who it is except they give you a name. I don't know if they give you a contact number. Even if they did give you a name & number, will they be cooperative?

There is an upside to this. If you do one I guess you wont be accused of Biased. the Downside is the the homeowner may accuse Harry the Aluminum can collector and you colluded.

So if the major benefit is Fast N Cheap, it may just be better to move on to some other kind of work.

 

[Mejappz]

So has any of you completed one for money? If so how much, because what I am reading the pay is low for fast delivery.

Here is what I know and don't know: Someone does an Inspection. I don't know who it is except they give you a name. I don't know if they give you a contact number. Even if they did give you a name & number, will they be cooperative?

There is an upside to this. If you do one I guess you wont be accused of Biased. the Downside is the the homeowner may accuse Harry the Aluminum can collector and you colluded.

So if the major benefit is Fast N Cheap, it may just be better to move on to some other kind of work.

$113.00 for a four-million dollar property.

 

[George Hatch]

Comparing Hybrid Appraisals with a 1004 Report​

by George Hatch

5. Next you get to the subject site and start analyzing the property, starting with the various physical attributes of the site itself. Even if you aren’t writing it down in your notes or later conveying it in your reports, you are taking mental notes of lot utility issues like the topography, terracing setbacks for the improvements and other factors. For view amenities you are considering type, quality, direction and orientation to the public zones of the house, not just ticking off a checkbox “view-yes” and so on.


Then you’re using a similar process in your inspection of the subject interior. Adding interior walls with floor plans in your diagrams is not done as much today, so many of you may not be doing that in your notes, but you’re still collecting that information mentally. You’ll also routinely make other observations that will eventually contribute to the development of your opinions about quality, condition, functionality and overall appeal.

The third-party “property inspector” who is driving to your subject isn’t doing everything that you would do during that drive either. They’re probably not engaged and certainly not to the level you are. They’re just driving to the property and performing the site inspection to the extent it takes to fill out the form. I would bet that their drive adds little or nothing to the process. They’re not “seeing” because they’re not looking, and they’re not looking because unlike an appraiser, they have no reason to look. The information about the subject neighborhood that you need to collect in order to perform your analysis isn’t germane to what they’re doing, which is limited to simply “inspecting” the subject and possibly photographing potential comparables.


Likewise, if they measure and diagram a structure, they probably are not making observations about floor plans and other subtle but important details that you would normally collect. They aren’t self directed in seeking out the information to be used in the analysis; they’re simply answering a limited number of questions on a one-size-fits-all checklist. This isn’t due to laziness or misconduct on their part but instead because nobody expects them to do anything beyond the form.

Comparing Hybrid Appraisals with a 1004 Report

Appraisers should not enable their readers to labor under the mistaken assumption that a hybrid assignment, where the appraiser doesn't consider certain elements, is of the same value as a conventional 1004.

www.workingre.com

well well well...and a spoon full of sugar helps the medicine go down

Yeah, I wrote that and I meant every word of it. Because these inspectors are NOT doing everything an appraiser does concurrently with their inspection the appraisers need to make more of an effort at their desk to understand what they're seeing.

What these inspectors are doing is but a subset of what an appraiser is doing when they're out there, because they're not appraising. Appraisers need to provide these disclosures as part of their reporting. "I saw the inspection report from Fly-By-Night Inspections, INC, and the pics included therein. I have developed my own opinions off of what I'm seeing. In lieu of information to the contrary I assume the info is correct but in the event that assumption proves incorrect it would have an effect on my opinions and conclusions. "

You keep hoping to find an unethically motivated flip-flop in my positions over the years, but you're always going to continue to come up short because I remain consistent. I make my share of mistakes but I don't argue my perspectives in bad faith.

 

[Carnivore]

I read your excellent article. Something really stood out and its worth Quoting
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"If the appraiser is attempting to emulate in a hybrid assignment all of the research and analyses they normally perform for a 1004 assignment, then it will require them to spend much more time/ effort during the desktop portion of the assignment. So for many, you might be saving 100 percent of the time normally spent on a physical inspection field trip but adding time in other places. If an appraiser is going to substitute assumptions on these additional elements in lieu of actually developing them, then that’s a reportable event, with respect to both their scope of work and their other disclosures. If a hybrid assignment omits certain elements that are normally included in a conventional 1004 assignment then we wouldn’t want any readers to make an unsupported assumption that the development process is the same or similar or equivalent to that used in the conventional 1004. If neither the appraiser nor the inspector performed any of those additional elements, then the appraiser should say so as a means of providing their users with the context it takes to understand what the appraiser did and didn’t do in that assignment."
-----------------------------------------------------------------------------------------

There in lies the rub for me. I will be actually be spending more time at the desk. I am concerned and know that my competition will not! IOW The pricing will make me non-competitive with Mr bragdocious. You know the guy who was slamming out 2-3 1004's per day by using every short cut possible. Including narration and misrepresenting he was using his College drop out live at home Son and wife who quit her Cashier Job at Walmart be Big Daddy has created an assembly line.

The Point is the Size(less pages) of the report encourages taking short cuts. We know much of the development is in the work file and to some degree reported in in a 1004, but not in the Desktop report. The desktop is 1 page plus maybe two pages of photo's. I looked at the preprinted BOA Desktop. It did not allow enough space for Subject and comparable prior sale history analysis. All you do is mark yes or no. The Instruction said to attach an addendum if needed. Well I know Mr Bragadocious he won't say a thing other than check the box yes or no and BOA will just let it slide by.

Considering all the above and much more I quote Kevin O'Leary from Shark Tank "I'm Out"

 

[djd09]

EA & HA Definition Changes​

Appraisers, effective with the 2018-19 USPAP, definitions for Extraordinary Assumption and Hypothetical Condition have changed.


Below is a one page PDF sheet you can print & post at your office, and you may distribute this to others if you like.


According to the Appraisal Standards Board, the Extraordinary Assumption change was done to clarify the term and its applicability. It seems the same rationale was used for the Hypothetical Condition definition change, although that was not mentioned in their Summary of Actions document issued on Feb. 23, 2017.


Underlined words are the changes made. I also include the prior definitions below for comparison.


EA#1 “I have made the extraordinary assumption for this specific assignment as of the effective date that none of these things done or not done, verified or not verified, made up for convenience or guesstimated without any support wont have an adverse impact on the comments and conclusions of this report.”

Extraordinary Assumption & Hypothetical Condition Definition Changes

Effective with the 2018-19 USPAP, definitions for Extraordinary Assumption and Hypothetical Condition have changed. Below is a one page PDF sheet you can print & post at your office, and you may distribute this to others if you like.

appraisersblogs.com

 

[shrubberyvaluation]

For the same reasons we expect the quality of food we receive through the drive through to be low. Fast, convenient & low quality comes immediately to mind for such fare. Few people who work at such places intend to make a career of it, and it shows.

Well it depends on the structure. If there is no demand and accountability for the inspectors that are lets say skippies they get to just wash their hands and move on, no signed name to a report with liability. I don't think that all inspectors are bad, but what happens when an inspector underrepresents the subject. The owner is refinancing, bought it a year ago for $1,000,000 (lets assume it sold at market value for this hypothetical), prices going up, and the appraisal is lower because of faulty property characteristics. Who is going to be gone after? I would be scratching my head trying to figure out what the reason is, could be bad characteristics, or could be the home sold over market prior. Unless the lender has a prior appraisal in hand that show the subject is superior to what was represented by the inspector the appraiser will be questioned, and all he can say is this is the relavant market data and my conclusions.

 

[shrubberyvaluation]

Yeah, I wrote that and I meant every word of it. Because these inspectors are NOT doing everything an appraiser does concurrently with their inspection the appraisers need to make more of an effort at their desk to understand what they're seeing.

What these inspectors are doing is but a subset of what an appraiser is doing when they're out there, because they're not appraising. Appraisers need to provide these disclosures as part of their reporting. "I saw the inspection report from Fly-By-Night Inspections, INC, and the pics included therein. I have developed my own opinions off of what I'm seeing. In lieu of information to the contrary I assume the info is correct but in the event that assumption proves incorrect it would have an effect on my opinions and conclusions. "

You keep hoping to find an unethically motivated flip-flop in my positions over the years, but you're always going to continue to come up short because I remain consistent. I make my share of mistakes but I don't argue my perspectives in bad faith.

At this point I might as well just see the property rather than trying to piece things together the inspector missed.

 

[George Hatch]

I think a lot of people would agree with you. I also think that the reason these lenders don't think our inspections are better than what they can get from a layperson is because some appraisers don't do more than what a layperson does. If the lenders can't see the difference then part of that is arguably on us.

 

[djd09]

Georgia Fines Clear Value Hybrid Appraiser​

1. performed an appraisal that was too narrow in the scope to determine a credible value...

Think It's Okay to Do Bifurcated Hybrids? Georgia Fines Hybrid Appraiser!

So, do you think it's ok to do bifurcated hybrids? On January 31, 2018, what appeared to be egregiously deficient Clear Capital “Clear Value” bifurcated

appraisersblogs.com

(b) not commit a substantial error of omission or commission that significantly affects an appraisal; and

Comment: An appraiser must use sufficient care to avoid errors that would significantly affect his or her opinions and
conclusions. Diligence is required to identify and analyze the factors, conditions, data, and other information that would
have a significant effect on the credibility of the assignment results.

An appraiser must be prepared to support the decision to exclude any investigation, information, method, or technique
that would appear relevant to the client, another intended user, or the appraiser’s peers.

An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results
are not credible in the context of the intended use.

Comment: If relevant information is not available because of assignment conditions that limit research opportunities
(such as conditions that place limitations on inspection or information gathering), an appraiser must withdraw from the
assignment unless the appraiser can

you cannot assume away credible...dont drink the kool aid