Question from potential private customer re reconciliation at sale price.

[alebrewer]

Both a refinance and a purchase assignment have the SAME purpose on top of the appraisal form ( purpose: Derive an opinion of market value)

ok

 

[alebrewer]

USPAP states that the market value opinion can be expressed either as a point or a range

ok

 

[alebrewer]

And the powers that be are doing the very same thing with AVMs and collateral underwriter...."80% LTV met.....approved for waiver".

Only the algorithms used to build that confidence interval are way more quantitative than what most appraisers are capable of reproducing.

 

[J Grant]

I don't think I'd say its a universal thing, but I'm absolutely sure some appraisers fall into this category - hence the reason users of our services believe they can create a model that works better than we do. As an aside - just got back two appraisals on the same property - one is at $750k and the other is at $950k. I don't blame the appraisers for being so far apart - I blame an industry that has rewarded mediocrity for several decades.

I blame one of those appraisers because I bet a forensic review would clearly show one of those opinisn is far better supported and credibly supported than th other.
Appraisal opinions do not have to match exactly, and on high-value or complex properties, the value difference might be greater, but this is absurd. 950k and 750k can not both be equally credible on a same property

It is the system's fault if one of the above appraiser is incompetent and yet they are hired over and over esp if for a lower fee. Any appraiser might be off on occasion but if competent it should not happen to such a large degree -

 

[alebrewer]

It is the system's fault if one of the above appraiser is incompetent and yet they are hired over and over esp if for a lower fee.

I've never been able to make a correlation between quality and fees. Perhaps your experience is different than mine.

I blame one of those appraisers because I bet a forensic review would clearly show one of those opinisn is far better supported and credibly supported than th other.

Probably 90%+ of all the reconciliations I've done have pointed to the 'real' value range being somewhere between the two appraisals. To your point, though, yes - one of the appraisers may be wrong. Even then, though, my point was that I don't blame the appraiser - I blame a system that rewards complacency and mediocrity. If those appraisers had been trained consistently, they would approach the appraisal problem from a similar benchmark - and would arrive at similar results (assuming they're capable of being trained consistently).

 

[Surf Cat]

Imo, an appraiser who believes "No one's that good" should not be appraising. And you are not the only one who has expressed this career killer of a thought - which the clients heard and read and say well, the appraisers dont' think they are good enough, so why use them?

I disagree and I'm going to stand by my assertion. The real estate purchase is an emotional one, A hurried one, A desperate one. There's no way that anyone on this forum can "pinpoint" at any point in time the "exact value" of what a home price should be.

Does that mean appraisers shouldn't be used? Of course not. We follow (okay, some follow) well documented methodology that leads to the most probable price as of the effective date of value that falls within an adjusted range. Basically, an educated guess as to the price the real estate would fetch in a free market. Doctors do this too by the way. Medical science is not an exact science. They are using their best educated guess based on the patient's symptoms.

Ale's post in this thread illustrates my point.

just got back two appraisals on the same property - one is at $750k and the other is at $950k.

Which value of the property is correct? Is it exactly $750k or is exactly 950k? I doubt either. But one of them is within the range of the most similar sales as of the effective date.

 

[TerryRohrer]

I've never been able to make a correlation between quality and fees. Perhaps your experience is different than mine.


Probably 90%+ of all the reconciliations I've done have pointed to the 'real' value range being somewhere between the two appraisals. To your point, though, yes - one of the appraisers may be wrong. Even then, though, my point was that I don't blame the appraiser - I blame a system that rewards complacency and mediocrity. If those appraisers had been trained consistently, they would approach the appraisal problem from a similar benchmark - and would arrive at similar results (assuming they're capable of being trained consistently).

I think this is on the individual appraiser, regardless of what training they were exposed to. Even 30 years ago, with a dial up modem (sometimes), the resources were available to figure it out if you had a mind to, and gave a damn. Now, there is nothing but excuses given the free and nearly free resources available, in excess quantities. It is simply easier to ask Fakebook how to get over any speed bumps that come along and add a paragraph of boilerplate to every subsequent appraisal.

 

[J Grant]

I've never been able to make a correlation between quality and fees. Perhaps your experience is different than mine.


Probably 90%+ of all the reconciliations I've done have pointed to the 'real' value range being somewhere between the two appraisals. To your point, though, yes - one of the appraisers may be wrong. Even then, though, my point was that I don't blame the appraiser - I blame a system that rewards complacency and mediocrity. If those appraisers had been trained consistently, they would approach the appraisal problem from a similar benchmark - and would arrive at similar results (assuming they're capable of being trained consistently).

Having done several hundred field reviews over the years, I can say that some appraisers truly are not competent or are competent but agenda-driven number hitters. Training could be better, agree there. I am not perfect, nobody is, and we all can learn, but still there is a basic competence and unfortunately, some are simply not cut out for res appraising work (IMO) ).

That is an unproven statement unable to make a correlation between quality and fees, and it always comes from AMC-affiliated appraisers- what a coincidence!

Of course not every fee lines up with quality but appraising is no different than other fields, the more competent can get better fees / and will spend enough time to do a good job and if they can not get enough $ to compensate for teh time, they leave the business sor do not do mortgage lender work. Sadly, the low AMC fees mean that the appraiser has to churn, and the speed mike makes even competent appraisers do a lower level job. The field is pathetic il

 

[alebrewer]

I disagree and I'm going to stand by my assertion. The real estate purchase is an emotional one, A hurried one, A desperate one. There's no way that anyone on this forum can "pinpoint" at any point in time the "exact value" of what a home price should be.

Does that mean appraisers shouldn't be used? Of course not. We follow (okay, some follow) well documented methodology that leads to the most probable price as of the effective date of value that falls within an adjusted range. Basically, an educated guess as to the price the real estate would fetch in a free market. Doctors do this too by the way. Medical science is not an exact science. They are using their best educated guess based on the patient's symptoms.

Ale's post in this thread illustrates my point.

Which value of the property is correct? Is it exactly $750k or is exactly 950k? I doubt either. But one of them is within the range of the most similar sales as of the effective date.

Its not worth the fight, bro. She'll die on that hill.

 

[Terrel L. Shields]

we, the appraisers, are tasked with not abusing the public trust

We cannot even define it. It's a unicorn concept. We have our own personal ethic, or we don't. The public be damned.