I am not doing the 3.6 FORM deal

[Zoe]

The software companies are not the problem. The stakeholders set out to diminish the role of appraisers and they succeeded in that mission. The appraisal profession will survive, if in reduced numbers, but the residential license side of mortgage lender work ( the vast majority of which was conventional or FHA/VA ), will be a shadow of its former self. Very few are signing up for or graduating from PAREA to train as a res license. Why would any young person or any person with an ounce of sense want to train, even with expedited training, for a field that is being marginalized, with assignments cut up into fast food , low pay widgets, a field that does not offer sufficient financial compensation due to fee predation from the AMC's? Anyone who can get out, will get out within the next few years. UAD 3.6 is one more reason to leave sooner rather than later, if anyone has the means to do so.

I think our good friend @Terrel L. Shields is about ready to hang it up. I am not sure he renewed his license in one State that was expiring this year.
I think he has a farm. He can stay busy.

 

[Overimprovement]

I will disagree slightly. Most outside the profession don't know what a good report/output is aside from it coming in at the value they want.

And ironically, that's the exact point that Fannie/Freddie have used to downplay the usefulness of a traditional appraisal---the fact that so many come in 'at contract price'. The longer it takes to put together a report using 3.6, the less likely the report will be sound, and even more will simply fall back on 'hitting value'. If you think revision requests are bad now, I shudder to think what they WILL be like soon, with a building of high-end computers' worth of data to throw back at the appraiser.

Make no mistake, 3.6 will greatly accelerate the demise of the appraisal industry as we know it, whatever is left as of today. Plan now.

 

[cashcatz]

With only several appraisal program developers, i see a darker side. What's to prevent them from really high increasing their fee's. i'm sure it will go to a new higher monthly fee, probable double at minimum. With corelogic owning total, they can kill every independent appraiser, or charge them to death. They are the coming godzilla of 1 management company in control of appraising. Now, who would buy bradford to compete.

Huh? There's several new entries. That alone will put pressure on what providers can charge. Heck, even now they basically all offer big deals to switch. TOTAL is cheap as chips considering all the functionality they provide as well as the others like SFREP and Bradford. Don't believe me then go price out what other niche industries pay for their software (spoiler: much more than appraisers). It's not the form software that is ripping everyone off, it's all the BS tech fees from the portals!

 

[Bobby Bucks]

Since I have the other license, my current plan is to wait and see what level I will participate. It all boils down to supply and demand and there will be screeching from all involved, the industry notables don't have anywhere near the leverage and power they think they do. They cannot make a part time or semi retired appraiser lower fees and spend more time on a form that isn't a form. I intend to charge what the market will bear. Here are some prediction memes, sort of.

 

[Alsie35]

Where are you vacationing? Stuck at work for 8 more years people need to live vicariously!

We go back to the 'Old Country' each Summer. An island in one of the Mediterranean Seas. Friends and family. Peace and coffee. (And an occasional 'beverage' with dinner.)

 

[Alsie35]

Except with all of the widgets in the new software. The same appraisers that turn and burn now will also use the widgets to spit out appraisals in no more than an hour or two. Of course the quality will really be suspect. But how long will it take the powers that be to realize they are getting black box appraisals

How long it takes enough remaining appraisers to get to being able to do what you describe above is the crux of the issue, particularly with 20% of us (or likely more) voluntarily removing ourselves from the "UAD 3.6 Self-flagellation Pool".

That "transition" when turn times quickly reach "Pandemic-Levels" is going to be UGLY for the lenders.

 

[TerryRohrer]

While I agree with this, I will also say that I have never seen location adjustments supported in a commercial appraisal. In fact, I rarely see any sales comparison adjustments supported. For $4,000, I don't want a sales comp grid showing no location adjustments between Dayton, Cleveland, Philadelphia, and Atlanta. Call me old fashioned.

This includes reports from about 40 different vendors, so it is not a limited sample size. Residential appraisers are held MUCH MORE to the fire to support their adjustments and conclusions than are commercial appraisers. Sorry if that offends any of my general friends here.

This comment suggests a residential appraiser is opining on non-residential appraisals and doesn't truly understand the entire picture. While the residential real estate market is more (maybe mostly) driven by emotion, the commercial real estate market is more (maybe mostly) driven by money...cold, hard cash. Why would an investor in Timbuktu, seeking the highest return on his capital, care if a property is in Dayton, Cleveland, Philadelphia, or Atlanta if they conclude that they have reasonably equal prospects for achieving their investment goals in each? That is the fundamental power of a cap rate. While those engaged mostly in appraising residential real estate might conclude that if rents in Dayton were $10/ft² and were $15/ft² in Atlanta, a location adjustment is mandatory, an investor or competent appraiser can recognize that a cap rate of 10% in each case reflects equality.

I was the last one who thought a new office building being constructed in Sydney, Montana, in 2006 (population 4,778 after trending mostly down for 20 years (where locally relevant real estate was barely saleable) could relate to similar properties in Tennessee, Ohio, Utah, Oregon, Colorado, or North Dakota, but after actually doing the work (rather than ignorantly whining about what I didn't comprehend on a forum), it is inconceivable that a location adjustment was warranted between those properties and my subject. Cap rates were all between 7.1% and 9.3% and averaged about 7.8%, with Pembina, ND (population 579 and falling) being the outlier. Even more shocking is that all of these properties, mostly constructed for lease to US Government specs for US Government occupation, involved leases that allowed the tenant to cancel the lease with 30 days written notice. Again, doing the work led to a conclusion that investors in these properties did not view that as a risk because most were not aware of even a single instance where that had occurred.

As an aside, I see a lot of comments from "residential" appraisers about how deficient appraisals of any property type are when completed by "general certified" appraisers (and vice versa), and how any appraisals done by "designated" appraisers are inferior to any ever done by any appraiser lacking the motivation or acumen to become designated. These comments, viewed generously, suggest that these commentators, engaged in the business of analyzing and explaining variation in real estate prices, are fundamentally incapable of identifying extraneous data. Less generously, these commentators exhibit maturity equal to what I remember on the playground in about the third grade. Either way, such comments almost always paint the commentator as petty and jealous more than they detract from other licensees or designees.

 

[Tim Hicks (Texas)]

I remember when so many appraisers said they were never going to use the 1004 UAD...

 

[shrubberyvaluation]

This comment suggests a residential appraiser is opining on non-residential appraisals and doesn't truly understand the entire picture. While the residential real estate market is more (maybe mostly) driven by emotion, the commercial real estate market is more (maybe mostly) driven by money...cold, hard cash. Why would an investor in Timbuktu, seeking the highest return on his capital, care if a property is in Dayton, Cleveland, Philadelphia, or Atlanta if they conclude that they have reasonably equal prospects for achieving their investment goals in each? That is the fundamental power of a cap rate. While those engaged mostly in appraising residential real estate might conclude that if rents in Dayton were $10/ft² and were $15/ft² in Atlanta, a location adjustment is mandatory, an investor or competent appraiser can recognize that a cap rate of 10% in each case reflects equality.

I was the last one who thought a new office building being constructed in Sydney, Montana, in 2008 (population 4,778 after trending mostly down for 20 years, where locally relevant real estate was barely saleable) could relate to similar properties in Tennessee, Ohio, Utah, Oregon, Colorado, or North Dakota, but after actually doing the work (rather than ignorantly whining about what I didn't comprehend on a forum), it is inconceivable that a location adjustment was warranted between those properties and my subject. Cap rates were all between 7.1% and 9.3% and averaged about 7.8%, with Pembina, ND (population 579 and falling) being the outlier. Even more shocking is that all of these properties, mostly constructed for lease to US Government specs for US Government occupation, involved leases that allowed the tenant to cancel the lease with 30 days written notice. Again, doing the work led to a conclusion that investors in these properties did not view that as a risk because most were not aware of even a single instance where that had occurred.

As an aside, I see a lot of comments from "residential" appraisers about how deficient appraisals of any property type are when completed by "general certified" appraisers (and vice versa), and how any appraisals done by "designated" appraisers are inferior to any ever done by any appraiser lacking the motivation or acumen to become designated. These comments, viewed generously, suggest that these commentators, engaged in the business of analyzing and explaining variation in real estate prices, are fundamentally incapable of identifying extraneous data. Less generously, these commentators exhibit maturity equal to what I remember on the playground in about the third grade. Either way, such comments almost always paint the commentator as petty and jealous more than they detract from other licensees or designees.

I guess a little jealousy plays a part when I see an appraisal with an appraiser with a bunch of designations can use a bunch of "comps" over double the GLA with $10 sq/ft/ adjustments and somehow not get any pushback. Maybe I need those designations!

 

[TerryRohrer]

I guess a little jealousy plays a part when I see an appraisal with an appraiser with a bunch of designations can use a bunch of "comps" over double the GLA with $10 sq/ft/ adjustments and somehow not get any pushback. Maybe I need those designations!

So what you and similar commentators are implying is that you have never seen similar reports from anyone lacking a designation and that you believe none exist. I don't think designations could help.