Adapt or Die?

[TC]

The other thing that they may not realize is that the old geezers aren't seeing the complete collapse because we've been around long enough to have built relationships with the better clients, thus leaving the worst clients to the junior appraisers. Once you guys get more established you'll have a little more leeway to say no to the worst loan originators.

Bingo!






...

 

[rescom]

Here's an opinion that's sure to be unpopular...

The real problem here is that too many residential appraisers let in too many trainees and now the residential market is completely saturated. There is a gross oversupply of appraisers, which basically makes the residential appraisal business a buyers market. That means the buyers (your clients) can get pit you guys against each other to get the lowest prices and the fastest turn times and the most cooperation with stupid stips. When you compete, lenders win.

Remember this the next time business turns around. Stop thinking in terms of making hay while the sun shines. Take the longer view. It doesn't matter how much money you make when times are good if in doing so you contribute to your own demise when times get tough. When you take on a trainee that person will be with us for the next 20+ years, and they eventually WILL become your competition. If you've already trained 2 appraisers you've already passed your career quota for trainees.

I agree 100%.

 

[SANDY]

Just by way of clarification, I don't think we have a trainee problem. Our problem is with the supervisors. The trainees do what they're told, they appraise the way they were trained and they go on to run shops based on the examples they've seen.

It's the donkey supervisors who have screwed things up, running trainee-based fee shops, cutting corners, abusing their trainees, allowing their trainees to solicit their own clients, and all that foolishment. It takes a lot of time and effort to do right by a trainee and these idiots have been skipping all that.

One more point of clarification - I do see some truth in the basic concept of keeping up with the times. The term "meaningful workproduct" has different meanings during different times of the economic cycles. One thing the new appraisers have never seen yet is that this quality vs. price conflict is a pendulum, and this pendulum will swing back to favor quality as this downturn progresses.

The other thing that they may not realize is that the old geezers aren't seeing the complete collapse because we've been around long enough to have built relationships with the better clients, thus leaving the worst clients to the junior appraisers. Once you guys get more established you'll have a little more leeway to say no to the worst loan originators.

As usual Mr. Hatch, your comments are excellent. I am wondering if this most recent fiasco just might be different than the other down cycles(ie.. the S&L one) in terms of the future demand for the poundage appraiser.
Also I wonder, what real impact (in terms of the overall picture we are now looking at) that all of the well documented/performed appraisals that every good appraiser turned out over the last few years had on the big picture. Ie...... Did all of the good appraisals/appraisers make any difference in the overall big picture? I say no because the whole system was broken so badly that the good honest and highly ethical appraisers were badly outnumbered. I know that is a whole other issue so back to the point i am trying to make-

As things are currently and as they have been, there are forces at work that are so powerful(like greed, speed and cheap products) that it seems like despite the major disaster occurring in the mortgage financing industry, there is likely to not be major changes/fixes in the near future. There will likely be some lip service bullshat changes but sooner than later it will be back to business for most of the others in the process and greed and speed will prevail again.

Think about it a minute-given the circumstances that the mortgage industry and all its various players find themselves in(not to mention the investors now holding the bag) wouldn't you folks think that appraisers and their skills would be so much in demand that we would all be swamped with work. But in general, that is not the case-cheap and fast is still kicking higher priced better qualitiys' butts overall in the market. Something's not right but I hope that someday soon the "made in China" appraisal product will fall out of vogue!

PS: To those folks that might be worried about my financial future-don't be concerned-my supervisors taught me much more than relying on a fee based income to support myself-so in a couple of weeks we'll be in the Keys for a couple weeks and maybe longer if I feel like it. None of us here need to be doing this for grocery money anymore.

 

[SANDY]

Call me simple-minded, but I would have trouble with doing "quality appraisals" on Monday thru Wednesday and then doing (I assume) "non-quality appraisals" on Thursday thru Friday. I only know how to do things one way and my ethics and quality standards do not know how to "adapt". Nor do I offer discounts or work for AMCs. I would much rather go sailing. Thus, I may "die" while waiting for the Johnny Come Latelys to discount themselves out of the business and for lenders to realize that a pretty important part of collateral lending is the value of the collateral.

You are truly fortunate. This portion of the post illustrates the position of many many appraisers and hence, the reason for the name of this thread. Times---they are a changin and there soon may be no market/demand for the so-called quality appraisals. At least quality appraisals as appraisers define it. Someone has a great saying here on the forum and it goes something like this--we don't want no stinkin appraisal we just want to know what it's worth!!! I would add to that-and we don't want the poundage we want it fast and cheap or we will use a different product(s) done bt someone else.

To respond to another post previousely that said if any appraisers want to compete with bpos and the like, just give up your appraisers license and do it-I say why should an appraiser have to give up his/her license to compete with less competant people? Answer is because USPAP puts appraisers at a competitve disadvantage!

 

[Stone]

You are truly fortunate. This portion of the post illustrates the position of many many appraisers and hence, the reason for the name of this thread. Times---they are a changin and there soon may be no market/demand for the so-called quality appraisals. At least quality appraisals as appraisers define it. Someone has a great saying here on the forum and it goes something like this--we don't want no stinkin appraisal we just want to know what it's worth!!! I would add to that-and we don't want the poundage we want it fast and cheap or we will use a different product(s) done bt someone else.

To respond to another post previousely that said if any appraisers want to compete with bpos and the like, just give up your appraisers license and do it-I say why should an appraiser have to give up his/her license to compete with less competant people? Answer is because USPAP puts appraisers at a competitve disadvantage!

Professionals are held responsible for practices that fall under their profession. You want appraisers to be able to give opnions of value but not treat them as appraisals. The problem is that our opinion of value is what we sell.

USPAP doesn't stop you from doing desktop appraisals. It doesn't stop you from doing drive-bys. It doesn't stop you from calling them something that sounds good to a client and it doesn't stop you from charging a lower fee.

It isn't that hard to set up your own document for the types of products you describe and perform them in a USPAP compliant manner. Sure, there would be some time spent at first, but you can certainly create something that would meet the applicable standards and not be too hard to do down the road.

What it sounds like to me, however, is that you want to be hired as an "apprasiser" but not have to take the responsibility that comes with performing an appraisal. I see no benefit in this for anyone without a shop of low-payed "appraisers" needing volume to get by. That is the type of operation that would make money at this. And, that is the type of operation that the profession is better of without.

FTR - I agree with you about there being an uneven playing field, but the answer is to not allow realtors to perform appraisals while calling them BPOs. Probably not going to happen, but devaluing our profession won't fix it.

 

[Roy Courtney]

I do not think it will be necessary to compete with BPOs. When the news began to leak out about the subprime mess it received very little attention. You may have noticed that over the past six months the news has moved to front page. Major lenders have lost billions. In some cases investors have lost their life savings. What they have not figured out yet is that this mess has not even started yet! People are having to move into tent cities, jobs are being lost, divorce and suicide rates are increasing. If there are people left with any wealth after all of the smoke clears they will most likely want an honest opinion of value for their assets. I sure hope I am wrong in my vision of the next year or so! Please tell me some good news!

 

[Roy Courtney]

http://www.youtube.com/watch?v=JiUP4CKTDcU

It is not my intention to take over the thread. But we are discussing Adapt or Die! If you look at the above news and add that to all of the other facts, we are in a mess. The last I heard the US credit card debt was near one trillion dollars! The savings rate for Americans has gone into the negative side. Unless a BPO is something we can eat, we will most likely not give a damn about it in a year or two!

 

[George Hatch]

Unfortunately the history of the appraisal profession shows that the value of a good appraisal gets a lot more recognition after these users of appraisals get hosed. The last banking bust brought about appraiser licensing, but left the loan originators untouched. That's why the loan originators and bankers are getting all the scrutiny now.

It doesn't take very many $100,000 losses to fully justify the time and costs involved with obtaining reasonable appraisals. By the time all the losses from the excesses of the market have been fully realized, cheap and fast won't be the priorities for appraisal reports. At least, not until next time.

 

[Tom Foster]

As the times change I have started injected some anger into my appraisals.

With 3 of my fellow appraisers now 6 feet deep, I still carry on in memory of Bob, an appraiser who was killed by a drunk driver in 2002.

Just last year, we lost Ed, who slow descent into death, was aided by heroin.

I know this is a bit melodramatic, but it is just a sign of things to come.

If I told you I was your mother, you could analyze the situation and be gone.

 

[JSmith43]

Adapt or die?

The appraiser that goes on a long journey with a certain client type is much like the young lady that goes on a long drive into the country on a first or second date. She sure doesn't want to hear the words "adapt or die", let alone, put out or walk. Yet, many appraisers are given the choice to "put out" or walk (the long back road to your next career).

Yes, supply and demand are out of whack. The crackerjack box with an appraisal license at the bottom didn't help much. But, you have to admire the power of national branding

All a broker in another state needed to do to meet delivery specs for appraisals after nationwide licensing was fax a request for a copy of the license....and E & O! If the request were resisted, the broker could say f#$% or walk, I have a black book full of appraiser's fax numbers.

And, those type of "adapt or die" moments were massively doled out during relatively good supply/demand conditions.

But, yes, over supply is one of the issues, but standardization of branding and the due diligence in a can concept, the mass due diligence initiative of the designed to fail cluster $&^% of the T 11 licensing scheme, oh yeah!