AI Connect

[Eli]

Sure... shoe salesman, manage a Pizza Hut, car salesmen (ask them if they have a degree...a lot do). My garage door installer has a degree in Physics. My neighbor who salvages old poultry equipment has an Animal Science degree; my CPA has a masters degree in Animal Science. The guy who built my garage in 1983 has a geology degree, but after his short building career he started repairing TVs, got a contract with WalMart and did repairs on their returns. Today Ozark Electronics is a multi-million dollar repair center. Time and Chance taketh us all.

Sounds like shoe salesman, pizza hut managers, car salesman, garage door installers, salvage business, wal-mart, electronics have taken the pee-poor supervisors trainees and I am glad for the trainees who won't believe their BS, and have to go through it.

 

[factsandtruth]

WTF are you driving at? This is the second time you've tried to bring this up. And it has nothing to do with the current thread. So your point I understand not. 2005 - The pressure for bad appraising came from the lenders. The newbies at that time represented some of the ill trained troops that were thrown into the battle as cannon fodder. The wise appraiser slipped quietly off into the night during that period of time. They eschewed the lender work and attempted to move their business into a more professional world. Lenders are a tiny portion of my life and I could live without them. So? Why do I care about training anyone? First off, if they wanted to be residential appraisers, I am not the guy. I don't do secondary market and haven't for 10 years.

So for everyone who also wonders what F & T is yammering about, here is that 2005 post that seems to so offend him/her< "Amen. I have been pressured so much by mortgage brokers I now refuse to work for them. I am doing more commercial mineral appraising and less residential appraising. I even have an anti-mortgage broker statement on my website. Feel free to quote me from there. Terry" The anti-MB statement has been overtaken by events and I took it down years ago, FYI.

In any case 2005 or 2015, the addition of college requirements, additional hours etc. is meaningless piffle meant to charm the powers that be and satisfy our handlers that we are trying to "improve the profession" when we have done absolutely nothing to "improve" anything over the years. Practice makes perfect only if you practice perfectly, otherwise you are only engraining a bad habit.

After admitting that you don't perform residential work (10years)you are so sure you know what's best for residential appraisers? I'm making a statement about the total chaos that was going on during that period(shallow education requirements, trainees appraising million dollar homes fresh out of school, broker pressure, appraisers being brain washed to hit numbers etc.) it all goes together.

Everybody needs to read those comments at the bottom of the article to refresh themselves about the "good ol days"

 

[Terrel L. Shields]

After admitting that you don't perform residential work (10years)you are so sure you know what's best for residential appraisers?

The fact that I do not do secondary market does not mean I do not do residential property. I do a lot of rural residential properties for estates and a few local in house banks. None of them are secondary market loans. And the worst offenders were those Mortgage bankers. I worked with some mortgage originators from real banks with real FDIC or OCC charters, but I never did more than the occasional work for a commission driven MB. Originators for banks rarely are paid commission, rather are paid at the end of the year for making good loans as a bonus.

It is true I no longer am on the FHA roster, I don't even own appraisal software anymore since my assistant quit. I currently have 2 farms, a vacant tract, two duplexes and two SFR to value. I am hardly ignorant of what it takes to appraise a house. So what specific information does USPAP apply to a residential appraiser that does not apply to a Certified General license as well? And what specific instance would I give an opinion about an issue I haven't dealt with in the past 23+ years?

 

[factsandtruth]

The fact that I do not do secondary market does not mean I do not do residential property. I do a lot of rural residential properties for estates and a few local in house banks. None of them are secondary market loans. And the worst offenders were those Mortgage bankers. I worked with some mortgage originators from real banks with real FDIC or OCC charters, but I never did more than the occasional work for a commission driven MB. Originators for banks rarely are paid commission, rather are paid at the end of the year for making good loans as a bonus.

It is true I no longer am on the FHA roster, I don't even own appraisal software anymore since my assistant quit. I currently have 2 farms, a vacant tract, two duplexes and two SFR to value. I am hardly ignorant of what it takes to appraise a house. So what specific information does USPAP apply to a residential appraiser that does not apply to a Certified General license as well? And what specific instance would I give an opinion about an issue I haven't dealt with in the past 23+ years?

I respect the time and knowledge....

 

[Ken B]

I can say from first hand experience that college students have no interest in becoming appraisers. Perhaps part of the problem is becoming a trainee to start-if you have a bachelors or masters degree, you might be able to make more money to start and might have a more prestigious title. But there is no way to get around that at this point. Right now, the "new blood" seems to be the appraiser's kids or relatives who have a little better understanding of the trajectory of their industry and maybe their kid's friends.

I have a couple youngsters in my office who joined the organization straight out of college. Both out of the state university's real estate program. They start as research associates on an hourly basis and then advance to junior appraisers on a split fee basis. These two guys are supervised by a top producer who works them like dogs. Their exposure to various properties types would be hard to duplicate elsewhere.

Real estate appraisal isn't for everyone. Then again, I can't think of anything that would be.

 

[Gobears81]

I have a couple youngsters in my office who joined the organization straight out of college. Both out of the state university's real estate program. They start as research associates on an hourly basis and then advance to junior appraisers on a split fee basis. These two guys are supervised by a top producer who works them like dogs. Their exposure to various properties types would be hard to duplicate elsewhere.

Real estate appraisal isn't for everyone. Then again, I can't think of anything that would be.

We thought that we were a hot ticket, but have been trying to find a trainee for awhile with limited interest. A few didn't look to be good fits, but the number of applicants behind them was slim to none. Maybe we are looking in the wrong spots...

 

[Terrel L. Shields]

It has been difficult to find good RE grads who are interested when they find that the four years they have spent means enduring another four years or so to get to the point where they can "do it themselves". And, for most trainees, they are going to be mentored by less than the size company that Ken and Michael work for. The trainee will get no salary and will skirt the issue of "contractor" with the IRS... which might be a problem some time in the future.

The bottom line is that a single contractor who does treat a trainee fairly and give them an opportunity to make a living wage, may be doing so at a serious impact upon their own net-net. And for months, you will be literally duplicating the research and analysis that the trainee is doing, or, putting the trainee in a position of lying about their experience with your complicity.

Our board has given any number of signals that don't necessarily jive. Some argue that an appraisal assignment is an 8 hour exercise and thus, 4 hours are allocated to the trainee (who may struggle for two days on what we could do in 4) and 4 hours to the supervisor. Not all states allow all hours to "count" or they use a hourly allocation that requires enormous documentation to overrule. So a trainee that devotes two days to a project and only gets 4 hours credit and say works 10 hour days six days a week with 2 weeks off, still only 1,200 hours a year "credit" for those 3,000 hours spent. In my state your driving time does not count. etc.

And for assignments that take only 4 hours? Claim the full 8 hours???? insensible system. I spent about 120 hours on a project recently. What board would ever allow that many hours to be claimed? And how would I ever be able to train someone in mineral appraising when you literally could make a very good living off as few as 30 assignments a year.... again, the trainee would never get the required hours in a specialization until the board relents and allows them to utilize these hours. Same with ad valorem appraisers and mass appraisers. Many have very good data manipulation skills, research skills, and usually make decent fee appraisers. But to get NO credit for their hours because the work performed wasn't a single assignment of a single property? The ASC tried to get Arkansas to claw back the licenses of about 100 appraisers who had claimed ad valorem experience going back to 1992. Can you imagine those lawsuits?

 

[leasedfee]

Many interesting comments that run the gauntlet. . . . The shift to online bidding has hurt the industry. It creates the same problems that the airlines face, in general, the cheapest bid wins, quality is ignored. Then you discover that there is more to the scope of work, or something altogether different, and you have a business decision to suck it up or annoy the client for more money. For all of its warts, which were many, talking about a project directly with the LO gave you a better understanding of the project for a fair bid and it provided an opportunity to demonstrate your market knowledge which was often appreciated and noted for their loan committees. An LO only had limited time to ring a handful of appraisers. Today, the appraisal department can equally email dozens of people without having much of a clue. I fired one national bank featuring bears because they only went to the lowest of the low bidders (or to an appraisal shop who was in collusion with the LO as to what fee they were bidding) and almost always had assignments that didn't match what was posted.

The principal-agent problem still ranges supreme.

The agency dilemma occurs when one person or entity (the "agent") is able to make decisions on behalf of, or that impact, another person or entity: the "principal". The dilemma exists because sometimes the agent is motivated to act in his own best interests rather than those of the principal. (wikipedia)​

Someone on the forum said more eloquently to the affect that We're The Only Business Where We Get Paid to Make the Client Mad. BUT you can only do that so many times before they stop calling you. In this regard, the agency dilemma, USPAP and whatever regulatory tweaks of next year is a failure. I've long contended that all bidding should be done via a centralized system where the client and the appraiser have no connection. Someone (bank, attorney, investor, etc.) needs an appraisal of a warehouse in Cincinnati (or single-family in Atlanta)? All approved and licensed industrial (or the SFR) appraisers in that sub-region can bid on it. The computer then picks a median-priced and median-timed appraisal. The mortgage brokers and wheeler dealers types would be helpless. Still to established appraisal shops who have exclusive or near exclusive relationships, this would ruffle lots of feathers of the status quo, . . . . . but it would solve many problems, including the development of trainees who'd work towards obtaining what medical doctors call "board certified fellows" in a particular property type and area. . . . . . .

The college degree requirement: Though I personally benefit, I was opposed to it as a requirement. First, I don't think it is good to have two categories of people in middle-class America, not to mention it promotes degree-mills. Second, I don't think it accomplishes what the ASB desires. When I was with a shop of 12-15 commercial appraisers, we hired a very talented young man who had a decade of construction experience but was from a poor family so never finished a degree. He was teaching us things from his experience, yet today he couldn't become an appraiser. Now he works in the real estate department for a fortune 1000 firm. On the other hand, a young lady with an English lit degree was completely qualified but she was never that enthusiastic about a career in real estate. I've hired college and MBA graduates and mostly have been disappointed as they often, ultimately, not interested in appraisal work. That was a great deal of wasted training time and energy, and headache. Not to mention very small companies struggle to offer perks and benefits and corporate formality (career ladders, vacation time) that degreed individuals and their family expect.
. . . . . . .
Regarding the loan-to-value ratio thing, all of the ratios look the hottest at the top of the market -- or time to buy for the last of the suckers who obtain their real estate analysis from a cocktail party or the club. Hyper ratios are the warning sign that things have gone beyond sustainability.

 

[Gobears81]

It has been difficult to find good RE grads who are interested when they find that the four years they have spent means enduring another four years or so to get to the point where they can "do it themselves". And, for most trainees, they are going to be mentored by less than the size company that Ken and Michael work for. The trainee will get no salary and will skirt the issue of "contractor" with the IRS... which might be a problem some time in the future.

The bottom line is that a single contractor who does treat a trainee fairly and give them an opportunity to make a living wage, may be doing so at a serious impact upon their own net-net. And for months, you will be literally duplicating the research and analysis that the trainee is doing, or, putting the trainee in a position of lying about their experience with your complicity.

Our board has given any number of signals that don't necessarily jive. Some argue that an appraisal assignment is an 8 hour exercise and thus, 4 hours are allocated to the trainee (who may struggle for two days on what we could do in 4) and 4 hours to the supervisor. Not all states allow all hours to "count" or they use a hourly allocation that requires enormous documentation to overrule. So a trainee that devotes two days to a project and only gets 4 hours credit and say works 10 hour days six days a week with 2 weeks off, still only 1,200 hours a year "credit" for those 3,000 hours spent. In my state your driving time does not count. etc.

And for assignments that take only 4 hours? Claim the full 8 hours???? insensible system. I spent about 120 hours on a project recently. What board would ever allow that many hours to be claimed? And how would I ever be able to train someone in mineral appraising when you literally could make a very good living off as few as 30 assignments a year.... again, the trainee would never get the required hours in a specialization until the board relents and allows them to utilize these hours. Same with ad valorem appraisers and mass appraisers. Many have very good data manipulation skills, research skills, and usually make decent fee appraisers. But to get NO credit for their hours because the work performed wasn't a single assignment of a single property? The ASC tried to get Arkansas to claw back the licenses of about 100 appraisers who had claimed ad valorem experience going back to 1992. Can you imagine those lawsuits?

Terrel-you make a good argument. But where do you propose that we cut back? I work in a market that is illiquid, and I'm guessing that you do too. Those can frequently be difficult markets to do appraisals in, and I think that a less qualified appraiser could really struggle in those types of markets if they don't have much experience to pull from. I say that because of most of my experience being in those markets- rather than to minimize the challenges associated with more liquid markets, especially since the values of properties in those markets are often higher.

I recognize that the vetting process of obtaining a certified general license is a pain. I am pretty busy and it still took me a full three years to get my CG license. Perhaps there could be a license in between trainee and certified general (for appraisers that don't do only residential work) that could ease the pain in making the transition? Not sure how that could work, but I worry that cutting the requirements for the certified general license that allows you to appraise anything including the Sears (or Willis) Tower if you can justify competency would not be the best decision. I'm not sure that there is much interest amongst younger people in general to become an appraiser-maybe they find working for a hedge fund or an investment bank to be a more attractive prospect. That might be more of the problem in the declining number of appraisers than the requirements in my opinion.

 

[Eli]

Terrel-you make a good argument. But where do you propose that we cut back? I work in a market that is illiquid, and I'm guessing that you do too. Those can frequently be difficult markets to do appraisals in, and I think that a less qualified appraiser could really struggle in those types of markets if they don't have much experience to pull from. I say that because of most of my experience being in those markets- rather than to minimize the challenges associated with more liquid markets, especially since the values of properties in those markets are often higher.

I recognize that the vetting process of obtaining a certified general license is a pain. I am pretty busy and it still took me a full three years to get my CG license. Perhaps there could be a license in between trainee and certified general (for appraisers that don't do only residential work) that could ease the pain in making the transition? Not sure how that could work, but I worry that cutting the requirements for the certified general license that allows you to appraise anything including the Sears (or Willis) Tower if you can justify competency would not be the best decision. I'm not sure that there is much interest amongst younger people in general to become an appraiser-maybe they find working for a hedge fund or an investment bank to be a more attractive prospect. That might be more of the problem in the declining number of appraisers than the requirements in my opinion.

Yeah, or all the other jobs Terrel mentioned that college grads are pursuing instead of appraisal. It's called competition for labor. Some blood sucking appraiser trainee sponsors who didn't teach the trainee anything anyway are having a hard time finding a college grad who will put up with their crap. With some sponsors, the trainee learned more on their own than from the sponsor. Now, with CU/UAD, the brokerage business or many other avenues in the finance business are much more attractive to qualified college grads. So are the other jobs Terrel mentioned earlier. It's called labor migration. We haven't even stopped existing certified appraisers from leaving the business, much less attract new ones. Of course most appraisers work in the single family mortgage side of the business. Fees were not really much of an issue prior to 2008 all the way back as far as I can remember, which was around 1985. So for 23 years fees were not much of an issue, but in the last 7 years they became an issue. Wonder why?