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Appraisal Institute Valuation Magazine Article

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Judy Whitehead (Florida)

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Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I received an issue of the Valuation Insights & Perspectives (2nd Quarter) from the Appraisal Institute in the mail today (I am not a member - I have never had time to think about membership in my ten years as an appraiser) but I was really appalled at the article that was written by Mark Yellen, President, Appraisal.com on page 46 (one of the last pages). The article was headed "True to Form: The Future of Appraisal Forms Software".

I suggest you read this article if you can. Perhaps I am misinterpreting it. I have been wrong before. BUT......he touts the Appraisal Institue Residential Database as an example of the ability for the appraisers to start sharing their data through modifications to every major appraisal software package. He also states that AIRD is now a reality and has benefited many appraisers and lending institutions without putting any of them out of busines.

NOW...... lenders want to take the next step......they want to start pushing more data to the appraiser when they place orders for appraisals and then they want to have some say about what the appraiser does with that data in order to come up with a final determination.

(I admit I am skipping some of the verbage) .....The programmers build a rules-based system into their workflow engines so that, on certain assignments the bank will be notified if the appraiser has gone outside the requested guidelines for the appraisal. FOR EXAMPLE, IF A LENDING INSTITUTION THINKS THEY KNOW THE VALUE OF A HOME AND CAN PROVIDE SEVERAL COMPARABLES TO SUPPORT THAT VALUE, THE SOFTWARE CAN SEND ALL OF THIS INFORMATION TO THE APPRAISER. THEN, IF THE APPRAISER FINDS THAT THE ORIGINAL ESTIMATE OF VALUE IS FLAWED, OR THAT DIFFERENT COMPARABLES ARE NEEDED, THE BANK CAN BE NOTIFIED ELECTRONICALLY!!!! It goes on to mention which software companies are on the cutting edge of this technology - Day One, Bradford, Polaroid and "Others."

Does anyone think this qualifies as "I need this home to appraiser for this value" or "Let me be the Appraiser"?????

This man ends the article with the comment that "The role of the residential mortgage appraiser continues to change.........those that have aligned themselves with the right clients and advanced with new technology are busier and more profitable than ever. The custopmers are asking for changes....are you listening carefully?"
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
I read the article. I would welcome reconsidering a value if they have data that I don't have, but selecting their comps for the appraiser to utilize is going too far. The article says we need to see the lender's side of the equation instead of the appraiser's side. I don't believe I have ever seen a lender that didn't think they had a good loan, but the lowly appraiser has destroyed the deal because the value isn't there. It is hard to believe that an appraiser has helped devlop this system. There are too many mindless sheep out there that will just accept their data and do what they are told. I know some areas that are within mile of each other that have similar size homes, but the values are about half of the other side of the tracks. Whatever happened to location, location, location. Or, has anybody ever heard of construction quality diffences, or different site values. How many times have you been asked to go over to that good addition down the street to make a sale work? This is like steering the appraiser in any direction they want. I guess you can tell I didn't care for the article. It is another case of the fox guarding the hen house.
 

Farm Gal

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Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Yup and if you don't think that is going to happen, or rather IS happening today think again...

First American was prepared to roll out their version of that program some time ago, then pulled in their horns. I'd sure like to have been a bug on the wall in the boardroom when whatever happened there took place.... Others have talked about, but not fully implemented such processes. So basically such prefilled formats are on the market now somewhere and shall soon become more prevailant. Bet me that they have realtors filling in most of the forms for MOST of the de-minimus valuations in states that permit such idiocy?

Our role IS changing, like it or not. In some areas such programs can and will do all of the fish in the barrel appraising that used to make this a marginally profitable business.

SOOOO what are we as appraisers to do: Raise our prices comensurate with the difficulty of the assignments that remain?

At what point will newbies, hopefulls and other untrained or desperate individuals come rushing in to take advantage of those high fees that will be required to perform a difficult appraisal comeptently?

At what point with most appraisers be devided by competency issues, as freshfaced and willing unknowingly incompetent folks take over most of the work?

Um does anyone else smell an exclusive professional designation revival in the making? IS there any other answer?
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Judy

perhaps if they're going to be able to provide any data, they need to become "Liable" for the events that follow. Just because the Appraisal Institute and/or the Lender Community wants us to go in that direction, doesn't mean we "Legally" can, based on the various rules we need to follow; USPAP; FNMA; and any other government arms that have their fingers in our "pudding". Just goes to show you how far the "Appraisal Institute" has gone to NOT stand behind the Troops that have supported them over the many, many years; it appears to be a case of Hurray for me and screw you. 8O

Just A Thought;
For the time being, if anyone gets supplied with information they have to use, provided by the Lender, then you should put in a clause; that professionsl assistance has been provided by "Mr.Lender" as noted and the development of this appraisal has been provided in compliance with the "Lenders Request" to utilize the sales noted. The Lender has agreed to "Hold Harmless" the appraiser noted in this report, with respect to the "Estimated Opinion of Value" for the reason's noted herein.

Good Luck

8)
 

David C. Johnson

Senior Member
Joined
Jan 15, 2002
Judy,

I read it too, after you pointed it out -- thanks (I think). In fact, I was compelled to read it a couple of times, and parts of it a couple more times.

Amazing.

But don't get me started.

Maybe another time.

Good thought, jtrotta.

Good ditto, Julio.

dcj

OK, just can't resist...But just this one:

What's this claim about the 60,000 appraisers all about, when, I believe, there are only about 75,000 in the entire country? That would be a whopping 80% of us, right?! Could this possibly be true -- or just another whopper?
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Judy,

"FOR EXAMPLE, IF A LENDING INSTITUTION THINKS THEY KNOW THE VALUE OF A HOME AND CAN PROVIDE SEVERAL COMPARABLES TO SUPPORT THAT VALUE, THE SOFTWARE CAN SEND ALL OF THIS INFORMATION TO THE APPRAISER. THEN, IF THE APPRAISER FINDS THAT THE ORIGINAL ESTIMATE OF VALUE IS FLAWED, OR THAT DIFFERENT COMPARABLES ARE NEEDED, THE BANK CAN BE NOTIFIED ELECTRONICALLY!!!!"

Sounds like more work for the appraiser, i.e. verifying the banks information and then looking for better comps. I'd charge more money for a job like that. I like jtrotta's suggestion of a liability disclaimer also. Let's see.....1) Added disclaimers 2) More research 3) More liability......MORE MONEY!!!!
 

Rick Neighbors

Senior Member
Joined
Jan 19, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Thank goodness for this forum! At least we can keep other up to date on some peoples sneak attacks.
 
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