• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

AVM article in REV hits the nail on the head

Status
Not open for further replies.

P.Johnson

Thread Starter
Sophomore Member
Joined
Feb 4, 2002
Its about time Mr. H publishes an article on AVMs that was not provided (or paid for) by one of his advertisers. I am among one of the thousands of appraisers resisting AVMs in any way possible, including not using any software or appraising for any clients which intend to use any of my information for an AVM. Unfortunately, what appraisers need is a far reaching recession which results in massive layoffs, foreclosures, and ultimately the lender's bottom line. It seems the industry is now controlled by people too young or too stupid to remember what happens to real estate markets when the economy turns bad. Our midwest real estate market has went from one of the most affordable housing markets in the US to one of the highest cost markets because of easy credit and appraisal policies since the mid 1990's when the refinancing boom ended. Do you know of any other time in our history that a single 22 year old making $25,000 with huge auto and credit card debt and a history of late payments could qualify for a $150,000 mortgage? Using AVMs only eases credit and easy money, making the inevitable 'correction' in the market larger and longer lasting. In the 1980's HUD lost nearly $30,000 for each property that went into foreclosure with relatively strict underwriting standards and a controlled appraiser fee panel. How much will a lender lose in a declining market where people are getting laid off, underwriting becomes stricter, every other house on the block has a for sale sign, and most importantly, the house was over valued in the first place? If they are going to get rid of appraisers, why not get rid of the underwriters as well. Just send anyone with a piece of real estate whatever money they want.
 
Joined
Jan 16, 2002
I also resist in every way possible. I'm with you 100%. Note the quote
in the article ".........appraisers who feed it accurate data is essential to its success".
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
I wrote an article on AVM and Regression Methods that was published in REV in the Spring of 1998. In the same edition Henry wrote an editorial basically saying you can’t do an appraisal using statistical methods and it could be seen by his ideas that he wasn’t statistically savvy. Since that time I have seen a shift in his opinion and in the last two editions he has written on a few subject invoking statistical methods. In the last two issues the question was discussed concerning the meaning of “predominate price” in which he used statistical methods to support his opinion. I see a clear shift in his thinking on the subject of statistics in the last four years. A couple of issues back I think I remember a definite bias in that direction. Henry throws a lot of weight and if he gets converted it is all over but the fat lady singing. In general, the "worm" seems to be turning in the direction of a new "form." Pun intended!
 

Benjamen Brossette

Freshman Member
Joined
Jan 15, 2002
AVM and the beholders have corrupted the principle of supply and demand.

I am 22 years old and I am in debt, but I am not too far in debt. If I did not become an appraiser I would be bankrupt and getting stiffed on a house right now. I am managing my finances quite well.

I have read about the 80`s. The situation at hand seems to be more destructive. The biggest lie is convincing the world something does not exist. My friends are in college or just now graduating. The difference between my education and their education? I know what exist and they do not!

I can`t even talk my sister out of borrowing money for her new found business. She went to a bank, shaked their hand and dove right into a pool that does not have any water. She absolutely has no idea what her investment means, nor she does not know what she is doing. I still wonder what her lease saids and how much she is paying, in fact I would like to know what what kind of loan she recieved. Last time I heard? Her boyfriend and the banker was trying to figure out everything on a couple of scratch paper.

It is not the young people, it`s the lie that does not exist!
That is my opinion!
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Benj --

You're not making much sense to me.

All your sister is doing is renting money.

As long as she puts it to good use, she will garner the manifold of time and effort.

Or, one might borrow money to buy a car to gather in orders for appraisals or to deliver the reports. OR, JUST MAYBE, to go out and do property inspections.
 

Benjamen Brossette

Freshman Member
Joined
Jan 15, 2002
I do not see anything wrong with borrowing money.

She does not know her competition, she does not know that there is a possibility she can borrow money from a better source, she does not know how the market will react because of location and the conditions of her lease, She does not have any comparable differences to guide her from making mistakes. She could borrow more than she has too.

The list can go and on.........

She can stay away fromt he mistakes and do it right the first time, instead they will use a bankers opinion and a few scratch papers.

A business need money to get going. They borrowed money against the lease to get the money. They do not have a clue what the market saids and how the lease will react to the market and the business itself.

She is taking the banker`s opinion over my opinion. An AVM basically represents this situation if an AVM were used.
 

Benjamen Brossette

Freshman Member
Joined
Jan 15, 2002
I see where you got confused Larry.

I said - I can`t even convince my sister from getting a loan.

I should have written my post more clear. What I should have said was this - I can`t even convince my sister from getting a loan from a more reliable or even a better source and order an appraisal to see what she is dealing with, and how to go about investing in a loan that will better suite her business.

The loan made was not a personal loan. The loan made was against the business lease.

I hope I cleared it up for you.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
I am a firm believer in employing professional help.

It ALWAYS saves money in the long run hiring a professional. I don't do my own income taxes because I want them done right. I'll bet I could by using last year's report and the annual software update.

Me doing them would be somewhat akin to sending my mentally sick child to a church pastor for counseling therapy.

It's just better if my taxes are prepared by someone in the industry. Then I know nothing has been left out. While he's doing my taxes, I can earn two to three times what it costs me to hire him. And, NO I don't use H&R Block!
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Larry, couldn't agree with you more, on the hiring a professional thing; but in most instances, some people need to get burned to figure out what went wrong and not to do the same thing again.

Benjamen, family advice is always recieved with negative input, I know you mean well for your sister, but she will most likely NOT thank you until after the mistake has been made. And just a little advice - Do Not Say I told you so** 8O


8)
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks