AVM's or CPA's

[Julio E. Sune Jr. (FL)]

http://www.kyappraisersboard.com/pdf/Avm.pdf

"Appraisers have a choice; they can unite and stand up for what is right or they can do nothing and watch appraisal assignments go to competing entities" [Sam E. Blackburn]

'Destiny is a matter of choice, not luck or chance" [JES]

:idea:

 

[Austin]

Quote from the article"

"Since 99% of all residential appraisals are at or above selling price..."

Reply: That statement is the deathnel of residential appraising and not AVM or CPA's. If 99% of appraisals are at contract price, why bother with an AVM or CPA? Just risk rate the loans by one tenth of one percent and do away with the whole process.
"Good morning and welcome to Walmart." Hey! Arn't you the lady that appraised my house about year ago?
Or how about this one: "Lady I am sorry but your foot just will not fit into a size 7 shoe." Lady's reply: "What do you know minister. You were a real estate appraiser and I hear you people couldn't even measure a house much less my foot."

 

[Fred]

"Since 99% of all residential appraisals are at or above selling price..."

Where do folks get these percentages?

 

[Austin]

AVM’S AND CPA’S
APPRAISERS OF THE FUTURE
By: Sam E. Blackburn, Executive Director

Since 99% of all residential appraised values are at, or above the selling price, then it stands to reason the selling price sets the market. Lenders are quickly realizing that if they can get an approximate value or a range in value from an AVM, why delay the process and the extra expense of contracting for the services of a certified appraiser.

Steven: I don’t know where they are getting the information from, but the Executive Director must know so why don’t you ax him? Within the last six months I had a bank VP tell me that if a seller was willing to sell and a buyer was willing to buy at the contract price, that was market price and he expected me to come up with that number. That is probably where that information came from.

 

[Stephen J. Vertin MAI]

I can not speak for Blackburn, but I believe the figure comes directly from FannieMae. It was used in a press release some time back. It was based on their internal study of appraisals and was used to justify the use of AVMs. The problem with the 99 percent figure, as many critics have pointed out, is FannieMae is an end user. They would never see appraisal that did not cut the muster or make the deal. Therefore, a number of appraisals may have never been counted. I believe this to be true and more accurate of actual facts. I am surprised so many in our profession add validity to Fannie's 99 percent fallacy. It does not give the full picture.

Steve Vertin

 

[larryhaskell]

I believe Steve is right because I've seen the same statement attributed to Fannie Mae. However, if Fannie Mae ever gets into the direct lending part of the business as they desire, that percentage will very likely go down.

 

[Residential Appraisal Ser]

Steve: You are right. Fannie made that statement to us at a meeting that we had. OUr question was/ did you see all the appraisals and did you see appraisals that were rejected by the loan officer and the 2nd and 3rd appraisal that was asked for.

We didn't get a reply. They are using this, to justify their AVM system.

William Sentner
President
American Guild of Appraisers OPEIU AFL-CIO

 

[Fred]

Austin writes:
"...but the Executive Director MUST KNOW" [emphasis mine].
Yikes (!), how un-Austin-like to presume bureacratic infallibility. :?:
As to asking - isn't an appraiser supposed to include the comps?

Bill,
That would be the same meeting where your pension-fund threats were supposed to make Fannie throw their AVM in the garbage, right?

 

[George Hatch]

I'm sick of hearing the "99%" comment. Fully 1/4 of the apartment appraisals I'm doing right now come in below the sales price, on occasion as much as 15% below. And another 1/4 of them are coming in higher than the sales price. I have similar ratios for a couple other property types as well. And these are just the appraisal assignments I can't talk my way out of doing. I prolly decline to even start another 10% - 15% just based on what I know about my market area. And I know I'm not the only one, nor do I even think I'm in the minority.

IMO, Fannie's "99%" comment comes from the fact that they only see the appraisals that will facilitate their loans. They don't see the appraisals that don't come in because their 'agents' are shopping appraisers until they get what they're looking for, and they don't see the pre-inspection declines from appraisers who won't hit the number. They also aren't paying attention to those ocassions when the sale price gets adjusted downward because of the appraisal or because one deal falls through only to have another deal at a lower price go through.

This isn't to say that a certain percentage of appraisers aren't hitting numbers because they are; but it isn't 99% of us. Nor is it to say that we aren't our own worst enemies with regard to this issue because we are; again, though, it isn't 99% of us. Smearing the entire appraisal profession based on partial data is just plain dumb.



George Hatch

 

[Anonymous]

George is correct, if a property doesn't appraise for or above the contract price the loan can't be made and fannie or freddie won't see the appraisal.