Bad Appraisers ?

[leasedfee]

I no longer allow myself to be rushed

I feel/suspect that rushed loans open LOs, the loan committees, and appraisers into making bad decisions as they focus solely on a due date and overlook or downplay negatives.

 

[Deleted member 128537]

I think for the public a bad appraiser is someone that consistently makes inaccurate (no credibility) value estimates. When I go out to make a value estimate for someone who is seeking to sell a home they want a number that is somewhat accurate. And I also tell them what I believe to be the margin of error based upon the data. A good appraiser recognizes when opinions are more difficult to make, and when those opinions are more accurate.

A good weatherman is someone that has some credibility because the prediction is somewhat accurate. I don't know why that attitude should be different in the appraisal profession. What I'm finding is that we spend too much time on USPAP issues. Frankly someone could have a fully compliant USPAP report and be completely off when it comes to value. And the bottom line for most of the public is the accuracy of the opinion and not USPAP. Is the analysis and final opinion accurate?

I spent 15 years working in a market and was consistently recommended by realtors to do value estimates to help price houses to sell. Why? They thought my opinions were credible and could be consistently relied upon. They knew I was going to be brutally honest. And they knew I would do the analysis and knew the market. Doesn't mean I was never wrong. But I was right more than I was wrong. They could give a .....about USPAP.

When my family hired an appraiser to do an estimate on the land we sought to sell we could give a rats behind about USPAP. We wanted an accurate opinion. Which by the way we got a fully complaint USPAP report but I could tell the opinion was 1,000 per acre off based upon the comparable sales used. And I was correct. Was it a good appraisal? Not in my opinion.

 

[GWISC]

I'm sure every appraiser has or knows of a report they have completed, but would love a "do-over" on. In those few cases, we are all bad appraisers. A truly bad appraiser is one who habitually obvuscates the standards either on purpose (willfull negligence) or due to incompetence.

I VA underwriter once used the term "that's not what your peers are doing" (as if I am a bad appraiser for not including an unfinished basement in my sketch and yes that really happened). My response; "A state board of discipline determines peer compliance, not an underwriter and not for what is included in a sketch". Unfortunately, our peers (knowledgeable appraisers) know a bad appraisal when they see a bad report, but not necessariliy a bad appraiser. Underwriters for some lenders who have no appraisal experience think appraisers who do unusual properties with few comps submut bad appraisals. I guess it depends on the perspective of who determines the quality of the appraiser. I know most of the appraisers in my area. About half I would be confident in appraising my house. The others, not so much.

 

[Deleted member 128537]

I think all of us have really missed it. We are not perfect. And often the data just isn't that good. When I do appraisals for people looking to sell or buy I always preface my opinion with this statement, "The accuracy of my opinion will be dependent upon the quality of my data." And when I think my data is sketchy I will let them know. And I will say well this is my best opinion, but I could be off for this reason.... And you should take that into consideration. Or this is one aspect of the data that I don't have clear market reaction for. I can't quite put a dollar figure on it.

Unfortunately we can't do that with banks. They all think that every appraisal should be as accurate as the next. And that everthing should be clearly quantified. And that just isn't the case. Banks want to make appraising into a science, a series of regression analysis, and some definitive paired sales analysis. Thus we have the UAD baloney. But appraising is an art in areas where data is often subjective and difficult to quantify.

Thus a "good" appraiser is someone that recognizes limitations and tempers expectations. Unfortunately banks don't like that ambiguity.

 

[GWISC]

I'm sure every appraiser has or knows of a report they have completed, but would love a "do-over" on. In those few cases, we are all bad appraisers. A truly bad appraiser is one who habitually obvuscates the standards either on purpose (willfull negligence) or due to incompetence.

I VA underwriter once used the term "that's not what your peers are doing" (as if I am a bad appraiser for not including an unfinished basement in my sketch and yes that really happened). My response; "A state board of discipline determines peer compliance, not an underwriter and not for what is included in a sketch". Unfortunately, our peers (knowledgeable appraisers) know a bad appraisal when they see a bad report, but not necessariliy a bad appraiser. Underwriters for some lenders who have no appraisal experience think appraisers who do unusual properties with few comps submit bad appraisals. I guess it depends on the perspective of who determines the quality of the appraiser. I know most of the appraisers in my area. About half I would be confident in appraising my house. The others, not so much.

 

[Tim Hicks (Texas)]

Although, I believe that there are only bad appraisal reports. A bad appraiser is any individual that does not strive to be educated in their field and has little to do with public or lender perception in my opinion. Weekly, I review appraisals where appraisers don't know how to check zoning, don't know how to check whether a property is in the city limits, don't bother to verify bad public data, don't know when a property has a private well or septic instead of city water and sewer, count any living area as GLA whatever the finish, do not know Departure was retired years ago, think that previous history only pertains to published sales, don't know Fannie Mae guidelines with regard to PUDs, etc, etc. Are these "bad" appraisers? No, they are just unprofessional appraisers. Yet, they all seem to have 3-4 pages of CYA addenda that has nothing to do with the property. Does this make them bad? No, just a joke.

 

[Pittsburgh Pete]

There are probably many more appraisers that are just not good at communicating their conclusions in the report than there are bad appraisers. Have read many a report where I'm good with the value but have no real idea how they got where they got.

 

[Don Clark]

I tend to agree with Time Hicks and Pete. But, I consider a "bad" appraiser, one who intentionally disregards their agreed to scope of work, strives to "Hit a number", and fails to do even the most simple things such as measure a subject property correctly, and last but not least, never crack the cover of the USPAP and has no real idea what the current criteria really is. USPAP does not demand perfection. It allows for mistakes that do not cause a report to be less than credible. There is not an appraiser alive or dead that has never made a mistake. A bad appraiser is one who intentionally does misleading things, states misleading things, and fails to do what they have said they would do and then certifies that they have when they have not.

 

[Mike Kennedy]

For those who may have missed this mini-series
Adam Johnston, SRA, AI-RRS. Chief Appraiser
2008 Revisited "Musings of an Appraiser" -

Disputing an Appraisal

You're Only as Good as your Last Appraisal

Incompetence is a bigger issue than Fraud

3 Excellent Opinions - entirely on Target
http://www.millersamuel.com/tag/adam-johnston/

 

[bnmappraisal]

You're Only as Good as your Last Appraisal

Mike, I didn't click on the link, but I will say I really agree with the above quote!

A client can LOVE, LOVE, LOVE you until (fill in a blank)

That's true with many businesses, but definitely applies to ours as well