California Licensing Fees Increased to $1,030 Every Two Years

[George Hatch]

For the sake of efficiency, for the sake of making it possible for appraisers to make a decent living, when the market wants to pay minimum fees, some standardization of work is called for. It is insane to insist total flexibility on the part of appraisers when users are not willing to pay the money for the time.

As you well know, once you agree to do an appraisal, users can come in after the fact and insist on certain additional work, which you currently neither cannot refuse nor can you charge additional for. And even if you can charge an additional fee, it has to be reasonable - and in the next time around the client may will likely hand the order to another appraiser who is more amenable to extra requirements. So, for example, I would insist:

1. No requests to handle additional comps. However, given the appraiser describes his curated databases and other data sources for comps up front. If an appraiser accepts an assignment, it is assumed he feels he has sufficient comps to do the appraisal.

2. It is totally the appraisers decision as how to handle hypothetical and extraordinary assumptions, or how to appraise a property, e.g. as commercial or residential. Of course the client can request how he would prefer the property to be appraised, but it is simply not his call - unless he is willing to go the hypothetical route.

3. And so on. Oh, these things are easy for me ....

How much you make isn't an element of the appraisal standards. Nor should it be. If you or I go broke because the market conditions for what we're doing are too weak to support us then it is what it is. Tragedy of the commons. That's no reason to dork appraisal standards to enable us to give our clients the "take it or leave it" ultimatum.

Senifeld's "Soup Nazi" character was only able to maintain the hostile relationship with his clients because his product was so popular with them that they were lined up to patronize him. Not because he had an entitlement to their patronage.

So no, nobody cares if you or I go broke because we can't figure out how to make a living and comply with our standards at the same time. If/when that happens then maybe we'll move on to a different gig.

So far, I've never had a problem doing both at the same time. I'm sorry if you're struggling. If you want, I'd be happy to give you some pointers. Most of us here would be, too. All you have to do is ask.

 

[RCA]

How much you make isn't an element of the appraisal standards. Nor should it be.

Of course, that is never true of any standards based profession. The people who write the standards do have some sense as to whether they are practical or not. In our case, in the case of the appraisal profession, they have simply pushed things to the limit with wishful thinking.

 

[Addie]

I regard your statement as extremely ambiguous and difficult to read - "minimums" and "upper limit"? OF COURSE, we can't dictate what the clients or user can ask CURRENTLY. But that is my point, we could give them a list of the things they can request. In fact, in other countries, this is often the case. The Germans, for example, you can be quite sure, are strict in this regard.

I think that, effectively, we do indirectly restrict what users can request, in many cases. The problem is that USPAP has worded the SOW crap such that it gives the opposite impression. So, again, it is the attitude that is important here. The SOW cannot be unlimited. It in fact, officially needs to be constrained - at least at some level that cover's all AMCs and lenders. Alterations should be allowed - only after agreement by various boards or some authority - after extensive review.

Can you show your work at least a little? Like give us 1 page of one of your reports...please.....just to prove it doesn’t say “yes, no,yes, I can’t, they have to pay, just put the lotion on the skin, no, yes, no”

Kind of for your own good. Just so we can check on you. Thanks. Society.

 

[CANative]

Can you show your work at least a little? Like give us 1 page of one of your reports...please.....just to prove it doesn’t say “yes, no,yes, I can’t, they have to pay, just put the lotion on the skin, no, yes, no”

Kind of for your own good. Just so we can check on you. Thanks. Society.

Instead of always being snarky and disrespectful of those with more experience, you should just monitor this board and pick up wisdom and information that will help you should you decide to follow through and become an appraiser.

Here is a good place to to read superlative appraisal reports by a past master, James Graaskamp.

Once you click the link and are on the site, select the tab for "Browse the Collection."

UWDC Collection Browse - UW-Madison Libraries

uwdc.library.wisc.edu

 

[RCA]

Can you show your work at least a little? Like give us 1 page of one of your reports...please.....just to prove it doesn’t say “yes, no,yes, I can’t, they have to pay, just put the lotion on the skin, no, yes, no”

Kind of for your own good. Just so we can check on you. Thanks. Society.

Sure, I will on my website, https://www.valuationengineer.com. ... At some point. I could take one of my reports and try to change all the info, but there are a lot of calculations that have to synch ... and it is not that easy to change everything, keep it in synch, to the point it can't be traced to the original property. More likely, I will just break it up into parts, to reduce the problem of keeping everything in synch.

I am working on a book that actually will be enormous - if I ever finish it. I'll probably publish it in chapters though. Practical examples, data, UML diagrams, code (SQL, Python, C# and/or R-Language).

My first focus will be on the analysis of residuals, subjective scoring - which is the central focus of the "Subjective Value Containment" approach I have created. So, yea, - I am working on it.

I think the only way to survive in residential appraisal in the future is to appraiser entire neighborhoods in advance. You will create and maintain curated databases for entire neighborhoods, updated automatically everyday. You will periodically update your models for all neighborhoods and market areas. In this way, if and when someone calls you for an appraisal - you are going to shoot them a 100+ page report lightning fast. - And the values are going to be very accurate.

---- And if you want to make a living at this, you will have to protect your intellectual property. Probably half the work for any software provider in this arena - is setting up security to provide the best lasting protection of your intellectual property. It's complex stuff.

NOTE: I don't know exactly where companies like House Canary are going to fit in the future of appraisal. I'm guessing they will eventually give up on doing appraisals and just provide data analysis services to various kinds of organizations. Now, they could do appraisals - but I'm guessing it just won't work out very well - due to the inefficiencies of large multi-focus organizations, and I don't think such organizations want to focus on just appraisal.

 

[RCA]

From today's BREA Winter newsletter: http://brea.ca.gov/pdf/19-368_BREA_Winter_Newsletter_web.pdf

"More surprising are the numbers that show how the population of appraisers in California is aging and how few young people are entering the profession. Nearly 70% of licensees are over 50, almost 40% are over 60, and less than 12% are under 40. When trainees are removed from the count, there are more licensees from ages 80–89 (109) than there are from ages 20–29 (88). See the table below for specific data. There are several factors impacting the appraiser population, including a reduction in the demand for appraisers due to changes in residential mortgage lending requirements and advances in technology. Lenders now allow waivers or other products (evaluations, automated valuation models, broker price opinions) when in the past, a traditional appraisal report was required. There are also legal and financial reasons such as increased license requirements and stagnating appraisal fees. Only recently has the Appraisal Qualifications Board allowed for an alternative to a four-year degree for a Certified Residential license. "

Traditional/legacy residential appraisal is dying and near dead in many areas. In fact, you could speak of the living dead, so to say.

I think, though, the market might eventually tune in to more accurate, informative, predictive and prescriptive types of appraisals. Different balllpark though.

Traditional commercial and rural residential will still be able to survive for some time to come. Yet, I think the fees everywhere are under pressure. Commercial multi-family has been getting ever more difficult.

It is far easier to make a good living elsewhere ....

 

[RCA]

Instead of always being snarky and disrespectful of those with more experience, you should just monitor this board and pick up wisdom and information that will help you should you decide to follow through and become an appraiser.

Here is a good place to to read superlative appraisal reports by a past master, James Graaskamp.

Once you click the link and are on the site, select the tab for "Browse the Collection."

UWDC Collection Browse - UW-Madison Libraries

uwdc.library.wisc.edu

For his day and time, these were excellent appraisals. Nowadays, though, at least as of 2006 or so, if you were to read through the "annals" of CBRE appraisal reports, they would all look pretty much the same - only far more detailed and advanced. Argus reports, complex Excel spreadsheets, and macros. ... I have no clue where CBRE is now in the state of the art. But the state of the art would be lots of ArcGIS diagrams, demographics, advanced reports to support assertions, far more advanced statistics and so on.

The logic in Graskamp's appraisals is simple and straightforward, and one can argue that is as it should be. However, he lived in a simpler time. In this day and age, things move faster, life is more complex and logical arguments tend to get out of touch with reality. Legal issues, tax issues, politics, ..... And the frigging students fresh out of college don't know a damned thing about logic, ... unless they are preparing for the LSAT.

... BTW, yea, prepare for the LSAT and see how you do.