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

[Randolph Kinney]

There are several appraisal firms near me offering residential, commercial and brokerage services. I don't believe this model is viable for all residential appraisers since the bulk of demand for residential appraising is for mortgage lending.

 

[RCA]

I believe that's what Zillow and others want too. If your method has any merit, Zillow would be paying you millions for it. If your method is job specific labor intensive suitable for one time use only reinventing the wheel for each neighborhood and time interval, then good luck with your method.

You don't understand. My method takes qualified appraisers. Zillow can't afford to pay appraisers to subjectively value all the homes it deals with. Why don't you even begin to understand this?

 

[Randolph Kinney]

You don't understand. My method takes qualified appraisers.

I understand that perfectly. Residential mortgage lending is morphing away from the licensed appraiser performing the traditional appraisal that employs traditional methods by using alternative means of valuations that result in cheaper and faster results.

 

[Mr Rex]

How many comparables does your method require Bert? How many properties is an appraiser going to have to subjectively rank/rate for your regression to work properly? I'm guessing more than the 3-6 closed sales and several listings currently in use. Is this practical or possible when the market forces want cheaper and faster, not more in depth and time consuming? You might need to get out of your office more often. The real world is something you need to keep in sight.

 

[RCA]

I understand that perfectly. Residential mortgage lending is morphing away from the licensed appraiser performing the traditional appraisal that employs traditional methods by using alternative means of valuations that result in cheaper and faster results.

If you are talking about hybrid/bifurcated appraisals, I consider those to be appraisals. A separate issue is how qualified the inspectors are and whether they are the ones who score (or measure or in other words assign a quantitative score) the intangible qualitative features such as condition, quality, view, etc., or whether it is some appraiser setting at a desk reviewing their inspection report.

Look I can kind of see this point here. IF and that is a big IF, IF you can use a qualified inspector, is that much different than simply using an appraiser? I suppose it is a question of degree. There is no arguing this point: If you don't need the accuracy a qualified appraiser can provide, you shouldn't be required to use their services. It may be that the "you" really means some GSE, such as Fannie Mae. Maybe all they really need is an approximate value, with the assurance that the house exists and is in reasonable condition for the subject neighborhood.

I would see my services being needed by a lender who is going max value on the loan. And down the road, I want to provide a "hurricane" forecast that shows where values can head in the next 8 years with probabilities. This would be particularly useful for a private investor, who could use my appraisal for:

1. Determining how much to loan.
2. Assigning interest rates to cover the risk, in combination with #1 (let's say a matrix, LTV vs Interest Rate).
3. Determining the insurance requirements for fire, earthquake.
4. Determining maintenance costs.
5. Determining what conditions and constraints would be appropriate for the contract.


Individual investors, with good, very good appraisers, should be able to outperform large lenders. You cut out the middleman, overhead and have more efficiency.

Everything is headed towards more efficiency. The appraiser can provide this - ------ but is damned best advised to avoid large institutions like GSEs. Very few appraisers will do good working with GSEs.

 

[Randolph Kinney]

I would see my services being needed by a lender who is going max value on the loan.

So your typical client is a lender financing 100% of the market value. Are you a VA appraiser? VA doesn't require more than the appropriate appraiser license and experience appraising residential homes.

And down the road, I want to provide a "hurricane" forecast that shows where values can head in the next 8 years with probabilities. This would be particularly useful for a private investor, who could use my appraisal for:

Maybe insurance companies? Even NOAA and IPCC can't accurately forecast next week let alone 8 years out what the weather is going to be.

Asset loans are more sensitive to movements in asset prices. You would do better forecasting the S&P500 index for the money you could make.

The appraiser can provide this - ------ but is damned best advised to avoid large institutions like GSEs. Very few appraisers will do good working with GSEs.

GSEs drive residential mortgage financing and SOW. That is the vast majority of residential appraising. You have a niche at best. It is not going to influence the apprising standards nor education.

 

[RCA]

So your typical client is a lender financing 100% of the market value. Are you a VA appraiser? VA doesn't require more than the appropriate appraiser license and experience appraising residential homes.



Maybe insurance companies? Even NOAA and IPCC can't accurately forecast next week let alone 8 years out what the weather is going to be.

Asset loans are more sensitive to movements in asset prices. You would do better forecasting the S&P500 index for the money you could make.



GSEs drive residential mortgage financing and SOW. That is the vast majority of residential appraising. You have a niche at best. It is not going to influence the apprising standards nor education.

No, about all I do now is Estate and Attorney appraisals. But, I am thinking about linking up with investors and contractors. I am not just there yet - other things on my plate.

VA loans are guaranteed by the government and exist for political purposes. Accuracy should be important, but there are so many appraisers not capable of reliably producing accurate appraisals, the best such an organization can do is establish a set simple regulations for all to follow and hope the thousands of miscalculations balance each other out.

It is a far different story to produce an appraisal for a project that a single investor may dump their life savings into. That takes a very good appraiser. And I would venture to guess, that those appraisers who retire rich are those who have been successful at this kind of business, not to mention certain names. But look around for the few appraisers who have multiple property holdings.

Insurance companies? They are interesting people that are often smart (in varying degrees) but too timid to change the world: They want to put a dog in sheep's clothing, e.g. they want stabilized value - but they want to call it traditional market value - so that everything looks kosher on the outside, internally they don't have to deal with explaining the ups and downs of the market which people in their realm are suspicious of, everything has to look like A, when actually it is "#!.*xYz"; and while a lot of them are smart, some are dumb, some are nasty as heck, some are sheep, some are wolves, but they are pretty much slimy for one reason or another. Whatever, - one thing for sure is they don't want to upset the cart.

Or, put it this way: Yes, insurance companies might like accurate values ... but they would want you to stabilize it, to make it something other than market value, yet they want you to call it market value. Accurate stuff would be used internally. You might very well wind up with 3 kinds of values and a nightmare problem of trying to massage everything to make it look kosher to the outside world, kosher to their managers and also kosher to their analysts. I've seen appraisers spin their wheels for months to make it all work .... So, at the end of the day, their Annual Report looks pretty much like the last one, no one loses their job, and the company keeps making as much money as possible.

 

[Mr Rex]

Bert Bueller? Bert? Bueller? Bert Bueller?

 

[RCA]

Bert Bueller? Bert? Bueller? Bert Bueller?

Off target by a long shot. Maybe Peter Gibbons in Office Space. I can relate to him when it comes to appraisal:

 

[gregb]

Received a letter today from BREA stating that if I get my renewal application and supporting docs in by 12/31/2019, the old, lower renewal fee will apply to a license that expires in April, 2020.