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Conservative Appraiser

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larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
My daughter was talking to a LO yesterday that works for a local mortgage company that sends us a few jobs a month. The LO was trying to get us to comp his own house for a loan because he didn't want to pay for an appraisal if it wasn't going to work. Nikki patiently informed him of the reasons why we couldn't do that and he was kind of satisfied. Toward the end of the conversation, the LO told Nikki that I had a reputation as a conservative appraiser. How could that be, I'm a liberal based on discussions in this forum. :) I have been called conservative B4 but gave it little thought. I've heard this term used enough that I was wondering if the "conservative" label is common to other areas of the country. Does anyone have a good sense of exactly what is meant by being a conservative appraiser. <_<
 

Willie

Senior Member
Joined
May 30, 2002
Professional Status
Certified General Appraiser
State
Tennessee
Larry, I got called the same thing, last week. New bank client. Probably have done 10 appraisals for em. Every one has worked out, which is pretty good out of 10 deals. I don't know where on earth she was coming from. :blink:
 

Kathy in FL

Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Florida
I'd consider that a badge of honor in this world of fly-by-their-pants number-hitters. You're a conservative appraiser!

You should get it on a T-shirt. Put it on your letterhead.

I'd hire you to do my house.

Kathy in FL
 

Patrick Egger

Sophomore Member
Joined
May 29, 2003
Professional Status
Certified General Appraiser
State
Nevada
Larry ... I'd bet we've all been called much worse ... its no different then many on this forum that label UW's and LO's ... all get painted with the same brush. Over the years there have been times that I was less optimistic then a seller/realtor/buyer/loan rep, etc .... and times I was more. The more didn't count at all.

In this business you're only as good as your last appraisal ... that's the one everyone is focused on until it closes. One of the first and best lessons I learned is as an appraiser, you don't dictate the market, you simply read and report on it. All to often appraisers think that 3 sales make a market ... they fail to look ahead at what's about to happen or behind to understand why the comps sold for what they did ... 3 comps adjusted on to the next.

If others think you're conservative and it bothers you, take a good look at some of your past assignments ... what happened to the market right after you appraised them? Did other comparable properties sell for a lot more or less than what you thought? Did you have some room, where you high or low?

If you don't make the number that makes the deal ... everyone thinks you're conservative ... and after you do a good review of your work, perhaps you are or maybe you're giving away the farm, who knows.

If you really want to know, take the client to lunch and find out why he/she thinks you're conservative ... review jobs you did for that client and see what the outcome was. Maybe its because you won't do comp searches, etc ... maybe you were low ... either way, find out .... perception is reality and you can change perception ... their's and yours.
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
A "conservative appraiser" is one who is thorough and accurate.

We have a known pecking order here of "conservativity". For most conservative appraisers here, mortgage appraisal opportunities do not exist.
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
Conservative = honest when it comes to apprasing.

I've told this story once before, but I'll repeat it for those of you who didn't hear it before:

A realtor was talking to me about one of my competitiors and referred to him as "Low-Ball Jones" (name changed to protect the guilty). Now, I'm pretty sure she (the realtor) was expecting me to jump on it and bad-mouth my competitor in an attempt to get future business from her. Instead, I said, "Yeah, he (the other appraiser) really knows his stuff!" Her jaw dropped almost all the way to the floor. :rofl:

Now, I really don't think that exchange will keep me from getting referrals from that realtor. There's a saying in sales "all buyer are liars." Remember that a lot of the time they will say something they really don't mean.

If someone calls me conservative (or low) I usually take it as a compliment. There's plenty of room in the appraisal profession for the honest, competent performer.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
In a situation like this, I'd much rather have a reputation as being a "conservative" appraiser than a "liberall" or "progressive" appraiser. Actually, I think most of my clients think that "conservative" is my middle name.

I do have one client (10+ years now) who occasionally seems to question my conservative credentials. I must be getting soft....

That said, truly being conservative is as much a problem for an appraiser as being truly liberal with values. Bias is bias.

Anyways, I like to check up on the properties I appraise when they end up selling. Post Mortums can be very revealing if you do them on a regular basis. Since the buyers/sellers are not always completely logical or well informed, some properties we appraise will sell a bit higher or lower than what they're really worth. I would be looking to change my adjustments if I found a disporportionate number of either higher or lower sale prices. At that point it's time to recalibrate our internal AVMs. Ideally, the demonstrated sale prices will include a sizeable dead hit ratio, with much smaller, but essentially similar sized, ratios of high sales and low sales. Too many of one or the other means it's time to readjust.
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
I am going to guess that, to a loan officer, a conservative appraiser is one that has a reputation for being low on to many deals. A liberal appraiser would be one that would get the number.

That being said, I would prefer to be in the middle on this issue. Some days the loan officer is going to be happy and some days, he won't. Hope it equals out in the end.

We do have an apprasier in town that has a reputation for being low, not conservative, but low. I have no idea how good or bad of an appraiser, he is, but both real estate agents and loan officers hate him. They even spread gossip about him. I would not want that repuation anymore than the other way around.

Some days you're the dog and somedays, you're the fire hydrant.

Randy
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
I just got a little more info so at least in this case I have a better sense of the definition. We talked to the processor who we know very well and got more info. The LO is buying a house for $284,000. In the conversation with Nikki yesterday, the LO indicated that a model match for the property he's purchasing minus some rear landscaping just closed for $264,000. The processor told us that the LO is willing to pay $284,000 for the property but needs it to appraise for $293,000 because the seller will then pay all of the closing costs. So all I have to do is appraise a property for $29,000 higher than the one that just sold. :blink: I just fired the client. :angry: Now you know one definition of conservative.
 
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