Declining Market = Do Not Use?

[The Warrior Monk]

Collectively and together were could be strong and control our destiny. They couldn't treat appraisers this way if we had a collective bargaining agreement. Just ask my brothers at the IBT.

Or we could just find clients that actually need an appraisal. If the client doesn't want your services, why twist their arm to accept it? That's not a business model I wish to have.

 

[T.E. Faravelli]

Or we could just find clients that actually need an appraisal.

David the issue is control over the appraiser. Mark, like the other ten appraisers I referenced, may have been sanctioned for expressing their opinions which, for arguments sake, is supported by facts. I have emails and faxes from chief appraisers, processors and loan originators admonishing appraisers for indicating declining values and stating oversupply, instructing, rather demanding the appraiser change it to stable and in balance. One CA went so far as to tell the appraiser they have been placed on the Do Not Use List - ask PEC_514 to attest to this. So, what can an appraiser do? Call the state licensing board - they're not going to help you. What power does the appraiser have individually to fight these abusive, oppressive and retaliatory actions?

 

[Otis Key]

I marked "just started marking declining" because we only have a very few (most new residential construction where they're advertising every Sunday "Come buy our house and have $15,000 to $40,000 instant equity"). Beyond that it is considered as stable or "slightly" increasing.

BTW, those new subdivisions that showed a decline on resales, also had a whole bunch of speculators buying at market prices and now selling at below what they paid.

Oh - and I've been through it before - I will be cut off from certain MBs, lenders and other clients - they don't want the truth - they just want to MAKE THE LOAN (aka COMISSION)!

 

[KenRossman]

This is very old news...

About 6-9 mos after the 87' stock crash, values in most of my markets began falling rapidly. I was tracking mean (MLS) sales prices in lotus, monthly by zip code. Initially I was utilizing it thru the early and mid eighties to form a basis for positive market condition adjustments.

When the market had clearly tanked and was headed south, I began making negative market condition adjustments. We lost most of our "broker" business within a few weeks when they demanded we stop making negative adjustments and we held our ground. Most if not all our competition (surprise, surprise) was calling the market flat and stable, making no adjustment for market condition.

Several very large mortgage banking operations and one bank also initially demanded we cease the negative adjustments. In three cases, I was successful in obtaining an audience with either principals, or senior reviewers/underwriters. In all three, I went from one of many appraisers on their list in my markets to their sole appraisal provider.

It was a run that lasted more than 10 years for the three clients. In all three cases, unfortunately all use AMC's now almost exclusively & the fees they offer are insulting. I provided my lotus printouts as "evidence" of market decline, in all three cases the lender asked and I obliged with copies of the monthly printouts.

Today I have almost no origination lender clients & largely service private clients who actually want to know what the property is worth, warts & all...

 

[Kendall Jackson]

Its funny if you look on Broker Outpost they are all complaining about values decling. go figure..

 

[Rob Lentz]

Appraisers Unite!

A badge of honor and integrity. Unfortunately, that doesn't pay the bills. I know of at least ten appraisers who have experienced this. Management runs roughshod over the appraiser because they can. Individually the appraiser is weak and insignificant. Collectively and together were could be strong and control our destiny. They couldn't treat appraisers this way if we had a collective bargaining agreement. Just ask my brothers at the IBT.

I think this is exactly what we need...with the fallout in the 2ndary mrkt and so on. I recently spoke with a colleague about the issue of "the box" and he said "I never mark it".

I do mostly commercial/narrative work so I am somewhat isolated from this mentality - my clients want the truth - one of my favorite new clients no longer sends work to another commercial appraiser in the area b/c he helped them hit numbers consistently over the past several years on commercial buildings in our market that are now empty and on the market for much less than appraised - and not selling. Of course a couple years ago, I'm sure they felt differently about him - therein lies the problem. I know markets change, and we don't have a crystal ball with which we can forecast what'll happen 2-3 years out...but if you're 5% over b/c you are hitting a number, and the market drops 5% for a couple years straight your client's 20% equity buffer is gone in no time - not to mention their holding and marketing costs.

To my residential colleague that "never marks it", I pointed out that the # of sales has dropped each year since 2005, along with the average sale price in the same timeframe (Both down approximately 5-6%) even when you exclude foreclosure/REO sales from the results. He said what I'm hearing here...he know's it'd be the kiss of death and he's already slow this year. There goes that sucking sound again. I told him to collect COD on everything, report the truth, and screen his calls - make the other fellow put his requests/complaints in an email.

What else can you do? On a brighter note, I gotta think that the few appraisers that actually get out there and lead on this issue will be rewarded when it get's worse...just like the lender that no longer sends work to my market's other main commercial appraiser - bad for him, good for me.

So where do we sign up for the union? And more importantly, what are the dues going to be?

Rob Lentz
CG - Michigan

 

[Artemis Fowl]

... I gotta think that the few appraisers that actually get out there and lead on this issue will be rewarded when it get's worse...
Rob Lentz
CG - Michigan

Already happening in some circles...

 

[camcisneros]

we shall see

 

[California Di]

Declining market

I have lost work by reporting a declining market. I recently had a mortgage broker call and say the we made a mistake on the report. I explained that there was no mistake, that the market is declining. He said that if I do not change it to stable that i was "killing his deal". I did not change it but am now chasing him down for payment for the appraisal. I am going to end up sending him to collection. It is so frustrating!! I am now requiring COD only.

 

[Vegan702]

I have been marking declining on at least 50% of my reports for the last year or so and have only had 1 person say something to me. Provide the data to support your claim and they most likely won't say a word.