Desktop Appraisals Becoming the New Normal

[shrubberyvaluation]

I don't see how hybrids increase or at least keep public trust the same. Fannie claims it will remove bias since the appraiser does not see the homeowner. But then are the property inspectors not immune to bias? It is just adding another layer of chance for error.

 

[Deleted member 122624]

Before I start I appreciate the effort, and you shouldn't interpret my criticism as personal.

You write "They don't need to be licensed, but they better well have some sort of competency in doing this all" and "They better represent themselves properly". So when you're meeting with your state board reps, what do you think they really hear? They can't regulate or set standards for an unlicensed activity, so what's the end game?

Let's get down to the mechanics of this: You want standards and regulations for anyone who physically collects property data, you want them to be held responsible, and you're meeting with GA state board reps advocating your position. With the "who" you're meeting with, there's only one arrow they have in their quiver: Licensing. And that arrow is the answer, from a regulator's perspective, to nearly every objection you have in your blog article: Licensing. It's even the answer to your point about public trust, when confronted with issues many years ago licensing the appraisal profession was the answer to the public trust question. Heck, appraisers jumped up and down about AMCs (rightfully so) for how long before regulators listened and responded with a license. See the pattern?


The only way to hold them responsible in a meaningful way, again, is through licensing. How well is that working with AMCs?

And they can, in no small part, because AMCs hold a license as an Appraisal Management Company.


Want real public trust? Let's kill AMC snakes by cutting off their heads: GSEs should adopt the VA appraisal management system. Cut off the monopolistic hold AMCs have on GSE/lending origination volume, that's what's best for public trust. I know this isn't popular, heck how can coach systems and puppy mills work if deals for volume can't be made with AMCs or lenders? I'll admit it isn't perfect, but the truth is AMCs have captured the market and until that is changed there isn't anything that will remove their unfair competitive advantage, not even a license for data collectors.

Fair enough. Here's my credential Mr. Dumpster. Before the board issued my license I had to take X hours of specific education, pass a test, pass a background check, and speaking of checks had to write a check to the state board. Oh, and now that I’m licensed I was just offered a seat on the state board, so now people call me Mr. Data Collector.

With all of that said, I’m not disputing your overall view. What I’m trying to point out is this will end just the same as the push to license AMCs and we as a profession will have to make room for another license at the dinner table.

I can’t disagree with what you’ve stated. That’s why I also stated some sort of certification or proper training as well as not representing themselves as an appraiser but more in the line of “property data collector” for the appraisal process or whatever.
Nothing is taken personal. I was just taking a totally different view of this other than what has been normally put out there.
I actually spoke to my state commissioners and board. Licensing is probably not the best way to go however they did agree with me on many other points.
Completely agree with your AMC comment.

 

[J Grant]

The most credible result is appraiser doing their own inspection, next credible is a trained, unbiased third party inspecting ( a hybrid ), least credible is nobody personally inspects, with a hodgepodge of sources used instead Why is the third, least credible option of 1004 D used for critical purchase loans? They do have hybrids available for reduced turn time, so why use the 1004 D ?

Was it hard for them to find third parties to do an inspection? or not as cheap as they hoped, or could be there is ore profit in skipping inspection altogether? If borrower pays a similar or same fee for an appraisal 1004, whether it becomes a 1004 hybrid or 1004 desktop, the biggest profit split to an AMC or lender , and especially if they use staff. In a desktop thee is no inspector to pay, the staff appraisers can double their volume, meaning they can fire half their staff appraisers,. A big win for them.

 

[J Grant]

I don't see how hybrids increase or at least keep public trust the same. Fannie claims it will remove bias since the appraiser does not see the homeowner. But then are the property inspectors not immune to bias? It is just adding another layer of chance for error.

The bias issue is being used as a straw dog by fannie, since this was being planned and tested by them long before any of the bias suits were filed. Most of these suits have been dismissed and the one in Cali sounds phony and is not even resolved, yet they seized on them as some noble public service reason. Backed up by a very weak study showing at most, a sliver of percentage of what they call "low" valuations in a few census districts.

Meanwhile, every other profession including RE fields of lending and RE sales has experienced discrimination suits at one time, whether race, sex, or other, and they were resolved without eliminating contact with an entire profession -

 

[Non Sequitur]

I don't see how hybrids increase or at least keep public trust the same. Fannie claims it will remove bias since the appraiser does not see the homeowner. But then are the property inspectors not immune to bias? It is just adding another layer of chance for error.

If Fannie is really concerned about public trust it should manage the appraisal process like the VA. No one is knocking the VA over its valuations or process.

 

[alebrewer]

No one is knocking the VA over its valuations or process.

Well, some are - it's just not the appraisers...

 

[glenn walker]

Well, some are - it's just not the appraisers...

Well, some are - it's just not the appraisers...

GSEs have nothing to do with public trust or how appraisals are ordered it further isolates appraisers away from homeowners and realtors and soon nobody will even know what we do for our fee. Thats OK with me as I no longer care but appraisers need to be truthful as its all about fees not quality-Hell these same people loved the Covid-19 desktops and many wanted them to continue forever.

 

[alebrewer]

appraisers need to be truthful as its all about fees not quality

I agree - my gut says that most appraisers would be perfectly fine with the alternative SOW, if there was some guarantee that fees would remain similar to what they're accustomed to now. J as much as said so in one of her posts (not that J is representative of the residential appraisal world). And I think it would be Pollyannaish to think that they will remain the same - they most likely will not. That said, I also think it's reasonable to assume that overall income may be similar - at least given the reduction in volume that we're already seeing.

To wit:
standard SOW appraisal fee is $500 and the appraiser can do 30 a month. That's $15k a month.
alternative SOW appraisal fee is $300, but the appraiser can do 50 a month. That's $15k a month.

Caveat: this, too, is speculation.

 

[glenn walker]

I agree - my gut says that most appraisers would be perfectly fine with the alternative SOW, if there was some guarantee that fees would remain similar to what they're accustomed to now. J as much as said so in one of her posts (not that J is representative of the residential appraisal world). And I think it would be Pollyannaish to think that they will remain the same - they most likely will not. That said, I also think it's reasonable to assume that overall income may be similar - at least given the reduction in volume that we're already seeing.

To wit:
standard SOW appraisal fee is $500 and the appraiser can do 30 a month. That's $15k a month.
alternative SOW appraisal fee is $300, but the appraiser can do 50 a month. That's $15k a month.

Caveat: this, too, is speculation.

Spoke to nephew yesterday he is a business and real estate attorney. My questions were related to liability on a Desk top "V" full 1004. He is of the opinion that the lowest liability appraisal is the desk top and 2055 exterior drive Bye. He then asked has anyone every questioned your use of MLS photos and details on how you arrived at a Physical condition on a comparable ? I said no we base our condition on interior MLS photos and driving by the comps. He responds with exactly you also carry almost zero liability because you never physically inspected those comparables. Finally as liking to suck up as much free time out of him as possible because he owes me money which I will never see except to suck it out of-him one cut at a time.

I now digress and I asked how about racial issues ? He responds like all appraisers that is not hi area of expertise but like us he reads all the latest news on lawsuits involving charges of white appraisal biases.
His beady little eyes open and he says yeah nobody can make a race case if they ever even saw you and you didn't go inside their home. We finish up and he says yeah do you know that now almost 75% of all our clients consultations are virtual and on zoom and its no longer a Covid-19 temporary thing as we can do more consultations at lower prices and make the same or more money. CHANGE IS A COMING and so we all have to get used to it.

 

[J Grant]

I agree - my gut says that most appraisers would be perfectly fine with the alternative SOW, if there was some guarantee that fees would remain similar to what they're accustomed to now. J as much as said so in one of her posts (not that J is representative of the residential appraisal world). And I think it would be Pollyannaish to think that they will remain the same - they most likely will not. That said, I also think it's reasonable to assume that overall income may be similar - at least given the reduction in volume that we're already seeing.

To wit:
standard SOW appraisal fee is $500 and the appraiser can do 30 a month. That's $15k a month.
alternative SOW appraisal fee is $300, but the appraiser can do 50 a month. That's $15k a month.

Caveat: this, too, is speculation.

But since there is a finite number of orders, either the appraiser will only have 30 assigned a month, or the appraiser doing 50 a month took the orders away from another appraiser, who now does 10 a month.