Drive By Or "windshield" Appraisals

[Tom Foster]

As an appraiser for 18 years and a real estate agent for 7 years. I see things from a 4th perspective.

The escrow I closed 3 days ago with Bank of America as the lender, used an AVM desktop evaluator for the appraiser.

The funniest thing was when I called them to tell them to ask when the appraiser is coming out; they transferred me over to some lady. She said “Oh I thought I ran that one, what is the property address”? I gave it to her and as I was talking to her I could here her tapping on the keyboard. In about 30 seconds she said “OK, it appraised at the full sale price.

There was $3,000 we requested in repairs, carpet, 1 door, kitchen sink etc. But at a sale price of $456,000 and 80% LTV the lender took a chance.


The deal closed, everybody got paid and there was no appraiser needed.

I like appraising, but I do have a 4 backup plans if the whole industry implodes.

Remember appraisers do not create the deal, but we sure can kill the deal.


Tom

 

[Farm Gal]

Ummm....

An addition to certain specific scope items one should list for a driveby, there need to be some stated Extraordinary Assumptions and there are more than a few USPAP requirements which are not covered by the '2055 form' which need to be addressed in narrative or additional FORM attachments.

Most software packages have a minimum of what is needed on an updated 2001 (or later) USPAP Compliance form... best check them out.

 

[Ed]

Tom....When that guy refinances his $456,00 home in 6 months and an acutal Full 1004 Interior Inspection Appraisal is done and it Appraises for $400,000 or the Loan goes bad, who's going to look like a fool? It's easy.....Everyone that was involved in the transaction and I mean everyone.........

I've already been involved in Appraisals such as this. AND IT AIN'T PRETTY.

I was the one that did the Full Appraisal (w/ my mentor) after the fact and of course it was our fault that the house didn't Appraise for what the buyer bought it for 6 months ago.

A change needs to be made and knowone seems to see the problem or provide an answer. As long as it USPAP compliant and I get paid seems to be OK with everyone. WHY.... How about being able to sleeping at night and being able to live guilt free.

Will it go away on it's own?....... YEA RIGHT.

OK now I'm done.........

 

[Tom Foster]

Ed, you can’t just leave this discussion. You have opened up a can of worms that can’t be closed so easy.


The beauty of the AVM is that when the house does appraise 6 months later for 50K less, I won’t be the one holding the bag. I could NOT have “hit” the value if I was the appraiser that they were asking and I’m glad I was an agent in the deal.

I have even practiced that “agent face” in the mirror you know...the look a guy has after finding out his wife was messing around his best friend. I just have to put on my agent face.

I have always been honest to myself and never beat myself up about things I had done. It did not bother me to acknowledge the many things I done.

I sweep that stuff under the rug. You have to give yourself a break. Forget about those times and move on.

However I did have a nightmare just one time. The hawkish ugly looking old crone of a judge said "I've seen the evidence against you. Did you know that your entire appraisal career in on the line??? I know you think you’re going to try to plead out of this, but you’re looking at six to nine months incarceration, minimum."

I woke in a cold sweat and have been an honest appraiser ever since. Since that day, flatulence retention has ceased to be a problem.




Tom

 

[Ed]

Tom....I know I've opened up a can of worms, but it seems that everyone does not agree with my position.

My thinking whether it's right, wrong or indifferent is Full Appraisals seem to be the minority when an order comes to our office.

Lenders are trying to stream line the process and save time and money, when an Appraisal is suppose to protect their investment. I know I'm new at this but, it's not Rocket Science and I'm old enough to remember the S&L scandles.

My little soap box.........

 

[Tom Foster]

Ed,


I’ve seen many appraisers including myself think that they are doing the right thing and are going to strive to make some changes in this appraisal biz.

What you are postulating here is very true and bringing it up is the trait of a first-rate business owner.

Just wait till you get about 5 years in the biz and those feelings will be even stronger.

But then 10 years later you will become a silent professional, taking in all those years of knowledge and all those books and classes etc. Then you make the step to the practical side of things.

I'm occasionally finding it a bit frightening what I am seeing with these AVM’s doing the appraisal instead of a flesh and blood appraiser. But to relax I've been going to the gym, biking, and swimming. I’m always carrying my cell phone.

It does restrict me a bit for sporting activities like swimming, but what would be worse would be that others would see it clipped to my belt. I couldn't possibly explain that away.

Tom

 

[Ed]

Tom....You're right, as simple as it seems, one Trainee will not change the "biz" overnight. I'm more concerned about 10 years from now. How the "biz" change and where will I fit in.

I'll probably be driving my car to do a "Drive By" Appraisal because that will be the only accptable way to do them. VERY SAD.........

Hopefully with enough pressure from our governing body, things will change for the best. We can only wait and see.

 

[Wally Jones]

Don't despair just yet, Ed. It seems the lenders have made the same discovery about drive-by appraisals that they are coming to realize with AVM's. They just don't give them what they want all the time. As I tried to point out before, a drive-by has a very limited use. For awhile, clients thought they could use them to get a cheap appraisal. We charge the same as for a full appraisal, so that didn't work. In the past year, we have done exactly one exterior only inspection. (A nasty divorce.) Some clients order a "2055 with interior inspection". We try to point out that it's basically a full appraisal, but that's what they want so that's what they get.

Anyhow, at least in our market, looks like there is no great demand for a true "drive by" and when we get such a request, we try to make sure the client really knows what they're asking.

There will always be appraisers who try to shortcut the system and are willing to bend their ethics to make a few bucks. They'll continue to do so no matter what report forms are ordered by a client. Hopefully, with new people such as yourself coming into the business, the profession will be a better place to conduct honest business.

 

[Ed]

It seems as though I've rattled a few cages with this Post Re; Drive By Appraisals. I'm sorry if I offended anyone. I'm simply trying to speak my mind and this Forum is a good way to do that.

I enjoy what I do, I've never had a job that I look forward to go to everyday. I want this Profession to remain Ethical and Respected. Once I'm Certified by the State, I'm going to sit on a few Appraisal Board meetings in my state. I'd like to take an active role in this profession and not just Appraise.

So some of you may actually get see my smiling face in the not so distance future.

 

[Jeff Horton]

Originally posted by Ed@Oct 17 2003, 10:32 AM
One More Time - HOW CAN YOU APPRAISE SOMETHING YOU HAVEN'T SEEN. Simple, You Can't.........

I have a question. How is a drive-by really any different than a Proposed Construction? Sure you have plans and specs (if your lucky) to go by but that doesn't mean that it what will be built to plans. You can't see it but you appraise it, based on ASSUMPTIONS.

Why is that any different that making an assumption on the interior of a drive-by?

I have read this with interest. I agree and disagree with what I have read. I personally rarely do drive-by's other than pre-foreclosure because of lack of good data in our rural area. I did one last week and kicked myself for not paying attention when I accepted the order that it was a drive-by.