Full Appraisals Vs. AVM's in one month

[Pamela Crowley (Florida)]

Pam may be wrong about review work, but she is not wrong about litigation. It may take a couple of years, but when people are unable to sell at anywhere near the loan value they will go to the courts looking for who and how that value was determined. Don't write the residential appraisal profession off just yet.

Thank you Steve. This is the reason I put the word reviews in as 'reviews'. I expect to have various homeowners asking for a review of the appraisal that was done for their loan, that they paid for - then they will find out there wasn't any appraisal at all. Basically, what would have been a review will be a retro appraisal.

 

[Mountain Man]

Hey, very good reason to not just delete your old comp base. CD burn, tape back up, what ever, but save it. 8)

 

[Leon Stewart]

Pam may be wrong about review work, but she is not wrong about litigation. It may take a couple of years, but when people are unable to sell at anywhere near the loan value they will go to the courts looking for who and how that value was determined. Don't write the residential appraisal profession off just yet.

I think you might be mistaken as to how this process will play out. Since the Lender is not making any determination of Value (an AVM is not considered an Appraisal) they will switch the responsibility for the value conclusion to the borrower that decided to pay a certain price for the property. In other words it'll go back to the "Buyer Beware" concept.

With the AVM the Lender is using Credit and Employment History as the sole Criteria to make the loan. The value of the property is not weighted, and they are using the AVM just as a guide to keep the process from getting to far out in left field.

leon

 

[Farm Gal]

Since the Lender is not making any determination of Value (an AVM is not considered an Appraisal) they will switch the responsibility for the value conclusion to the borrower that decided to pay a certain price for the property. In other words it'll go back to the "Buyer Beware" concept.

OK so perhaps appraisers should begin activley sincerely marketing ourselves as 'value experts' and selling our services to the public, as in the good old days when the appraiser was the ONLY one who took the buyers interest into account!?! Not as advocate 8O but as the only D3P?

Such that in the future, if the buyer thinks him/herself expert and competent, then fine, let them pay whatever, and the cautious or truely knowlegable spend an appraisal fee on a REAL analysis? :twisted:
Caveat Emptor: I can probably live with that!

 

[Pamela Crowley (Florida)]

OK so perhaps appraisers should begin activley sincerely marketing ourselves as 'value experts' and selling our services to the public, as in the good old days when the appraiser was the ONLY one who took the buyers interest into account!?! Not as advocate but as the only D3P?

Such that in the future, if the buyer thinks him/herself expert and competent, then fine, let them pay whatever, and the cautious or truely knowlegable spend an appraisal fee on a REAL analysis?
Caveat Emptor: I can probably live with that!

EXACTLY!!!!

 

[The Bob]

Well, I think we will still be needed, there just won't be as much mortgage related appraisals. AVM's will get the easy stuff. But they still need us to do the Relo's, REO's, custom new construction and the proverbial "out in the boonies" type assignments. I really don't think this is going to blow up in their face. Sure, there will be isolated stories of an AVM missing the value, but you have to relaize, the large lenders are not looking at INDIVIDUAL risk on a particular home. That's history. They now look at PORTFOLIO risk. And the AVM satisfy's there rquirements. As long as they can be reasonably certain of their total risk, they really don't need a full blown URAR for most loans.

 

[Karl]

Just for your own survey start asking some of your GOOD Clients what they think of AVM's We've asked several of ours & the answers are basiclly Well if we could understand how they come to there values we MIGHT use them. However we take four houses in a square mile & have a range that is so far out of whack with no Ryme or Reason. Seems AVM's are based primarilly on occupants credit rating not on house value. Is what our cliets are sayin Of couse we are VERY RURAL.

 

[Leon Stewart]

Since the Lender is not making any determination of Value (an AVM is not considered an Appraisal) they will switch the responsibility for the value conclusion to the borrower that decided to pay a certain price for the property. In other words it'll go back to the "Buyer Beware" concept.

OK so perhaps appraisers should begin activley sincerely marketing ourselves as 'value experts' and selling our services to the public, as in the good old days when the appraiser was the ONLY one who took the buyers interest into account!?! Not as advocate 8O but as the only D3P?

Such that in the future, if the buyer thinks him/herself expert and competent, then fine, let them pay whatever, and the cautious or truely knowlegable spend an appraisal fee on a REAL analysis? :twisted:
Caveat Emptor: I can probably live with that!

Lee Ann:

That could be a consideration for the buyer to contact an Appraiser Directly for their Services, but keep in mind, most buyers will not know that there is no Appraisal involved in the process unless they make a formal request for a copy. The Lender will not volunteer this information.

This "no-appraisal" system will probably expand quite rapidly since FNMA and Freddie changed their requirements to eliminate appraisal on some types of loans, and the only market that will remain will be FHA, VA, Rural, and some Inner City Urban Markets. I think that as the Work declines for the Residential Appraiser most General Appraisers will make the little work that remains a part of their operations, and the Licensed/Certified Appraiser will fall by the wayside, and there wont be enough work for most of them. That's just my opinion as to the direction of Residential Appraising in the future.

leon

 

[Pamela Crowley (Florida)]

Another related article:

http://list.realestate.yahoo.com/realestat...829/20020829401

 

[Farm Gal]

Leon:

I understand your concern, and I share that concern - DEEPLY. However my point was that we as a group of professionals should probably come together and do what other threatened industries have done: SELL OURSELVES!!!

The Beef Council consisted of a handful of small beef producers who convinced bigger producers (who initally could not have cared less about thier smaller competitors) that they should hang together or they'd all hang seperately... once organized: they did a good job and changed the industry entirely!

IF you can convince the public that their individual best interest and tastes and the single most important puchase they are going to make in their lives should be looked at by a D3P, not just folks who's commissions hang on ever higher values... and tell a few tales of woe such as we hear hear and SEE on occasion ourselves...

imagine!

8)