Has the quality of appraisals gone up since the AMCs took over?

[TC]

It's been about 10 years since I did a mortgage appraisal, so I don't have a horse in the race. I still do private work and review appraisals for County Assessment appeals. I read a lot of comments on the Forum about appraisers taking 6-8 hours to complete a single family. But when I review appraisals they all seem to be boilerplate with standard canned comments. Looked at one yesterday and to start off, ALL CAPS, one line for reconciliation and TYPING errors. Is it that hard to spell qualitiy or similiar? At least use your spell check.

So to all you that take 6-8 hours, what are you putting into the report? Graphs, charts, linear regression?

I thought the AMCs were improving every aspect of the business.

 

[chad hampton]

I consider charts and graphs to be more worthless than boiler plate information.

I doubt theyre any better or any worse. Honestly, for the cost of the appraisal fee, you get more information than about any other professional report out there. I write engineering reports from time to time that consist of two or three pages and they are a minimum of $300

I do the same appraisals for the AMC’s I work with as I do my direct lender and mtg clients.

They cost the borrower twice as much though

 

[Fernando]

When I started out, I remembered others and even me using boiler canned comments.
When I review reports, I still see canned comments which fill up and make report bulky.
To typical readers, the comments and many pages seem impressive but to me, they're fluff and I have to dig through the comments to read what are relevant.
In my reports and in AF, I get to the point as short and simple to the point comments as I can.

 

[George Hatch]

The only way I can think of why reports might be different is because of the aggregation of the market - more reports going through fewer pipelines, each with their own reviewers. Not necessarily better, but more consistent WRT what they are/aren't.

 

[glenn walker]

It's been about 10 years since I did a mortgage appraisal, so I don't have a horse in the race. I still do private work and review appraisals for County Assessment appeals. I read a lot of comments on the Forum about appraisers taking 6-8 hours to complete a single family. But when I review appraisals they all seem to be boilerplate with standard canned comments. Looked at one yesterday and to start off, ALL CAPS, one line for reconciliation and TYPING errors. Is it that hard to spell qualitiy or similiar? At least use your spell check.

So to all you that take 6-8 hours, what are putting into the report? Graphs, charts, linear regression?

I thought the AMCs were improving every aspect of the business.

A Loaded question as so many hate AMCs they cannot be objective and they will instantly default to fee issues.

 

[Fernando]

Another of my pet peeve is addendums. When reading the report, I hate to search for the addendum to read the boiler plates. There is a reason why the main two pages have set line spaces to be filled out. Just state the relevant facts as concise and short as possible.

 

[Mejappz]

Appraisal reports have deteriorated in quality since I began my career. The main culprits are the AMCs, prioritizing low-cost, quick, and unqualified appraisers. I have repeatedly observed that none of the reports I reviewed during COVID made any upward adjustment for the rising market conditions, even though some of my markets were increasing by 25% annually.

That is not the only issue. The appraisers often claim to use paired sales analysis to derive adjustments, but I doubt that is true. For instance, I reviewed an appraisal from a large AMC last week, and the appraiser used condo units that faced the intercoastal waterway as comparables for the subject with an ocean view. The subject was undervalued by about 100K. Another appraisal listed the subject's lot size as 2,000 square feet when it was 10,000 square feet. This was not an isolated error but one of many in the report.

Last year, I did a field review for a subject with a fully finished basement, 1,000 sq ft of living space, and better condition than the rest of the house. The appraiser labeled it as a den, took a photo of only one section of the basement, and omitted the photos of the bathrooms and living area. No value was assigned to this area.

When I receive appraisal orders directly from a local bank, they are much more thorough than AMC reports. For example, the appraiser describes the subject in detail instead of using generic language. You can tell there was some effort or due diligence involved. I have more examples, but I will stop here for now. All of these reports had the USPAP compliance boxes checked.

 

[Fernando]

Appraisal reports have deteriorated in quality since I began my career. The main culprits are the AMCs, prioritizing low-cost, quick, and unqualified appraisers. I have repeatedly observed that none of the reports I reviewed during COVID made any upward adjustment for the rising market conditions, even though some of my markets were increasing by 25% annually.

In retrospect, you can see prices increased 25% but at the moment, it's difficult to see what is happening unless you are definitely seeing price increases.

That is not the only issue. The appraisers often claim to use paired sales analysis to derive adjustments, but I doubt that is true. For instance, I reviewed an appraisal from a large AMC last week, and the appraiser used condo units that faced the intercoastal waterway as comparables for the subject with an ocean view. The subject was undervalued by about 100K. Another appraisal listed the subject's lot size as 2,000 square feet when it was 10,000 square feet. This was not an isolated error but one of many in the report.

Canned comments indicating use of paired sales analysis but when appraisers see the comps, we can see some better comps can be use or at least explain why those comps were used. Appraisers need to communicate more in why certain comps were used.

Last year, I did a field review for a subject with a fully finished basement, 1,000 sq ft of living space, and better condition than the rest of the house. The appraiser labeled it as a den, took a photo of only one section of the basement, and omitted the photos of the bathrooms and living area. No value was assigned to this area.

When I receive appraisal orders directly from a local bank, they are much more thorough than AMC reports. For example, the appraiser describes the subject in detail instead of using generic language. You can tell there was some effort or due diligence involved. I have more examples, but I will stop here for now. All of these reports had the USPAP compliance boxes checked.

Depends on the AMC and bank. When I see AMCs acceptable requirements are low, I know what is minimum expected for me.

 

[George Hatch]

IMO "addenda creep" is attributable to the overly constrained comment fields in the main form.

 

[Fernando]

In retrospect, you can see prices increased 25% but at the moment, it's difficult to see what is happening unless you are definitely seeing price increases.

Canned comments indicating use of paired sales analysis but when appraisers see the comps, we can see some better comps can be use or at least explain why those comps were used. Appraisers need to communicate more in why certain comps were used.

Depends on the AMC and bank. When I see AMCs acceptable requirements are low, I know what is minimum expected for me.

In my review, original appraiser didn't even explain why the income approach not used in 1004. With all the canned comments, we couldn't one be put in for the income approach.
Or should I search through the addenda to find that comment. Ugh.
I didn't know standards so low. Don't need to make effort in commenting about subject related to income approach.