Hybrid Appraisal Extraordinary Assumptions

[Terrel L. Shields]

It says the appraiser must state whether they did or did not inspect. Not that an inspection is required.

For an appraisal. For an evaluation an inspection is required along with photos. Does not say the evaluator has to inspect or take photos. But someone has to. You don't blend the eval. with an appraisal. You are doing one or the other. And if you have an appraisal license in my state it needs to be an appraisal that meets USPAP. If you are not licensed or only registered then the report has to state it is not for an FRT to comply with our state law. And it still has to meet the IAG for evaluations.

It is a choice. Evaluation or Appraisal. And again in all mandatory states, if you are an appraiser you must have the proper certification required and comply with USPAP, with rare exception.

 

[George Hatch]

A $75 fee for these hybrid assignments cannot exist without appraisers who are willing to hit the "accept" button.

 

[Terrel L. Shields]

A $75 fee for these hybrid assignments cannot exist without appraisers who are willing to hit the "accept" button.

The total cost to the borrower remains the same, and yes most evaluations are billed back to the borrower in, if not all, ARM loans. So why are banks adopting these except to take a piece of the fee? They have every incentive to drive cost down and profit more. Therefore in clear defiance of bank law saying fee and turn time is not to be used as a method of choosing a valuer (either appraiser or evaluator) you get the obvious. The low bid. Certainly I've never seen RIMS send a bid request without a suggested fee and never won a bid when I bid a $1 more.

 

[Mr Rex]

For an appraisal. For an evaluation an inspection is required along with photos. Does not say the evaluator has to inspect or take photos. But someone has to. You don't blend the eval. with an appraisal. You are doing one or the other. And if you have an appraisal license in my state it needs to be an appraisal that meets USPAP. If you are not licensed or only registered then the report has to state it is not for an FRT to comply with our state law. And it still has to meet the IAG for evaluations.

It is a choice. Evaluation or Appraisal. And again in all mandatory states, if you are an appraiser you must have the proper certification required and comply with USPAP, with rare exception.

Inspection and photo?. Show me where it says that? You agreed that the AI article parroted the Guidelines? It does not say that. Don't confuse an "and" with an "or" in sentences. Stop reading between the lines and read the lines right there in black and white.

 

[BRCJR]

XIII. Evaluation Content
An evaluation should contain sufficient information detailing the analysis, assumptions, and
conclusions to support the credit decision. An evaluation’s content should be documented in the
credit file or reproducible. The evaluation should, at a minimum:

• Identify the location of the property.

• Provide a description of the property and its current and projected use.

• Provide an estimate of the property’s market value in its actual physical condition, use and
zoning designation as of the effective date of the evaluation (that is, the date that the analysis
was completed), with any limiting conditions.

• Describe the method(s) the institution used to confirm the property’s actual physical condition
and the extent to which an inspection was performed.

• Describe the analysis that was performed and the supporting information that was used in valuing
the property.

• Describe the supplemental information that was considered when using an analytical method or
technological tool.

• Indicate all source(s) of information used in the analysis, as applicable, to value the property,
including:

o External data sources (such as market sales databases and public tax and land records);

o Property-specific data (such as previous sales data for the subject property, tax assessment
data, and comparable sales information);

o Evidence of a property inspection;

o Photos of the property;

o Description of the neighborhood; or

o Local market conditions.

• Include information on the preparer when an evaluation is performed by a person, such as the name
and contact information, and signature (electronic or other legally permissible signature) of the preparer.

 

[Mr Rex]

Indicate all sources used in the analysis including: OR

and notice where "evidence of an inspection" falls in the written directive. Words mean things, the order of words mean things, and little things like punctuation mean things

That is hardly a requirement for a photo or inspection. Reading is fundamental, literacy is scarce, and understanding is lost.

What it says is say what you did and do what you say which is USPAP boiled down to the essence of the discussion.

Maybe the most outstanding need for CE for appraisers is a simple understanding the written English language since many after decades of repetitive exposure to USPAP they still read between the lines, color outside the lines, or simply have their own misconceptions of what they think it says and what they want it to say. It is a sad commentary on appraisers at large IMHO. I learned to read when I was 3. I don't know how long after that it took me to have rationale thought regarding what I read @ 3, but I am mighty disappointed and quite frankly worried that my "peers" older and younger show signs of illiteracy because they can't read and understand the English language when it relates to their every day way of making a living. It ain't rocket surgery.

 

[Carnivore]

"Partition the SOW to lower cost" is the primary factor in play here. The functions of analyses, opinions, conclusions and report writing are arguably worth more per hour than making appointments and driving to the subject and performing the inspection and laying all that info out in its own report. That's why these runners only get $20/hr and the appraisers get a higher rate.

The reason that also leads to shortening the time to delivery is because the number of qualified appraisers far less flexible than the number of potential inspectors. So rather than only getting an average of 6 or 7 1004s a week out of each member of their panel for the types of deals these hybrids would be used for they will now be able to get multiples of that. So from a lender's perspective it's a far more efficient use of that limited resource, REGARDLESS of how much they pay the appraiser. And within reason, it's scalable according to how much volume they're getting in.

They can get more of this type of appraisals done with fewer heads. Meaning the supply of appraiser productivity will probably ALWAYS be much greater than the demand.

I also have to wonder how much business these hybrids will siphon off from the AVMs.

So the real question is this: Of the partitions how would one determine the $(value) amount of each. Lets use an example:

$400 URAR full monty - We assume each appraiser has determined that to account for his/her time;

Fixed/veriable(est) Annual Cost = MLS, Realtor Dues, Licensing, E&O, CE, supplies, Software Fee's etc blah blah

A: Receive assgn, Make work file Time=X=$ Avg Easily Predictable
B. Drive to subject & comps and back to office Time=Y= $ Relatively Expensive variable
C. Assemble, fill in the blanks, Analyze Time=Z=$ Depends -- This should be the most expensive partition.
D Add time for ave BS(from AMC), deliver Time=BS=$ Who Fkng Knows Frankly we should work to delete them from the process because any good portal Like AI Port can be set up to assign & Receive , review and deliver and even Bill

So our task is first to find out what they are paying the Runners? Shouldn't be to hard to find out with such a wide & Large group we have here.
I bet its not more than $20 Bucks. Someone must know! Realtors friends would know If a member here has completed one then maybe they can find out from the Realtor contact

Here is what I think; AMC have been recruiting Appraisers and they are stating average Fee is $65-$75 bucks per Desktop. They obviously are adding their Skim on top. My guess is that its the same if not more. I seriously doubt it is less.

If we assume the following $75 bucks Appraiser $75 Bucks to AMC. = $150, Then we have $250 left over to pay the above Some where in there should be a profit margin also but I dont think most appraiser think in those terms.

My example of the hospital that I recently visited and posted a link to in this thread is something to look at closely. Once you understand what the medical community is doing then everyone should understand what the purpose of a Desktop is designed to do. Replace Doctors with Appraisers in that hospital model.

Maybe I will specialize in Desktops for zip code 28202. Now there I can do that and make money with a desktop. I hate driving into uptown, find parking and make numerous attempt to hack into the secured Condo towers in uptown Charlotte. I could create Skeletons for each tower.

 

[Mr Rex]

XIII. Evaluation Content
An evaluation should contain sufficient information detailing the analysis, assumptions, and
conclusions to support the credit decision. An evaluation’s content should be documented in the
credit file or reproducible. The evaluation should, at a minimum:

• Identify the location of the property.

• Provide a description of the property and its current and projected use.

• Provide an estimate of the property’s market value in its actual physical condition, use and
zoning designation as of the effective date of the evaluation (that is, the date that the analysis
was completed), with any limiting conditions.

• Describe the method(s) the institution used to confirm the property’s actual physical condition
and the extent to which an inspection was performed.

• Describe the analysis that was performed and the supporting information that was used in valuing
the property.

• Describe the supplemental information that was considered when using an analytical method or
technological tool.

• Indicate all source(s) of information used in the analysis, as applicable, to value the property,
including:

o External data sources (such as market sales databases and public tax and land records);

o Property-specific data (such as previous sales data for the subject property, tax assessment
data, and comparable sales information);

o Evidence of a property inspection;

o Photos of the property;

o Description of the neighborhood; or

o Local market conditions.

• Include information on the preparer when an evaluation is performed by a person, such as the name
and contact information, and signature (electronic or other legally permissible signature) of the preparer.

I was in High School English class type settings in the 3rd grade. Go back through what you just posted and note the paragraphs, sub sentences etc and get back to me. I'll even give you an easy starting place. Some of the sentences/paragraphs had a large period in front of them, some had a circle. Can you go through and exam and explain the differences?

Reading is fundamental...

 

[Terrel L. Shields]

Evidence of a property inspection;

o Photos of the property;

That is pretty plain to my way of thinking and I just finished a class last week that was on the very subject of Evaluations and FRTs...The instructor has been teaching FDIC, OCC, etc. examiners since 2001. You do understand what "at a minimum" means don't you, @Mr Rex ?

 

[George Hatch]

A: Receive assgn, Make work file Time=X=$ Avg Easily Predictable
B. Drive to subject & comps and back to office Time=Y= $ Relatively Expensive variable
C. Assemble, fill in the blanks, Analyze Time=Z=$ Depends -- This should be the most expensive partition.
D Add time for ave BS(from AMC), deliver Time=BS=$ Who Fkng Knows Frankly we should work to delete them from the process because any good portal Like AI Port can be set up to assign & Receive , review and deliver and even Bill

That's what I think. It's the part that only the appraiser can do, and is also the most difficult part - there is no autopilot mode anywhere in there. The hard drive is always being used during that portion of the assignment.

You don't want to forget responding to stips, when that's the case. That time adds up, too.