Hybrid Appraisals

[Overimprovement]

A quick thought on NAR. The reason they wield so much power is that realtors in a very practical way HAVE to join that org to access the local MLS. But, you will say, so do appraisers. True, but the NAR doesn't represent appraisers, they represent realtor interests, which are actually quite different.

I really think the stranglehold local MLS's have on transaction data is nearing an end. More and more info is going public, and the sarcastically funny thing is more and more MLS's are being taken over by the CoreLogics of the world. They don't realize they are selling their livelihood to the devil when they do that. They are, one-MLS-at-a-time, losing control of their only real precious commodity--transaction data. I predict by 2030, most MLS's will be owned by a few large data warehouses. Definitely trending in that direction. And every time a realtor does a property "inspection", they are inadvertently feeding the machine as well.

But why was each locality able to put such a stranglehold on the data to begin with? Because before computers, transaction data was on cards at some local office (many of us remember getting 'comps' that way). But it was local to each community/city/county. With usually one organization holding the key, anyone who wanted to play...had to pay. That simply morphed into the local MLS's, or more precisely, the local Boards of Realtors, which controlled all the data. It's always been about the data, and always will be.

Appraisers have never had that, but I continue to assert that if all the appraisers in one area got together, and just talked, they could affect real change. Just the exchange of knowledge on what is going on with AMCs, PDCs, waivers, staff appraising, etc, would be beneficial. Historically, appraisers locked up their personal knowledge in a vault. But as more and more get desperate just to keep the shingle hung, I think more and more would be willing to share info. Obviously the larger the city, the more unlikely this is. But as always, it HAS to start locally.

 

[George Hatch]

. Appraisers have so little leverage compared to the highly funded and powerful AMC and lender lobbies that accusing us of being hypocritical is absurd. There is no hypicry in stating teh fact that teh supply and demand dynamics of a large volume of orders with a small scheme of effective demand ( the AMC ) was the overnight change after DF banned individual loan officers from ordering appraisals. Your refusal to acknowledge that is evident..

Overnight, appraisers saw their own clients shift to AMC, and the appraiser was doing the same work for their former clients at half the fee due to DF, seeing the AMC order since loan officers could no longer do so. That s not like any other businessf wrt free market catilsim supply and demand.
You act like residential mortgage rendering orders or alternative is subject to the same supply and demand as free market business or the non AMC side of appraisals.

"power" is not an element of the act of hypocrisy.

And yes, I saw how the LENDERS acted WRT their engagement options. They acted in their own best interests. And with utter disregard for the well being of fee appraisers. "supply/demand" does not only apply to the appraiser side of the equation, nor does supply/demand imply some kind of parity between the two opposing elements of that dynamic. You have no leverage because you have too much competition.

Everyone knows that there is zero exaggeration affoot when they say "if you won't do it we'll just go find someone else who will". That's your real problem and, even though it's to an admittedly lesser extent, that's also my problem.

 

[J Grant]

A quick thought on NAR. The reason they wield so much power is that realtors in a very practical way HAVE to join that org to access the local MLS. But, you will say, so do appraisers. True, but the NAR doesn't represent appraisers, they represent realtor interests, which are actually quite different.

I really think the stranglehold local MLS's have on transaction data is nearing an end. More and more info is going public, and the sarcastically funny thing is more and more MLS's are being taken over by the CoreLogics of the world. They don't realize they are selling their livelihood to the devil when they do that. They are, one-MLS-at-a-time, losing control of their only real precious commodity--transaction data. I predict by 2030, most MLS's will be owned by a few large data warehouses. Definitely trending in that direction. And every time a realtor does a property "inspection", they are inadvertently feeding the machine as well.

But why was each locality able to put such a stranglehold on the data to begin with? Because before computers, transaction data was on cards at some local office (many of us remember getting 'comps' that way). But it was local to each community/city/county. With usually one organization holding the key, anyone who wanted to play...had to pay. That simply morphed into the local MLS's, or more precisely, the local Boards of Realtors, which controlled all the data. It's always been about the data, and always will be.

Appraisers have never had that, but I continue to assert that if all the appraisers in one area got together, and just talked, they could affect real change. Just the exchange of knowledge on what is going on with AMCs, PDCs, waivers, staff appraising, etc, would be beneficial. Historically, appraisers locked up their personal knowledge in a vault. But as more and more get desperate just to keep the shingle hung, I think more and more would be willing to share info. Obviously the larger the city, the more unlikely this is. But as always, it HAS to start locally.

I wish it were true wrt appraisers -

RE agents have a very different supply and demand dynamic with their customers. MLS seems as strong as ever (which, from the apparent POV, is a good thing wrt access ). Zillow and all those sites are vehicles for MLS listings and lead to agents. MLS lawsuit wrt fees turned out to be a face - they protected their own fees as far as the GSE statements regarding concessions and commissions.

RE comminos remain strong because the RE agents have a large supply of customers, all people, entire regions and cities of them - Appraisers have a smaller segment of lenders and AMC's for their client base. wrt residential mortgage lending. Add to that the RE agents work for one broker in any office, and that gives the broker negotiation power for the fee protection for their agents.

 

[J Grant]

"power" is not an element of the act of hypocrisy.

And yes, I saw how the LENDERS acted WRT their engagement options. They acted in their own best interests. And with utter disregard for the well being of fee appraisers. "supply/demand" does not only apply to the appraiser side of the equation, nor does supply/demand imply some kind of parity between the two opposing elements of that dynamic. You have no leverage because you have too much competition.

WHY do we have too much protein? That is what you do not acknowledge or how it affects supply and demand to the vast favor of the AMC and affiliated lenders. We did not need all reminders of the facts for all these years, as if we were ignorant, we needed support.

I do commend you for supporting wrt the petition years ago and acknowledging that lawsuit would help if anyone had the energy to pursue it wrt anti trust - I do not have the focus for it at this point, though I would participate. ust -

 

[George Hatch]

In my view, being honest and direct with appraisers is a kindness. Lying to them and indulging them in the impossible fantasy would be an unkindness. Low EQ, low empathy, low respect.

A certain percentage of appraisers have already been starved out and there will be more. Not everyone is going to make it. And I'm also pretty sure that some of the appraisers who do make it will wish they hadn't.

If someone is eventually going to get starved out anyway then it's to their advantage to see that coming in advance. Transitioning out sooner might be better for some people than transitioning later. Conversely, it's to their disadvantage for them to take seriously the fantasies that a few of their peers are trying to sell to them. As for the survivors who intend to stick it out, they are also better served by figuring out their strategies too, and to refrain from relying on any other party to save them.

None of this is news. We have a few forum regulars who have already withdrawn from the marketplace, including a couple who are working in a different day job. It's already been happening for a long time.

 

[J Grant]

In my view, being honest and direct with appraisers is a kindness. Lying to them and indulging them in the impossible fantasy would be an unkindness. Low EQ, low empathy, low respect.

A certain percentage of appraisers have already been starved out and there will be more. Not everyone is going to make it. And I'm also pretty sure that some of the appraisers who do make it will wish they hadn't.

If someone is eventually going to get starved out anyway then it's to their advantage to see that coming in advance. Transitioning out sooner might be better for some people than transitioning later. Conversely, it's to their disadvantage for them to take seriously the fantasies that a few of their peers are trying to sell to them. As for the survivors who intend to stick it out, they are also better served by figuring out their strategies too, and to refrain from relying on any other party to save them.

None of this is news. We have a few forum regulars who have already withdrawn from the marketplace, including a couple who are working in a different day job. It's already been happening for a long time.

I never tried to sell a fantasy, I did try to explain how and why things came about, so many blame the appraisers when we were facing forces that were insurmountable, though yes, of course, that segment of bad actors in appraisal share a portion of responsibility.

Imo, the biggest seller of fantasy was those appraisals insisting that going after private work was the answer. If that were a realistic alternative for res appraisers, everyone would do it. True, some are not good at marketing, but the reality is that there is no viable volume of private work enough to sustain most res licensed people. At best, it is a side niche that takes years of marketing to develop, and to get orders other than listing work, needs advanced education and specific high-level experience - who can starve for 10 years to get that small, elusive piece of the pie -

 

[djd09]

yep...its a good thing they cut the mortgage brokers out of loop

 

[George Hatch]

It was inevitable. It happened because it had to happen, whether sooner (FIRREA) or later (D-F). IRL loan originators use appraisals as an advertising brochure for their deal, whether they're on staff or outside as independents. That's their only use for an appraisal. LOs don't make loan decisions. It's not their money going out the door.

Conversely, underwriters rely on appraisals as part of their due diligence and then they pass their package to the actual lenders whose money IS funding the loan.

It's supposed to be underwriters+reviewers+appraisers vs loan originators. Not LOs+appraisers vs underwriters+reviewers.

 

[Joe Flacco]

Anyone under 50 should re-evaluate their situation and find better employment than simple fee appraising offers.

I disagree with this.

Younger appraisers should invest in themselves to become local experts and focus less on earnings and profits. Even if you are stuck with AMCs you should challenge yourself and accept difficult assignments. Go after all the hard ones. You might not make any money but you always learn something if you pur the time in.

The knowledge and expertise you gain by doing this through the first half of your career becomes very valuable for the second half.

 

[Terrel L. Shields]

I love an optimist but...first, I'd want to get my CG. Second, I want to market to CPAs and Attorneys and third you can change careers and keep your license too. It's a good selling point in other occupations. I still hold my Reg Prof. Geologists license and haven't done a lot with it in reality but it is a selling point in mineral appraising.