Hybrid Appraisals

[J Grant]

The appraiser must comply with USPAP. Hybrid appraisals can comply.... or not. Just exactly the same as any other appraisal. Hybrid or not, there are two written report options.

I haven't yet figured out what the attraction is.. for Lender/Clients. I get reports based on hybrid appraisals for review. I also get to see the fees and the turn times. They don't seem to be cheaper or faster, most of the time. Yeah, the appraiser gets less... but the property inspector gets paid too... and the AMC, if there is one.

Imo, one of the advantages of hybrid to the GSE and affiliates such as AMC's is that the hybrid essentially increases the supply of "appraisers", not the actual licensed appraise supply, but that the work volume that appraises can produce is now relieved in part with a nonappraiser insect pro - a RE agent or property manager or the like - who are in greater numbers and who might charge less for an inspection as a side gig.

The AMCs or a lender can also squeeze more work out of staff appraisers - who no longer have to leave their desks, The AMC sends out a nonappraiser instead - or if a staff appraiser has a free hour, sends them out - and the deskbound appraiser can do more volume in a wider geo area - who cares if they ever set foot in a subadvisor that is 90 miles away.

There is no advantage for a hybrid and perhaps even is a disadvantage to the consumer or the investor - thus, the entities designed a cherry-picked study to provide a rationale -they claim more through reporting on condition or fewer errors if one can believe that on face value.

 

[alebrewer]

Imo, one of the advantages of hybrid to the GSE and affiliates such as AMC's is that the hybrid essentially increases the supply of "appraisers", not the actual licensed appraise supply, but that the work volume that appraises can produce is now relieved in part with a nonappraiser insect pro - a RE agent or property manager or the like - who are in greater numbers and who might charge less for an inspection as a side gig.

This is actually a cogent grief. I, too, am concerned about the 'robo-writers' - specifically with respect to the quality of the reports. From a theoretical perspective, I've no doubt someone in Idaho can produce credible appraisals in Texas. I would quantify that statement, though, to add the caveat that the appraiser would need to be very familiar with the market - maybe moreso than someone who is actually in the market.

For the most part, though, that's not the case. I suspect many of the AMC 'churn n burn' shops have ghost writers making chump change, the 'appraiser' is just reviewing the report before signing, and then it's shipped. The impetus to the appraiser is obvious - the more he/she signs, the more money they make, so that there is an incentive to 'not' be as thorough as they should be.

 

[shrubberyvaluation]

The appraiser must comply with USPAP. Hybrid appraisals can comply.... or not. Just exactly the same as any other appraisal. Hybrid or not, there are two written report options.

I haven't yet figured out what the attraction is.. for Lender/Clients. I get reports based on hybrid appraisals for review. I also get to see the fees and the turn times. They don't seem to be cheaper or faster, most of the time. Yeah, the appraiser gets less... but the property inspector gets paid too... and the AMC, if there is one.

Only thing I can figure is maybe you will get lucky and the PDC will make the property seem better than it is, or you get a 2nd shot to put it up to full if it fails, a third shot if you start PDC + AVM.

 

[shrubberyvaluation]

Maybe they could be, but numerous USPAP instructors on Facebook groups say they’ve reviewed hundreds of them and haven’t seen one yet.

I doubt those doing them for $50 are USPAP compliant and I'm sure even if they wanted to those that offer them would make it hard to impossible and still get work from them.

 

[frogman]

I'm not interested in debating the allegation itself. I'm just checking on your basic honesty. I doubt any well-formed appraiser who has seen a bunch of these can say "never seen one" that's compliant.

And no, based on your previous remarks on the topic I definitely don't consider you to be well informed as to what is/isn't USPAP compliant.

Besides the preprinted scope of work, does anyone else besides the appraiser determine it?

 

[glenn walker]

Yes, the hybrid form complies with USPAP - though USPAP compliance lies within the content of the appraisal, not a form or format (in this case, pairing the inspection done by someone other than the appraiser doing the appraisal.)

A better question might be: why is the appraiser, who will be responsible for the appraisal, not the same person who inspects the property?

The same reason a primary Md is not responsible for a MRI that was done by a radiologist. The MD just uses the report he didn't physically do it.

The same with a civil engineer's report the appraser depends on it's conclusions but did not do the physical inspection.

 

[TerryRohrer]

The same reason a primary Md is not responsible for a MRI that was done by a radiologist. The MD just uses the report he didn't physically do it.

The same with a civil engineer's report the appraser depends on it's conclusions but did not do the physical inspection.

What is the reasonable basis upon which an appraiser can form a belief that someone they don't know anything about, much less what their instructions and scope of work were, was competent?

(c) When a signing appraiser has relied on work done by appraisers and others who do not sign the certification, the signing appraiser is responsible for the decision to rely on their work. (i) The signing appraiser is required to have a reasonable basis for believing that those individuals performing the work are competent; and

 

[shrubberyvaluation]

Besides the preprinted scope of work, does anyone else besides the appraiser determine it?

Try to change the scope of work FNMA wants and find out who determines it.

 

[chad hampton]

The same reason a primary Md is not responsible for a MRI that was done by a radiologist. The MD just uses the report he didn't physically do it.

The same with a civil engineer's report the appraser depends on it's conclusions but did not do the physical inspection.

Interesting to bring up civil engineering. I worked in a CE office for a decade. We would never rely on field work done by any technician that wasn’t an employee and trained in house.

Anyone who likes the hybrid model must have also been a fan of the trainee “runner” model of the 90/2000s. That was at least a model where the licensed individual “trained” their trainee in some way. Maybe that’s the case? The folks I see defending/pushing hybrids are imo some of the most unethical professionals I’ve ever encountered in any profession. So it shouldn’t surprise me.

 

[Tom D]

No certification, or license, for an inspector. That seems to be a 100% reliable report. Most doctors & professionals rely on reports done by educated professionals.
Now a realtor is a licensed person to do real estate. Their report could be reliable with some minor appraising class on appraising requirements.

I would rather drive around listening to the radio and do 5 physical inspection a day, at my price. Well, i have little GLA row homes in this big city.
Hybrids & waivers will kill off 80% of the volume for the normal 1004 doers. And the new uad3 looks like an aggravating new way to torture the rest of us.

My new appraisal motto is, who cares why there are more walking dead than before, and why. Look for an alternative income stream, you younger appraisers.