Hybrid Appraisals

[Mike Ault]

80% of the loans we acquire have appraisals. We just spent over 6 years and millions developing the next UAD for appraisals.

Danny had indicated in an earlier thread shortly after this hybridization project was announced that the GSE's would insist that the valuation portion be performed by someone who was geographically competent in the subject market which they were appraising in. Can you tell us if that's still the case? Or has that criteria been expanded to anybody who's licensed in the state that the subject is located in?

 

[Terrel L. Shields]

Bifurcation and eliminating demand for appraisals through waivers

Then squeal like Porky Pig when sales pick up and there are no appraisers available because half of them have been run out of business and half the rest eschew secondary market work totally. I've not done one in well over 10 years. I don't even own the software anymore. All narrative of my own creation. Just created a 45-page report - $900 fee. What AMC would pay that? Last week I did another for $1,200. The lawyer thanked me and said it was good work.

At my age, I don't do a lot of jobs, but the ones I do are profitable except the pro bono work I do for estates of people having to go on Medicaid. And I've done two of those since Christmas. I don't mind at all to do that kind of work cheap. I do mind being expected to work for C Store wages with a huge liability factor hanging over you for the next 3 years (Statutes of Limitations here).

 

[Terrel L. Shields]

Or has that criteria been expanded to anybody who's licensed in the state that the subject is located in?

Can you fog a mirror?

 

[Mike Ault]

Can you fog a mirror?

Most days. I was simply curious if every GSE valuation in Texas will soon be performed out of the Fannie Mae field office in Dallas. I have no desire to do appraisals outside of my service area. Too close to retirement to have a boss, regardless. There will always be sufficient private work available for me to earn enough beer & bait money.

 

[RCA]

Then squeal like Porky Pig when sales pick up and there are no appraisers available because half of them have been run out of business and half the rest eschew secondary market work totally.

True. But even that day is over, I believe.

I've not done one in well over 10 years. I don't even own the software anymore. All narrative of my own creation. Just created a 45-page report - $900 fee. What AMC would pay that? Last week I did another for $1,200. The lawyer thanked me and said it was good work.

Sounds like my situation.

At my age, I don't do a lot of jobs, but the ones I do are profitable except the pro bono work I do for estates of people having to go on Medicaid. And I've done two of those since Christmas. I don't mind at all to do that kind of work cheap. I do mind being expected to work for C Store wages with a huge liability factor hanging over you for the next 3 years (Statutes of Limitations here).

Yep.

- I am kind of in the same camp. So my appraisal license is coming up for renewal, in less than two months, And, let's see, it is $550-$800 for courses just to get it renewed and then additional courses for the AI. $1030 for a license every two years and that fee will likely increase. Plus another $900 or so for insurance. ....

With a limited number of years left to live, I'd rather spend my time writing and programming than doing appraisals in a slow market at low fees. It doesn't really pay to do appraisals off and on. You need a steady stream of work and reasonable fees. For the kind of appraisals I do - with advanced analysis, the work is just not there at this time.

Add to that, the trend is towards automation - and that trend is accelerating.

Additionally, I see that I need all my time to do writing and software development, so there is too much to get done in what time is left. If I don't jump in and pay for courses, renewal and another year of LIA insurance, I save about $2700 for this year. ----> And, I am going to want to buy that new Mac Studio M4 Ultra when it comes out.

So - I think - on the one hand I don't have a choice financially - and on the other hand I have less to worry about by not renewing. I may possibly regret the decision, but there is so much inertia in the real estate industry for real improvement, and without immigration the US population is expected to decline from about 334M to 330M by 2040, with immigration - then maybe it could possibly reach 350M or a bit higher, at the same time it is definitely getting older.

Many predict the economy to be in a slump until about 2040. I believe that, more or less. AI and robotics will do good, but that's not saying much for anything that doesn't fall into their supply chain.

Also manufacturing environments for the future will be more specialized towards a large manufacturing base built on robotics rather than people. Where is the consumer demand going to come from? There will be a certain amount of chaos and fragmentation in society for a couple of decades, and it may be unpleasant. But those retired, with decent social security, can probably get by.

 

[J Grant]

And how to you develop those opinions when doing a proposed home? Do you take the plans/specs out to the site and develop those opinions there? No. You read the plans and specs, and from that info you develop an opinion about the proper quality rating, while sitting in your office, no? Plans/specs is the original hybrid appraisal.

The fact that you have historically conducted two activities while on site (collecting data and forming opinions based on that data) does not mean those things have to be developed on site or at the same time. And what about all the third party data on the subject you use now? And all the third party data you use for the comps?

On a proposed home, the appraiser inspects the site, and often sees a finished builder model, and drives the comps. None of which is true in a hybrid where the appraiser does not inspect. They reason we work from plans and specs is that the house is not been built yet. In the typical hybrid, the subject house IS built, so what is the reason for not sending the appraiser out to do the inspection?

Third-party data we use for a subject and comps is in addition to our inspection of the subject and the ext drive inspection of the comps and the neighborhood.

 

[Bobby Bucks]

There is very detailed and specific training for property data collectors for how they engage with the homeowner or property contact. They should not be impersonating or saying they are the appraiser.

Detailed and specific training? That is funnier than anything posted by the Fern. Are you being serious? If so, someone needs to call the USPAP police.

 

[Bobby Bucks]

I can see it now in the next mass email from Joan & the Joanettes, “ Come to Vegas for the gala networking event & get your property data collector designation for 50% off, plus free background checks for the first 20 applicants.” .

 

[Zoe]

Then squeal like Porky Pig when sales pick up and there are no appraisers available because half of them have been run out of business and half the rest eschew secondary market work totally. I've not done one in well over 10 years. I don't even own the software anymore. All narrative of my own creation. Just created a 45-page report - $900 fee. What AMC would pay that? Last week I did another for $1,200. The lawyer thanked me and said it was good work.

At my age, I don't do a lot of jobs, but the ones I do are profitable except the pro bono work I do for estates of people having to go on Medicaid. And I've done two of those since Christmas. I don't mind at all to do that kind of work cheap. I do mind being expected to work for C Store wages with a huge liability factor hanging over you for the next 3 years (Statutes of Limitations here).

Well, heck yeah, you know there is dang shortage of appraisers. cough.......cough.......cough.

 

[Zoe]

Sometimes I think the whole party thinks appraisers are dumber than they are. They will find out soon when complaints start flying and regulators call in an actual appraiser to review the process.