Hybrid Appraisals

[CGinMN]

I just don't think the lenders are that pumped about hybrids.

Yeah, most are not.

The point would be to pay a premium today to scale adoption, win over appraisers, then pull the rug on fees. This seems to be what a lot of start ups do to gain market dominance.

I guess this would be a tough sell to the consumers who actually pay for these. Not sure if they’re letting borrowers pick? But they would need to see a significant cost savings in order to pay for an inferior product. Borrowers aren’t incentivized to use this program like the lenders who like it will be.

 

[George Hatch]

Can we talk?

Behind all the bloviation of this thread is the real issue and that is this:

Appraisers are (quite rightly) seeing the slow demise of the 1004 "All-Done-By-Appraiser" as the simultaneous "Destruction of the Fee Appraiser Business Profitability" Model. USPAP-Schmoospap. Its always about 'The $$$'.

(Yeah, it's sorta inevitable due to actuarial factors - the future newly minted "appraisal homunculi running in an AMC hamster wheel" will never get anywhere close to our level of global appraisal experience or have the opportunity for success that we've had, but they will know how to upload and import stuff from "The Cloud" that someone else designed, that they may not completely understand.)

Anyway - that's why I'm personally not happy with the ongoing changes. The ability to make a good independent bu$ines$$ out of it. Otherwise, Just follow the $$$ (and don't y'all try to tell me that isn't the only reason you're unhappy with it either )

Agree. The fee appraiser business model itself is facing the existential threat. I think the main thing that's kept it going has been the cyclical nature of the RE markets themselves. The demand is too inconsistent to make it feasible to actually hire appraisers to work as employees.

The hybrid thing could really work for the lenders if the demand was consistent enough for them to hire appraisers and inspectors as employees working business hours at an hourly rate + benefits. Then the lenders could directly control the time frames involved and the consistency factor.

But IRL every time the demand ebbs the drain of the fixed expenses of employees just kills the lender. That's why subcontracting based solely on demand is more economically viable for them, especially if they can offload the entire expense onto the borrower. The lenders are only engaging the appraiser hours they actually use.

 

[CGinMN]

It is weird if you’re Fannie and want fast appraisals, which Justin just admitted was the goal (refreshing for a GSE collateral guy BTW), why would you add more parties, which means the appraiser has to wait to get the PDC to start work. Why are you creating longer forms instead of shorter forms?

I think in the future you might get property owners scanning interior and proxy pics will send their drones out for the exterior data collection. That can be done very quickly, at the time of loan application even. That data packet will be directly uploaded into the appraisal software. All that’s left is filling in the gaps. In the meantime we are at this place where the technology, the market, the financial incentives of the various parties are out of sync. Not sure if it ever gets in sync.

 

[Terrel L. Shields]

saves consumers on average $350-$400 over the traditional appraisal." (

I would bet the AMC keeps every dime of it 9 of 10 times. And how can it save the customer $300+ when the AMC never paid that much to an appraiser in the first place?

 

[shrubberyvaluation]

Apparently it IS feasible because so many appraisers are willing to shop vac the floor for peanut shells that spill from the master's table.

This thread would not exist if even half of the appraisers out there were shooting these down at the prices posted. Just because WE turn down $150 net for a desktop or hybrid form, does not mean staff appraisers are.

Like my good friend BMAC has said--its all about the fee. If the fee were comparable on a per hour basis to what we have all gotten accustomed to, most of these threads would not exist either. Would I do the PDC's for $200? Probably. Would I do the appraiser portion of a hybrid for $300 or more? Probably. But the volume simply will never be there for most appraisers to make a living doing them. That is why realtors (not top producers either) do the PDCs for $50 and staff appraisers are forced to churn out 20 reports a week or more to get their 'salary'--which is a joke as it is totally dependent upon output. Salary is fixed. Staff appraisers totally work on commission, the AMC's just don't call it that.

Let's all be honest with each other--it's really just the fees, but APPRAISERS have perpetuated this with every low-priced assignment they accept. We have dug this hole. Don't look up.

Here's dirt in your eyes.

AMC expects you to do it in a half hour. Thats a good hourly, just hope you keep your license and don't get sued.

 

[CGinMN]

It’ll be curious to see, if/when GSE layoffs happen, which AMCs they all have jobs lined up at. I think we know they’re not going back into the field.

 

[shrubberyvaluation]

It is weird if you’re Fannie and want fast appraisals, which Justin just admitted was the goal (refreshing for a GSE collateral guy BTW), why would you add more parties, which means the appraiser has to wait to get the PDC to start work. Why are you creating longer forms instead of shorter forms?

I think in the future you might get property owners scanning interior and proxy pics will send their drones out for the exterior data collection. That can be done very quickly, at the time of loan application even. That data packet will be directly uploaded into the appraisal software. All that’s left is filling in the gaps. In the meantime we are at this place where the technology, the market, the financial incentives of the various parties are out of sync. Not sure if it ever gets in sync.

They want more detail while cutting down the time you complete your report to 30 minutes. Something doesn't line up. Sounds like they don't care about accuracy, just that it looks nice and pretty. Fill the report with nice looking graphs, doesn't matter if they mean anything.

 

[shrubberyvaluation]

It’ll be curious to see, if/when GSE layoffs happen, which AMCs they all have jobs lined up at. I think we know they’re not going back into the field.

The real reason for FNMA to team up with the most unethical of AMCs.

 

[CGinMN]

They want more detail while cutting down the time you complete your report to 30 minutes. Something doesn't line up. Sounds like they don't care about accuracy, just that it looks nice and pretty. Fill the report with nice looking graphs, doesn't matter if they mean anything.

The data is to improve their AVM to expand waivers. So in a sense, they are increasing appraisal costs on one set of consumers to decrease costs on another set. Since waivers are disproportionately granted to wealthy white borrowers, this does strike me as out of sync with their mission to support minority homeownership.

 

[shrubberyvaluation]

They don't want to pay 30% more than regular appraisal. Cheaper is supposed to be half of the value proposition.

But we were told it was about bias, don't tell me they lied...