Hybrid

[Joe Flacco]

The most equal comparison to an appraisal on a SOW basis is the BPO. I doubt there are many users who - if the price is equal - would not choose to obtain an appraisal rather than a BPO. So what's the difference between the two? It isn't necessarily the substantiative elements of the SOW because aside from some reporting disclosures there aren't any.

The primary difference between an SR2 compliant appraisal report and a BPO is the appraisers disclose what they actually did and didn't do, including the various assumptions and limitations involved; whereas most BPOs don't. This is why the readers sometimes assume things about the BPO that didn't happen - because they weren't informed it didn't happen.

To a certain extent the same is true for the AVMs. They don't use the same protocols for data qualification that appraisers routinely use, which isn't necessarily a problem in and of itself; but where they come up short is in not informing the reader of exactly what they did and didn't do and what assumptions and limitations are involved.

So when appraisers complain about being "limited" by the requirements of say what you do and do what you say they are missing the primary REASON those specific elements are required in our minimums. What UTILITY the conformance to those minimums add to the credibility of their work.

When a appraiser uses the fannie mae guidelines as the rules for selecting comps, does that comply with standard 1? BPO standards are something like fannie mae guidelines.

 

[chad hampton]

When I go to the doctor, it is not the doctor who weighs me, takes my BP, etc. Others collect that data, and then he analyzes it. He also gets a higher hourly rate The same is true with many other professions. The role of the real professional is the analysis, while others collect the data.

Fair enough on the other points, no one ever said we had to agree I learned house measuring and some basic house inspection items in my trainee classes. I know in NC, they take you out to a house in one of the trainee classes (or at least t10 years ago when I knew some people who took the classes).

But I'm glad you brought this up. I was going to bring up the Dr visit thing before as well, but the point I was going to make is that you don't bring in your own vitals to a dr and have him go run with in. It's not a 3rd party that sets the foundation for the rest of the visit and is the basis for the dr. recommendations. These are done by his/her employees, nurses, who have training and are licensed and employed by the dr. or his group. I don't think a dr office visit is a good example if you on the side of hybrids in their current state as they are explained here.

Same with accountants. I don't fill out my tax returns the way I see fit and then take them to my account for him to sign and take responsibility for.

When I think about it, I'm not sure I can think of too many professions in which 1 party is responsible for everything, yet they aren't in the control of the process from start to finish.

I worked as a design engineer out of college, before I was a licensed PE. Sure, the jr staff engineers did most of the design, but they had degrees & worked directly under the PE, who was 100% responsible. All employed by the same company. Even the min wage technicians who went out collecting field data are employees. Survey got subbed out some of the time, but that's also a job that requires a stamp/seal.

The only legit reason to be pushing for an cheap/inferior hybrid product is banks and AMCs want to get into the appraisers pocket even deeper. Claiming any other benefit is being dishonest.

 

[J Grant]

I wouldn't disagree with looking for untapped opportunities; that's good business. But I wouldn't discount the so-called tired/dated advice. It is neither tired or dated. I turn down work from attorneys/accountants/estates because my pipeline is full of work from attorneys/accountants/estates.
The business is out there.

I think your designation , cert gen license and the fact that you are superior (imo) in the way you write and conduct yourself makes a big difference ! As many an appraiser who are good at what they do have not had success getting this type of work .

That aside, a bright spot is that if the hybrids (not bifurcated test program ) but the hybrids paying $60, while a low fee, if they increase in volume may make up for some loss of work of traditional appraisals to hybrids.

 

[hastalavista]

When a appraiser uses the fannie mae guidelines as the rules for selecting comps, does that comply with standard 1? BPO standards are something like fannie mae guidelines.

What is in Fannie's guidelines in regard to selecting comps that is in conflict with the USPAP?

 

[chad hampton]

Appraisal can't compete with AVM's and BPO's because they are not bound by the same standards. If they are okay with no standards valuations then let them have it. The emphasis on speed and cost in appraisal is making a lot of the appraisals subpar when it comes to developing the value. Probably getting same level of standards as a BPO but just labeled as a appraisal. It is just not being measured because standard 1 compliance is assumed.

Very true. I lost about $50k/yr worth of 2055 business several years ago when brokers in NC changed the NC law to allow BPOs for things other than prospective listings. I'm not lying when I say the work dried up in a span of about 2 months. With that being said, I'm torn on changing the laws and rules to allow appraisers to not comply with USPAP to compete with agents. Part of me says we would get all the work back, but then part of me says I want no part of competing with 100,000 agents in NC for this work. That's a race to the bottom.

When I took my first appraisal class, the instructor told me the value of this license is that anytime a bank needs a value on a property, they must go to you. They are not permitted to go anywhere else. How times have changed.

 

[George Hatch]

Fannie (or any other user) is free to add whatever extras to an assignment they want so long as they're not undermining our minimums.

Back before the SOWR was swapped in for the DEPARTURE RULE we used to also have a SUPPLEMENTAL STANDARDS RULE that required appraisers to also adhere to the client-defined extras so long as they didn't undermine our minimums. Now that requirement is bundled in with the SOWR.

 

[Joe Flacco]

What is in Fannie's guidelines in regard to selecting comps that is in conflict with the USPAP?

When a appraiser uses the guidelines as the criteria for selecting comparables and the only differences considered are the categories in the form to bracket, that method does not comply with standard 1-2(e).

 

[George Hatch]

Very true. I lost about $50k/yr worth of 2055 business several years ago when brokers in NC changed the NC law to allow BPOs for things other than prospective listings. I'm not lying when I say the work dried up in a span of about 2 months. With that being said, I'm torn on changing the laws and rules to allow appraisers to not comply with USPAP to compete with agents. Part of me says we would get all the work back, but then part of me says I want no part of competing with 100,000 agents in NC for this work. That's a race to the bottom.

When I took my first appraisal class, the instructor told me the value of this license is that anytime a bank needs a value on a property, they must go to you. They are not permitted to go anywhere else. How times have changed.

Your appraisal license is not an EBT card. Nor was it ever. Your business exists only to the extent you can identify a market to service and a product to sell to that market. This has always been the case in our business whether we recognized it as such or not.

If you wanted guaranteed employment you should have taken a job in gov't.

 

[hastalavista]

I think your designation , cert gen license and the fact that you are superior (imo) in the way you write and conduct yourself makes a big difference ! As many an appraiser who are good at what they do have not had success getting this type of work .

That is quite a compliment, and I appreciate it.

Very true, the designations (both of them) create opportunities. However, it isn't the designations that make any appraiser better, it is the required course work (with tests and demonstrations of mastering that course work) that make the appraiser better. I speak to a lot of residential appraisers who ask me if I think a designation will make a difference? This is what I tell them: As it stands now, and if you are planning on continuing your focus in residential mortgage work, then I cannot in good conscience recommend obtaining a designation. However, I do recommend taking all the course work necessary for the designation because it is by completing the course work that you can expand your appraisal competency. And that expanded appraisal competency will allow you to take more complex jobs in the residential mortgage space.
The designation is like a mini-resume by your name; it makes a difference (sometimes a big difference) by those who consider it in their engagement decision.
But the course work is what adds to your skil lset and competency level as an appraiser. That sticks with you with or without the designation.

And, true, the upgrade to a commercial license expands the potential business.

But recall I was thrown out of high school in the 11th grade, and didn't finish college until my late 40s. If I can do it, anyone can!
But maybe better said is that no one has to do what I do to expand out of the residential mortgage bucket (of which, I still do work within), all they have to do is take some concrete steps to expand out of that bucket, and maybe work as hard in the new assignment types as they did to get where they are with the mortgage finance assignment-types.

 

[Joe Flacco]

Fannie (or any other user) is free to add whatever extras to an assignment they want so long as they're not undermining our minimums.

Back before the SOWR was swapped in for the DEPARTURE RULE we used to also have a SUPPLEMENTAL STANDARDS RULE that required appraisers to also adhere to the client-defined extras so long as they didn't undermine our minimums. Now that requirement is bundled in with the SOWR.

That is true but fannie mae guidelines are additional reporting requirements and not to be used as additional development standards. If using fannie mae guidelines as development standards then you are getting fannie mae guideline value and not market value.