Illinois Board Issues Warning On Hybrid Appraisals

[Evincere]

I have been in arguments with several real estate agents lately. Even the association of realtors employees get upset with them. I cannot imagine trusting them on an inspection on a universal basis. They are heavily biased to selling a property. Their compensation is based on selling a property.

That’s it. No if, ands or butts. “Market Value” does not enter the equation.

You make a good point. Realtors are all about keeping prices up. What no one knows for sure (because of the different company versions of the hybrids) - definitely cause for speculation - is where and from whom are these pre selected hybrid comps originating?

 

[Eli]

Shouldn’t be a problem......,,,”Partner”.

 

[Eli]

You make a good point. Realtors are all about keeping prices up. What no one knows for sure (because of the different company versions of the hybrids) - definitely cause for speculation - is where and from whom are these pre selected hybrid comps originating?

This market is “so hot”. Notorious here for going on price per SF and choosing comps like 40% smaller in GLA. Or jumping to a different area with similar GLA. Have to realize their compensation is based on selling. They are biased with a license to do it.

Appraisers don’t operate that way. “That is not the way appraisers roll”.

 

[Eli]

If I was your real estate agent and I could get you 3 times Market Value on your home, then that is my job. I am perfectly legal in doing it.

 

[Eli]

My new motto to real estate agents is “that’s great, you do your job, I’ll do mine”.

There are USPAP issues involved too. Notice some high ranked appraisers on the AMC side have tried to abolish USPAP.

 

[Eli]

If I was your real estate agent and could get you the property for half it’s market value, I am perfectly legal in doing it.

I am done. I have no skin in the game.


That’s why I say don’t call it an appraisal with agents involved. Call it something else. Let that liability fall somewhere else.

AMC’s are similar in their bias. Fees should be separated.

 

[gregb]

There are benefits for appraisers to understand the NAR code of ethics:

2026 Code of Ethics & Standards of Practice

Code of Ethics and Standards of Practice of the National Association of REALTORS® Effective January 1, 2026.

www.nar.realtor

 

[J Grant]

It is very reasonable ... until you apply the exact same standard to the comps, making every appraisal done illegal.

But the same standard does not apply to the comps, since we are not appraising the comps !

The comps info was not prepared for appraisal purpose the comp info was prepared for listing/other purposes by a RE agent/other. An appraiser is often skeptical about the personal representation of a comp for that very reason, thus drives by/verifies/checks with other sources/online pub recs etc. The appraiser will not drive by the comps on a hybrid and possibly may not speak with/ the inspector party ..

The problem with hybrids is there is no "reasonable" way the appraiser can rely on the "accuracy" of the "data" since an inspection is not mere data gathering as spun by fannie ( spun now that it suits them) the inspection is where the person inspecting forms impressions, judgement rs and opinions IN ADDITION to noting data-

Appraisers can chose to accept this limitation, but the report can still be challenged or discredited due to gap between what was inspected on subject and the way it is understood /reported by appraiser

 

[J Grant]

So I am going to assume that everyone against hybrids NEVER did a 2055 based on interior photos from a Realtor who got their license two weeks prior to that listing............ This is a Scope of Work Issue and nothing less. The SOW rule is a great tool for appraisers and the Hybrid thingy pushback is because of idiot AMCs telling appraisers they can complete a report subject to Standards 1 and 2 in an hour and some idiot appraisers are doing them for fees that are absurd................ This is all about fee; if the AMCs were offering $300 no one would complain.

Your personal opinion that if the fee was $300 nobody would complain- or do you claim to mind read for the entire profession.

Appraisers have issues with the 2055 and may turn them down even with a good fee if info is lacking. On a 2005 the appraiser inspects subject from street ( and sometimes goes inside if owner is there, I;ve done it) , plus the 2055 is not typically (if ever) used for origination loans (purchase or refinance) . The reliance on 2055 is either for a HELOC or portfolio review or legit ordered because the appraiser can not get interior access such as in a default situation.

Fees both to inspector and appraiser will likely be an issue, and everyone is aware of it and admits it, so why do you constantly make the derogatory toward other appraisers point that it is only about fee? How do you know the exact same issues would not be discussed whether fees were an issue or not? Appraisers constantly discuss issues and appraisal problems here that have nothing to do with fees, or might be correlated to a fee but the appraisal aspect remains apart from the fee.

And let's not be naive, if potential to procure lower fees was lac king this product it would not be on the menu. IT will start with the inspectors, who will be paid low/pressured for turn time. Fee issues can extend to the appraisal portion each appraiser will have to deal with as they deal with other fees. But is predictable inspectors will be paid as little as possible/pressured for deadlines, which can impact quality of their work or who would choose to do the inspections.

 

[Evincere]

I have been in arguments with several real estate agents lately. Even the association of realtors employees get upset with them. I cannot imagine trusting them on an inspection on a universal basis. They are heavily biased to selling a property. Their compensation is based on selling a property.

That’s it. No if, ands or butts. “Market Value” does not enter the equation.

keeping values in their hoods on the high end definitely is an objective