July 2008 ASC Q&a- Wink Wink Comp Comp

[George Hatch]

Offshore,

Are you somehow under the impression that your MB client would suddenly stop pressuring you and threatening you for what they want? If so, think again. Your clients ARE the problem, and putting a barrier in their way isn't going to solve it.

 

[woodyva]

In all the vitriol, I still don't see how I delivered a report, or
am I off topic?

Your now returned to your regular TV schedule.

We have been able to do raw data searches for originators for a long time. Once i opened my company we created a form that explains in very specific detail what we can and can not do. If i am asked for a value we charge.

The form includes spaces for the requester to fill out to give us parameters on the research. They can decide how much GLA to pull by, how many bedrooms, etc. we will even pull a tax card for them. Often times they decide its too much work for them and move on, others that do it sometimes still want a range.

More often than not it is a waste of time. Something for nothing is what most originators want.

 

[woodyva]

11,290 posts for Steven and nothing of substance? Not one?

Plenty of substance if you are a lender, or a lender's lapdog.

 

[DWiley]

...TAF by furthering their vague responses has proven again that they lack a spine.

The invertebrates I see are the appraisers who lack the moral fiber and business sense to say "No" when they are asked to do appraisals for free, guarantee results, accept ridiculously low AMC fees, etc.

As long as appraisers keep complying with such requests clients will continue making them, and who can blame them? If several of my my local gas stations constantly let me have 1/4 of a tank of gas for free, I am certainly not going to offer or expect to have to pay for it. And I am not going up the street to a gas station that charges me for 1/4 of a tank. Of course gas stations would never do this because gas station owners have more sense that to engage in such ludicrous behavior.

Woody is right. They want something for nothing, and they have every right to expect it because so many are willing to provide it. Is that the client's fault?

Even if it were the ASB's job to save residential appraisers from themselves, it would be an impossible task. Changing USPAP cannot save an appraiser from his/her own stupidity and/or lack of ethics.

Any appraiser who has taken a USPAP class knows that a typical "comp check" requests is actually a request for an appraisal. If an appraiser performs the requested appraisal, but then ignores the standards and laws that apply to the assignment, I don't see how writing more laws and/or standards will affect the situation. The appraiser has already demonstrated willingness to ignore the laws and standards.

As Walt Kelly so famously stated, "We have met the enemy, and he is us."

 

[woodyva]

The invertebrates I see are the appraisers who lack the moral fiber and business sense to say "No" when they are asked to do appraisals for free, guarantee results, accept ridiculously low AMC fees, etc.

As long as appraisers keep complying with such requests clients will continue making them, and who can blame them? If several of my my local gas stations constantly let me have 1/4 of a tank of gas for free, I am certainly not going to offer or expect to have to pay for it. And I am not going up the street to a gas station that charges me for 1/4 of a tank. Of course gas stations would never do this because gas station owners have more sense that to engage in such ludicrous behavior.

Woody is right. They want something for nothing, and they have every right to expect it because so many are willing to provide it. Is that the client's fault?

Even if it were the ASB's job to save residential appraisers from themselves, it would be an impossible task. Changing USPAP cannot save an appraiser from his/her own stupidity and/or lack of ethics.

Any appraiser who has taken a USPAP class knows that a typical "comp check" requests is actually a request for an appraisal. If an appraiser performs the requested appraisal, but then ignores the standards and laws that apply to the assignment, I don't see how writing more laws and/or standards will affect the situation. The appraiser has already demonstrated willingness to ignore the laws and standards.

As Walt Kelly so famously stated, "We have met the enemy, and he is us."

Danny:

I have never agreed more with what you have posted.

The snake has no head is the best thing that comes to my mind. I think the death of the "independent" appraiser is upon us. I am speaking solely along the lines of very small firms. Co-ops or mergers among small firms into larger groups will help fix the problems we have.

My term for individual appraisers has long been "the schooling fish". Why do fish school? Safety in numbers. Our problems come directly from when we do school, the first time a problem comes along we scatter concerned with only ourselves.
People like Richard Frank and Andy Anderson have the right ideas.

What does this have to do with the topic? Issues like this could be handled by a group of independent thinkers to decide on and vote as a group. You could bring any 10 of us together that debate on this forum together and we would make a very sound and reasonable decision. In example Ken, Steven, myself, Pam, Danny, Hatch, Dodd, and Al could all be put in a room to decide our collective fate on any given topic. This same group in it's parts are very opposed to one another's ideas in some cases, but that would make it better for all of us. It allows for all points to be considered and while each may scream their faces red, in the end making all of us a part of it can only help us stand stronger.

 

[DWiley]

I think the death of the "independent" appraiser is upon us.

Years ago the AI did survey and found that the average size of a residential appraisal company is 1.2 people. I believe this factors heavily into some of the problems we face. It is not impossible to work alone and maintain one's ethics, but it is certainly more difficult.

It is hard for an appraiser working alone to have a large or diverse client base because of the difficulty in providing service. It is very tempting to latch onto that one good client that provides enough business to sustain you. I suspect this is the norm rather than the exception for residential appraisers. It takes less effort, and it lets one spend more time being an appraiser and less time being a marketing director.

However, relying on 1 or 2 clients makes one extremely vulnerable to pressure. If they start asking for unethical things you could lose the client if you say no. Lose one good client and your business is greatly affected. This can lead to lots of pressure, both from the client and from yourself. I actually had an appraiser who was being investigated for fraud tell me once, "I am single, I work alone, and I have two kids. I did what I had to do to pay the bills." I wish she had been so honest in the appraisal report.

I learned the lesson of client diversity about 15 years ago, before I owned my own company. I was on staff at a firm with four appraisers, and one client was the source of 70%+ of our business. Then one day they called and told us they were setting up their own in-house appraisal division. The work flow stopped almost immediately. I vowed to never be in such a position again.

I now monitor our client base very carefully, and I get nervous if any client grows to the point of providing more than 10% to 15% of our business. We prefer getting a few assignments from a large number of diverse clients. That way if any one clients starts pressing to hard we can simply remove them from our list of approved clients. And if a client fires us because of one appraisal that was below the sale price we still have most of our business still intact.

It is easier to latch on to one or two big clients. It is also easy to focus on the low hanging fruit - lenders. But in the long run I think relying primarily on 1 or 2 lenders it is a business model that can and will result in presssue to do unethical things.

Plenty of people do work alone and maintain professional and ethical behavior. I do not mean to denegrate those folks in any way. They should be saluted. However, if the pressure gets to be too great, affilating with or partnering with a small group of other appraisers can help insulate one from pressures that some think are inescapable.

This same group in it's parts are very opposed to one another's ideas in some cases

Can I nominate that as the understatement of 2008?

 

[Elliott]

DWiley said, They want something for nothing, and they have every right to expect it because so many are willing to provide it. Is that the client's fault?

Even if it were the ASB's job to save residential appraisers from themselves, it would be an impossible task. Changing USPAP cannot save an appraiser from his/her own stupidity and/or lack of ethics.

So when TAF makes policy do they ask themselves, 'what would physicians, lawyers,
and cpa's do in this situation,' or do they say, 'what do lenders, AMCs, and title
companies want?' It seems like the decisions sound like 'business decisions' so as
not to offend the gorilla rather than than an ethical decision. Why didn't TAF just say,
"Appraisers can not do comp checks, no way, no how?" Instead of this continual
tap dancing. 99% of comp checks are appraisal selection of value, of getur dun,
and finding the 'go to' appraiser. Is TAF really so removed from reality they can't
see that?

 

[Workbox]

Appraisers and others, when at the VA meeting, I notice many older appraisers with very concerned looks on their faces. At the same time I saw young faces also. This debates and discussions here are not just about who has the most post or has the best argument, but what are we going to leave to the rest and for the young that want to make a living in appraising. Many appraiser got caught off guard and when the plantation mentality began to weigh off, many began to question, "How in the Heck did we get here?". Over time, many began to see the dynamics in play, and how the cause and effect was established in the current climate of "how fast?", "how Cheep?", and "do you do comp checks?". And When many appraisers were screaming, "Why are you letting this Happen?" and "Warned" those that are suppose to be on the side of the public trust and the improvement of the profession just seem to look the other way.

Some will argue Just say "No" to comp checks, other have tried to do other forms of similar service, still no job assignment or fee. So either if you say "yes or no", you are still not going to get paid unless you hit the target. We can throw UPSPAP around all day long. But what is happening with those that are suppose to regulate this, have become blind and something has a Cracken upon them.

Yes, Yes, I know it is USPAP and I am not a Guru by all means, but I have friends for the answers and I have many here that can advise or interpret to me correctly. But it is so basic and fundamental of what a "Comp Check" means, and so should the TAF and others. We can put as much Vanilla Icing on top, in the middle of a Chocolate cake, but you are still going to taste the Chocolate. No matter how you "Vanilla" this topic, It is still about hitting the number/value.

But I like I said before, once the MB/LO's, Realtors get a hold of this, they are going to throw it like crazy monkeys at the zoo, with boo in their hands.

 

[woodyva]

Monkies throwing Boo, that is poetic. I like that image as it fits so very fittingly.

 

[Fred]

Plenty of substance if you are a lender, or a lender's lapdog.

And way too much for a form monkey. If I cared what you "thought," I post with checkboxes and not use words larger than yes or no.

Danny:
I have never agreed more with what you have posted.

How relieved he must be.