Newbie Question

[warranpiece]

Hello all,

I thank you in advance for your responses. I have finished my class and am awaiting my CA state exam. I have a close friend who is a residential certified appraiser with his own small business. He is training me.

My question comes from being shocked into a very quick realization that the standard operating procedures for this industry are a little off. My friend is very conscientious and definetly is an above average appraiser, but I hear him responding to questions that I can only assume are being conditioned into appraisers nationwide. He will ask them "What value are you looking for?"

SO is this my own paranoia, or is this really the way it is? I have a business background and am jumping ship to this industry. I live in San Diego and hope that with a market rebound, stricter requirements, appraisers that don't like to market themselves, and a large amount of retirees, I will be able to make a mark a make a good living. But I really would like to support the professional needs of my industry as I have done in industries past.

ANy advise or pearls for the new guy?

ONce again I truly appreciate the time.

Take care.

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[teh l33t]

My friend is very conscientious and definetly is an above average appraiser, but

He will ask them "What value are you looking for?"

Sounds like the "average" Skippy to me...my advice is to find a new sponser or keep your day job. Working with your friend probably sounds good at first but is not always the best idea. Most particularly when your name and license will be associated with a Skippy. If you do not know the term "Skippy" read more AF

Welcome to the forum and good luck with your buddy.

 

[Ken B]

I have to wonder if posts like this are "real." Some part of me desperately wants to believe that posts like these are created by someone wanting to "stir the pot."

 

[The Warrior Monk]

Moved to Newbie Section...play nice!

 

[warranpiece]

I assure you this is a real post. I just finished my class this week and am here to find suggestions so that I can represent the appraisal field appropriately. "Corporate responsibility" for lack of a better term is important to me.

So help me out a little so I can catch up here. What is a skippy? Since people are constantly asking you for a specific value or to do value checks to see if something is possible, how do you handle it? If he is in fact telling them that the value they seek is not there, does that make him less of a "skippy"?

No urge to stir the pot, just to learn. I don't have alot of options for people taking me on. One guy offered but said he took 70% of my fee and I would have to get my own business. My buddy will take 50 bucks for time and the rest is mine. He has been in business for 2 years and never had an appraised value cut. Is that good or not?

Look guys I turned down a well paying job in the optical industry for the sake of my freedom in something I can do out of my home. My wife is working on doing what she has to do for home inspection.

I am just here to benefit from your experience. I do not take it for granted.

Thanks again for your time. I hope I came to the right place.

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[The Warrior Monk]

So help me out a little so I can catch up here. What is a skippy? Since people are constantly asking you for a specific value or to do value checks to see if something is possible, how do you handle it? If he is in fact telling them that the value they seek is not there, does that make him less of a "skippy"?

The definition of "appraisal" is "opinion of value." That doesn't have to be a point number. It can be, but it can also be a relationship, such as "less than $zzz, greater than $zzz, etc.

The problem with saying the value is not there is that you are doing an appraisal, and must keep the appropriate workfile. Basically, you are providing free appraisal services.

No urge to stir the pot, just to learn. I don't have alot of options for people taking me on. One guy offered but said he took 70% of my fee and I would have to get my own business. My buddy will take 50 bucks for time and the rest is mine. He has been in business for 2 years and never had an appraised value cut. Is that good or not?

IMHO, 70% for the mentor under those circumstances is ridiculous. My first appraisal job was corporate, and the lowest tier appraisers started at around 30%, with benefits. Plus you have to get your own work, which means you are marketing, which is developing the mentor's business. You should be compensated for that, over and above any cut you may get for an appraisal.

 

[warranpiece]

Thanks for the reply. I have been reading quite a bit here and in between a mish mosh of rants and tings over my head I began to understand exactly what the problem is. I also saw a justification for an opinion of value given over the phone after searching applicable comps and reviewing MLS to see if the value is possible.

I do not wish to do this. In my former industry the same problem just had different names. But essentially it was a professional that was being kept under seige by what would be considered SOP as a result of those less responsible. I want to know what is in the opinion of you all something that is acceptable, and what is over the line.

As far as my friend is concerned. Not having a single appraisal value cut is a good start. He is willing to give me %85 of my fee (if it is 350 on a SFR). Why would I go to someone else? I know he may not be the best in the world but when you punch the numbers it seems to make sense right? I keep my own money, and keep all of my own clients during my TRAINING. What would you do? I just heard something that didn't jive and wanted to find out what you guys thought.

I am not looking for a free education here, just the opinions of my colleagues.

All thoughts are welcome. Thanks alot!

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[Chris Colston]

Your friend has been business only 2 years and has never had a value cut? How does he know that? Often times values are cut (especially in this market) and the appraiser never knows. Sometimes you do find out. I've been in this business 20 years and in the past year I have had values cut many times. The latest onslaught was 39%. Another was cut this week by 12%. I'm also in the middle of my first law suit because the borrower thinks I appraised the house too low. Go figure.

Two years in this business, your friend is still learning to walk and has already established some really bad habits. On the subject of pre-checking values, this did not come up in any of yours classes? Any value opinion or range of value, or even the comment that the subject probably will or will not come in for the expected value, given by a licensed appraiser IS an appraisal and MUST have an accompanying work file that includes all of the necessary parts of USPAP Standard 2 including a signed certification.

Perhaps you can teach the "teacher" and maintain an ethical and above board relationship and you'll both succeed.

Good luck to you.

 

[Lawrence R.]

New argument for comp checks/ not taking orders that won't make value.... being a bad idea.

Let's say you decide that comp checks are fine and the president wrote you a letter saying you could do them.

what about this:

you get the order for a house and the "owner's estimate of value"(BS) is

200K. Your gut says nothing in that area is selling over 150K. You politely call the client and say, I can't do the appraisal. You then stay in the afterglow of the warm fuzzy feeling that you aren't a Skippy because you didn't take the order and inflate an appraisal.

OK, next day:

Same client sends you an order for a house. Owner's estimate seems feasible. you go out and do the work and turn in the report. You don't call and say you can turn the report around in 3 days, see you then.

What you have done at this point is communicate, without saying a word, that you will accept an appraisal contingent upon value. You also have communicated that you won't take one contingent upon value too.

But when you demonstrated that when you can't hit value, you won't take the order, you are simultaneouly saying that IF you accept the order, you CAN.

That is textbook contingency, because on both of them you rendered an opinion of value, but your payment was contingent upon you acceptance of the one that you could "hit".

Against the law in soooo many ways, quit tap dancing on FIRREA and USPAP and just do what you know is right.

QUIT while you can. You are already rationalizing breaking the law and equating underwriter acceptance with quilaity work.

One has nothing to do with the other. You do not have the kind of character it takes to uphold the high end of this profession. Sorry. Too much moral equivalence in you.

 

[warranpiece]

Thanks Chris,

I appreciate the advise. I took a correspondence course and was not in a classroom but I am aware that any opinion of value needs a work file and that a "value check" is fancy for "work for free for me please". The problem is that I have met no less than 10 local appraisers (no trainees ), and all of them do this.

So what am I to think?

Don't worry. I plan to keep an ethical compass on the dash of my car.




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