Newbies Please Read This

[Michigander]

I usually do the purchase side of things anyway with a few refi's thrown in, so value rarely comes up with the lender.

Am I missing something here? Last I check, fully 40% of the sales that I appraised were too high. One buyer does not make a market. If you hit them all when the sell, then there is something wrong. Now my 40% is excessive, but this has been a wierd year for me and I've gotten kind of crazy sales come across my desk; and not too many to boot, so it's probably a bit skewed. But ask any appraiser who has been around awhile and they will tell you that it is typically in the 10% range or so that don't hit sale price.

 

[JEREMY SAPOSNEK]

Answers to so called stupid questions are the building blocks of solid foundations.........




If ya cant stand the nfire:"HEAT"nfire:, get out some ice cream and stand in front of an A/C unit till it :jumping: "COOLS" :jumping: off a bit .
Jeremy Saposnek

 

[Jeremy Noland]

Rachel,

Noticed I said rarely. It does happen but not very often. I would say less than 5% of my appraisals have a problem with value. Most of the homes I am appraising are in subdivisions that have 4 or 5 different models, so the sales price is usually very close to appraised value. My mortgage friend somehow works it out though because I have not heard from him about value too often.

One thing in this downturn for most appraisers that might work is this. Contact mortgage companies all over your area, and offer your services to them. But here is the catch, you will charge $50-$100 more for loans that close, but not charge for loans that don't close. Now many might say that you are doing some work for free, but believe me you will get more than enough business to make up for it. I know of a one man appraisal shop doing this and he seems to like the arrangement. He tells me he gets more calls than he can handle, and only about 15% of the appraisals he does he does not get paid for. The company I work for doesn't want to do this, but once I get through my trainee period, he will allow me to still work for him but do this arrangement.

What do you experienced people think of this arrangement? Does it sound like a good idea or not? I just heard that one appraiser talking about it and he is happy with it, but what do others think?

 

[Tim Hicks (Texas)]

Congratulations, Jeremy, you took the bait. Read your certification and limiting conditions. Tell me what it says about fees contingent on any conditions including closings.

 

[Tim Hicks (Texas)]

Now, tell us again how Pam should not post here which would be hard since she is a moderator.

 

[Stone]

One thing in this downturn for most appraisers that might work is this. Contact mortgage companies all over your area, and offer your services to them. But here is the catch, you will charge $50-$100 more for loans that close, but not charge for loans that don't close.

You're kidding, right? Trying to get some people worked up a little? You can't possibly think that this is anything but fraudulent? Tell me you were just trying to stir things up. :blink:

 

[Dee Dee]

Jeremy,

I'm glad you came here looking for advice.
The first thing I'd suggest is that you take Tim's post very seriously.

Always be wary of any special financial arrangements with mortgage lenders that will generate more business for you. They're not the ones who will have to defend your license in front the state appraisal boards if someone blows the whistle. They're not the ones who are responsible for adhering to the standards and ethics that allow you to continue being an appraiser.

Your current supervisor is smart for not agreeing to this adjustable fee arrangement that is contingent upon the outcome of the loan. He's making sure that he won't have any liability whatsoever because his signature won't be on the appraisal.

Be careful or you could lose everything you've worked for.

 

[Bobby Bucks]

I never saw this thread initially because I have practically stopped reading anything in the newbie forum because the questions here are for the most part repetitious and diffuse with regard to day to day appraising, while they are obstinate on the subject of entering the business. Life is tough and unfair. Get used to it. I consider the posts about Pam and other members who have been helpful to be utterly disrespectful, considering that all the information given in here is gratis. It reminds me of someone feeding a flock of gulls on the beach.....at first they appear grateful....as time goes on more and more appear....then things began to get crowded and ugly.....then they begin defecating on you.... when the free food finally runs out they get even angrier and then resentful. Use the frigging search feature. Everything you ever wanted to know is there for free and don't expect a member to drop what they're doing, find it for you on their time and then get insulted because you can't comprehend it. That's what mentors are for.

 

[Jeremy Noland]

Didn't say I was doing it. Said another appraiser I know is doing it and is successful at it. Thanks for your opinions though about it. I appreciate the experienced appraisers responses. Let me ask though, how would the appraisal board know that on some appraisals this person is getting a check and others they are not? Isn't it his choice on how to do business? Now again, I just heard this idea from another appraiser and am not doing it myself, but thought it was a creative way to do business...but maybe not.

Tim,

I don't think anyone said Pam should not post here. I think it is great we get expert advice from her or any other experienced appraiser, however I feel her way of going about it was different than how anyone should respond to another person. That is all. I could yell at every driver who cuts me off, but what does that accomplish. Some things are better left unsaid.

 

[George Hatch]

Jeremy,

You asked for feedback, so keep that in mind as you read this. I shall assume that since you are asking for feedback that you really don't understand the ramifications of suggesting this as a good course of action for other appraisers. So from that perspective we're glad you asked.

The company I work for doesn't want to do this, but once I get through my trainee period, he will allow me to still work for him but do this arrangement.

Are you seriously considering this? Have you ever read the "Appraiser's Certification" form that you sign along with every SFR appraisal you complete?

6. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrance of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, or the need to approve a specific mortgage loan.

How can an appraiser reconcile a business arrangement wherein they will not receive payment unless the loan closes, or will not receive an assignment unless they agree in advance to provide a predetermined value? Especially after the appraiser certifies that they didn't do it?

I am very sure that such an arrangement would turn out very profitably for anyone who engages in it because it basically guarantees the clients will get more 'useful' appraisal work that hits the desired values; because the appraiser will not get paid unless they hit the value and/or otherwise obscure all negative information that would get in the way of that desired result. Under this arrangement, the clients only pay for appraisal work that is guaranteed to enable them to fund the loan. The clients might as well just do it themselves and sign their own name to it because once the appraiser's compensation is contingent on the results, their impartiality is, at the very least, open to question. Especially after the appraiser lied and said they weren't engaged or paid based on these results.

In my state, appraisers have lost their licenses and been severely sued for such offenses. It completely violates our professional ethics, not to mention just good common sense. And this is not just my opinion, either. It's a fact.

Don't do it, don't hang out with people who do it, and don't encourage other people to do it. If what you say is true about your supervisor allowing you to continue working for him while you do this arrangement, even if its only for your own side work, that doesn't speak well for him either.