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Newbies Please Read This
- Thread starter Pamela Crowley (Florida)
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Jeremy Noland
Freshman Member
- Joined
- Jan 13, 2003
- Professional Status
- General Public
- State
- Kansas
George,
Thank you for the information you provided.
I think maybe were are all on different thought processes though. My thought was, and maybe I am wrong (I have known to be wrong many times) that it would have nothing to do with fudging value. I see it this way. It actually would alleviate the problems of mortgage lenders/brokers putting pressure on 'hitting a value'. In other words, if I don't get the value they want from the appraisal, I don't feel pressure to increase the value to get paid. I tell them to have another appraiser do it if they need a higher value. I stand by my appraisal. That would be better than be charging $350 and me telling them I am not going to get the value and them never using me again (losing business always stinks). This way they are not out $350 with a loan that won't close and I have not ruffled the "great" mortgage broker's/lender's feathers. :lol: I think you could get more than enough business to make up for the appraisals you don't get paid for. Plus, I am not the type who would fudge values anyway just to keep business, but I do see where an appraiser who doesn't take his/her business seriously might do that. The mortgage company learns I won't increase value, but also knows they are not out money. Therefore they use me more often and I get more business.
For example, a mortgage broker/lender uses 2 appraisers to do his appraisals. He/She knows that more than likely both appraisers will come up with similar values. Who would he/she choose...the appraiser who will charge no matter what comes back or the one who doesn't charge if the value is not hit.
From what I have read and studied I don't see the problem any appraisal board would have with this. I might be missing something though.
Also, I was thinking more along the lines of loans not closing for other reasons (ie. lender backs out, borrower decides not to go with loan, deal falls through, etc.).
That is my thought process, please feel free to criticize, or set me straight. That is why I ask the questions. I take no offense to anything said. This forum is a great learning tool.
Thank you for the information you provided.
I think maybe were are all on different thought processes though. My thought was, and maybe I am wrong (I have known to be wrong many times) that it would have nothing to do with fudging value. I see it this way. It actually would alleviate the problems of mortgage lenders/brokers putting pressure on 'hitting a value'. In other words, if I don't get the value they want from the appraisal, I don't feel pressure to increase the value to get paid. I tell them to have another appraiser do it if they need a higher value. I stand by my appraisal. That would be better than be charging $350 and me telling them I am not going to get the value and them never using me again (losing business always stinks). This way they are not out $350 with a loan that won't close and I have not ruffled the "great" mortgage broker's/lender's feathers. :lol: I think you could get more than enough business to make up for the appraisals you don't get paid for. Plus, I am not the type who would fudge values anyway just to keep business, but I do see where an appraiser who doesn't take his/her business seriously might do that. The mortgage company learns I won't increase value, but also knows they are not out money. Therefore they use me more often and I get more business.
For example, a mortgage broker/lender uses 2 appraisers to do his appraisals. He/She knows that more than likely both appraisers will come up with similar values. Who would he/she choose...the appraiser who will charge no matter what comes back or the one who doesn't charge if the value is not hit.
From what I have read and studied I don't see the problem any appraisal board would have with this. I might be missing something though.
Also, I was thinking more along the lines of loans not closing for other reasons (ie. lender backs out, borrower decides not to go with loan, deal falls through, etc.).
That is my thought process, please feel free to criticize, or set me straight. That is why I ask the questions. I take no offense to anything said. This forum is a great learning tool.
George Hatch
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
- State
- California
Jeremy,
I can believe that you're sincere about preferring to lose a single fee for a single assignment rather than lose a client. I can appreciate the idea of culturing long term relationships as a successful business strategy. I feel that way too. However, there's a big difference between simply taking the longer view and offering yourself up as a sacrifice on the altar of "the Customer is King".
There are some really practical reasons why I think you should reconsider, and there are some practical solutions that you can use to address the legitimate needs of the client while maintaining your own professional position.
Reasons not to do it. The USPAP prohibition is really all the reason you need. Then there are the rules and regulations that givern your license, which incidentally include complete compliance with the USPAP. But there are other ones too. For one thing, it establishes a very uneven appraiser/client relationship, wherein the client is in complete control and the appraiser is constantly reacting to the clients' demands. This is how appraisers end up feeling like a dog on a short leash, contantly getting yanked around and being subjected to demands to perform "stupid appraiser tricks". The first time that "Skippy, the Amazing Appraiser Dog" balks at one of these stupid demands, they get kicked out anyway. It's like living your entire life with a sword hanging over your head, fearful to offend your master. It's no way to live and it's no way to conduct business as a professional.
Next up is the fact that the appraiser is not only beholden to the person who engages them. The Client in a mortgage loan situation is placing the appraisal with a lender who is using the appraisal for the purpose of justifying the extension of other people's money as credit to purchase the property. That lender, whom the appraiser never even speaks to, along with the federal regulatory agencies that regulate and underwrite the entire process, are the entities to whom the appraiser owes the greatest allegience because the mortgage broker is really nobody other than a middleman. They don't have to live with any negative consequences of a deal gone bad. The appraiser has at least some responsibility to everyone in that chain. Once an appraiser crosses that line in a client relationship, it's very difficult to ever recover it. The client knows the appraiser isn't supposed to do it and is being deceitful in denying in their reports they are doing it. This does not contribute to a relationship where the client can trust the appraiser, or their work, or really, trust any other appraiser. This is one reason a lot of people think that appraisers will roll over for them, because one or two individuals do it we all end up looking bad.
Another reason to avoid it. The appraiser may intend to provide nothing but "A" class work. Completely on the up. However, if they said they didn't do it on a contingency when they really did, they already have compromised their integrity in this situation. In other words, if they lied about the fee, how can anyone trust any other aspect of the work as being truthful? There's what you intend and then there's how it looks after the fact. It isn't enough to avoid doing unethical things, appraisers need to avoid even the appearance of impropriety. Think about how a third party, especially a state board, would look at it. The burden of proving impartiality and professionalism is already on our heads and it's tough enough as it is. Adding this element of contingency into it only multiplies this burden.
Another reason to avoid it. Your reputation. It's a small world out there and once your integrity is questioned its very difficult to recover. If you think about it, the only legitimate personal attribute appraisers have to sell is their reputation for impartiality and proficiency. When it comes to dealing with mortgage brokers, the Total Economic Lifespan of the average appraiser/client relationship is measured in months, not years. I reckon the average is about 9 months or whenever the outstanding balance for fees due on deals that won't fund exceeds $2,000, whichever comes first. Make no mistake about it, mortgage brokers consider appraiser/client relationships to be an expendable and easily replacable commodity. I assume that you aspire to continue working as a appraiser long after your mortgage brokers have left town. It might seem self-serving, but the only way you do that is to give your long-term interests equal or even greater priority than merely responding to the short-term interests of these mortgage brokers.
There are several other reasons not to even consider this, but I think you get the idea.
[/QUOTE]From what I have read and studied I don't see the problem any appraisal board would have with this. I might be missing something though.
I can believe that you're sincere about preferring to lose a single fee for a single assignment rather than lose a client. I can appreciate the idea of culturing long term relationships as a successful business strategy. I feel that way too. However, there's a big difference between simply taking the longer view and offering yourself up as a sacrifice on the altar of "the Customer is King".
There are some really practical reasons why I think you should reconsider, and there are some practical solutions that you can use to address the legitimate needs of the client while maintaining your own professional position.
Reasons not to do it. The USPAP prohibition is really all the reason you need. Then there are the rules and regulations that givern your license, which incidentally include complete compliance with the USPAP. But there are other ones too. For one thing, it establishes a very uneven appraiser/client relationship, wherein the client is in complete control and the appraiser is constantly reacting to the clients' demands. This is how appraisers end up feeling like a dog on a short leash, contantly getting yanked around and being subjected to demands to perform "stupid appraiser tricks". The first time that "Skippy, the Amazing Appraiser Dog" balks at one of these stupid demands, they get kicked out anyway. It's like living your entire life with a sword hanging over your head, fearful to offend your master. It's no way to live and it's no way to conduct business as a professional.
Next up is the fact that the appraiser is not only beholden to the person who engages them. The Client in a mortgage loan situation is placing the appraisal with a lender who is using the appraisal for the purpose of justifying the extension of other people's money as credit to purchase the property. That lender, whom the appraiser never even speaks to, along with the federal regulatory agencies that regulate and underwrite the entire process, are the entities to whom the appraiser owes the greatest allegience because the mortgage broker is really nobody other than a middleman. They don't have to live with any negative consequences of a deal gone bad. The appraiser has at least some responsibility to everyone in that chain. Once an appraiser crosses that line in a client relationship, it's very difficult to ever recover it. The client knows the appraiser isn't supposed to do it and is being deceitful in denying in their reports they are doing it. This does not contribute to a relationship where the client can trust the appraiser, or their work, or really, trust any other appraiser. This is one reason a lot of people think that appraisers will roll over for them, because one or two individuals do it we all end up looking bad.
Another reason to avoid it. The appraiser may intend to provide nothing but "A" class work. Completely on the up. However, if they said they didn't do it on a contingency when they really did, they already have compromised their integrity in this situation. In other words, if they lied about the fee, how can anyone trust any other aspect of the work as being truthful? There's what you intend and then there's how it looks after the fact. It isn't enough to avoid doing unethical things, appraisers need to avoid even the appearance of impropriety. Think about how a third party, especially a state board, would look at it. The burden of proving impartiality and professionalism is already on our heads and it's tough enough as it is. Adding this element of contingency into it only multiplies this burden.
Another reason to avoid it. Your reputation. It's a small world out there and once your integrity is questioned its very difficult to recover. If you think about it, the only legitimate personal attribute appraisers have to sell is their reputation for impartiality and proficiency. When it comes to dealing with mortgage brokers, the Total Economic Lifespan of the average appraiser/client relationship is measured in months, not years. I reckon the average is about 9 months or whenever the outstanding balance for fees due on deals that won't fund exceeds $2,000, whichever comes first. Make no mistake about it, mortgage brokers consider appraiser/client relationships to be an expendable and easily replacable commodity. I assume that you aspire to continue working as a appraiser long after your mortgage brokers have left town. It might seem self-serving, but the only way you do that is to give your long-term interests equal or even greater priority than merely responding to the short-term interests of these mortgage brokers.
There are several other reasons not to even consider this, but I think you get the idea.
[/QUOTE]From what I have read and studied I don't see the problem any appraisal board would have with this. I might be missing something though.
Pamela Crowley (Florida)
Elite Member
- Joined
- Jan 13, 2002
- Professional Status
- Retired Appraiser
- State
- Florida
Jeremy,
Woah! I hope you finally did read through this whole thread and many of the others here!!! You can't really offend me since I've already given so much time and effort here helping, my pay being the help and knowledge I've received in return. I have to chuckle at some of the offended newbies because if you're offended, your appraisal ignorance and sometimes simply laziness is showing! So you took the initial appraisal course - you're now like a newborn babe. You've taken the initial course and have 50 appraisals that you've worked on - you're now like a toddler. You now have 100 appraisals under your belt and feeling like you really know your stuff! - you're barely a teenager!!! This thread and this whole newbie/wannabe section of this forum was started to help the newbies learn. It wouldn't be here at all if we didn't want to help you!!! Learn to search for your own answers first, use the search feature on this forum, then post your questions that you couldn't find the answers to. If we hand you all the answers to all your questions each week or month (some many, many times - over and over again), the lessons don't stick anywhere near as well as when you have to search for it yourself. Just a simple fact regarding the way most learn.
****************
What you have brought up in this thread is an excellent example of just one of the misconceptions so very many trainees have.
George has given you excellent information and advise. My next suggestion to you is to take a USPAP class ASAP. It's simply a matter of time before your appraiser acquaintance is caught and discipline or has his/her license revoked. Appraisers that do business like that are getting caught more and more often and personally, the State Boards can't revoke the licenses fast enough for me and most of the regular forumites here. Between 3 local appraisers in my area, 10 complaints were filed ranging from incompetence to obviously intentional fraud with our State Board at their October meeting. If I, or many, many others, hear of an appraiser doing what you are suggesting, we will immediately call our State Board offices and turn them in. We're beyond sick and tired of the unethical and incompetent appraisers that are ruining the reputations of all of us and we're not going to sit back and wait for someone else to catch them to do something about it.
Those of you that don't take the job of appraising seriously enough to learn what you are supposed to and not supposed to do I won't be feeling sorry for when you do get caught.
Those of you that are questioning the advise being given by your supervisor(s) I especially want to hear from!!!! If you're afraid to post it in an open forum, please do choose one of the regular posters here that you feel most comfortable with and send your question in a PM (Private Message) or email to us!!! We do know how bad so very many supervisors are!!!
I do hope you take the advise here seriously. I hope you take the time to read as much as you can stand here and then read some more. Most of all, when you do need advise or have a question that you haven't been able to find an answer for, I very sincerely hope you post that question here!
Woah! I hope you finally did read through this whole thread and many of the others here!!! You can't really offend me since I've already given so much time and effort here helping, my pay being the help and knowledge I've received in return. I have to chuckle at some of the offended newbies because if you're offended, your appraisal ignorance and sometimes simply laziness is showing! So you took the initial appraisal course - you're now like a newborn babe. You've taken the initial course and have 50 appraisals that you've worked on - you're now like a toddler. You now have 100 appraisals under your belt and feeling like you really know your stuff! - you're barely a teenager!!! This thread and this whole newbie/wannabe section of this forum was started to help the newbies learn. It wouldn't be here at all if we didn't want to help you!!! Learn to search for your own answers first, use the search feature on this forum, then post your questions that you couldn't find the answers to. If we hand you all the answers to all your questions each week or month (some many, many times - over and over again), the lessons don't stick anywhere near as well as when you have to search for it yourself. Just a simple fact regarding the way most learn.
****************
What you have brought up in this thread is an excellent example of just one of the misconceptions so very many trainees have.
George has given you excellent information and advise. My next suggestion to you is to take a USPAP class ASAP. It's simply a matter of time before your appraiser acquaintance is caught and discipline or has his/her license revoked. Appraisers that do business like that are getting caught more and more often and personally, the State Boards can't revoke the licenses fast enough for me and most of the regular forumites here. Between 3 local appraisers in my area, 10 complaints were filed ranging from incompetence to obviously intentional fraud with our State Board at their October meeting. If I, or many, many others, hear of an appraiser doing what you are suggesting, we will immediately call our State Board offices and turn them in. We're beyond sick and tired of the unethical and incompetent appraisers that are ruining the reputations of all of us and we're not going to sit back and wait for someone else to catch them to do something about it.
Those of you that don't take the job of appraising seriously enough to learn what you are supposed to and not supposed to do I won't be feeling sorry for when you do get caught.
Those of you that are questioning the advise being given by your supervisor(s) I especially want to hear from!!!! If you're afraid to post it in an open forum, please do choose one of the regular posters here that you feel most comfortable with and send your question in a PM (Private Message) or email to us!!! We do know how bad so very many supervisors are!!!
I do hope you take the advise here seriously. I hope you take the time to read as much as you can stand here and then read some more. Most of all, when you do need advise or have a question that you haven't been able to find an answer for, I very sincerely hope you post that question here!
DB
Elite Member
- Joined
- Apr 29, 2003
- Professional Status
- Certified Residential Appraiser
- State
- Tennessee
Jeremy,
I have logged over 100 SFR 1004's so far this year, 30 2055's and close to 70 SFR evaluations and I still consider myself a Newbie. It scares the dickens out of me that you didn't recognize this scenario as a violation of USPAP. Have you received your trainee license? If so, you had to have the USPAP class. Study up!
Trust me on this one ...... the advise that you get here may be wide a varied at times, ours is a business of opinions, but everyone agrees on one very important thing .... the legal aspect of our business. There is a USPAP forum here as well as people always standing by to answer your questions, especially when you are in a pinch. If you face a moral dilemma and have no where to turn ..... turn here.
My supervisor and my un-official mentor both encourage my participation here ... not because they don't want to teach me ... but because I bring things back to them from the forum that is thought provoking and proves to them that I am not solely dependent on them for my success .... but that I care enough to learn all that I can .. from them ... from books ... from classes ... and from the friends I have made and share mutual respect with on this forum. (& then there's Tom... :lol
Please ..... Please take the advice that has been given you ..... separate yourself from those who are ignorant or immoral. (remember the 1968 "Guilt by association law ... if you don't .... look it up!) Bone up on your USPAP. Ask yourself lots of questions and then find the answers. If you can't .... there are many here who will help you. Besides a good mentor, there is no better place to turn when you need help.
Good luck!!
(Oh yeah .... and eat lots of chicken .... it's cheap and tastes better than Mike's Ramen noodles) :lol:
I have logged over 100 SFR 1004's so far this year, 30 2055's and close to 70 SFR evaluations and I still consider myself a Newbie. It scares the dickens out of me that you didn't recognize this scenario as a violation of USPAP. Have you received your trainee license? If so, you had to have the USPAP class. Study up!
Trust me on this one ...... the advise that you get here may be wide a varied at times, ours is a business of opinions, but everyone agrees on one very important thing .... the legal aspect of our business. There is a USPAP forum here as well as people always standing by to answer your questions, especially when you are in a pinch. If you face a moral dilemma and have no where to turn ..... turn here.
My supervisor and my un-official mentor both encourage my participation here ... not because they don't want to teach me ... but because I bring things back to them from the forum that is thought provoking and proves to them that I am not solely dependent on them for my success .... but that I care enough to learn all that I can .. from them ... from books ... from classes ... and from the friends I have made and share mutual respect with on this forum. (& then there's Tom... :lol
Please ..... Please take the advice that has been given you ..... separate yourself from those who are ignorant or immoral. (remember the 1968 "Guilt by association law ... if you don't .... look it up!) Bone up on your USPAP. Ask yourself lots of questions and then find the answers. If you can't .... there are many here who will help you. Besides a good mentor, there is no better place to turn when you need help.
Good luck!!
(Oh yeah .... and eat lots of chicken .... it's cheap and tastes better than Mike's Ramen noodles) :lol:
CANative
Elite Member
- Joined
- Jun 18, 2003
- Professional Status
- Retired Appraiser
- State
- California
Doug: I don't remember signing anything. 
Jeremy: Please, listen to what most people tell you here.
I'm just thankful I learned the ropes before actually swinging on them.
Lee Ann: Aint sarcasm a wonderful thing?
Jeremy: Please, listen to what most people tell you here.
I'm just thankful I learned the ropes before actually swinging on them.
Lee Ann: Aint sarcasm a wonderful thing?
Tim Hicks (Texas)
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Texas
Isn't it amazing how every appraisal report out the door has limiting conditions and a certification attached, but so few know what is in it. I know the print is smaller, but we still ought to read it now and then. I took the time in 1991, has it changed since then?
- Status