No Appraisal Needed

[gregb]

Joe, if you are telling us heads should roll, then I am thinking you have it under control as to the who and the why. Faster and cheaper is a small part of the whole story, but you know that already.

 

[gregb]

My bias as a broker is in favor of my client. I act in their best interest. Why would they need an appraisal? I would never let them pay to much for a property.

This is the forth property in a year that I closed with them. Contrary to some beliefs, most brokers act in the best interest of their client and don't have tunnel vision on doing a deal to get a paycheck. You last in the brokerage business by being of value to your client.

I am simply advocating that appraisers might want to focus on being of value instead of regulations which requires thier participation.

A significant amount of my appraisal work involves buyers or sellers of commercial property who want a credible value determination to make a financial decision. Nobody needs to require them to get an appraisal, they do it because it is of valuef to them.

On the purchase of a $600,000 house with me as the broker there is no reason to get an appraisal because there is no value in doing that.

Interesting take. In the last two years several agents involved in all cash transactions with contract prices between $3,000,000 and $11,000,000 involved me in advising their buyers/clients as to the market value of the interested property. Yeah, I can see there is no value to you in advising your clients to get an independent appraisal, cuz it might make you look bad.

 

[Michigan CG]

Anybody who has been pushing for faster and cheaper in the profession for the last 20 years. Were there AI members pushing down this path? Chief skippies? Why don't you tell me who has been leading down this path?

It is common for folks to blame AI for the AMC model and the faster and cheaper as people notice when there are designated members of the AI being owners or chief appraisers. The AI doesn't release the number of appraisers with the residential SRA designation but I have read it is about 3,000. Take that number for what it is worth, a guestimate.

Now look up a few of the big AMCs and you will see no appraiser ownership but rather a lot of players from former AMCs, a lot of former mortgage people and some people who are just plain idiots.

Look up the number of Chief Appraisers who have designations and you will find it to be few. There are some, but few. If I had to do the AMC thing I would rather deal with one with a designated CA than one who has some idiot who doesn't know the difference between excess and surplus land.

The fast and cheap is the only way they can compete.

Meanwhile there are plenty of clients who not using AMCs and that number is growing. They don't try to push down fees in the winter and subsequently appraisers don't try to push fees up in July. I would blame the fast and cheap model mostly on the idiots who have continued to train new "appraisers" when it is not financially feasible. No one can train new appraisers in areas where typical fees start with a 3. Anyone who says differently is not being honest.

 

[Joe Flacco]

It is common for folks to blame AI for the AMC model and the faster and cheaper as people notice when there are designated members of the AI being owners or chief appraisers. The AI doesn't release the number of appraisers with the residential SRA designation but I have read it is about 3,000. Take that number for what it is worth, a guestimate.

Now look up a few of the big AMCs and you will see no appraiser ownership but rather a lot of players from former AMCs, a lot of former mortgage people and some people who are just plain idiots.

Look up the number of Chief Appraisers who have designations and you will find it to be few. There are some, but few. If I had to do the AMC thing I would rather deal with one with a designated CA than one who has some idiot who doesn't know the difference between excess and surplus land.

The fast and cheap is the only way they can compete.

Meanwhile there are plenty of clients who not using AMCs and that number is growing. They don't try to push down fees in the winter and subsequently appraisers don't try to push fees up in July. I would blame the fast and cheap model mostly on the idiots who have continued to train new "appraisers" when it is not financially feasible. No one can train new appraisers in areas where typical fees start with a 3. Anyone who says differently is not being honest.

I just mentioned AI because it was mentioned in a reply. They have some knoweldagble and skilled members. How AI is managed is embarrassing. I don't really give a **** about AI.

 

[Phil McDonald]

While I would agree that many of those who post on here possibly are more concerned about protecting the profession itself than the public interest, I do have to ask--and what exactly is wrong with that? No one else out there seems to give one rat's *** about appraisers. Never have. We have always been left to fight all our own battles, and that does not appear to be changing any time soon. Should we instead just roll over and say whatever--we can always do these hybrid inspections for $50?

And I do think it just possible that there are some, if not many, appraisers who truly DO believe they not only are earning a paycheck for their families, but also doing something positive for someone. I personally am concerned about me being able to continue doing a job I really enjoy for another 10-15 years, and I also wonder if the plans I have for my children to take over my business will be a train wreck by the time they are old enough to actually do it.

I also believe there are a few of us still sick that the same lenders and GSEs OUR tax dollars had to bail out just 10 years ago are now again seemingly hell-bent on going down a road to repeat this history. I've personally witnessed enough mortgage fraud in my life to know the true value we can provide, and that this service should not be discounted in the name of saving a few dollars (out of hundreds of thousands) or a week of time (when the average person lives in a home 5-10 years).

I also feel good at the end of the day thinking I have provided a real service to my clients by providing an honest, well-supported market value for the collateral they are loaning on, or whatever other intended use the report has.

Let all the fancy acronym-toting government and quasi-government agencies worry about the public trust. Its enough work for me to worry about the future of my profession.

What you say is valid. We all want that. We want to stay in the business which we worked hard to enter. We want to prosper. There is nothing wrong with that.

I am just saying that there is a different way to achieve that result. Standing in front of the train with a petition in hand might not achieve that result. Taking other actions might.

I won't say that the days of becoming a CR and being content are over or are coming to an end because a couple of decades ago when I entered the business I was told all that gloom and doom and we are still here.

I did take that insight from others to heart and set out to insulate myself the best that I could. That involved obtaining the highest level licensing in both appraisal and brokerage, getting a master's degree in real estate and finding niche markets outside of mortgage lending to establish a track record.

Nobody has to do what I did to protect themselves. They just have to do something different. Find a niche market and become the go to appraiser. I do a significant amount of litigation work in commercial appraisal. Attorneys call me just because they have a real estate question and I don't tell that they need to order an appraisal, I figure out an answer for them and then when an appraisal is required by them or the many other attorbeys they know then I am getting appraisal assignments.

I get several assignments for insurance purposes. They need a credible replacement cost and I do that. The more I do that, the more assignments I get.

I get difficult residential assignments and it is common for me to hear that I am the second or third appraiser at the property. They are difficult because they are different but they are simple in comparison to some commercial assignments.

I get a steady stream of cannabis related assignments because early in that game I made an effort to gain some insight and expertise in that property type.


The list goes on and on. My point is that doing nothing to increase the value you bring to the market and instead protesting that work is being taken away is probably not the answer which achieves the desired result.

Find a niche in appraisal outside of lending. Expand your tool box to other segments. Learn to be a home inspector or public adjuster if brokerage is not the right path, become a certified property manager.

I am just saying that there is action that every appraiser can take and protesting a policy which may result in fewer appraisal assignments is probably not the action which will achieve the desired result.

I might be wrong and it is great if I am. I am just putting up these posts because this business has been good to me and my insight may resonate with someone.

I have no interest in debate. Everyone can move forward on whatever path makes sense to them and I sure won't try to stop them. I am good with whatever happens to this industry because it will not have a big impact on me.

 

[Phil McDonald]

Interesting take. In the last two years several agents involved in all cash transactions with contract prices between $3,000,000 and $11,000,000 involved me in advising their buyers/clients as to the market value of the interested property. Yeah, I can see there is no value to you in advising your clients to get an independent appraisal, cuz it might make you look bad.

Why try to attack me personally and make such a claim that I would not advise a client to get an appraisal because it might make me look bad? I hope you actually do a bit more due diligence in your appraisals before reaching conclusions than you did in this post. Because if you don't then you are always wrong.

We can compare resumes and track records to teach you this lesson and I have no interest in doing that because I am not here for that.

If you disagree with my opinion then state that you disagree with my opinion. Don't reach a conclusion about me because my opinion is not in agreement with yours.

 

[gregb]

phil, sorry you took my post as an attack. bottom line is if you don't advise your buyers to get an appraisal on all cash purchases, then in my opinion you are risking the elements of buyer remorse that may come back on you. It's your life, carry on.

 

[Terrel L. Shields]

CYA can solve a problem. A broker-appraiser who cuts a fat hog on an overpriced property could risk having a remorseful buyer come back saying you should have known it was overpriced. Would potentially impact you as a buyers agent more than sellers, but agency is an issue and carrying that extra expertise has a downside. Merely saying you are wearing your broker hat doesn't reduce the reality of you other license.

 

[chad hampton]

It is shocking to you that my client would not have an appraisal completed when I am their broker?

There is no chance that a residential appraiser completing an appraisal on that property is going to have greater market insight or valuation insight than I have.

I am not trying to be a jerk, I am just pointing out the facts.

Lol, so says almost every agent I ever met. I’m confident that you are an expert in your market at both selling and appraising and there’s probably a 99.9% chance you will never have a problem. But it’s bad advice for an agent to not give their cash clients the option of an appraisal. Small price to pay. If things go sour, you will be viewed as a biased party. Assuming you were acting as a broker and not an appraiser.

We’ll probably have to agree to disagree on this one.

 

[Evincere]

It wouldn’t / shouldn’t matter That the name of the administration is mentioned because it is in fact a matter of politics. And if politics directly affects my ability to earn a living and against my self interests, adhering alligence to party lines becomes self defeating. It is what it is - If Trump approves and is at the helm of the ship steering its direction I will support any opposition to his actions. .