PAREA Update

[Joe Flacco]

There is a trainee on Reddit saying he has been doing 32-40 appraisals per month in his first year training and now it is really slow doing 17 appraisals per month.

It doesn't matter what fee you pay this guy after he gets certified. You can pay him $1,000 per appraisal and you will get the same appraisal report he was doing for 30% of whatever the fee his supervisor was charging.

 

[Joe Flacco]

The trainee system is broken. We incentivize the wrong metrics like speed and turn time.

On top of that, those that train new appraisers are generally appraisers that probably should not be mentors.

PAREA is not great but it is not as if the current system is working well. A lot of issue and it is complicated.

 

[J Grant]

There is a trainee on Reddit saying he has been doing 32-40 appraisals per month in his first year training and now it is really slow doing 17 appraisals per month.

It doesn't matter what fee you pay this guy after he gets certified. You can pay him $1,000 per appraisal and you will get the same appraisal report he was doing for 30% of whatever the fee his supervisor was charging.

If $1000 per report would get a much better pool of quality, experienced appraisers available, why would a client opt to hire Mr Churn and Burn to pay them $1000?

People hire these appraisers BECAUSE they work cheap.

 

[ucbruin]

Most if not all forumites say they are giving their clients 100% effort/quality at $500/report....
Can't give more than 100% effort/quality regardless of the fee....
So why would a client give a higher fee....
Assuming effort/quality per forumites are equal....

 

[shrubberyvaluation]

If $1000 per report would get a much better pool of quality, experienced appraisers available, why would a client opt to hire Mr Churn and Burn to pay them $1000?

People hire these appraisers BECAUSE they work cheap.

Correct. The point is the curn and burn will work for $200 or $1000, but the person writing credible reports may only work for $1000. You pay cheap you will only get the churn and burn, paying more just lets the client be more picky on appraisers. Of course there is nothing saying a client can't prefer a churn and burn over a credible report.

 

[shrubberyvaluation]

Most if not all forumites say they are giving their clients 100% effort/quality at $500/report....
Can't give more than 100% effort/quality regardless of the fee....
So why would a client give a higher fee....
Assuming effort/quality per forumites are equal....

I do rushes for a higher fee, or more complex appraisals. Not every appraiser is equal.

 

[Joe Flacco]

My average fee for 2022 was $1175. Median appraised value $1,825,000.

 

[chad hampton]

The current system is broken because there’s no financial incentive for the mentor under the current rules.

Don’t fear third-party data
(1004 Desktop Limiting
Condition 3)

A common concern we hear from appraisers is
about using third-party data in desktop appraisals;
specifically, what is the risk to appraisers in relying
upon third-party data, and are appraisers expected
to validate such data?
It is important to recognize that appraisers have long
used third-party data routinely. For example, every
time an appraiser uses real estate multiple listing
services, they rely on photos, measurements, and
other data from a third party. Often appraisers use tax
records, surveys, inspection reports, satellite imagery,
and more — all from third parties. Appraisers can
use third-party data with confidence by analyzing its
reliability in the context of the body of information
available in the normal course of business.
Limiting Condition 3 from Form 1004 Desktop sets
forth the same concept. It says:
“The appraiser has relied on data provided
by third parties in this appraisal report. Such
data may include, but is not limited to, flood
maps, multiple listing real estate services,
tax assessment records, public land records,
satellite imagery, virtual street views, property
data services, surveys, engineering reports, and
property data aggregations. After examination
of the data and data sources, the appraiser has
used only the data he or she considers reliable.
The appraiser assumes there are no material
omissions and makes no guarantees, express or
implied, regarding the accuracy of this data.”

https://singlefamily.fanniemae.com/media/32976/display

what a cesspool of poor appraisal practice...anyways, reliable has nothing to do with credible

Of course the difference, the snake oil salesman failed to tell you is that all of the other third-party data we get from the MLS was collected not for appraisal purposes. The folks going out to the subject are going out there for the sole intent of their work being included in an appraisal report. That makes it significant appraisal work.

And I’d still like to know how a real estate broker is considered to be unbiased and impartial when they go out to a property. It’s in their best interest to make sure that appraisal is high because they’ll be listing the home next store next month.

But don’t let something like that get in the way of making sure your buddies that run the AMC’s get their profits. I’d be embarrassed and ashamed if I promoted those products.

 

[djd09]

The current system is broken because there’s no financial incentive for the mentor under the current rules.


Of course the difference, the snake oil salesman failed to tell you is that all of the other third-party data we get from the MLS was collected not for appraisal purposes. The folks going out to the subject are going out there for the sole intent of their work being included in an appraisal report. That makes it significant appraisal work.

And I’d still like to know how a real estate broker is considered to be unbiased and impartial when they go out to a property. It’s in their best interest to make sure that appraisal is high because they’ll be listing the home next store next month.

But don’t let something like that get in the way of making sure your buddies that run the AMC’s get their profits. I’d be embarrassed and ashamed if I promoted those products.

their theory is that if all the other data can be wrong or misleading, then the appraiser has an excuse for the subject property data being wrong or misleading...dont drink the kool aid

 

[George Hatch]

You two can complain about it all you want, but the appraiser can only be held to account for what they actually do.

Matter of fact, if either of you has even done a 2055 where you didn't inspect the interior or measure the GLA - and I know you have - then that completely guts the rationale "appraiser is personally responsible for the accuracy of all the subject data whether they put their hands on it or not". Even if you were to claim you've never done a 2055 - for which I won't call you a liar if you make such a claim - the argument still doesn't make sense when considering the liability track record for 2055s. Other appraisers have been doing them - with no ill effects - since long before either of you took your first Appraisal 101 course.