Remote Commercial Review Appraiser?

[Terrel L. Shields]

Clients expect appraisals to be credible

And they are much more quixotic about their reviews. Again, the thread is about Remote Reviews. What else explains thinking some joker in Denver or Oklahoma City can review a poultry farm when they've never been near one? When the reviewer is calling me and asking things about how many eggs does a chicken lay...is there a concrete floor in the house under the "floor material"...etc.

An entity producing appraisal reviews is not going to last too long if that entity doesn't know what it is doing

I see commercial and government "reviewers' who have been doing this work for years and still clueless. I've had reviewers play gotcha, etc. Isn't it funny that appraisers can work for private parties, testify in court, deal with condemnation issues, and do so without "reviews"? The other side simply gets a real appraisal instead. "Review" is a bank process almost exclusively. And its purpose is to create a confirmation bias, to give the bank an extra layer of due diligence. Meaningful review is an entirely different notion.

 

[hastalavista]

And its purpose is to create a confirmation bias, to give the bank an extra layer of due diligence. Meaningful review is an entirely different notion.

I definitely think there is a bias about reviewing evidenced in this thread!

 

[Terrel L. Shields]

I definitely think there is a bias about reviewing evidenced in this thread!

Do you honestly believe that a reviewer in Oklahoma City who has never SEEN, let alone been in or appraised, a poultry farm, should be doing a review of one? I'm not talking about Podunk Bank, but a reviewer hired by one of the largest, if not the largest bank, in two states (OK & AR).

 

[hastalavista]

Do you honestly believe that a reviewer in Oklahoma City who has never SEEN, let alone been in or appraised, a poultry farm, should be doing a review of one? I'm not talking about Podunk Bank, but a reviewer hired by one of the largest, if not the largest bank, in two states (OK & AR).

On the surface, no.
And while it may sound like I'm hedging my bet, I would say that part of it depends on the review SOW. However, in the same breadth, it is hard to believe that the SOW for the review wouldn't require some level of competency in the property that was the subject of the review.

I don't doubt your experience, Terrel. And I can appreciate chicken-coop (a special-use property type, no?) competency is relatively limited,
But you apply that limited slice of the pie to the general universe of appraisal reviews. I simply disagree with that extrapolation.
I do think a competent appraiser in Omaha can review a report of a retail building in San Francisco without ever setting foot in the Golden State for many review scenarios (regulated institutions and non-regulated institutions).

 

[Terrel L. Shields]

chicken-coop

We don't have chicken coops...unless you call a 55' x 600' building costing $1.5 million for 4 house complex, a "coop".

I was reviewed by at least 3 appraisers in Oklahoma who had very little or no experience with such farms. One was likely an in-house appraiser for this bank who took an overflow assignment (apparently) from Arkansas - 200 plus miles away. She called and tried to learn a few things to her credit, but is such a review really meaningful? I doubt it. They simply didn't want to pay the freight to a regular ag appraiser because at that time the new poultry farm construction biz was going great guns...who wants to do a review when you can get $2500 for a report in the same time?

A coop


a Farm - 12 houses

 

[PL1957]

FWIW, when I've run in to third-party reviewers who don't know what they're doing, I've called the original client and asked them how they want me to handle it. Sometimes the review goes away, sometimes it gets reassigned, sometimes they ask me to humor them. I always let the client know.

 

[Terrel L. Shields]

when I've run in to third-party reviewers who don't know what they're doing, I've called the original client

That's not the cowboy way...

 

[PL1957]

That's not the cowboy way...

The cowboy way is to complain to people who can't do anything about the problem? I may just be a city boy, but I like my way better.

 

[Terrel L. Shields]

What's to complain about? I'm not paying for the review. Yes, it is a waste of my time, but what does it accomplish for the bank except, as I first noted, being a compliance document to be held in file.

Isn't this like the talking dog joke? The guy is working on his car when a man with a dog stops by, the dog leans up on the fender and said, "I think it is the coil giving you problems." The guy turns to the dogs owner and said, "You mean this dog talks?" And the guy replies, "Don't pay any attention to him because he don't know diddly about cars."

Any remote review of the report needs to be done by an expert in the property type at a minimum. Most residential reviews I see are now appraisers with very high (recent) CR numbers because they are the only people willing to review a report for $150. What does that tell me about the importance of a review to the bank? It's for compliance with standards which require the appraiser be periodically reviewed...or did you miss that in the IAG...

• The work performed by appraisers and persons providing evaluation services is periodically reviewed by the institution.
​

If serious about reviewing my work, they would have hired someone with an ag background and paid whatever it cost. Again, from the IAG

Reviewers also should possess the requisite education, expertise, and competence to perform the review commensurate with the complexity of the transaction, type of real property, and market.
and
For example, an institution should perform a more comprehensive review of transactions involving large-dollar credits, loans secured by complex or specialized properties, and properties outside the institution’s traditional lending market. Persons performing such reviews should have the appropriate expertise and knowledge relative to the type of property and its market.
​

Seems to me that the reviewer must have some inkling about the type of property (Ag - poultry) and requisite to that you need to understand the market for poultry farms, right?