Tell us how you really feel about appraisers ...

[George Hatch]

He misses the point of an appraisal the same way a lot of appraisers miss the point.

The primary attribute that an appraiser operating to specs is selling and is adding to the underwriting that no other individual adds is their assurance of impartiality and objectivity WRT the property and the valuation. Not the resulting number on the bottom line of a 1004. It's the disconnected 3rd party perspective itself and how closely the appraiser conforms to that role that makes that 1004 marketable.

Everyone and their dog has an opinion of the value; there's nothing special about that. Other parties might be well informed so that isn't what makes an appraiser's opinion different than a broker's opinion. Your work isn't marketable because you have an opinion. It's marketable *solely* to the extent it is perceived to be based on honesty, professional integrity - which for our role as appraisers includes impartiality and objectivity - and to the extent the analysis stands on its own merits.

The reference to the public trust in the appraisal profession is oriented to promulgating that perception starting at the client and user level. If your users don't trust you then they won't use your work. As one example, appraisers get ghosted or blacklisted for getting caught with lying in appraisal reports. (that's obviously not the only reason appraisers get ghosted but it is one reason).

 

[J Grant]

He misses the point of an appraisal the same way a lot of appraisers miss the point.

The primary attribute that an appraiser operating to specs adds to the underwriting that no other individual adds is their assurance of impartiality and objectivity WRT the property and the valuation. Not the resulting number on the bottom line. No, it's the outside perspective itself and how closely the appraiser conforms to that role that counts.

Everyone and their dog has an opinion of the value; there's nothing special about that. Other parties might be well informed so that isn't what makes an appraiser's opinion different than a broker's opinion. Your work isn't marketable because you have an opinion. It's marketable *solely* to the extent it is perceived to be based on honesty, professional integrity and to the extent the analysis stands on its own merits.

The reference to the public trust in the appraisal profession is oriented to promulgating that perception at the client and user level. If your users don't trust you then they won't use your work. Simple as.

Exactly.
While there are a plethora of valuation products taht users can avail themselves of to replace an appraisal, the ROLE of the appraiser, as the one not vested in the outcome of the transaction party, can not be replaced. This is especially important in residential mortgage lending, which has a high volume of transactions and is backed by US taxpayers.

In that light thoiugh, the ROLE of the appraiser has been debased by the regulators, the GSE entieits and the support of AMC fee predation. There is no problem with the mortgage lenders using an AMC, but THEY should communicate the AMC with no, as in zero connection to the appraisal fee.

There is also no or at best a thin veneer of protection for appraisers wrt to bending to the client pressure to hit values ( usually on the higher end ) and the AMC's have offered no protection in that regard, which was their original intended purpose.

The author of this piece had a correct overview of a dwindling supply of appraisers and a trend toward aging appraiser ranks. That is caused by the AMC fee predation and, along with it, the lack of protection from value pressure, and value pressure need not be spoken - clients and AMCs stopping work to appraisers who come in "low" on more than rare occasion is a Pavlovian tool. I would go so far as to say that Fannie and Freddie support that pressure, because their own alternative product ( the WAIVER ) circumvents appraisal regulation to hit targets and then goes about hitting the target value, as long as it falls in the AVM range from FF. The loan officer writing in the value target they need as the property value ona WAIVER, is the very thing that the HVCC and then Dodd Frank was designed to prevent. Thus, Fannie nd Freddie simply won't use an appraisal, then no HVCC or Dodd Frank applies to a WAIVER. It is appalling that the regulators allowed it.

Any new younger appraisers can easily look up the hostile work envrioment and low pay outlook facing appraisers why it is attracting low numbers nto the fiel.d

 

[alebrewer]

It is my understanding that AVM's are also impartial and objective.

 

[George Hatch]

WRT "role cannot be replaced", I initially qualified my observation by referring to "that no other individual adds to the transaction".

A calculator or abacus or AVM is not an individual, but their usage can also return a usable result for certain situations so long as its operators are staying out of the transaction. The users obviously think so, at least for some properties and some transactions. And it is those users who choose which forms of valuation they're going to use. Hence the utility of paying attention to their legitimate user-driven expectations, and not hassling your own users over their minimum expectations.

 

[J Grant]

I personally think that an appraisal and an AVM - that it is best to have both ( which is often the case ). Each product has a strength and a weakness.

As AI evolves, integrating its analysis or portions of an AVM into an appraisal is also an option.

Human oversight that is not biased toward a financial outcome is essential in taxpayer-backed lending work, imo, and most software companies are not equipped for that. They have no mission to protect the public trust, or to get a well-supported MV, they are profit-driven entities.

 

[azbassman21]

Always baffles me as to why they point to the appraisal fee as the one that's too much, when title can charge exorbitant amounts of money for a policy that wouldn't be necessary if the escrow officers and title agents did their jobs correctly. Not to mention lender fees, etc. But I guess this company doesn't have a vested interest in an appraisal company, therefore they go after them.

 

[chad hampton]

If public trust was intended to meet client trust it would’ve been called client trust or intended user trust. Public means public.

 

[J Grant]

If public trust was intended to meet client trust it would’ve been called client trust or intended user trust. Public means public.

The public does not have to trust us. That is the wrong interpretation of public trust (as in saying our client does or does not trust us).


It means that our actions as appraisers in our professional capacity should be worthy of the public trust.
A cop should act ethically and honestly - teven though he criminals will still hate him and much of the public may not trust him

 

[glenn walker]

Welcome to the club Voxtur..... have fun driving drunk people around while making Uber and Lyft lots of money and having your passengers throw up in your personal ride essentially making what appraisers do.

Always baffles me as to why they point to the appraisal fee as the one that's too much, when title can charge exorbitant amounts of money for a policy that wouldn't be necessary if the escrow officers and title agents did their jobs correctly. Not to mention lender fees, etc. But I guess this company doesn't have a vested interest in an appraisal company, therefore they go after them.

Because those fees are not out of pocket and consumer's don't care if fees in the loan it's a 50 cent a month over 30 year's but that $500 plus is upfront. Nobody want's to pay for an appraisal.

 

[George Hatch]

If public trust was intended to meet client trust it would’ve been called client trust or intended user trust. Public means public.

You would literally flunk the test. I know this because I passed the test and always defaulting to the intended user among the choices presented is exactly how I passed the test.

The operative term in the very next line of the PREAMBLE and the elaboration in the SOWR is "meaningful and not misleading to intended users". The public's perception starts from there, same as applies to your professional reputation . You aren't going after any 3rd party validation or approval and there is not one reference to supporting the taxpayers interests anywhere in USPAP.

Test your reasoning by swapping the variable. If your use/user is outside of the GSE rat race then what role does your appraisal play in supporting the general economy and taxpayer interests to which you guys are always citing in your fee advocacy? WRT any specific service, "public trust in the appraisal profession" literally CAN'T extend to interest that are external to the service being provided. Nobody BUT the user is even in a position to trust the appraiser's work.