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The need for appraisals in the future

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jmaze1793

Thread Starter
Freshman Member
Joined
Jun 6, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I've been hearing from friends in the banking business that within the next 5 years or so, the need to get an appraisal is going to dramatically decline as banks are going to just pull the comps themselves instead of hiring an appraisal. Has anyone out there heard of something similar to this or is this information incorrect.

jason maze
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Jason,

I strated 5 years ago and heard that when I started. Still working. My mentor heard that when she started 9 years prior to me and she is still working. She told me her mentor heard that when he started 20 years prior to her and he is still working. Just some for thought.

There is not doubt that AVM's will take some of the work away from us appraisers. There is still no doubt that our job as appraisers will change in the future. But I still do not belive like most doom and gloom crowd says that all of our work will go away. I just think our job will change with time and perhaps when (not if) the economy truly goes south and we have another debacle like the S&L bail out of the 80's appraisers will still be around just changed/tweaked slightly. Perhaps for the better or worse.

Ryan
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Ditto. I remember when pin wheel printers, dos based computers, and the computerized MLS system can into being. Ohh, oh.....uh oh..... what are appraisers going to do now :?: 8O as was the worry of the worry wartz. :wink:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Yes, AVM's are going to remove some of the cookie cutter properties. However, foreclosures are going up accompanied by an increase in fraud, which is going to put pressure on the Mae's to go back to appraisals. A bigger problem is the consolidation of lenders and the use of AMC's which mean lower fees for the same work. Couple this with increased education requirements, including college degrees, and more difficulty in obtaining a license (state and federal requirements) and you will see fewer people entering the field. The effect will be a declining number of appraisers as the work declines. There will always be a need for appraisers (litigation, divorce, investment analyses, etc).
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
I have a loan officer friend who works for a Freddie Mac lender who said that starting sometime this month they are going switch over a majority of their appraisal work to the Loan Prospector system and AVM based values. The difference between then 5, 9, 20 years ago is the consolidation in the market. Fannie currently has about a 1.3% foreclosure rate. For the sake of this thread let's say that the value of 1.3% of thier total portfolio is worth half the value of the loans because it was either overvalued or trashed by the borrower on their way out the door. Fannie's loss is less than half a percent of a multi TRILLION dollar portfolio, a really big number if you won in in the lottery but probably not even close to what Fannie spends of paper and copier toner every year.
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
I'm with Ryan and the majority on this one. Remeber when the dot.coms said "this changes everything?" Apparently it didn't.

Of course, change is inevitable. However, I believe there will always be a need for good appraisers. Now, the number hitters, on the other hand, may be on their way out.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Five assignments in September were Fannie Mae foreclosures and the number is increasing. Wanna bet we will always have work to do? Might not be on every loan origination but just cleaning up the mess will keep me busy. VA has also said they will continue to use appraisers. What we need is a good ol fashioned recession...just watch them come flocking to us to bail them out.

I believe the good appraisers will always be in demand. Just like a toliet, our profession needs a good flushing once in awhile. It will be more and more difficult for the newbie to find work but seasoned pros will still make a good living.
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
I too believe there will be work, only the clients will change.
 
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