This is a pretty niffty detailed chart for finding time adjustments, we are done.

[Joe Flacco]

Really? I don't see it. For a long time I ran a file called "How am I doing" and when a property sold that was NOT listed that I had appraised within the previous 3 years, I made a market adjustment then compared to my own appraisal. Most were reasonably close with only a few higher than 10% after time adjusting. I did that for residential and farm properties. Close counts in horseshoes, hand grenades, and appraisals. No one can nail 100% of actual sale price with any consistency.

Don't know about that Joe. Are stock pickers better now too? I don't think so.

I was not appraising in the 90's, but 30 photos of all sales versus one front photo of the house did not improve the accuracy of appraisals?

 

[Terrel L. Shields]

I was not appraising in the 90's, but 30 photos of all sales versus one front photo of the house did not improve the accuracy of appraisals?

Of course not. I still saw the house in either case. The client didn't see the interior like we do today, but so what? They are not determining the accuracy of the report. And in those days we frequently called or talked to the owners themselves. And we called the agents almost always because there were lots of gaps in the data. Those quarterly sold books were kinda sketchy with low resolution dot-matrix print out with 2"x2" BW Photo.

 

[Joe Flacco]

Of course not. I still saw the house in either case. The client didn't see the interior like we do today, but so what? They are not determining the accuracy of the report. And in those days we frequently called or talked to the owners themselves. And we called the agents almost always because there were lots of gaps in the data. Those quarterly sold books were kinda sketchy with low resolution dot-matrix print out with 2"x2" BW Photo.

There is no way that appraisals are not much more accurate today compared to the 90's. If that is the case, then that just means we are failing to adapt with improving capabilities.

 

[Joe Flacco]

I don't believe appraisals or appraisers are more accurate. BUT the desk jockeys think otherwise, as evidenced by the "What about the whales" attitude.

I'm not sure what you are trying to get at with this, but nobody cares about regulations on appraisers. They care about regulations on banking. From that perspective, we are one of the regulations getting in the way of the business of banking.

We are the testing for sharks and whales.

 

[Terrel L. Shields]

There is no way that appraisals are not much more accurate today compared to the 90's.

several factors at play. But the elephant in the house today is larger and more complex. In 1990, I still saw rural homes being built that had no central heat and air. They were heated by wood stove and cooled by wall or window air. The FHA houses (basically the same as Cherokee Nation financed homes) were all 1 bath, 3 bedrooms, and an attached carport for 1 vehicle. They were 1100 SF. Brick exterior and composition roofing.

Those same 1970s homes have been added on, they've got updates, they've added decks and enclosed garages. Just looked at one of those "Indian homes" where the owner said the kitchen used to be the carport. So they added to the back. They added to the side to more than double the original. Those are far more difficult to value than the 3/1 with carport plain jane.

Secondly, all sorts of "upgrades" were made. Heat pumps instead of regular CHA. Triple pane glass (90% of houses here before 1979 had single pane, aluminum frame windows.) Fireplaces became vanity items, gas log. Functional ones might be pellet stove inserts or such. I would say about 80% of our rural houses also have a shop building. That building will be from 900 - 2400 SF typically. It might be wood frame. It might be metal (light) frame and a few might have red iron steel. Lots of difference in prices. And I have run into 10 or more homes with lifts to work on cars. Value that "accurately".

In the more than 30 years I been in biz, I've seen a lot of different material with different costs. Slab is common, basements are not. Wood subfloors - well could be tall or low. Vinyl siding, steel siding, aluminum siding, Vinyl windows, aluminum frame, or wood. top end appliances, commodity grade? Flooring? Bamboo. hardwood. Softwood. Concrete plank. carpeting. Vinyl (who does lino anymore). tile. Ceiling fans. remote controlled fans. zoned heat and air. All this is a far cry from a mere 30-40 years ago.

With each feature becoming more and more complicated, trying to separate them all on the basis of "paired sales" becomes a fool's errand. We have to substitute linear regression and sensitivity for pairing. We fool only ourselves otherwise. Judgment was never more necessary than today.

 

[J Grant]

Really? I don't see it. For a long time I ran a file called "How am I doing" and when a property sold that was NOT listed that I had appraised within the previous 3 years, I made a market adjustment then compared to my own appraisal. Most were reasonably close with only a few higher than 10% after time adjusting. I did that for residential and farm properties. Close counts in horseshoes, hand grenades, and appraisals. No one can nail 100% of actual sale price with any consistency.

I also come close much of the time - at least for reasonably priced sales - and that includes the values where most OMV did not match a sale price or a high refi wish. Those properties ended up selling for a close amount to what I appraised them for, most of the time..

But we need to keep in mind that the purpose of an appraisal is not to nail a sale price 100%. That is impossible to predict and market value does not always equal sale price - though the entities push that now in their Waiver as long as the sc fits in their own AVM range -

 

[Sadie]

I believe appraisals should be mandatory most of the time. Due to people doing what they do to their homes. There's some serious Butchery going on out there labeling it as remodeling. You can't turn over the camera and reporting to the homeowner as they'll hide the defects and won't be truthful.

To make the process more efficient, the appraisal report should be streamlined and trimmed of all the fat. You don't need a 27 page report most of the time. But the property should be inspected. And not by an Uber driver.

Agree, how many car loans are made w/o a book value to go with it? As to the length of the report, IMO, much of it is CYA stuff and clarifications for poorly written imbedded verbiage.

 

[Sadie]

I know most of those appraisals were ordered by mortgage brokers with a vested interest in the outcome of the appraisal, and used only appraisers who guaranteed to hit whatever value they wanted. I lost a ton of business during that period. That's why appraisal reform happened, and a substantial number of unethical appraisers lost their favorite mortgage broker clients. The answer to that problem was not eliminating appraisers, the answer was ensuring the people who ordered appraisals didn't have a vested interest in the outcome.

Most subprive mortgages have an appraisal to go with them.

 

[Mike Ault]

Most subprive mortgages have an appraisal to go with them.

True. Some of them were ordered and completed by individuals with integrity, and some were not. There are ways to skirt around AIR requirements using arcane "appraiser panels" populated by a few favored "number hitters" specializing in 24 hour turn times and assisted by runners. That crap is going on in my town, as we speak. And undoubtedly yours as well. That's why I have little faith in those "compliance audits" which alebrewer was talking about earlier in the thread. I guess that makes me "a handwringer".

 

[Sadie]

I have a serious question seeking serious answers. I am an old timer but not an old time appraiser, having started Y2K. There was appraising pre licensing, then came licensing, USPAP etc. Then came all of the photo requirements, interior, side yard, street both ways, toilets- seat up, seat down-, then UAD, ANSI, bifurcated appraisals detailed time adjustments...I'm sure I missed a few "enhancements".

Does anyone think that appraisals have gotten better, more accurate, more reliable?

Yes and no. I think you have to explain your thinking a little more, whereas before maybe you just made your adjustement and said you made the adjustments. We have more data available so there is that. And we have to be more precise in our commentary. Better? I think so. If nothing else, it make the appraisers, PDCs or whoever work a little harder to hide the bad stuff.