To be a CG or not be

[Alsie35]

It's obvious (at least to me) that the big banks/mtg companies are doing their best to remove appraisers from the equation leaving more and more appraisers fighting for less and less. I think that if someone took a poll they'd find that most residential mtg. appraisers have not seen an increase in income in the past few years and that most have seen a decline. I expect this to continue.

Waivers, AVMs, hybrids, etc. will be the norm soon. Again, IMO (an opinion not shared by all, maybe not by many) is that a mtg appraisal does very little to mitigate lenders' losses when the borrower quits paying the mortgage. If this is the case, why bother with a full appraisal when an AVM or other product produces a number that's 'close enough'. When a borrower defaults the loss to the lender is usually a big number, much bigger than the difference of a few thousand $ that an AVM, etc. provides vs. a full appraisal. Some appraisers think they are a big component in the lending process when, in fact, they are a very small cog in a very large machine. They are currently needed so someone can check a box, little more. As long as FHA and F/F can continue lowering their standards knowing that the taxpayers will eat the losses, the system is not going to change.

Well, all that may or may not happen. No one can predict the future. As far as mtg appraisers not seeing an increase in income the past few years ...

... that was an obvious, and predictable, consequence of the "unnatural" increase in our income during the pandemic and is just the market adjusting itself during a period of high rates and increasing reluctance of people to move when they are holding sub-3% mortgages. It says nothing about the future of the business.

Business wise, going into residential mortgage lending and developing a system to do so efficiently has been the best business decision that I've made in my life (though it initially happened through pure happenstance).

As far as CG work goes ... I don't have the math brain so that option is not open to me ... if you do, bully for you ... we all find our niches ...

 

[ucbruin]

I passed with 100%. My boss (25yr veteran working as the chief appraiser) never did pass, despite taking the test 4 times. My understanding of it is that the pass rate for the CG exam has never exceeded 50%.

Tiffany always complains about the situation but she doesn't seem to appreciate the fact that in the beginning nobody knew what to expect, nobody knew what it would take to pass those exams, nobody had access to pass-the-test prep materials, and afterwards everyone was 100% paranoid about losing their licenses over trivial issues. The familiarity breeds contempt for how the state would handle complaints and how the banking regulators would act during their bank examinations took several years to occur.

Not so much for me and the others who worked for a fee shop (I worked part time for the shop)....
The owner of the shop had some type of relationship with the powers that be....
He seemed to have some type of knowledge of the type of questions that could be on the test....

 

[George Hatch]

How many appraisers at that time could possibly have had such a relationship to know what would be on the test? It probably was more than 0%, but when half of everyone is flunking that exam its apparent that hardly anyone was actually being grandfathered past that exam.

 

[Tiffany Gibbons]

I passed with 100%. My boss (25yr veteran working as the chief appraiser) never did pass, despite taking the test 4 times. My understanding of it is that the pass rate for the CG exam has never exceeded 50%.

Tiffany always complains about the situation but she doesn't seem to appreciate the fact that in the beginning nobody knew what to expect, nobody knew what it would take to pass those exams, nobody had access to pass-the-test prep materials, and afterwards everyone was 100% paranoid about losing their licenses over trivial issues. The familiarity breeds contempt for how the state would handle complaints and how the banking regulators would act during their bank examinations took several years to occur.

They don't tell you what you make unless you don't pass. I made 82 the first time, thats how I found out 83 was passing. I do not believe you made 100% unless you were given a copy beforehand. Now It is also a completely different test if you re-test, 4 completely different versions. It's pass or fail, at least in TN. And I've taken both the CR and CG. I actually have both printouts with the phoro from when I passed each. This person is more likely to have my experience than yours as this person is in Tennessee. And the 4 year degree, of course.

 

[Zoe]

I'm a CG that upgraded from CR and only got close to that income a couple of good years. I was doing both commercial and residential and I worked 24/7 with no life balance. The expense for Costar alone made it impossible for me by myself to make money doing commercial. I loved doing commercial/industrial appraisals but aside from some big nightmare property I got a $10,000 fee for because no one would touch it, residential was what paid the bills for me. Especially after all those classes, not to mention the CG test is much more difficult (you will need to be great at Advanced Income Capitalization) and you have to make 83 to pass not a 75 like when the OGs took it when licensing first started and the test was easier as well.

I never got a $10,000 fee. You did good girl. I was typically in $1,500 to to $5,000 range. I am not sure that would be possible today. I had good clients. Sometimes fees were less than $1,500.

I worked with MAI's at many big enterprises. They were not doing $125K to $150K.

Most MAI's were around $80K-90K if they were really good. Maybe. But they had fringe benefits. Maybe way less.

Plus they had to give cut to the enterprise.


My turn times were typically 1-3 weeks. I could not throw single family residential in there and meet the turn times.

 

[Zoe]

$125K to $150K is big number in revenue. Just sayin.

 

[Tiffany Gibbons]

I never got a $10,000 fee. You did good girl. I was typically in $1,500 to to $5,000 range. I am not sure that would be possible today. I had good clients. Sometimes fees were less than $1,500.

I worked with MAI's at many big enterprises. They were not doing $125K to $150K.

Most were around $80K-90K if they were really good. Maybe. But they had fringe benefits.

Plus they had to give cut to the enterprise.

That was only once, and that property was a "white elephant", an abandoned old mental institution being considered for alternative uses. It was on the Historic Register so they couldn't tear it down. worried about that appraisal for years afterward. It took me a month and I made my boss go with me because homeless people lived in it. The interior was covered in peeling paint and asbestos, so I had to recommend OSHA inspection and remediation. They tried to get me to appraise it again years later and I declined. After that, I did community bank commercial stuff Millington and Tipton County mainly.

 

[Tiffany Gibbons]

Not so much for me and the others who worked for a fee shop (I worked part time for the shop)....
The owner of the shop had some type of relationship with the powers that be....
He seemed to have some type of knowledge of the type of questions that could be on the test....

I worked for 2 different fee shops. The first one (who would not give me credit for the work I did when I wanted to be a trainee) was a CR with a law degree (but never passed the bar) that paired with an "appraiser/congressman and they wrote part of USPAP. Hell, I typed part of it. It was meant to be elitist. I stayed with the second firm for 15 years until predatory lending crashed the economy last time. My supervisor at the second firm was great and gave me and others opportunities to advance. But AMC's killed that model.

 

[Mark K]

Well, all that may or may not happen. No one can predict the future.

I can't predict the future but I can read the writing on the walls.

As far as CG work goes ... I don't have the math brain so that option is not open to me ... if you do, bully for you ... we all find our niches ...

I did some CG work with supervisors but not enough to get the license. As far as the classes go...I found them to be pretty straightforward and not particularly challenging. I suppose the engineering math at Purdue helped out a bit.

In any event, I'll be watching the fun from the sidelines after Sunday, my license expiration day. Its been an interesting 35 years.

 

[George Hatch]

They don't tell you what you make unless you don't pass. I made 82 the first time, thats how I found out 83 was passing. I do not believe you made 100% unless you were given a copy beforehand. Now It is also a completely different test if you re-test, 4 completely different versions. It's pass or fail, at least in TN. And I've taken both the CR and CG. I actually have both printouts with the phoro from when I passed each. This person is more likely to have my experience than yours as this person is in Tennessee. And the 4 year degree, of course.

In my case I watched them grade it . By hand with a punchcard overlay. There were 6 of us from the same bank taking exams that day - we all carpooled. A couple of them were taking the CR test, the rest took the CG test. One of the CGs had no college.

And you're right, someone taking the test today will have an experience more like your's.