This AVM appraising may have a side effect that some of you guys have not considered. Recently I did a number of appraisals on foreclosured properties that were under contract of purchase from the lender to local speculators. You talk about some deals!!! I am talking about buying these houses, spending a little fixing them up and making a profit of $25K plus per each deal. You can clean up on manufactured homes. I recently appraised one that was setting on a rental lot, had a loan balance of $55,000, and was good quality and two years old, like new, under contract at $15,000. I was appraising it as if on a lot owned by the purchaser. We are talking about a profit on this deal of around $40K. One or two of these deals a year can keep this old man happy.
Stop worrying about the fate of the banking industry and do what is best for your pocket book. That is what the lenders are doing not to mention your bought and paid for political leadership. Hey! It is the American way. I can hardly wait for the bubble to burst. I see gold in them thar hills.
I agree with you completely, opportunity is out their everywhere with people who possess apprasing skills/knowledge and have access to the data we have.
SO MANY posts on this board are apocolyptic for our industry. BS. Yes it may and probably will change dramaticly. So what are you going to do, sit around and talk about how you wish things were the way they used to be, or roll with it use your skills and never skip a beat. I will be part of the later, and Austin you sound like you are with me.
AVM'S will put appriasers out of business. At least the ones who cant adapt to a changing industry and still utilize their skills. My whole philosophy on avms is that I still plan to be around appraising the forelcosures and foreclosures resales in 4 or 5 years, as corporate America realizes that avms dont work en masse, and by utilizing them predominately they have just got rid of their favorite scape goat, the appriaser.
Everything runs in cycles in this industry. My bet is this AVM fad will come full circle, just give it time. However, more than likely things will get alot worse before they get better......Meanwhile, go buy one or two or ten foreclosures/rental properties/fixer uppers, you name it. We all have access to the data and you are in position to minimize your downside exposure alot more than the average investor. Guarentee everyone knows a loan officer who can give them a sweatheart deal on a loan .
One more little tidbit on this subject to think about. For the last 14 years I have been a full time contractor for a commercial bank. There has never been a minute in the last 14 years when I did not have more appraisal work than I can do. How did I get this position? The former appraiser for the bank was an old Realtor board member. They lost about $250K on one client in one day in 1986. I attended all of the trustee sales of all kinds of properties from industrial to commercial to residential properties. I knew the bank CEO and before every auction he came over and asked me what the property was worth in my opinion. I was right on target on every piece. After the last auction he came over and said we need to talk. He asked me if I would be interested in doing their appraisals. I said yes. Then the said you may be called upon form time to time to stretch one a little here and there. I replied: “I will appraise for you under one condition. You don’t tell me how to appraise and I don’t tell you how to run the bank.” He thought for a second or two, stood up with extended hand and said: “You have a deal.” In the last 14 years the bank has not lost one dollar. They have had three foreclosures and on all three I told them in the report the property was high risk. In 1998, they were the #1 rated small bank in the state, and their earnings on assets are one of the best in the country.
What is the moral of the story: Bad lending =’s golden opportunities for appraisers that know what they are doing, do don’t despair.
PS: Every generation of bankers has to learn this lesson the hard way. It is a rite of passage in the lending field.