Pressure: My Story

Mark Skapinetz

Mark Skapinetz

Certified Real Estate Appraiser at Whats It Worth Appraisal Services
Mark Skapinetz is a 16 year Real Estate Appraiser in Marietta GA with extensive knowledge in Residential Appraising.He is the Head GA rep for the American Guild of Appraisers (AGA). Featured on Podcast such as Voice of Appraisal with Phil Crawford and The Appraisal Coach Dustin Harris as well as published interviews in Valuation Review. He is the Creator of the 100% Real Estate Appraiser Group, The People's Appraisal Blog and Co-Creator of AppraiserFest.
Mark Skapinetz

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Pressure: My Story... Appraiser Pressures to Hit Value or Get Fired

Appraiser pressures aren’t normal everyday life pressures…THIS IS WHAT PRESSURE is like for appraisers. Hit value, get paid. Don’t hit value, get fired or quit.

In just 16 years as an appraiser, I’ve seen and heard many things. Some, I just want to forget and some I wish I never heard.

Appraiser pressures aren’t normal everyday life pressures, they’re different. Typically, when business is good, it’s for reasons like doing a great job and providing a great service. Or, it could be because one aims to keep the client happy by hitting value, which is not exactly a good thing. If business is slow it could be because the market slowed, the quality of service is poor, not providing obscure requests for updates, or maybe they removed you from their list of approved appraisers. Hell, we all know it could also be because your fees are reasonable but considered unreasonable to the AMC and they continue to shop for the cheapest. Truly sad days in this respect.

We became appraisers to do the best jobs possible for our customers, abide by laws and regulations, and uphold the public trust.

Today, too many AMCs are controlled by lender demands and if they can’t make the lender or client happy they risk losing the account. To leverage themselves, they’ve negotiated my time, my expertise, and my contribution to the process on my behalf and unfortunately, they’ve done a very poor job negotiating and it’s starting to show.

In this example of client pressure, a subject property appraised for $180k; the contract was for $225k. Five comparables were provided on the subject street including one across the street. All five were renovated like the subject and the sale across the street was an almost perfect match to the subject; it sold for $180k a month prior. Three others on the same street sold between $175 and $180, within 3 months of the appraisal. They were the same style of home and similar size, too. The last one was around the corner and sold for $195k and a little larger in size.

When I submitted the appraisal, I was BOMBARDED with requests to consider other sales that were larger, sold several months back, and one had a basement. After I addressed as to why they weren’t used, I resubmitted the report. They sent it back again with two more sales to consider that were also less relevant than the comparables provided. In total, this happened three times. So basically, what they were saying is that all of research and verification of recent sales on the same street were insufficient compared to cherry picked sales from around the market area. This is what value pressure looks like. Pressure to change the value to meet everyone’s expectations to make the deal work, not what is right or correct to protect the public trust.

I did not succumb to the pressure and for that, my assignments went from several to zero.

In another example, a subject appraised for $370k, the contract was for $385k, the list price was $400k (this is important). I used sales in the immediate subdivision, three of which had finished basements, that ranged from $350k to $385k. Once the report was submitted, I was immediately contacted by the selling agent claiming I failed to do my job and failed to consider chandeliers and drapes and two Tupperware containers that were claimed to be rain collection systems (I’m not joking). I was then supplied with two new sales to use; both from other subdivisions down the road. I was also provided a prior appraisal that was completed three weeks earlier. Upon review, I see this is not an appraisal report at all, it was a desktop report and the appraiser picked the top 3 sales from other areas instead of using the comparables in the immediate neighborhood. The desktop value of $400k is the (same as the list price). An interior inspection was not completed and relevant adjustments for differences in basement area and finishes weren’t considered. I received three messages from the agent threatening to turn me into the state. The lender asked to reconsider value three times.

I did not fall for this pressure and continue to uphold the public trust to do what is right for everyone, not my wallet.

THIS IS WHAT PRESSURE is like for appraisers. Hit value, get paid. Don’t hit value, get fired or quit.

I work hard and do the best I can possibly do, yet some who have never understood appraising, have the education or credentials to appraise, are suddenly somehow now the experts.

Bill Black describes it perfectly as the Gresham’s Dynamic in valuation which simply means that bad ethics and practices push good ethics and practices out of business. No one cares until it’s too late and THEN want to cry wolf.

I am sounding the alarm for consumers, if you really want to know your net worth, hire an independent and trustworthy credentialed appraiser to serve YOUR best interest. This is about your home and the well-being of your family. I am the appraiser who does not fall for control fraud and neither should you.

Image credit flickr - U.S. Army Europe
Mark Skapinetz

Mark Skapinetz

Mark Skapinetz is a 16 year Real Estate Appraiser in Marietta GA with extensive knowledge in Residential Appraising. He is the Head GA rep for the American Guild of Appraisers (AGA). Featured on Podcast such as Voice of Appraisal with Phil Crawford and The Appraisal Coach Dustin Harris as well as published interviews in Valuation Review. He is the Creator of the 100% Real Estate Appraiser Group, The People's Appraisal Blog and Co-Creator of AppraiserFest.

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21 Responses

  1. Baggins Baggins says:

    “If you’re going to ‘manage’ the process, I expect you to be as qualified as me, and negotiate on my behalf as well or better than I would myself.” I’m a free agent and my negotiators keep on trying to put me in the big league show, for second stringer prices. It’s simply illogical to have an underqualified advocate of the lender manage the only unbiased participator in the lending process. Separation from loan production rules increased daily working pressure to appraisers 10 fold. Instead of being able to hold an aggressive comp searching broker responsible, now we are unable to hold non licensed non accountable appraisal desk managers to any comprehensive standard, and there is a new game and new gimmick at every new lender company one may seek to engage with. On the other side the honest brokers have the worst of it as well, they are no longer able to have one on one communications with appraisers, for those brokers whom would care to protect their borrowers interests first.

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  2. Diana N. says:

    I have had similar situations happen to me over the 45+ years I’ve been appraising and it’s sad. I had one assignment where there was no direct source of heat in the home, and  because I wouldn’t lie and say there was heat, I lost that lender after 20 years of working with them.

    We are supposed to give a totally unbiased value based on documented  information to either support or negate a purchase price or estimated value, but if we don’t make the number we are blackballed. From a lending standpoint the purpose of the appraisal is to protect the lender and the borrower if something should happen during the term of the loan so none gets hurt. I always thought I was doing what I was taught to do, I guess not. For what it’s worth most of my work now has become  foreclosures, estates, divorces and tax appeals and I don’t have to fabricate values.

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  3. Koma says:

    Been there! Had one where the subject was purchased land with owner built house with similar houses in subdivision. This was for refi. 2 recent sales in subdivision 1) $795,000 2)$825,000 and 2 outside in similar range. Opinion came in $800,000.

    Lender came back with 3 sales in a builder cookie cutter subdivision close by at a range of $650-$740,000. Of the three one address provided did not exist. After I went and provided explanation why the other two were not comparable they stated ok. Two months later they came back with the same sales as before and told them that and that I would not go back and look/comment again. Also notified them that if they contact me again for the same reason I will be contacting my state board.

    My reports are done responsibly and per standards required of me. I will fight for my opinion of value every time!

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  4. Eric says:

    Good points to all – most Appraisers and Brokers are trying to do the right thing – but it only takes a few bad apples to ruin an entire market area.  We had plenty or rules in place in 2007 – but nobody was ENFORCING them then, and now we have lots more rules that they don’t even know how to enforce.   We need some new sheriffs in town – and AARO ain’t getting it done.

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    • (1) Most states don’t have peer appraisers on their staff as investigators. Having an appraiser license does NOT make them a competent peer! (2) AARO is merely the state regulators organization designed to do an end run around their own state regulators and to conspire with TAF to violate USPAP in their own “investigations”. (3) There is a trend among regulators where they erroneously think they don’t have to conform to USPAP in their own reviews even though they are rendering the most severe judgements on the quality of other appraisers work. It’s a “You must do as we say, not as we do” mentality. There will NEVER be uniform or fair enforcement of appraiser regulations unless it is handled by one single federal agency; AND that agency carries out its investigations in compliance with USPAP! The MINIMUM federal standard!.

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  5. Fritz Vogel AGA,CRS,CEI,GRI NY Cert. Appraiser 27yr says:

    Your only as good as your last report. Very sad.

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  6. Good article. Happens all across the country. Repeating the past. Thank goodness, there’s a majority of appraisers that hold tight to their ethics and keep doing the job they were taught.

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    • Baggins Baggins says:

      But it is a shame the vast majority of persons dealing with mortgage lending distribution and assignment systems, do not have a license, or hold to similar ethic. We can only hold out so long, 130,000 ruined careers later, still nobody recognizes the root causes of our ailments. Under qualified ‘managers’, and improperly co mingled fees.

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  7. Mark, you are among the relatively few that don’t cave to this sort of pressure. I say relatively few, because if even a simple majority of appraisers stood up to this, it would cease. It goes on only because too many appraisers tolerate it.

    Most readers are unaware you are in Georgia and that state has a ‘same subdivision first’ comparable sales selection rule. Aside from sound practices even if you had gone outside the subdivision you’d have had an impossible task of justifying it.

    I have to wonder if the desk top ‘appraisal’ was used to help the agent set his asking price; and then further used to convince the buyers about what a fair deal they were getting? When third parties start threatening to tun us in to the state, it really is time to turn both them and their managing brokers into their states DRE for violating Dodd Frank AND their own states appraisal independence rules. Desk appraisal over value by 9.25% is also worth turning in.

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    • Mark Skapinetz says:

      The desktop was in fact used to set the value. Upon looking at it I noticed the 3 top sales used with disregard to the 3 others in the subdivision. Not only that on this desktop grid it only stated “basement” for each comp with no regard or adjustments for 3 finished basements to the subjects non finished basement. No interior done to know anything about the house. How can you accurately value a home when you disregard the finished basements and any interior finishes? Sloppy work and no actual effort put into it. Welcome to the world of cheap desktops that agents now rely on.

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      • Diana N. says:

        You would have thought that whoever did the desktop would have been smart enough to check multiple listing information and check out the interior photos. I do this every time I do either a desk or field review or even a 2055, to see how accurate the appraisers information is and hopefully even the subject can be found on MLS to be checked out.

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      • Next question(s),

        Was this done by a Georgia appraiser, that lives or works in Georgia with a physical address there? Send a copy of their report to the state. I don’t say that lightly.

        As appraisers we ‘accepted’ horribly low quality work from our peers over the past ten years and made excuses that somehow the low fees made it ok to do shoddy work. End result? A rush to the bottom as far as fees went.

        The fact that desktops or hybrids MAY be legally done does not by any measure mean that the quality of those being performed for $25 to $65/ $75 each remotely achieves the legally required USPAP compliance.

        If we don’t nip this trend in the bud by standing up against poor quality desktop work we will be aiding MISMO, FNMA, FreddieMac and any loan packagers specializing in junior lien lending in destroying the concept of professional real estate appraisals.

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  8. Fritz Vogel AGA,CRS,CEI,GRI NY Cert. Appraiser 27yr says:

    Diana is right, we do always go back to MLS Pix and old data to review what was available. Unfortunately, “THEY” who seem to be better than us do not. They are just fast on the trigger.

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    • Baggins Baggins says:

      The ability to be fast, is the primary point when appraisal distribution departments look at their internal stats, and determine who’s ‘most qualified’ to receive the assignment.

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  9. Pierce Blitch, III, IFAS says:

    You are not alone. Keep up the good fight and stand your ground. We all have “Those” appraisers in our individual areas that make it difficult to almost impossible for each of us. We are the Gate Keepers for the Consumer and the Tax Payers who will once again have to bail Big Banks out in the next crash. Maybe, just maybe, if we continue to stand our ground, we can prove Gresham’s Dynamic to be wrong if only in regards to professional real estate appraisers.

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    • Baggins Baggins says:

      Yeah, positive messages. Our skills have no influence on appraisal distribution though. What’s your fee and turn time and when was the last time you upset a mortgage lender.

      Gresham’s Dynamic, a good read, thank you. Audit the FED. Now something there reminds me of the current appraisal industry…..

      While the solution seems simple, the background against which regulation should be taking place is quite muddy. The U.S. Securities and Exchange Commission (SEC), long ago captured by the very industry it regulates, has steadily weakened the fiduciary duties of investment advisers over time. It now permits core fiduciary obligations to be waived by consumers (despite the anti-waiver requirement found in the express language of the Investment Advisers Act of 1940). The SEC, incapable of seeing the limits of disclosure, permits dual registrants to disclose away conflicts of interest, with no requirement that the transaction continue to be in the best interests of the consumer.

      Gresham’s Dynamic: Why Bad Actors Dominate Financial Services

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  10. E J B says:

    It seems to me that AMC’s are beginning to see a little pressure on their business model lately, but as long as we have the idiots in DC who are bowing to the banks and billionaires, and you know who’s running the show, we’ll never be rid of them until they accomplish their final goal of totally getting rid of independent appraisers and go to AVM’s that can be manipulated to their needs. Appraisers are toast because the last thing the ‘too big to fail” want is to protect the public since we’ll be the ones to bail them out again.

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  11. I think a lot of the issues involved in contemporary appraising arise from lenders not holding their own paper very long. If every institution suffered directly from poor or bad loans, the appraisal world would change overnight. Quality would be the most important metric and bad appraisers would be weeded out. It feels like we appraisers get all of the liability and virtually none of the profit.

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  12. TruthBTold says:

    Great read Mark. You’ve told every appraisers story. I’ve posted on my social media outlets.

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Pressure: My Story

by Mark Skapinetz time to read: 4 min