Author: Jonathan Miller

NAR Bifurcation Position Is a Good Thing 14

NAR Bifurcation Position Is a Good Thing

I reread last week’s post in Appraiserville: “NAR Real Property Valuation Committee Issues Position On Bifurcation” and felt I left the reader hanging with this incomplete thought: But I don’t want our industry to think: There, we’ve addressed and resolved the threat to appraisers and more importantly, the public trust. After marinating in this topic, I believe the more accurate way to think of this new NAR policy position is this: One of the largest residential real estate trade groups (NAR) developed an appraisal policy on a controversial appraisal topic: bifurcations. Appraisers have been battling the implementation of bifurcation for...

The Costly, Less Accurate & Less Timely GSE Pilot Programs Are Dead! 18

GSE Pilot Programs Dead

The Only Good Pilot Is A Dead Pilot? Like my father always told me about having a business partner (see title above). But I digress. I have yet another independent confirmation that all GSE pilot programs are now dead under the new FHFA director. Fortunately for appraisers, his biggest concern is risk management and this action seems to confirm this. The GSE pilot programs designed to “improve” efficiencies, such as bifurcation (a spurious solution that is more costly, less timely and less accurate), are dead. Not everyone in the chain of command may be aware yet. Real Estate Appraising Is...

North Dakota Was Told Getting A Waiver Was A Snap - ApppraisersBlogs 3

Waiver Was a Snap – It’s All About Control

When North Dakota re-applied for a state-wide waiver, the appraisal industry was nearly unanimous in outrage at the audacity of the state to apply for one in the first place because its entire premise was false. Some of the facts brought up by the appraisal industry in opposition that were ignored were: There were more appraisers in the state than there were a decade ago There are plenty of appraisers in the cities Rural appraisers have always been hard to find because the economics make nominally feasible to cover those markets The economics of AMC-gouging of appraiser fees had forced...

Appraisal Fee Transparency Is in the Public Interest 24

Appraisal Fee Transparency

Bill H.R.3619 has left the House and is now ready for consideration in the Senate. There are a number of key issues presented in this bill. Three of them jumped out at me: SEC. 3. TRAINEE APPRAISERS. (12) TRAINEE APPRAISER. — The term ‘trainee appraiser’ means an individual who meets the minimum criteria established by the Appraiser Qualification Board for a trainee appraiser license and is credentialed by a State appraiser certifying and licensing agency.” This definition is critical to help undo the logjam that appraisers face bringing more people into the appraisal profession. SEC. 5. REQUIREMENT TO DISCLOSE APPRAISAL FEES....

GSEs to Halt Hybrid Pilot Program? Rumors or Fact? 26

GSEs to Halt Hybrid Pilot Program?

My colleagues in the appraisal industry and I have been confused/alarmed by the actions of the former GSEs Fannie & Freddie over the past several years in their efforts to raise mortgage volume. Banks continue to remain in the fetal position on risk post-financial crisis and low mortgage rates and inverted yield curves aren’t helping. As a result, the GSEs, who remain in receivership, are doing all they can to remove pain points for banks to lend more and as a result, exposing the mortgage process (and, of course, the taxpayer) to unnecessary risk. As an appraiser, I’m clearly biased...

Banks Are Driving the Waiver Train - Appraisers Blogs 14

Banks Are Driving the Waiver Train

On its own, the recent decision to provide a temporary appraisal waiver for the entire state of North Dakota is mind-boggling for a number of reasons and seemed pre-determined: The state has been challenged by the lack of appraisers in rural areas since time began and there are plenty of appraisers in metro areas. The inference is that all states with a lot of rural areas should have to have qualified experts come up with valuations. There is no verifiable appraisal shortage in the state. In most cases the problem is with AMCs and their business model, unable to pay...

Sitting In The Witness Chair... Expand Your Consulting Footprint 3

Expand Your Consulting Footprint

I’ve sat in the witness chair as a real estate expert many times over the years. It’s nerve-wracking, but it is also fun and fascinating. My partner in our commercial firm says there is something wrong with me because I enjoy it so much. Consider that something you wrote in an appraisal report six months ago is being discussed now and what you wrote back then is not subject to edits. You have to live with what you wrote. I think the quality of appraisals in the U.S. would improve substantially if all appraisers had to sit in that chair early...

FDIC & US Treasury Championing Automation to Replace Appraisers 13

Pushing Automation to Replace Appraisers

Regulators today are often removing barriers to responsible behavior with the hope of expanding lending activity since falling mortgage rates aren’t the answer. Banks are pushing back and it is instructive to see the way FDIC thought back in 2006. FDIC and the U.S. Treasury have turned out to be very anti-appraiser and are championing ways to automate as a way to replace us. Think about wildly inaccurate Zestimate-like AVMs on first mortgages. Economist, real estate agent and good follow John Wake shares this:

Never Appropriate for Non-Appraisers to Perform Home Valuation 4

Non-Appraisers Valuation Never Appropriate

Here is a NAR deck on AVMs (automated valuation models). Here are some recent survey results that show more than half of the respondents indicated, it is either NEVER appropriate or NOT SURE if it is appropriate for a non-appraiser to perform a valuation on a home. So the jury is still out for a third of respondents but a third are absolutely sure it is inappropriate. One can infer that appraisers have an opportunity to convey what AVMs really are to the public.  

Incomplete Data Provides Incomplete Assumptions - Data Pollution Reality 7

Data Pollution Potential to Cause Bubbles

In meetings with the National Association of Realtors and The Appraisal Foundation, there was a lot of time spent listening to AVM owners espousing their importance and more sober observations of the pitfalls. One of the presenters seemed to be bragging that 90% of the time, a good Automated Valuation Model (AVM) can be within plus/minus 10% of the actual value. Remember that Zillow’s Zestimate is within 5% of the actual value only 50% of the time. Both numbers are very dreadful and very random inconsistency across the marketplace. But still, there is a place for their use in conjunction...

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