The Greatest Recession
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Appraisers provide an essential financial service according to the verbiage I’ve read from The Department of Homeland Security and various sources. We are exempt from “stay at home” orders. The State of Colorado has defined appraisal services and appraisers as providing an essential financial and professional service. Colorado says that appraisers are exempt from stay at home orders.
An abundance of caution:
During the Vietnam War, I enlisted in the Army Reserves. The Army sent me to Basic Training at Fort Polk in Louisiana and taught me how to kill people. Then they sent me to Fort Sam Houston in San Antonio Texas and taught me how to save people. I was trained first as a soldier, then as a medic and finally as an operating room technician. I was a “scrub nurse” and assigned to the 5502; a MASH unit stationed at Fitzsimons Hospital in Aurora. Those two schools and my experience while stationed to Fitzsimons taught me how to create and maintain a sterile field free from contamination.
To protect myself and my family from the coronavirus over the last several weeks, I have used those skills, experience, and the knowledge that l learned long ago. Before the coronavirus really started ramping up, I did two appraisals that required the typical interior inspection, photos, and floor plan sketch. Out of an abundance of caution, I purchased shoe coverings, a mask, and rubber gloves. I had a “coronavirus talk” with the listing agents of both homes. I asked them both to have their sellers vacate their homes and take their dogs with them prior to the inspection. I asked the listing agents to turn on all the lights and open all the doors … even the fence gates to the rear yard. I advised the agents that they and their sellers and dogs could sit in their cars at the curb and watch me enter and then exit their homes. I explained that I was going to float into and through the home and not touch any interior surfaces except the floors I walked on.
Needless to say, the listing agents and sellers were quite amused by my silly request and by the procedures I used as they watched me from their cars, with my booties, mask and gloves enter and then exit their homes. Thankfully, they complied with my requests albeit with a smirk on their faces. At the time, I suspect, they thought this was all ridiculous … a scene out of some science fiction movie.
And so, I inspected the homes and when I came out the front door, I felt as though I had just come out of an operation. I used sterile technique to remove my booties, and gloves and disposed of them into a paper sack which I sealed and later put into the trash.
I soon concluded that all this was absolutely nuts! To continue appraising, even using these semi sterile procedures and technique, was crazy and I was not going to continue to do it. The risks to myself, my wife, the Realtors and homeowners I came into contact with was simply not worth the risk. I surmised that sooner or later, I would become contaminated and likely infect someone else.
Jeff Bradford, one of our valuation industry giants said it best when he questioned the wisdom of allowing 40,000 active appraisers in this country to go from home to home contaminating everybody with the coronavirus like bees pollinating flowers.
The Alarming Predictions:
Recent predictions of 100,000 to 240,000 deaths from this virus should cause everyone to gasp and reevaluate their risks. Now do you believe “it’s not just the flu? I’ve read that 20,000 coronaviruses’ can fit on the head of a pin, that they can suspend in the air even after an infected patient leaves the room, and that they can survive on a surface for hours or days. It only takes one to kill you.
Given these risks, and understanding that asymptomatic carriers of the virus are now living and working among us, I no longer accept orders for appraisals that require me to physically inspect the interior of a home. I will shelter myself in my home or car. I do accept appraisal assignments that can be completed with a Desktop or Exterior Only appraisal that does not require me to enter into a home. Pre-listing, divorce, and estate appraisals can be accomplished using these types of appraisals.
An abundance of intelligence:
Slowly at first and now in increasing numbers, appraisers across the country are becoming educated to the risks and are refusing assignments that require an interior inspection. An abundance of intelligence is emerging. Homeowners likewise are calling their lenders and stating that they do not want appraisers coming into their homes. Appraisers are realizing that the risks of an interior inspection are not worth the reward. Bear in mind that the population of active appraisers has aged. Many appraisers are over the age of 60 and many of them have compromised health conditions. Informed appraisers just are not willing to “die in the trenches” for lenders, investors, sellers or Realtors.
The real estate markets are slowing:
The real estate market is slowing and becoming gridlocked. FHFA, Fannie Mae, Freddie Mac, VA and FHA are aware of this problem and the issues appraisers face. All of them have just recently offered to accept modified appraisal reports that allow appraisers to complete their assignments without an interior inspection. Technological solutions are rapidly becoming available that allow “appraiser assisted” homeowners to conduct an inspection of the interior and exterior of their homes using their smartphones. Apple’s FaceTime is being used to facilitate interior inspections. More technological solutions and methodologies are coming.
Investors are hesitant to embrace these temporary measures:
The big fly in the ointment is the investor’s reluctance to accept appraisals without the time honored interior inspection. Investors are concerned about the potential for fraud. They are worried that homeowners will not photograph instances of mold, structural defect, physical and functional obsolescence.
The Greatest Recession is now spreading across the US:
I’ve dubbed it The Greatest Recession because I fear it may surpass the devastating effects of The Great Recession of 2008. Until most investors agree to accept these temporary modifications and technological solutions, or we conquer this disease, I fear the real estate markets will grind to a halt. The investor’s hesitance to accept modified appraisals without interior inspections will prevent the real estate market from leading this country out of “The Greatest Recession” now spreading across the US.
We must embrace the science and change if we are to save the world and humankind.