Robust & Precise Inspections – Hybrids V
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No more pesky appraisers blowing up sales commissions & bonuses & salaries…
A “hybrid” appraisal is a new name for where the property inspection is separated from the analysis and appraiser’s certification. It is faster and cheaper and…
Many years ago, I had several trainees, and as each gained experience and competence going out with me, I first let them inspect homogeneous neighborhoods, with me driving by on the outside to check on locational and optimal use issues. In time, they did complete appraisals on their own (although I always internally reviewed and signed). Both the appraisers and I learned more and more about the markets and how features related to each other and needed adjustments.
An important part of appraiser training was the field work. The most important part of the training was there, in the field. Looking at a house is quite different from looking at a checklist box on a Fannie Mae form. Driving a neighborhood is quite different from statistics describing it. Both are needed.
Today we are told that the inspections can be performed in a “robust and precise” manner by “highly trained inspectors.” But no one seems to know how this training magically appears.
The essence of data science, and EBV (Evidence Based Valuation©) is that 80% of the needed effort and expertise is getting the data right.
It appears to me that those who care about collateral risk should care the most about the data. The data that matters the most is on each individual property, and proximate influences, and pricing indexes and forecasts. Do they? Or do they care the most about making the deal, the commission, the salary bonus for volume on short-term profit maximization, rather than long-term benefit to shareholders, consumers, and the overall public trust?
The illusion of public trust was shattered ten years ago. And twenty years ago. And every ten to fifteen years back at least to the Great Depression of the 1930’s. Homes sat vacant. Foreclosed. Families lived in cars. Driving west to the next greed-induced crash. No problem.
No problem. It’s only a few hundreds or millions of families damaged. A lost sense of safety in young people. Distrust. Emotional and psychological damage. Carried forward. No problem. It’s just consumers who lose their homes to overvaluation pressure. No problem it’s just consumers who pay the taxes. The taxes easily bail out the system. A failed system.
The system also fails to provide the greedy “sufficient” gain. The darn government keeps trying to impose rules and regulations to protect the consumer. And the system gets worked. Every time and this time.
This time, let’s get those pesky appraisers out of the way once and for all. Let’s put trained and robust and precise inspectors out there. Then have the “appraiser” fill in the form. In fact, no need for a form. Data is data. We got it. Problem solved. No more pesky appraisers blowing up sales commissions and bonuses and salaries. No more appraisers with the expenses of license fees, MLS memberships, professional dues, appraisal software, records verification, and state-approved classes. Super savings all around.
Then comes the next economic meltdown. We must fix the cause.
Let’s license the house inspectors…