Valuation Expertise Viewed as a Commodity
An appraiser shared an email survey concerning hybrid appraisals. The survey reveals the fees they are thinking of charging. These fees aren’t that different from what I’ve heard elsewhere.
It’s actually quite telling on how the AMC/Mortgage Lending industry sees the appraiser’s role in providing a reasonable benchmark on their collateral to make more informed lending decisions.
Here’s the scenario – take the $78 national desktop report fee and divide it by the $500 average appraisal fee as quoted by Realtor Magazine. Now think in terms of the inspection versus valuation.
valuation expertise is viewed as a commodity and not a skill that takes years to obtain…$78 Valuation / $500 full appraisal = 16%. Don’t get me wrong. Appraisers are willing to work for $78 on desktop valuations but many have little choice in the submarkets they cover. It also shows how the valuation expertise is viewed as a commodity and not a skill that takes years to obtain.
The fact the mortgage industry thinks a $78 expense is a reliable expenditure for a reliable valuation suggests we will be looking at a significant mortgage bubble in the future.
To all you 16-percenters out there – start taking stock of what you are really worth.