NAR Bifurcation Position Is a Good Thing

NAR Bifurcation Position Is a Good ThingI 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 several years, largely on the misrepresentation of future providers of such services such as AMCs and future users of this service, such as banks. Bifurcations may have some very limited uses, but I object to portraying it as an industry-wide replacement for full appraisals. Bifurcations are much less accurate, more expensive, and slower to complete. But other than that, they’re awesome.

Regulators like FHFA reach out to groups like NAR to get feedback on controversial proposals for policies like this. Now one of the largest residential real estate trade groups with about 400 lawyers will be pushing this policy through all their channels, and that is a good thing for the appraisal industry. Groupthink has been steered to the appraiser’s way of seeing the world, the last protector left in the mortgage process to protect the public trust.

Jonathan Miller
Image credit flickr - Nothing To Do in L.A.
Jonathan Miller

Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.

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16 Responses

  1. Jeff Bodi on Facebook Jeff Bodi on Facebook says:

    I’m all for public access to the MLS and the elimination of realtors. They take way too much commission for way too little work.

  2. David Samnick on Facebook David Samnick on Facebook says:

    As appraisers we can just collectively say NO and not perform this product. Furthermore they are not economically feasible. No one can make a living doing this crap work.

    • Anita Hale on Facebook Anita Hale on Facebook says:

      I agree. An appraiser strike. Fees are too low to make sense. At $25 you can Uber or UberEats and make the same amount of money….

  3. Avatar Cotton says:

    Very easy solution ban together and boycott theses horrible bifurcated products. Anyone completing these types of bifurcation is destroying our entire profession, damaging public trust and ultimately harming the tax payers. No bifurcated product is USPAP compliant. Turn ever appraisers completing these into the state for harming public trust. Bifurcation is nothing more than a money grab for the amcs. Charge the borrower $400 and pay the untrained inspector $50 and $50 to the appraiser. The borrower has no idea they were scammed out of the appraisal fee. As far as NAR they will be replaced by zillow so get ready to kiss those commissions good bye!

    • Avatar Koma says:

      Unfortunately we will not ban together and boycott these trash products. I am on an AMC panel to see what appraisers are taking for fees in my areas and just the other day a full appraisal (1004) came in for a refi at $280 in a market with a C&R fee of $475. I always bid a dollar over (if by chance they award it to me I cancel) to see what happens and low and behold someone actually accepted for the $280. SAD!

  4. Avatar TruthBTold says:

    David, what has become apparent to me is the plan with banks and AMC’s is to create an entirely different culture of appraisers, appraisers who do what their told by the AMC or staff supervisor without regard to USPAP or their own individual risk and liability. Their main enforcer is, no more work or reduced paycheck if you don’t comply. This is what I’ve witnessed over the past ten years and is how they’re getting appraisers to do work for minimum wage fees, unrealistic turn-time, and bifurcated appraisals. That and keeping an oversupply of appraisers so the demand won’t go up. At least once a month I get a call from someone who has just finished a $4,000 course from a trade school that told them how wonderful, exciting and lucrative being an appraiser is. When they call me looking for a supervisor to help meet their trainee experience, it is the first time they hear “what’s really going on” in this profession. When they can’t find a supervisor as an independent, they answer one of the ads for a staff appraiser. It’s the ever traditional big corp. squeeze, “if you want to feed your family, have a decent lifestyle, then you’ll have to take an individual risk, if you want to work with us”!

  5. Avatar SB says:

    Getting a lot of daily bid requests from this slimy AMC
    Might be the very worst in the USA…

    Check out their “stellar” BBB rating

    How could any sane individual work for them???

    • Avatar koma says:

      Holy Cow I just received and order from these guys. New construction rehab loan (?) with a turn time of 48 hrs. Marked them as Spam lol

  6. Avatar Swifty says:

    SB, I may get on, just so I can tell them I don’t work for AMCs.

    I just love when I do that…

  7. Mike Irvine on Facebook Mike Irvine on Facebook says:

    Maybe the TAF can take a stance that Zillow is good for Real Estate Industry

  8. Avatar Dave says:


  9. Avatar Pat Turner says:

    First I hope everyone has a wonderful holiday season!

    Second, stop this immature discussion regarding boycotting, etc. It could be construed as “price fixing “, but that’s a stretch too.

    Get the best education you can. Trust me, you don’t know it all yet. Be better educated than those asking for dumb ass bubble gum popping questions.

    Know Dodd-Frank, know USPAP inside and out. Stop being pushed around and intimidated!
    We are the professionals although…….
    We need to speak from knowledge and not emotion.

    Ask the AMC if they have submitted your report to the lender…..I promise you will be shocked at the answer!!

    • Avatar Koma says:

      So, were the GM workers who went on strike being immature? We as appraisers have to use what tools we have to get things done. The slow walk of moving those in power to do what’s right most of us will be retired by then. Yea I know, I know future generations. If I’m not learning something new as often as I can then I wouldn’t be an appraiser. Price fixing really then I’m guessing you think a C&R fee schedule is price fixing too? Reached a mile with that one too huh?! And for those asking dumb ass gum popping questions (mature?) they have access to the money so some appraisers have to put up with them.

      I do agree with your Stop being pushed around and intimidated comment. It’s your license and they need your signature more than you think!

      Appreciate everyones input!

      • Koma – of all people Pat does NOT oppose organized responses. He is however very pragmatic about it.

        At last check there were around 40,000 unique appraisers doing residential loan transaction appraisals for GSEs. Some are association members; some are coalition members, some are AGA (Guild), members, but MOST are not.

        Then there is the issue of appraisers disagreeing with each other whenever possible-even when not helpful in achieving bigger goals.

        The FACT is that an organized (meaningful) boycott could not be orchestrated…by any of us. Nothing worse than having an organized event that no one participates in. Strikes and boycotts were considered and dismissed as not being practical. Wishing it were otherwise does not make it so.

        Strikes and boycotts are only a few tools in the arsenal of organized groups. Nationally we’d need around 50% to 75% of the 40,000 to be effective. Doing it on an individual state basis is an option BUT that would then provide ALL the justification lenders need to obtain appraisal waivers through ASC.

        Making targets of lenders that fail in their obligations under FIRREA or Dodd Frank is another tool. Reporting them more often than they or their stooges report appraisers for non critical errors is far more effective than a ‘boycott’. (Example BofA reversed one poorly thought out policy in less than 4 weeks after we filed our complaint via ASC to OCC).

        Since we do NOT have 30k or 40k appraisers in agreement on any one known topic, we need to stick to other more productive methods.

        One is educating people on such a wide front that an organized boycott isn’t necessary. The grassroots opposition to bifurcated hybrids IS working. Do we achieve any more if we call it a ‘strike’ or a ‘boycott’ than we do by many, many, many individual AGA, coalition and other organization members voluntarily CHOOSING not to do them?

        I’m fairly certain Pat is suggesting we make sure we are using the right tool to achieve the desired results. Pat & I don’t always agree, but we BOTH recognize things that do not work; and the reasons why.

        Pat’s been around for a while. His license #4 can be found on many of the hieroglyph appraisals done for old caves before paper was invented. These predate UAD, cuneiform and even handwriting. Adjustments were often made in terms of (-)bison or (+)bison pictures. He knows what’s wrong with our profession today; the regulations we operate under and a lot of the things that need to be accomplished to reclaim it.

        Appreciate David and Komas fervor, but we are not an industry that costs our clients money if a few of us sit idle for months. We’d never even know who the scabs are. We would also become the justification for legally allowed statewide appraisal waivers.

    • David Samnick on Facebook David Samnick on Facebook says:

      Pat Turner would you agree that the Bifurcated product is not economically feasible? The answer is quite simple. It’s NO. They are not. No one is discussing pricing we are discussing boycotting. All appraisers could have an open discussion and all come to the same conclusion. Bifurcation is TRASH. Those who do them should call it a day as YOU are doing nothing more than harming the industry. If we are knowledgeable professionals and successful business owners than surely we can recognize when a product does more harm than good. I for one will not do them. I urge my fellow professionals to just say NO.

      • David I can personally confirm that Pat is doing a LOT to eliminate bifurcated hybrid appraisal products. What I can’t divulge are the details.

        FWIW – while I disagree with the Constantine & Cannon interpretation of Sherman Anti Trust prohibitions, calling for a boycott IS a violation…unless you are a recognized labor organization operating very narrowly within the limitations of your own charter. For easy reference: 1. We cannot say, tell, directly urge or induce all appraisers to not accept any work for less than $550. (or whatever amount); 2 We cannot say “Let’s all boycott all bifurcated hybrid appraisals”. There are nuances on what we CAN say such as “I think anyone doing hybrids is a damned fool” (perfectly acceptable). Or…”I cannot imagine ANYONE doing a USPAP compliant appraisal for less than $XYZ because it takes 6-12 hours and at XYZ they’d be working for less than minimum wage.”

        Patience David. Keep urging opposition to hybrids but be sure to do it legally. (this statement is broad enough and ambiguous enough to not likely step into Sherman territory)


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NAR Bifurcation Position Is a Good Thing

by Jonathan Miller time to read: 1 min