A Journal Piece of Appraiser Independence

Appraiser Independence Appraisal Independence

A Journal Piece of Appraiser Independence (Part 1): Where Do We Go From Here?

Buyer Beware! Where is the Value? (PART 1)

In the years of 2007/2008, the ideologue of, “Appraiser Independence” had become popular for the real estate market’s economic agents and the processes it relies on to function properly. The idea gained respect, due to the perseverance of Real Estate Appraisers carrying out their Independence, during the decade of 2000-2010.

The Home Valuation Code of Conduct (HVCC) was introduced according to prevailing design and initiative:  the advancement of a market in need for an inspired and renewed sense of competition and freedom, but with sensible regulation to assist in reducing adverse affects of pure unattainable greed, to allow economies the ability to evolve and/or progress.

In retrospect, Fannie Mae and Freddie Mac—these secondary financial power houses, were placed into the center of attention with a well deserved, controversial lawsuit—instead, a decade worth of accomplishments were somehow mismanaged and/or changed, thwarting a sincere Independent Real Estate Appraisal Process. Wall Street Firms failed; they backed fraudulent/misleading documents—paying a premium while looking for unattainable returns; however, the most daunting reasoning, are artificially/manufactured (high) values, maximizing an unattainable greed, at once, cycle after cycle, and unfortunately without missing a beat.

The Dodd/Frank Financial Bill continues to have an impact on real estate economies, and its processes. In the Financial Bill’s failure to effectively and faithfully execute Appraiser Independence to its fullest, the Financial Bill inherited the exploited spirit of the HVCC. Now, the spotlight is on Appraisal Management Company’s (AMCs) liability to the real estate market’s overall value.

Before the real estate market went into a recession, then depression, and before the implementation of the exploited HVCC (Appraiser Independence), the general public was no-where near being knowledgeable (well informed or well advised).

I would like to share a summary—a professional description of the standard for which our real estate market typically operates—“Market Value.” Value definitions are pertinent to any Appraisal. Unfortunate events can occur when the real estate market is not operating within its full, socio-economic, and morally ethically, capacity to deliver an interpretation of a credible, but meaningful value. Value, in general definitions, strongly suggests a knowledgeable buyer and seller (well informed or well advised)

“…The definition of “Market Value” in its strictest sense is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably (well informed or well advised) and assuming the price is not affected by undue stimulus.”

A market cannot experience freedom and sincere growth, the Real Estate Appraiser cannot experience true Independence, and the buyer/seller cannot be knowledgeable when value is pre-determined, biased, dictated, pressured in any way, enslaved, blackmailed, or manipulated and exploited, recreated and replaced.

Between the years of 1998 and 2000, the prevailing issues were acknowledged. Changes were accepted as a necessity to avert a foreseen crisis, by a small group of Real Estate Appraisers who were historically and spontaneously joined by social technology (www.appraisersforum.com). Economically speaking, the logic is simple: tinkering with or outright playing with real estate value is pure economic suicide. Many Independent Real Estate Appraisers, over the prior decade, were hard at work eliminating commissioned driven, and profit motivated professionals; from selecting, retaining, and managing/controlling the Real Estate Appraiser (thus, estimates of value) during the run-up to the economic crisis; subject to the duress from the content outlined in the opening sentence of this paragraph.

If we are to comprehend and deal with what is needed today for a healthy real estate market, we must all understand the complications of its history (most importantly, recent history). No profession that actively participates in the real estate market banded together to protect the general public, the value of the market, investor confidence, and the containment of the unattainable we call greed—making a difference by being open and honest—only the Real Estate Appraisal Profession portrayed that courage.

Ladies and gentlemen, it all starts with real estate value—this is about power and greed—beyond the majority’s wildest imagination.  As a group, between 1998 and 2000—Real Estate Appraisers stood up and said, “ENOUGH!” A petition was lobbied for by a young man aspiring to be an Independent Real Estate Appraiser, and then argued among a small group of Real Estate Appraisers in a newly formed virtual forum. Eventually soon after, a brave Independent Real Estate Appraiser ended up writing a petition, and Real Estate Appraisers had begun to realize their Independence. I am privileged to have played an important role in Appraiser Independence. Along with the excerpts quoted below, a website which hosts this very petition (over 10,000 signatures) is provided. The petition was publicly introduced in the year 2000, while staying open for nearly a decade: http://appraiserspetition.com/

 “…Lenders (meaning any and all of the following: banks, savings and loans, mortgage brokers, credit unions and loan officers in general; not to mention real estate agents) have individuals within their ranks, who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value.”

“…This pressure comes in many forms and includes the following:

  • the withholding of business if we refuse to inflate values,
  • the withholding of business if we refuse to guarantee a predetermined value,
  • the withholding of business if we refuse to ignore deficiencies in the property,
  • refusing to pay for an appraisal that does not give them what they want,
  • black listing honest appraisers in order to use “rubber stamp” appraisers, etc. “

Disclosure: Appraisal Organizations and Government were not involved. Individual Appraisers had everything to do with realizing Appraiser Independence, banding together for the social interest, putting it on the table, and advancing it. (I know—I was there—I am here today!).

Buyers and sellers are still too important to be influenced in a negative way. Main Street must be confident and knowledgeable, and investors must know for sure they can rely on the interpretation and true spirit of value. Instead, Main Street, and investors must feel assured the opinion of values are competently executed, ethically estimated, reconciled by the appropriate professional, and delivered in confidence—without pressure, predetermination, and without recreating and replacing, we largely experience today.

Automatic Valuation Models (AVMs) and Broker Price Opinions (BPOs) are physical reflections of “recreating and replacing” by the lending industry/data mining companies such as Zillow (AVMs), and real estate brokers/agents (BPOs). Unattainable greed forces unfound negligence upon the economy, as a whole—mocking capitalism, and depriving everyone of a meaningful study of value; a perception which conveniently allows the dictation of future market endeavors (supply/demand/value). Independent Real Estate Appraisers, today, can help protect the value of the real estate market by assisting the buyer and seller, being well informed or well advised.

Protecting and representing the real estate market’s value and relying on a knowledgeable buyer and seller, is an “Appraiser Independence” issue—today, and tomorrow. Without it, Appraiser Independence will be destined to fall. The unexploited HVCC (the original) did not go far enough in protecting the real estate market’s value, by creating a knowledgeable market and releasing the pressure from the profit driven who look to data mining for recreating and replacing, and of course to push loans through in the lending industry.

Appraisal Management Companies (AMCs) are the hubs/arms for carrying out real estate value “control” and “exploitation” within the real estate market, as of today (the profit driven—pressuring values, and data mining). An unknowledgeable market (buyer and seller), is one of several problems we all face, together, as a market; however, it is the core problem in defining value, as it is missing today.

Independent Real Estate Appraisers understand what unknowledgeable buyers and sellers do not——it is certain, and the most troubling: an unknowledgeable buyer and seller. The Real Estate Appraisal profession has an opportunity to do something great, in the midst of realizing and capturing Appraiser Independence, whatever that may come to be.

This article was published in the Appraisal Scoop in October 2011 and reposted with Permission from the author. This is the first of a two part series. Click here for part 2.

Guest blogger: Larry Benjamin “Benji” Brossette (AKA Greenback) became interested in Real Estate Appraisal at 18, received mentoring & guidance from the Appraiser Forum and participated in gaining Appraiser Independence. He went to school at Baker’s Professional Real Estate College located in Shreveport, LA. Benji specializes in the valuation of Land, Residential, and Commercial Properties in the Central Louisiana Region and is training toward his Louisiana General Certification. Larry Benjamin “Benji” Brossette on Facebook.



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4 Responses

  1. Avatar Jack Schlenk says:

    Question How many Appraisers were black balled in 2007 & 2008.
    If the analysis market data supported the sale or refinance value for the subject the client was happy.
    If the analysis market data did not supported the sale or refinance value some of the clients were not happy.

    Some of clients that were unhappy; This could result in the Appraiser being removed from the approved “Appraisal” panel.

    Some of the major AMC companies that are owned by banks still have me on the “Blacklist” because I would “not meet the number”. Please review my Blog about ANSI measurement for attics and lofts.

  2. Avatar Benji says:

    Hi Jack,

    I talked to an old friend of mine today. This friend may have an accurate estimate of the number of Appraiser Blackballed or Blacklisted by the year 2008. It may take this friend a while to respond, not because my friend does not know, but instead my friend has a large tendency to react and act on that reaction slowly. I did speak of your question, however, and I expect a reply when convenient. I haven’t ignored your post and I believe that was an interesting question.

  3. Avatar Benji says:


    May I ask that you review my article and observe your statement about AMCs being owned by Banks. Now, think about the AMCs that are own by MB/LO professionals. Where is the Firewall? Ownership holds a large amount of weight when considering the enslavement of Real Estate Appraisers (Value). AMCs can be large and diverse, but at the same time AMCs can contradict itself, or easily break the Rules of the Game via Ownership.

    Removing the Ownership may open up doors that we never knew existed. Appraiser Independence is in its infancy. Appraisers should be able experience Freedoms that had never existed until that moment of truth is felt.

  4. Avatar Benji says:

    I would like to make a couple of notes:

    1.) there are an extremely less amount of Appraisers blackballed or black listed today by the lending industry since 2008 and according to any and all changes made than they were in between 1998 to 2008 (has nothing to do with the time span). Any Appraiser involved in Appraisal Independence since 1998 – 2000 will know this is a fact.

    2.) Any and all attempts to get MB/LOs and Realtors back as a client will waste their time! Independent Appraisers made sure of this. Any attempt in the past has been a waste of time. Couple this with wrestling with a desiring a Slave Fee was more of a waste of time. Any Independent Appraiser that has been involved since 1998 – 2000 will punch holes in any and all efforts made to get MB/LOs and Realtors back into the passer pockets.

    It is time to start fighting for Appraiser/Appraisal Independence instead of wasting so much time on items that are not even close to being related to Appraiser/Appraisal Independence.

    A lot of people may not like me and, many may even hate me, BUT that has always been OK with me. It is their preference. Many Appraisers dislike me, because they believe I lied in 2010. I never lied and I proved it to the one’s that truly matter. I have the evidence and I only chose to show a select few Appraisers. Many dislike me, because they think I am full of it 🙂 However; I am warning any one who chooses to listen to me: I know a lot, I am young, I was there, I played major roles, I have answers, I have knowledge, I will be around for a long time and I have a lot in my files. I am ASKING those who choose to listen to actually listen some more and give me some credit beyond the common dislike; I can help, I am choosing to help, and it is time for the entire Profession to start helping and choosing the right path. Appraisers cannot UNDO what Independent Appraisers fought for because we didn’t just run our mouth endlessly we fought a war! We had so much evidence that would make the ordinary Appraiser’s face spin! We had a military, per se. The FBI has all of our intelligence. Overall; there is no more time for the BS if Appraisers actually want to make a difference and rid the BS from the Profession.

    Thanks for listening!


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A Journal Piece of Appraiser Independence

by AppraisersBlogs time to read: 6 min