By: Mike Ford

Mike Ford — Mon, 03 Oct 2016 09:39:15 +0000

Two excellent articles! The original and Clint’s.

Well done VaCap and well done Clint!

By: Clint

Clint — Tue, 21 Jul 2015 06:29:41 +0000

This is a well written article. As I was reading it I was thinking it could be used as the rational reasoning for the next housing crash, which I believe is going to happen unless we get real reform. In my experience as an Appraiser, I will tell you some of what is happening here. I will get an assignment for an appraisal, usually on a complex property, whether it’s lakefront or a farmette with acreage in a rural area. I will tell the AMC I won’t do it for the fee they want to pay. I usually charge 100 more for complex assignments, though in some cases I will charge 250 more just because comp selection is extremely limited, which requires more explanations for the AMC and more driving time taking comp pictures. They tell me they can approve a fee up to 495, which is still too low for some appraisals. So I can either take it or leave it. So what is happening, I believe, is many Appraisers are faced with this dilemma and will give into the AMCs 9 out of 10 times. As you know, appraisal is not a science, and the market is far from perfect. Sometimes I will look at a property and see recent sales and current listings in the neighborhood and everything will come together making the adjustments seem logical and supported in every way, but sometimes you can’t make sense of it because there is no logical pattern between sales, and it basically comes down to providing a range of value, and putting most weight on 1 or 2 sales in the adjustment grid. So now what if you have a range, and the most similar sales support an opinion of value which is $2,000 below the contract price, but the other sales you have, which hold less weight for whatever reason, indicate an adjusted sale price of $2,000 more than the contract price. The subject was exposed for a normal period of time, and the average sales to list price ratio in the neighborhood in the last 3 months was 98%. inventories are low with a 2 to 3 month inventory. The contract price is 100% of list price because there were multiple offers. Median selling price was fairly stable over the past two years and over the past 6 months, but median list prices have been increasing. This could be a sign of an increase in values, but based upon statistical analysis there is not enough data to support it. So no time adjustments are made as a result. If this were a Refinance I would come in at a value opinion of X based upon what comps 1 and 2 indicate; being the most similar to the subject, but since it’s a purchase I come in at the contract price, which is 2,000 more because although sales 3 and 4 are slightly superior they support the contract price, the contract was negotiated between two parties, and there were multiple offers after a reasonable exposure time. For whatever reason the buyer thinks it is worth what they are willing to pay. There are no issues with the report and value opinion is supported. About a week later, after appraisal is complete an amendment to the contract changes the contract price to x minus 2,000. The amendment was signed after the effective date of the report. The Lender wants the appraisal to show the amended contract price in the report. The Appraisal was completed with a value of x and the Appraiser doesn’t modify the value; just the contract price with an addendum stating so. So now the Appraisal is $2,000 higher than it would have been if the lender would have waited for the final contract before ordering the appraisal. Then the Lender asks why that value! Please explain your reasoning. There is still pressure from Realtors. Lenders ask for consideration of sales without even checking to see if they are comparable. owners appeal your value opinion without understanding the difference between above and below grade finish. builders won’t supply contracts for new construction comps, and then throw a fit when their construction cost per square foot is above market and can’t be supported. There are numerous stupid things that the appraiser has to explain which have nothing to do with value. It is more difficult to be a good appraiser now more than ever because it is less profitable when you have to deal with people questioning everything you do, and don’t get paid for the extra time spent responding to those concerns. The process would be better for the Appraisers, Realtors, Buyers and Sellers if the value opinion was a range instead of an exact number. A purchase assignment should not be ordered until after all parts of the contract have been signed and provided to the appraiser, after all inspection contingencies, so we are provided with the final contract. If the effective date of the report is prior to any signed amendments to the contract it shouldn’t be our problem to fix. We should be able to charge a fee that is the same for AMC as non-AMC clients especially considering the numerous revision requests we get over dumb things that have nothing to do with value. until these things are fixed your’re going to keep seeing Appraisers leaving the industry and fewer entering. AMCs, Lenders and Realtors need more regulation to create more uniformity in this marketplace. Every client should have the same requirements. Every MLS should be required to verify property details, and provide all salient features, including all fields that Fannie wants on their forms. All property records for every municipality should be required to be online using data from assessors, builders, MLS records, and department of Revenue for verification purposes. All sales should be recorded in an online searchable database. All builders should be required to furnish contract details for all new construction contracts. There should be absolute transparency and no one should be able to keep property information confidential. The idea is to have one giant searchable database for all property records that includes everything you need to know about every house ever built in the U.S.

By: Retired Appraiser

Retired Appraiser — Mon, 20 Jul 2015 23:27:08 +0000

Here is a thought for appraisers who are disgusted with your pay and ready to quit. Fly for a regional airline; they are begging for pilots (and with good reason). I’ve put together a list of the lowest paying regionals for you to review. As disgusting as these numbers appear to be it would be a substantial raise to the net pay of the average residential appraiser when they subtract their expenses and divide by the number of hours they put in each week.

10 Lowest-Paying Airlines
Estimated First-Year Salary as of July 20, 2014

Great Lakes
$14,616

Silver Airways
$18,693

SkyWest Airlines
$20,064

Mesa Airlines
$20,183

GoJet Airlines
$20,504

Republic/Shuttle/Chautauqua
$20,655

ExpressJet Airlines
$20,745

Atlantic Southeast Airlines
$20,907

Trans States Airlines
$21,531

PSA Airlines
$21,600

By: Retired Appraiser

Retired Appraiser — Thu, 16 Jul 2015 22:50:37 +0000

Recent Interview With Head Of Banking Lobby

Kickbacks? What kickbacks?
(Speaker holding hands behind his back while $1,000 bills fall to the floor)

Truth In Lending Regulations? Why, the appraisal fee is listed on the correct line of the HUD-1…along with our kickback…I mean service fee.

[Speaker leaves stage…picking up cash he’s dropped on his way in…muttering something under his breath that sounds like “assholes” on the open mic.

Comments on: AMC Dangers to the Consumer

By: Mike Ford

By: Clint

By: Retired Appraiser

By: Retired Appraiser