Mike Alderman, What you say is true. R.E. IS changing…as it always has. In 1971 I heard a story about old timers writing up offers on napkins on the hood of their cars…so with one of my more loyal clients I did the same thing. Offer made and accepted on a napkin (and cleaned up REAL fast by escrow instructions). Those were the wild and wooly days.

I got out in ’74 and went into Credit Union work til ’80-’81. Started a diving company in ’83, and then back to sales in ’84 when the Easton Act (disclosure panic) was the big deal in California. By ’86 I remembered why I got out in the first place and became an appraiser. I was an MAI Candidate back then (until licensing); training under an old time MAI; and an SRPA; doing a LOT of work for Resolution Trust after the S&L Bailout.

Fast Forward to Present- Through ALL the changes in the market the one constant is that the market itself actually WORKS! It gets manipulated, twisted, bent and subverted, but the actual R.E. Market WORKS. Not perfectly (even in open, true honest deals) because the participants are imperfect and have so many different motivations and requirements. But it works well enough to estimate the impact of most of those diverse motivations. Some measures can be proven, and some are derived from that first super computer that all of us ever used; our minds. Early on I was told to listen and pay as much attention to that computer as all the other ‘hard data’. It is NO LESS VALID just because it cannot be quantified mathematically. Even IRS refers to what they call “a smell test” before they decide to open up an audit case on tax returns. PURELY subjective! YOUR computer has already done all the calculations and distilled it down to a few answers.

We always knew our job was a varied blend of art and science, but those who currently use our services have been conned by software writers and hucksters into thinking it is ONLY a science. That THEY are the only ones with the solution to let non appraisers THINK they can determine values! Merely numbers to be crunched. When THOSE numbers don’t work, then keep searching until you find numbers that ‘appear’ to . The process is more important than the validity of the result.

Take music. It can be boiled down to almost pure math and pure science. A series of notes, pauses and timing. Take the purest music ever written, and the most technically ‘correct’ non musician playing it and compare him or her to a musical artist; a true musician. The result of one is science and sterile, the product of the other is art that stirs the soul. One teaches small children in a poor school district; the other plays in Carnegie Hall.

We need to be allowed to go back to practicing our art; coupled with softly applied but meaningful oversight to keep us honest. Professional peer groups used to do that. Now we require State and Federal Agencies to do it. Agencies & GSEs that only see the math and science.

Like FNMA who ADMITS their historic guidelines have skewed appraisal adjustments away from market perceptions for decades! In fact they have discontinued those fallacious guidelines completely. Well, ALMOST completely. The CU database that they use to tell appraisers that THEIR adjustments are “outside the model” is of course based on those very same ‘guideline’ adjustments that FNMA now admits were worthless.

Now if “that don’t make ya sit up, scratch yore haid; and say hmmmmm” nothing will!

I personally think we can direct a return to sanity. It just takes some real effort and cooperation among appraisers, and eventually those we deal with. Later this week I’ll post a draft proposal for a fair national (minimum) REASONABLE fee for our primary products. I’m not focusing on ambiguous “customary” anymore since that metric has been so perverted. Its based on the lower end costs and benefits of one of the higher cost of living areas; but for those so inclined you can recalculate it to your own local multipliers from the data and links it contains. IF we agree it makes sense, then ultimately we will have to stand WITH AMCS to get THEM the amounts from the banks that allows for us to be paid the amounts proposed! Right now, the banks and lenders associations engage in Sherman Anti Trust price fixing (in my opinion).

My intent IF we can get enough general consensus here, is to submit it to the AGA for review and for further submission to each of the State Coalitions, and Known Appraiser Peer Groups. My belief is we need to go for it nationally rather than piecemeal, state by state though we certainly need all coalitions support to do that.

YOU folks will find the flaws in it, I’m sure. Those that can be fixed will be corrected, but most importantly we CANNOT AFFORD to take another year to get started on this! Please address it fairly and openly, but without quibbling over minor flaws. We COULD get this in the works in months rather than years. Thank you.

I am an appraiser, real estate broker and state real estate instructor. I see the changes in appraising in motion, real estate closings are in for big change next month and I haven’t taught a real estate appraisers class in years. Real estate is not the place to be (unless you’re a banker , and not sure about that) at this time or in the future. I’m in my 60’s and my daughter just graduated college, I’m expanding my resources to something less stressful. Use to like the variety of appraising but ‘it just ain’t fun no more!!’ (for reasons you stated)

(blushing)

thank again RA. for the record, let me say that i love appraising. i enjoyed the challenge, i enjoyed meeting the people on the road, and it sure as L beats sitting behind a desk all day long. your comment made my weekend. thank you.

but looking at my numbers, i see my yearly volume constantly going down because it takes so long to do an appraisal nowadays. i see my expenses going up every year. i see my pay frozen at the same rate it was about ten years ago by greedy AMC’s/banks. i also see half my business drying up real soon as interest rates trickle up and my refinance business starts slowing way down. it doesnt take a rocket scientist to see that this is not a sustainable path for business success. i encourage all appraisers to look closely at their numbers too before its too late.

for the record, i have turned down an insane amount of business this year! but i refuse to work 20 hours a day, seven days a week, mostly in an effort to try and catch up my shrinking business income. it doesnt take a rocket scientist to see that this is not a sustainable path for sanity/family/health success.

i applaud those who diversified like mary, and do little AMC work. i didnt mind doing AMC work at first. NAS was my first AMC, and they were a dream to work for. but as time went by, the AMC concept became a twisted abortion, and instead of them working for us as designed, we all ended up working for them.

seventeen years of appraising is a hard habit to break, and i am as nervous as hell, but i have my families support, and the support of a great company. i am still a 1099’er, and i love that my pay will be 100% based on my performance, because that means my income possibilities are endless again. knowing my drive and ambition as well as i do, i know things will be just fine.

let me also say that the appraisal world is much worse than any of you know. what you see in forums and read in articles only scratches the surface of all the BS that is going on right now. me not wanting to end up in the Chicago Bears end-zone lying next to Jimmy Hoffa, is the reason i cant give out any more information other than that, but i assure you all, things are VERY BAD.

anyway, it sure feels good to sleep soundly like a newborn baby again. its been a very long time.

my bleeding is almost over . . . . .

I knew that you were disgusted with the business but I had no idea that you would actually leave so quickly.  Another STANDING OVATION FOR BUBBA JAY!!!

Reading your comment tonight made my day.  For six long years I’ve screamed to appraisers boycott AMCs or get out of the business to save yourselves from bankruptcy and (or) insanity.  You’re the first one that I’ve heard from in 76 months had the balls to take a leap of faith and follow through.  It’s not easy by any means (I paid dearly for the decision) but in the long run you’ll be happy that you left.   You may even want to burn your bridges like I did…so you won’t be tempted to retreat.  People have a knack for succeeding when they can’t go back to something to something that was familiar but a money losing proposition.

STANDING OVATION for Bubba Jay Folks!!!  Our HERO of the month.

I didn’t retire from appraising…I ran like L at age 48.  I cannot imagine trying to stick it out to retire in this business.  Anything and everything pays better with 1/1,000,000th of the liability of appraising.

Ben, seriously-the suggested rewrite should be posted for an objective (hopefully VERY fair) peer review here. Perhaps all won’t agree, but you may well jog someone else into similar thinking with an end goal of achieving exactly what you suggest.

I used to like USPAP, but it is now used more as a club by regulators, rather than “minimum standards and guidelines.” Even the AI apparently thinks USPAP now sucks as written since they want to replace it in so many instances.

with that, i probably should say thank you RA. your comments in the past made me wonder if there really WAS something better out there or not. combine that with the endless insane time-wasting revisions, frozen pay, increasing costs, increasing liability, etc, etc, etc, and finally, all the stress making me get short with my wife and kids on occasion, well, that was the final straw.

i took your advice RA and started passing out resumes, and all i can say is wow, were you right. there are a lot of very good opportunities out there that pay the same or usually better, have benefits, i get weekends to myself and family again, AND, the POTENTIAL FOR ADVANCEMENT BASED ON MY PERFORMANCE. you know, just like appraising used to be 15-20 years ago. remember?

well, as of sept 30, i will be joing the other 50k+ appraisers who also told everyone to stick this nightmare where the sun doesnt shine. i have accepted one of the three very nice opportunities i was offered, and i will not be renewing my license in the next few weeks.

as an appraiser in my mid 50’s, let me say to all the other aging appraisers out there that age is a fools excuse. most younger applicants these days lack talent, experience and ambition. there are more unlocked doors out there than you think, and they are easily opened to the intelligent, ambitious and hard working people that we all are. i urge you all to treat yourself and your sanity to an unlocked door today before things get any worse, because you KNOW DARN WELL that they will.

my bleeding is almost over . . . . .

Cause we’re all working toward retirement like you. LOL. Forget washing cars. The job every appraiser should aspire for is the new business creation exec at an AMC. My kid worked at an AMC. The new business exec got to fly around the country, schmooze potential clients and if he brought them in, $35 of every appraisal ordered went to him. Big $$$. No liability.

FHA hasn’t a clue there either. I can tell you as a former member and chairman of a zoning board that, I, as a member or the chairman could not opine if a property could be rebuilt, if destroyed, but FHA wants the appraiser to do so? The appraiser has no zoning board authority. Only the entire board has that authority. Then again, there’s always the issue that no one seems to understand USE in zoning.

There should never be a scenario of FHA versus USPAP.

Here’s the deal. And it’s a very simple problem to solve. There should never be an instance where a RESIDENTIAL appraiser in a lending scenario needs to read and comply with two instruction books.

FHA, VA, FANNIE, FREDDIE, USDA, etc have been created by Congress for the benefit of the American people. No one seems to get it-they are AUTHORIZED by Congress. All have the authority to set their own regulations, hold ‘court’ and enforce those regulations, AKA boot you from their approved lists.

If you follow their RESPECTIVE appraisal guidelines, you shouldn’t have to worry about a second instruction book’s issues, which by the way,  makes their guidelines assignment conditions of USPAP. It’s redundant and quite frankly absurd.

Bye USPAP. No man can properly serve two masters.

Not going to fly as the home inspector will not certify that the home meets MPR/MPS. You need a FHA 203k consultant that is also a licensed home inspector.

A big Amen to that Ben!!

It just shows how warped the system is. Instead of protecting the entities that lend, insure or guarantee the funds, we worry about the costs to the borrower who generally has little skin in the deal.