Wake Up Call for Seasoned Professionals
Rookie mistakes by seasoned professionals are inexcusable.
Here’s a disturbing trend that the board is seeing more frequently: Appraisers who do not know how real estate works. What do I mean by that?
There are complaints pouring in where the appraiser doesn’t know how to read contracts, riders, leases, zoning restrictions, blue prints, or listings. I’m not talking about complex documents or Associate Trainees struggling with their first few assignments. I’m referring to seasoned professionals who’ve been in the business for five, ten, or even thirty years.
We have complaints where appraisers can’t tell when they’ve been presented with a bogus lease or contract.
Do not look to this publication to provide guidance on how to spot a phony contract. We are not here to be your back-up course provider in reading blue prints and translating them into a meaningful sketch.
When we’re faced with a complaint that includes a sham contract or an appraisal that still reports long dead zoning descriptions, and the respondent has a license number that pre-dates my own; don’t expect an education sanction.
You should know this stuff by now.
If you’ve been appraising for a few decades and you still can’t tell what a seller concession looks like in a simple real estate contract…prepare for the worst.
The time discover that you’re unfamiliar with how riders work or how to calculate the cantilevers on a split-level is not when you’re facing a board member and a department attorney on a complaint. It’s too late then.
There are broker courses and junior college courses that can help you learn about contracts and leases. There are courses in reading blue prints available on-line and in a classroom. Discover them on your own. We won’t be sending you to any. I promise.
Real estate appraisal is a complex profession that deals with a serious segment of our nation’s economy. There is no learning curve when you’ve been doing this for five years or more.
Rookie mistakes by seasoned professionals are inexcusable.
By Lee Lansford – Illinois Appraiser Newsletters – Volume 4, Issue 5
- Hybrid Assignments, the Consequences - February 7, 2019
- Bankers Concerned About Appraisals - October 18, 2017
- Third Party Blues - July 19, 2017
Here are my thoughts in a nutshell:
Pay them over minimum wage and they will take the time to read the documents like in the old days. It’s that simple folks.
Thanks Mr Lansford, good advice as is come to be expected from the IL groups. / However, there is simply too much positive reward for appraisers who appease lending clients and amc subsidiaries who do not focus on these issues. Such research efforts take additional time, and with lenders being apparently fearless regarding consequences of hiring the lowest bidder quick and cheap appraisers, appraisers who put in the appropriate time and effort receive the short end of the stick with the majority of mortgage lending clients out there. Why the state boards do not re test appraisers and provide more meaningful testing to requalify appraisers regularly regarding knowledge of these issues? Well that’s part of the problem. Sadly, appraisers are not called to task regarding appropriate and necessary knowledge sets before hand, but rather are only reactively called to task regarding occasional complaints now and then. Most instances of such approach go under the radar without much ado at all unless a borrower coincidentally defaults or a complaint is made. I’d like to think I know how these things work, but then again I don’t get many orders through mortgage lending channels because the next appraiser is quick and cheap and consistently underbids me. The lender and amc in select examples may profit from using that appraiser who cuts corners and underbids. Maybe if those other appraisers could not pass a necessary every 5-10 year testing requirement, they would not be creating such a systemic problem in the industry. If you were not trained on such issues and received a license without having to know about such issues, all training ensuing from that appraiser creates a systemic problem in appraisal credibility. Let’s face it, the various independent appraisal testing organizations out there don’t cover a sample contract, or anything close to that, as I recall. There is a separation between proper fully versed appraiser knowledge, and the testing requirements to attain an appraisers license. Experience is clearly not enough, nor is a 1 year training requirement. It’s the difference between proactive and reactive appraisal requirement. I believe the testing requirements should be continued throughout an appraisers career and be more in depth and encompassing from the start. Also I think a smart updated standard would be to have appraisers provide county links to current zoning regulations within the reports. So much of that reporting is copied and copied again, with appraisers, lenders, and Realtors never taking the time to actually read the county zoning pages. Even copied property cards don’t always indicate the correct zoning. One must know the varieties of county zoning to be sure for each individual order. Thanks for the great article Mr Lansford.
This is a great reason why future appraisers need a 4-year college degree. things like how real estate works, how to read and understand contracts, how to read blueprints and what a seller concession is, will all be covered in those 4-years of that basket weaving degree.