We Became Complacent
Appraisers are supposed to be messengers of the market, right? If that statement is accurate, the question everyone needs to be asking is why appraisers are not allowed to do their jobs?
Without getting into a lot a finger pointing and blame, I am just going to come right out and say it. Appraisers are to blame. Not because appraisers wanted to influence the market, but we allowed others to take control and we sat by and did nothing. Yes, I said it, appraisers sat by and did nothing; appraisers are to blame.
When UAD was first introduced, it changed the way we report quality and condition of not only the subject, but the comparable sales. The UAD system is seriously flawed and bias. It does not allow an accurate reporting of the market, nor does it reflect how buyers and sellers interact within the market. The only explanation is to make every property fit squarely into the box to quantify an emotional purchase. Emotion cannot be quantified, it just can’t. We raised a fuss when it first came out, but we became complacent and accepted what was being dictated to us.
The purchase of a home is not like purchasing a gallon of milk or gas for your car. It is an emotional experience that cannot be quantified in any logical sense. Yes, common sense and logic play a part, but the primary trigger to make a purchase offer is based on that gut feeling when you walk into the house. Or maybe the house reminds you of your granny and sometimes it is a quirky or cool little thing like a 1950’s built in turntable that resonates. The point is emotion is the controlling factor.
If you ever watch HGTV, and we all know you do, the buyers always compare the properties to make their decision. They weigh the pros and cons, but ultimately their decision is based on emotion… I really loved that back yard; the master closet was exactly what I wanted; that kitchen was to die for, etc. I have yet to see on HGTV or in real life, any buyer choose randomly and say any of those houses will do. The UAD system does not reflect true market comparison between properties relative to the subject. Anyone who thinks otherwise does not understand how the market works. Appraisers are not being allowed to report the market accurately with UAD. Appraisers became complacent and accepted UAD.
Sorry Fannie and Freddie, you were wrong then, still wrong and are going down the wrong path now.
Fast forward to appraisal waivers and bifurcated appraisals; a bad situation just became worse. That same inaccurate data from UAD is now the sole factor in what is being called modernization. Is anyone at Fannie and Freddie intelligent enough to understand basing decisions on a flawed system with flawed data will never have a positive outcome? Remember the old saying two wrongs do not make a right? It is so relevant here.
Once again, appraisers are making a fuss, but some appraisers have begun to accept this modernization and are performing bifurcated appraisals. If we do not stop being complacent, they will become the norm. Then what?
The handwriting is on the wall, the market will crash once again. Yes, somehow, appraisers will be blamed, maybe not because of flawed appraisals, but because appraisers were complacent and allowed it to happen.
If you are reading this, most probably you are an appraiser. If you are betting on a second career as a greeter at Walmart, I hate to break it to you, Walmart has eliminated those positions.
I understand many markets are extremely active and appraisers are busy, but you seriously need to think towards the future because that work will dry up and then it will be too late. Remember what happened in 2008? How many appraisers took on part time or odd jobs to feed their families? How many lost their homes? How many left the profession they love? How many of your friends and neighbors suffered? How many have never recovered?
Some appraisers may think we are all doomed and we cannot change what is happening. I say hogwash! Each and every one of us has the ability to control who we do business with and what assignments we accept. We have control over our fees, what goes in to our reports and most importantly, we have control of our livelihood.
Don’t become complacent Do the right things.
By Advocate. The author is a Certified Residential Appraiser and has chosen to use the pen name Advocate to protect their identity. Many famous people including Benjamin Franklin, Agatha Christie, and Steven King have written under a pen name for various reasons. Just Google pen names used by famous authors, there are only 45,700,000 results to choose from.