Appraisers, did you Shoot yourself in the Foot?

Failure to Inspect & Photograph Comps Backfires on Appraisers

When I explain the rules many of the appraisers start complaining: “An MLS photograph depicts the house at the time it sold so it’s more accurate than my photograph would be”…

There’s a lot of yelling and screaming about bifurcated appraisals. Unfortunately, appraisers may have shot themselves in the foot when it comes to this issue. Allow me to provide an analogy to help explain the issue.

I’m not sure if this happens in other areas of the country but in Seattle there is a strange “left leaning” way they do things: State and Federal governments perform numerous traffic studies, to determine the safe speed limit for various types of streets. The city government sets the speed limit on their streets, posts signs, and police patrol the area. Violators are issued traffic tickets. In traffic court people have all sorts of excuses for exceeding the limit: “I didn’t know that was the speed limit;” “I had to use the bathroom;” “I was running late to my next inspection,” etc. If enough people break the requirement or complain, the city doesn’t enforce the safe limit.. heaven forbid no! They simply raise the limit to match how the people are driving. As you might well guess, the results of this process create an environment of higher speeds, more traffic, more accidents, property damage, as well as fatalities. I bring this screwball, “I’ll-give-you-what-you-want” method up because, the same is happening in residential appraising.

The appraiser is required to certify – swear as true – that they performed certain tasks when providing an appraisal using FNMA’s 1004 form – a few of many requirements are:

  1. Use current market based data to determine every adjustment;
  2. Personally inspect and measure the subject;
  3. Accurately describe the condition of the subject and neighborhood;
  4. Personally inspect each of the comparables, at least from the street, and;
  5. Take and use in the appraisal, an original photograph of each comparable.

I have a CE class called Photograph and Inspection Requirements. The class explains the state, federal, USPAP, VA, FHA, and Fannie Mae requirements regarding inspections, measurements, and photographs. When I explain the rules many of the appraisers start complaining:

  • “They don’t pay me enough to inspect each comparable for every appraisal;”
  • “An MLS photograph depicts the house at the time it sold so it’s more accurate than my photograph would be;”
  • “I can write up two appraisals a day if I use MLS photographs and skip driving by the comparables;”
  • “If I use the county’s measurements my house will be similar to my comparables, or what Fannie Mae already has,” .

Appraisers read the rules, take classes, and sign a certificate that accompanies every appraisal but then… SOME ignore the requirements by having others inspect the subject or drive-by the comparables or worse yet, use MLS photographs in their appraisals. In other words, they use the Seattle Method (denial and excuses).

As result of failed appraisals occurring prior to 2012, Fannie Mae created an automated review process capable of reviewing 20,000+ appraisals a day. More than 20 million photographs are uploaded to Fannie Mae’s Collateral Underwriter each year and their system has discovered some problems related to information and photographs.

Microsoft, and several other companies developed programs that can “fingerprint” each photograph: PhotoDNA & toothpic. These programs identify and categorize every photograph appraiser’s use in their reports. They know every time an appraiser reuses a photograph from a past report or uses an MLS photograph… every time. They know who is lying to them about inspecting the comparables and the source of the appraiser’s “original” photographs.

Instead of measuring and creating a sketch of the subject many appraisers download a sketch from the county assessor and submit it as their own, often resulting in incorrect square footage.

Instead of enforcing the rules that we all know and disciplining the offending appraiser for lying about inspections and source of photographs, Fannie Mae is planning on using the Seattle Method, simply change the requirements to match the current actions of SOME appraisers. In other words, this bifurcated process is brought on by the ethically challenged appraisers who signed a certification stating one thing but did something else. (Bang!)

Bifurcated Process

Appraisers lying about their scope of work and ignoring appraisal/lending requirements have given banks and Fannie Mae the excuse they needed to change appraisal requirements.

Since many appraisers failed to inspect the comparables and take ORIGINAL photographs, the bifurcated process will no longer trust appraisers… instead some under paid inspector, or UBER driver, will be hired to do that portion of the process.

  • Instead of inspecting the subject, the lender or Fannie Mae will send the appraiser photographs from past appraisals, or MLS photographs. The desk bound appraiser will be forced to make quality and condition ratings on what others have viewed.
  • Instead of inspecting, walking around, and measuring the house, information might be provided by a past appraiser, the county, or Google Earth. In the lender’s mind, inaccurate information from the county or Google Earth is just as questionable as the information supplied by an appraiser who used the same source.
  • Instead of providing current information about the neighborhood, Fannie Mae and banks will rely upon what the government or past appraisals have indicated, even if it’s years old.
  • When it comes to adjustments there will be no more “it feels like $X per square foot based on my 20 years of experience.” Computers running algorithms check on the accuracy of adjustments. Now you’ll REALLY need facts to back up every adjustment and the support for the adjustment better be in your appraisal or work files.

None of this sounds like it will help appraisers, but it will make for a quicker delivery to the lender/client (lucky them). I’m trying to help appraisers become better, make more money, and survive this upcoming shift. If you understand the failures and what’s coming, you can learn, adapt, over-come, and maybe even thrive. The appraisal World is about to be divided into two or three groups.

Tier 1: Appraisers who provide a full inspection of the subject and comparables. They will provide accurate and up-to-date information about the neighborhood, subject, and comparables including current photographs. They know how to select comparables, even in areas where sales are limited. There are more than 35+ different methods for determining adjustments, Tier 1 appraisers know at least five of these. These appraisers will receive the highest fees for their higher quality work but not every appraiser will be offered these assignments.

Tier 2 or 3: This will be for the “form fillers” out there; appraisers who will provide desk appraisals via a bifurcated appraisal process. These appraisers will sit at their desk and rely upon questionable information provided by an unknown person of questionable training. The appraiser signs the appraisal not the inspector or supplier of the information. When a buyer becomes upset with the appraisal, guess who they are going to sue… the desk bound appraiser of course. Remember the unlicensed inspector whose work you are inserting into your appraisal report has NO RESPONSIBILITY for its accuracy. Desk bound appraisers are still subject to the same laws and lawsuits when their appraisals contain inaccurate information.

There will be many form fillers and they will compete against each other the only way they know how: He who has the lowest fee gets the job. From the information I have, the appraisal fee appears to be headed down to $125 per bifurcated desk appraisal. Try and live on that while paying higher E&O insurance fees which are based on the increasing number of appraisals each appraiser supplies.

I’m Trying to Help Provide A Choice

Appraisers have a choice. They can step up their game, fully inspect the neighborhood, subject, and each of the comparables; take ORIGINAL photographs of each comparable and provide useful current information… or not.  If you want to better understand today’s scope of work requirements I strongly suggest taking the live CE class or the non-CE webinar Photograph and Inspection Requirements.

If you need help in selecting comparables or determining adjustments, I offer classes (Selecting Comparables) that can help improve the quality of your work to Tier 1 status.

The other choice is to continue failing to perform the job correctly (violating the agreed upon Scope of Work) thereby giving banks the excuse they need to change the rules to equal the actions of a few appraisers; this will allow them to eliminate large numbers of appraisers. I recommend taking live classes, learn how to provide valuable services select appropriate comparables, and determine accurate adjustments. The future is in your hands, not mine I’m just trying to keep you safe out there.

I try to help by providing live CE classes (Finding Comparables and Adjustments II) in which I demonstrate how you can survive and step up to Tier 1 appraisals and fees. Your choice…

By Richard Hagar, SRA. Richard is the owner and senior partner of American Home Appraisals he’s also the lead instructor of the Hagar Institute. Richard started as a real estate agent in 1976 and became an appraiser ten years later. He provides appraisal services involving complex legal appraisal issues and assists in the defense of appraisers involved in State disciplinary actions. He provides compliance training to appraisers and lenders including government fraud investigators.

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52 Responses

  1. Avatar CJK says:

    In other words, because the form fillers were lazy the rest of us will suffer again. The death of the appraisal profession was put in motion by the “appraisers” themselves. First, Skippy was crying about having to take comp photos. Now, Skippy is complaining that someone else will be taking the subject photos. Skippy better make sure that the E&O insurance will cover them on these $125 reports. Also, make sure that you have a good work file for when the State comes after you. See you in court Skippy, your boilerplate addendum will not save you.

  2. Avatar Kim DeFilippis says:

    Bull. The bifurcated product comes from a desire for cheaper and faster. Your article insulted the professional work that I and thousands of others do every single day.

    • Greg Wilkinson on Facebook Greg Wilkinson on Facebook says:

      While I understand the feelings and, being a good appraiser, I to get irritated, it is what it is. The profession is killing itself from the inside out. I have talked nonstop about this for years and it just falls on deaf ears. It’s about time appraisers have a “come to Jesus” moment with the sad truths. This article is 100% truth but hard to swallow for some.

    • Avatar Carl says:

      Kim, it may have come from the desire for cheaper and faster but skippies gave them the excuse they needed to change appraisal requirements!

      “Since many appraisers failed to inspect the comparables and take ORIGINAL photographs, the bifurcated process will no longer trust appraisers… instead some under paid inspector, or UBER driver, will be hired to do that portion of the process.”

    • John Giordano on Facebook John Giordano on Facebook says:

      I find it hard to believe all of this is over comp photos.

    • Kim, Richard is at least partially correct in his rationale on why bifurcated-BS-Appraising was justified by FNMA. You are correct on the cheaper and faster part. That was planned long before NON-FNMA vendors started promoting non-USPAP compliant third party desk appraisals by the appraiser based on a third-party property inspection.

      The “What is a ClearVal Appraisal” article I previously wrote in this blog addresses this; as does an even earlier set of articles on First Americans failed PACE PRO products.

      To Richard’s argument and contention, FNMA DOES feel (many) appraisers are liars, cheats, and thieves that cannot be trusted. That’s a view held by internal FNMA reviewers. I’ve spoken with some directly.

      Right or wrong, that perception as insulting as it is to those of us that are Tier 1 appraisers, is the justification that they (FNMA) now argue as supporting AVM based garbage valuation (such as their Value-Verify-trademarked-Garbage). They contend that since the appraiser’s data couldn’t be trusted anyway, then there isn’t that much difference between a full appraisals results and the results of one of their egregiously deficient automated products. No hybrid of any kind can credibly stand up to my full appraisal. Not ever.

      On the other hand, hybrids often can equal lousy appraiser reports where false data and certifications are used.

      I have been saying for years it is not possible for most appraisers to do two full appraisals per day start to finish all by themselves. We regularly hear people claiming to do 3 or even more per day ALL BY THEMSELVES! Consider them to be the Tier 2 or 3 appraisers Richard writes about.

      Anyone can do that many if they send out unlicensed or undisclosed trainees to do inspections; skip seeing comps, and ignore ‘niceties’ like analyzing neighborhood conditions; site data (including HBU), zoning or general plan verification and analysis and actually researching market perceptions and using only supported adjustments. Oh yeah, just to make it even faster they skip Cost and Income Approaches for some spurious boilerplate reasons.

      While we have all had cases of individual photo glitches, most of us don’t use “Dog ate my homework” lame excuses to justify missed photos in every order.

      That’s our ‘competition’. They are often the same ones who take lower fees to get more work. They can afford to take lower fees because THEY aren’t the ones doing any fieldwork!

      Good appraisers like yourself (& I’ve read enough of your posts to believe you are a good appraiser), or me, or Richard needn’t feel insulted by explanations of WHY hybrids-BS (& or the lies told to justify Evals & PIWs) are argued to be valid by FNMA. We should feel insulted by the tier 2, 3 & 4 appraisers that are allowed to call what they do “appraisals” or that they are allowed to keep their licenses. I added Tier 4. Those are appraisers that would knowingly lie, cheat and steal.

      We should refute the bad practices of FNMA on their own lack of merit. Not create sophist arguments for them by refusing to recognize our own professions unacceptable ‘short cuts’.

      Richards reminders of certifications are spot on.

      “The appraiser is required to certify – swear as true – that they performed certain tasks when providing an appraisal using FNMA’s 1004 form – a few of many requirements are:

      Use current market-based data to determine every adjustment;
      Personally inspect and measure the subject;
      Accurately describe the condition of the subject and neighborhood;
      Personally inspect each of the comparables, at least from the street, and;
      Take and use in the appraisal, an original photograph of each comparable”

      Don’t shoot the messenger (Hagar). He tells it how it is. He does it so we can avoid making unnecessary ‘mistakes’. Not always complimentary, but in my experience, always well researched.

      In fact, the very first thing I tell AGA members that have false complaints filed against them is to take his class (or equal AI class) on learning how to bulletproof their workfile BEFORE they send it to the state.

      • Avatar don says:

        We appraisers have oversold ourselves, we over-regulated ourselves, we created our own whores.

        It was a slow process, but we couldn’t have done it without governments help. There have always been sluggards, crooks, and accommodators, and always will be.

        It remains that when the lenders began using public funds to guarantee individual, and corporate loans individual integrity lost.

        The only solution is nearly impossible due to human nature.

        Legislators have to hold lenders responsible, some of that goes on know with swaps of loan packages, or within bond packages. Also making lender-brokers ultimately responsible for their loans would make both credit applications and appraisals MORE honest.

        Should the public dollar support the corporate profit? Can congress solve this kind of problem when they have caused it?


        • Baggins Baggins says:

          You can’t regulate honesty but one could allow the free market to self correct the issues. Some argue to stop the government guarantee which incentivizes poor performance. A multiple step process back to free markets. How much would it take for an independent entity to insure these loans if they were not insured and backed by the government? Would that price be the same regardless of quality or work type? Streamlining the process came with a price. Honk if I’m paying your mortgage, Again. On the brighter side, all homes will now be more likely to appreciate at a rapid pace, as qe funds continue to flood into the housing market. I keep a little oragami boat paper dollar in a cup by my desk so I will be instantly alerted when the dollar no longer floats.

          • Avatar don says:

            Up until the late 1960’s most many loans were sold with RECOURSE, that is the original lender had to take the loan back or substitute the bad for the good in a package. This worked well for many years. However so did our present method especially for the flaky borrower. I recall CalVet a unique state lender who had an annual bond sale, then lend to Cal Vets until the bonds ran out. They bragged a 1% loss or less, how ever they didn’t finance with a T.D. they resold the house on a 20 year contract to the vet, and there was no secondary financing.

            cal vet required State Representatives vote for bond renewal when the funds ran out. That was the lowest priced home financing available, the bonds were tax advantageous for the investors, the California Veterans were well served, and the legislators had served their obligations well.

            • CalVet were land contracts of sale. Money was rarely available, and the ceiling loan amount rarely worked in urban counties like LA or Orange. As an agent I found ONE property that fell into their guideines in three years. One. (Los Angeles region-Torrance, Hawthorne, Gardena, Inglewood, Wilmington, Lomita).

              Vets were only ‘well served’ if they wanted to live where no one else did.

              • Avatar don says:

                And California is still making CalVet loans, never in the exclusive neighborhoods. I heard recently they are making a 20 year 2.7% loan no points? Land contract!

    • Kimberly Pugh DeFilippis on Facebook Kimberly Pugh DeFilippis on Facebook says:

      This is a self-policing profession. And like any licensed profession, it is up to the licensing agencies to address these problems. The GSEs should be pointing their fingers at the licensing agencies, not changing professional standards. Its a bunch of bullshit. There would be NO skippies if licensing agencies were doing what they’re supposed to be doing.

  3. Baggins Baggins says:

    Great article. If an appraiser did not inspect it, had outsourced the typing services or used all copied language, did not select comps themselves, and used someone else’s program to determine adjustments, has there actually been an appraisal? We need EO providers to charge premiums to some and start asking a much longer set of more detailed qualification questions, including basing premiums on the total volume of reports an appraiser completes yearly.

    One of the reasons the CU system may never be voluntarily released to open or controlled independent review, is that the frequency of repeated copied statements within reports would have remarkable volume which quite possibly would be far greater than uniquely written reports. Those discount guys are better protected when only a singular report is being reviewed. I hope speedy appraisers understand their precious typing services are copying a the same thing into everyone’s report in a system of ongoing rotational plagiarization. One day it’s going to all come out and they’ll be left holding the bag.

    Operational rule #1 for tier 1 appraisers; refuse service to companies whom send all the beneficial easy work to tier 2 & 3 guys, to only use tier 1 only for pick up left over otherwise difficult to assign work. They can kick that back to the discounters and accept the consequences of their own profit model. Rotational distribution goes a very long way towards correcting the shortcomings which come along with allowing cherry pickers to game the system and only take what they want at extreme discounts or extreme speed. This correction could help this industry, simply forcing assignment companies to assign rotationally without bias, with consistent fees. Also this would provide relief for older and disabled appraisers, both of which experience extreme discrimination in mortgage lending. If you’re good enough to be on an approved panel, you should expect a fair and evenly balanced portion of assignments at a standard pre defined fee which is applicable to everyone. Fee surveys were originally intended to be only a survey, to identify the most common fee the majority would accept. You know, think I will take one of those orep online ce’s you wrote, why not. Will order this week. Thanks again.

    • Avatar don says:

      I remember several years ago that the V.A. in L.A. who had long used rotational distribution among the panel appraisers WAS caught; by an assigner accepting money for favoring a few appraisers.

      Ain’t nothing perfect in this world. I thought it questionable for a couple of appraisers to SO limit their areas as to seemingly get only the good stuff. Maybe the older non physical can hire help, would that be fair! or would it dilute the product.

      Keep trying we’ll never get it perfect we can get it right!

    • Avatar Bill Johnson says:

      And just think Baggins, there are those among us who can complete 4 to 8 appraisals a day working 4 days a week (32 hours), armed only with a chauffeur, a marble, a toothpick, and a Rosettastone subscription.

      Seek the truth.

      • Baggins Baggins says:

        Hopeful measurements regarding performance factors against work quality have so many different metrics on local, national, work type, client by client, and situational basis. Accountability is difficult to nail down, complicated with speculations as to how many take various shortcuts. Ensuing arguments as to what is valid activity and what is not. In this infinite loop without apparent result based consequences on the work quality side, many have chosen to focus exclusively on performance. Sometimes that bubble pops though. In the larger business world, many industries reward additional effort formed around maximum possible compliance with existing regulatory guidelines. Appraisers can fit in anywhere they feel comfortable, their participation and acceptance of possible liability risk against income is all voluntary.

    • Bags, I released copies of the original FNMA CU patent applications years ago after I first analyzed & reported on them.

  4. Avatar CJK says:

    Summarizing, we have seen numerous claims where having the right photos in the appraiser’s file enabled us to either prevent a lawsuit or resolve it on an expedited basis. We have also seen far too many claims where the lack of photos has caused us to do significant discovery to corroborate the appraiser’s position. Often times, these claims are settled because we cannot support the appraiser’s version of the facts.

    A photo is truly worth a thousand words, and with today’s technology it only takes a few minutes to take photos throughout the property. Photographs can save countless hours and dollars if you later find yourself in the position of having to defend an errors and omissions claim. – Copyright 2004. LIA Administrators and Insurance Services. All rights reserved.

    Skippy, are you letting someone else take the photos? It will not matter what FNMA or USPAP says, when others are going after your E&O insurance. Watch out for JPMorgan Chase, they love your insurance company, they also like to put appraisers on the black list that they have. When your name is on the list it is all over for you.

  5. Greg Wilkinson on Facebook Greg Wilkinson on Facebook says:

    This is an excellent article and what I have been trying to get into my peers heads for year. We have been killing the profession from the inside out for year as we dumb down what we do and what value we offer. There are far too many doing exactly what is talked about in this article and I have hundreds of appraisals in my possession from hundreds of appraisers in my market that do just this.

  6. Avatar Bill Johnson says:

    Here’s a comment from me yesterday.

    “The taking of the picture Mr X is to offer your immediate client support for what you did, and perhaps more importantly provide documentation for others that view your work down the line (Federal Gov. / via UAD portal / state review boards, etc.). As an example, I used a comp the other day where I was on the fence concerning its location designation (satellite view / etc.), however upon driving the property the newly paved old street now had double yellow lines, and speed bumps (obviously adverse). The picture I took of the property in part focused on featuring the adverse features (showed double lines / speed bumps) so that all parties involved had a visual understanding of why I did what I did (location rating).

    Interesting enough Mr. X, neither the listing agent nor the 9 other times the property was used as a comp (via A la mode) by a panel of my peers, was the property identified as warranting an adverse location designation, nor did any of the appraisers photos show the adverse characteristics.

    This is a great example of why we drive the comps, and why we use our photos instead of using what the agent wants to show, or perhaps what even other appraisers don’t want to explain.”

    The problem with the above scenario is that in my opinion the prior 9 other appraisers were wrong with their location designation, however with technology (UAD portal data) the powers that be will flag me for being different from a panel of my peers.

    My point is, appraisers often seem to get rewarded (perhaps in the short term) when they follow close behind prior appraisers, versus independently seeking the truth. Perhaps not enough appraisers are hearing “None of our other appraisers ……”

    Seek the truth.

  7. Morning all,

    This isn’t JUST about SOME appraisers using MLS photographs or not measuring the subject, these are only trigger points. SOME lenders want faster/cheaper and/or elimination of appraisers — they are using the photographs, etc. as excuses to lower the standards. Example: This morning I have 6 appraisals on my desk ready for review and all 6 have MLS photographs instead of the appraiser’s ORIGINAL photographs; as a result it appears that the appraisers missed knowing about the view amenity that some of the comparables have.

    When I provide education….. I’m trying to help appraisers improve the quality of their work…. and hopefully their income.

    • Avatar CJK says:

      This is my point, how does Skippy know if an adjustment is warranted for view or location? It is not really about the photo, it’s about other factors that may need an adjustment, but Skippy would not know this. Some people are just so lazy. The 1004P still has the section for view and location.

  8. Avatar CJK says:

    Just because Skippy does not do something should not dictate what we do. In my market it is very easy to obtain the permits for the well and septic, as well as the license and certificate of good standing for the HOA’s. I always include these in my reports. When I ask my “peers” if they do the same they all say no. It really takes no time at all to do this. I also take a photo of the septic, propane tank and well. I was trained by a good appraiser 36 years ago, and he is still very proud of me. I do not really care what my “peers” do, as for Skippy, see you in court.

  9. Cheryl Ruth Accardi on Facebook Cheryl Ruth Accardi on Facebook says:

    I honestly believe that the appraisers ruining our profession are not on these appraisal related Facebook pages nor do they read any of the publications we do. They don’t care. We can complain all we want on here! THEY ARE NOT HEARING US!

    • They hear. Being thick headed though many won’t change until they or someone they know gets caught and fined. The ONE thing AGA cannot and will not try to help defend is an appraiser that was knowingly dishonest. We have a good track record and won’t risk our own credibility by trying to justify dishonest behavior.

  10. Avatar Brian says:

    While I agree with the sentiment of the article I have never seen this FNMA requirement:

    Take and use in the appraisal, an original photograph of each comparable

  11. Avatar CJK says:

    How does Skippy make a location or view adjustment if you do not want to drive the comps and take a photo? The photo simply proves that you made an attempt to look at the comps. I just looked at a property that was directly across the street from a large concrete drainage ditch (2 of my six sales also had this same feature). Funny thing, no reference was made to this in the MLS for the subject or the comps. They also conveniently did not include any photos showing this condition. I requested a copy of the flood cert from the lender, included 3 photos from different angles and included 2 sales with the same condition. How do the desk top form fillers do it?

  12. The photo requirement is part of FNMA’s “Unacceptable Appraisal Practices” it’s a document they issued years ago which is why I made it part of the webinar and CE classes on the topic. The class also includes FHA and VA requirements as well as several of the bank’s “Scope of Work” that’s included in their engagement letters.

    The class also includes copies of the disciplinary actions by numerous states. One state issued a $64,000 fine for using MLS photographs and NOT disclosing their use or source

  13. Avatar CJK says:

    From one of my national lenders:

    ALL photos to be current (comparable sales, listings, and comparable rentals.) Appraisers can utilize clear electronic images of comparable sales including original images from photographs, copies of photographs from a multiple listing service (MLS), or copies from the appraiser’s files. FHA and USDA reported are excluded. Fannie Mae and Freddie Mac’s scope of work remains in effect; at a minimum, the appraiser must inspect each of the comparable sales from at least the street. Provide statements of attestation of visual inspection for each MLS photos utilized on the photo page. If there is no access to the dwelling (cannot be seen from the street), include a photo of the mail box or driveway in addition to the MLS photo.

    From another client:

    “Original photos of comparables used in the report are required. If original photos are unavailable and a MLS photo is provided, a statement confirming the comparable was viewed by the appraiser is required.”

    Does Skippy see what they are saying? Get off of your backside and make an attempt to VIEW THE COMPARABLE. How many form fillers just use the MLS photos without even looking at the comparable. Many “appraisers” have been deceiving the clients for years. That might be one reason why they now just want us to sit at our desk. Because it appears that is what some “appraisers” have been doing all along.

  14. Part of the charges by the State of California:
    “Respondent failed to inspect the exterior of the comparable sales, which was contrary to the stated Scope of Work, and Respondent did not provide ORIGINAL PICTURES [emphasis added], which was an assignment condition, in violation of the Scope of Work Rule;”

    The statement of charges go on to list the USPAP Standards that were violated. The appraiser was given a $10,000 fine by the state of California on 3/11/2016

    Image from the charges are shown in the following post

  15. From the Statement of Charges


  16. Avatar Michael Curtis, SRA, AI-RRS says:

    As a former associate of Richard Hagar, I can attest that he is absolutely spot on. His class Photograph and Inspection Requirements is very informative and should be taken by all; especially the ones who complain that taking comp photos is a waste of their precious time. Even after being associated with Richard for many years, I learned a lot about photographs and appraisal fraud. Our profession is constantly changing. If we want to be considered as professionals, it is our obligation to keep current.

  17. Avatar Jack Of All Trades says:

    Hey appraiser blogs fix your like button, I think there’s a big glitch.

  18. Avatar CJK says:

    I see the down votes from Skippy, but the form fillers have not told us how to determine if a view or location adjustment is required, considering they do not even want to drive the comps (heaven forbid if they need to press a button on the camera). Come on Skippy, you can do it. How do you make that determination is it from a 5 year old google map? Or, are you so good that you know what every property in your market has, so you do not need to look at them again? Skippy what would you do with this if you are just sitting at your desk doing 4-6 reports a day?

  19. Avatar CJK says:


    What would you do with this if you do not want to drive the comp and take a photo. Is it important to let the client know what is next to the property? If you did not have a photo like this in your report and a comment, I would report you to the State.

  20. Avatar Ralph says:

    Has anyone ever put their comps on the grid and made no adjustments? I bet not because your were conditioned to adjust for everything even when you had no clue what you were doing. For an exercise try putting your comps on the grid, and reconciling to your best data and explain in your reconciliation, and lose all that boiler plate BS how your not a home inspector and can’t see under ground oil tanks etc.

  21. Avatar CJK says:


    If this was across the street from one of the comps, would you still use it? How would you even know if it was not important for you to even drive the comps and take a photo? Are you still using outdated google maps?

  22. The problem to me seems to be that appraisers have not done a good job. And they have not done so because there is always someone willing to attempt to automate the process by any means possible so they can make the ‘big bucks’- Even in cookie cutter ville, I don’t think churning out a report in 4 hours can possibly do a very good job of vetting comps and researching zoning, etc. let alone running the sensitivity analysis or paired sales necessary. And don’t even think about doing the cost approach or income approach that might consume another whole 45 minutes. The lenders are not dumb. If getting a report that is done in 4 hours, why am I paying $100-150 an hour for it? I can get someone to slop out a report for $20 an hour…AND actually take the time to look at the property and the comps even if a separate function from someone else.

  23. Gwendolyn Lanford Gwendolyn Lanford says:

    If This Were true they would just need someone to go out and take the comp pictures not do the subject inspection and measuring. BS

  24. Avatar Bill Johnson says:

    Just did an inspection/assignment today where the borrower provided the prior purchase appraisal from a few months earlier. Very interesting reading considering his “competency is based on doing 20,000 appraisals over the past 10 years”, but yet no adverse location rating, and he didn’t subtract the 2nd story stairs/open to below (GLA off by 10%).

    No problem, market value is $20,000 lower as compared to 2 months ago, and say goodbye to that 20% LTV ratio. Let the fireworks begin.

    Seek the truth, or apparently complete 2,000 assignments a year (250 working days a year or 8 per day).

    • It makes one wonder if people that make those claims ever check their own math. OR they are taking credit for a LOT of other appraiser’s work. My first thought is how many unlicensed appraisers are they sending out that they will sign on as having inspected?

      I used to rewrite, edit or suggest edits to 6 to 10 a day; and long ago as many as 30 a day. That is NOT remotely the same as ‘doing’ that many a day.

  25. Avatar Don Orttenburger says:

    My question is regarding rentals. I have reviewed the entire 1004, 1007 & 1025 forms and typical addendums and only find reference to “comparable sales”, no mention of comparable rentals. If taking photos of all comparables including rentals is required than the statement would be “comparables” without the limiting statement of “sales”. Is there any reference to drive-by rental photos in HUD, Fannie or Freedie. This comes up because, being the anal personality I am, I told my client that ordered the rental comps after the appraisal was delivered that I needed to do a drive-by inspection but now have my doubts.

    • Avatar don says:

      Hope you charged enough fee. Look up FRV fair rental value in the federal definition, describe rents and concessions, ( is their any discount for payment before the first, does the contract allow the landlord to sue & lien the tenant for the contract amount or the discounted amount, etcetera? Who pays what? Lots of stuff is more important than the polaroid, also an anal don


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Appraisers, did you Shoot yourself in the Foot?

by Guest Author time to read: 7 min