Hybrid Appraisals Survey Results
Appraisers, about 1.5 weeks ago, I asked Washington State appraisers to respond to a survey I designed, having to do with HYBRID appraisals.
The tabulated results of that survey are displayed below in the embedded PDF, with ‘quick’ responses below. Of the surveys distributed to nearly 400 appraisers, the response was better than other types of market surveys, meaning the results are statistically acceptable… and could be transferred ‘by inference’ to the appraiser population across the US.
A HYBRID appraisal is a ‘desktop assignment’ where the subject property inspection and photos is done by a non-appraiser, and that info/data is turned over to the appraiser, who completes a comp grid, makes adjustments if needed, and provides a value in a report sent back to the client. Usually at a low $$ fee.
The questions I asked, and the ‘quick’ results are these:
I currently complete Hybrid Appraisals: 4.29%
I have considered doing Hybrid Appraisals, but have not done any yet: 7.14%
I CURRENTLY DO NOT DO, and WILL NOT DO Hybrid Appraisals at any time in the future: 88.57%
Visually, the results look like this:
Based on these results, and if trends are similar across the US, it means the lenders and their Appraisal Management Companies are having to work very hard to find appraisers who want to do HYBRID Appraisals. It may be that they will come to realize that a huge majority of appraisers are just not interested in working for minimal dollars per report. If that’s the case, the use of these kinds of reports will diminish.
Dave Towne on e-AppraisersDirectory.com
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Brandon Perkins
I don’t do hybrids but I don’t think that the issue is with doing them more than the fee. If they were paying well, there would be a waiting list. Why don’t we focus on that rather than bashing the Companies that want them done
Dumbest thing I have ever heard !!!
The issue has always been client that wants the abbreviated, and very low cost “appraisal” also does not want so much disclosure that their users think its unreliable or less reliable than a normal USPAP compliant appraisal would be….
Otherwise why not just use the old style 704 (pre 704Ds) form report; add a sheet of what it is and what it isn’t disclosures and scope limitations?
Concur with John J. and Teri R on this.
I hope those hybrid inspectors have background checks, E&O and are required to indemnify the appraiser for any over looked or missed adverse conditions. Wonder how much they are getting paid ? I wouldn’t touch one of these things for the AMC’s fee of $75.
Realtors are telling me they would NEVER !!!!
I don’t see the author bashing the companies asking for these products. What I see is an industry unwilling to accept them. Maybe it is the fees or maybe it is the product itself. I am part of the 88% that do not complete these. There are several different formats for these and the samples of completed reports I have seen, in my opinion, are questionable at best. General canned statements that basically state nothing is a common theme in these reports. They do have a limited scope of work to them, however, the appraiser still must comply with USPAP. The amount of “behind the form” work does not vary too much from what a traditional URAR requires. Remember the form does not make it USPAP compliant, the appraiser does.
The E&O Liability Insurance companies may want to know if you are completing these types of reports. The risk on these “no site visit” orders is multiplied ten fold from our “normal” risks, which are already enormous on regular Appraisal products. Any faulty, missed or misinterpreted information from the Site Visit could lead to multiple errors which could lead to a MISLEADING report, for which the Appraiser is ultimately responsible.
There is a time and place for productivity and efficiency. Like working under the protection of a major company like stewart or someone. You have quotas there you must meet. Review is fast and furious several a day, using somewhat similar trust other data principals. But when amc’s try to do that and farm out this same work to 1099’s, they’re just hijacking cash which would otherwise be available to appraisers in the form of medical and vacation benefits, a cozy working chair, secure office parking, on site job training for newer and hopeful appraisers, etc, etc. The model does not jive well for independents. The very act of channeling anything through an amc puts the future viability of the appraisal profession at risk.
I’d love to do these, which companies are sending them out?
The URAR is a dinosaur, what a sad waste of time in most cases. Appraisers right now are like Blockbuster video employees complaining about Netflix. The writing is on the wall, adapt or be left behind. The last missing piece of the puzzle is getting the realtors to enter honest information into the MLS, which is probably why CoreLogic is buying up MLS systems across the nation. Once the MLS is standardized to match up with the AVM, they will start pressuring the agents to comply.
Rely on all realty agents adopting a strictly honest policy? They’re salesmen. Keep dreaming.
Just join up with CRN, Sabbie, you should fit right in.
Yeah keep trying to convince the market that they are justified in paying you $50/hr to drive around town with a tape measure and/or sit around doing data entry into a form, when those can easily be outsourced or automated. Sorry but we are really being paid for our judgment, which amounts to comp selection mostly, and also comp adjustment. Well the adjustment part can be pretty well automated, because we’ve already given Fannie Mae years worth of bona fide appraiser adjustments absolutely free of charge via the UAD. Their computers know by now that the typical appraiser will adjust 3% for a water view for a 1200sf home in the 94122 zip code, for example. As for comp selection, that can also be pretty well automated as long as it is a fairly boring market, and more so as the datasets become more reliable. The thing with the Robot Revolution is that the machines don’t have to do a good job, they only have to do better than the average worker. I will tell you from my review work that the average appraiser brings very little “good judgment” to the table but is mostly just a form filler anyways. As soon as the AVM becomes “good enough” it’s going to take over for many loan products where the property is not complex or a probable value range is acceptable.
Cart before horse. Please will you comment similarly on amc pay scale being grossly inflated first? Then I’d like to hear your take on realty points, and origination points and their income. What’s your position, where exactly are you from? I don’t have to convince the market, my clients rely on me because I’m not one of those lackluster appraisers. Your faith in robotics is misplaced and about a hundred years too soon.
I am a certified appraiser with 15 years of experience. My clients consist of small local/regional lenders who manage their own panels, plus the better AMCs that pay well and treat their clients with respect. At the same time, I am not too dense to realize that much of the scope of work for the typical URAR is a big fat waste of my time. I would rather do 4 times the reports at 1/4 of the fee than waste my time performing menial tasks like sitting in traffic and data entry. It’s painful to see other industries grow and evolve while ours remains stuck in the Betamax age. I believe in markets and progress. The essential element of capitalism is creative destruction, where the old and tired is replaced with new and better. I understand that hybrid appraisals would change the supply/demand dynamic in the industry and put some appraisers out of work, but I am confident enough in my ability to adapt. Really the main things holding our profession back are the GSEs with their stifling bureaucracy and the Luddite appraisers who cling to their old inefficiencies in the name of job security.
Quarter of your fee, what’s that $50 ?
Sabbie, if you are referring to the 1004MC form, I’d agree with you…though some form of credible market trend research is still required.
IF you are referring to skipping the field inspection; neighborhood driving and mental observations and calculations appraisers do while viewing real estate; or comp viewing and comparisons, then I disagree.
It’s OK if you feel some MINIMAL standards are old and tired and need replacement. Its even ok if your highly specialized local clients don’t need real appraisals.
Just don’t call whatever product you give them an appraisal if its not USPAP compliant, and don’t put MY taxpayer funds at risk.
In fact, if they are as incompetent or negligent about due diligence as you describe, why not just give them Zillow’s URL?
What about treating the customers with respect and not using purely computer derived estimates? If appraisers have to take a step back, amc persons should also revert to amobeas or some other very very simple form of life, basically not even recognized by full sized human beings. A home is more than a number on paper. Your job is more than menial tasks. If meeting with homeowners does not greatly enrich your understanding of the subject property, you’re doing it wrong. Read a story about that in the jt mag, some appraiser complaining about chatty homeowners and actually having to have a conversation with a homeowner and give a damn about someone other than himself. Ask the homeowners if they’d care to run fast and loose on the largest investment of their lives, to save a few hundred dollars! “Although client definition is important for ethic and process, it’s important to remember that appraisal is about protecting the public trust.” The selfish decisions of selfish individuals is not aligned with the peer standard of promoting the highest ethic first.
If the appraiser doesn’t filter out the errors rather it be from the assessor, agents, MLS, etc. (I just did a 1 Br / 1 Ba property / not as advertised 5 Br / 3 Ba (basement), but instead their was a property waiver (not inspected / measured / analyzed), then its not an individual error, but rather when used by the computers (unchecked), taints all future data. I will agree that upwards of 50% of the time, what Is supposed to be there is there (3 Br / 2 Ba / 2 Garage, etc.), but how does one propose without the appraiser checks and balances which 50% of the data is in line?
Seek the truth
Sabbie, All I could think after reading your 3% post was wow! I urge all to look up the San Francisco neighborhood you cited. Assuming the Great highway to the west is the primary water fronting street I have to ask if the same 3% computer knows that their is a little lake or pond area south of Noriega Street? Will it get the same 3%?
So, your computer believes that (1) the 1,200 sf water facing hose is the highest and best use of the site in this high value real estate area?
A house on Great Highway will have the same view as one on 48th St; or the east-west streets like Judah? A full on 180 degree panoramic view will be the same 3% as a sliver view up the street that is obscured or mainly an over the roof top view? It’s all 3%? No 10% or 20%; or 5%? None are $100,000 to $500,000 unless that is also 3%? The ocean view is worth the same to the flks in the 1200 sf house as the folks in the new or renovated 3,000sf or even 4000 sf improvements?
Sabbie your other posts say you have been certified for 15 year so I take your word for it. Even though your posted perspectives seem more like those of a Zillow programmer than experienced appraiser.
It’s unfortunate you think all you do will driving around is go from point A to point B, because THAT is as much a part of the appraisal process & analysis as inspecting the property is.
FYI a GS 13 real property appraiser now makes between $50 to $65 per hour (plus benefits and ZERO overhead) whether they are driving around or sitting in the office reading their email or taking courses. They are paid for their body of knowledge-not what they did from 9AM to 10AM.
Look it up folks Zip Code 94122
Sabbie, for a really fun (& educational) time, why not completely redact all client and owner specific information (even your own name and license info) and upload one of these hybrids that you ‘love to do’ to appraisersblogs for our collective peer review?
Seriously. Post it under different name just in case it turns out to be grossly non compliant despite your confidence in the process.
What BETTER test than to subject it to peer review?
In fact, I offer the same challenge to ANY software or AMC company currently pushing these products. Lets see a finished product. Only enough specific property identifiers to pin the neighborhood and property size.
Titan Analytics, care to give it a shot? Heck, I’ll even give the address. Try my families old house from 40 years ago. 23145 Ocean Avenue, Torrance CA. (Pssst! hint-there MAY be expansive soil issues associated with its surrounding area).
It’s not that simple. The data is sourced from assessors whom have wildly varied ideas and approaches to this data. Corelogic accelerates data problems with ease of access tools, more and more agents auto import with less data verification. The glory days of hulu and netflix are fading fast as major corps yank the usage rights. Meanwhile, good old cable never stopped being reliable. My mom does hybrids, but she had hip surgery and those products cut her effective income in less than half, same amount of working time though.
The form used is not the Appraisal process, it is the method to report it only.
Unfortunately, because so many of the current Licensed/Certified Appraisers “came of age” during the Boom years when data was plentiful, this is the pervasive misunderstanding of the Appraisal process running through all of these “reforms” to get things done more quickly and cheaply.
The Site Visit is the foundation of the Appraisal process after you identify the Scope of Work, and the Scope of Work can change drastically in many cases AFTER the Site Visit is performed.
This has nothing to do with the form on which we ultimately report the results of the Appraisal process.
Oh man I was just up in the mountains, only half of them know what they’re doing up there. Data clean up galore, mismatching benchmarks to price and value on every corner, grossly mis priced properties. Previous in out appraisal services undervaluing by over 20% or 100k. Well, it’s too bad about all those agents and appraisers not taking time to become real property specialists, material masters, locational wizards, and assessment guru’s. They limit themselves with this imposed notion that they’re just form fillers and their judgement should be limited to such a small array of form based considerations. It’s all part of the illusion to promote automation and discredit the long standing validity of professional valuation services. Fortunately there are many of us left who took on a position that minimum standards are not enough, and we pride ourselves on knowing more, providing more, integrating meaningful consultation into everything we do, and ultimately rising above the competition. It’s easy to do these days, with so many people who don’t have equivalent real property skills treating automation like god.
Please check with your E & O carriers. I have had a conversation with my E&O company and this type of product is not covered by my policy. It was explained that the division of liability is too gray, regardless of how many disclaimers and assumptions. There is a reason only 4% are doing them and I would be willing to place a wager, those that are doing them, have never checked with their E& O carrier.
Excellent information Mike. If E&O wont cover it, then attaching an E&O cover sheet of any kind inferring coverage would then be misleading. I’d hate to be the guy trying to defend one of these before a state board.
I have the technical skill to make it USAP compliant, but the compensation would be nowhere near what i’d require to do so. Therefore I won’t be doing them.