Let Appraisers Train Their Own Inspectors
If we are to make a third party inspector liable for the data they provide…
FNMA’s recent newsletter states that a third party inspector should be hired to deliver photos, sketches, etc about a property to them. After their review, if they believe an appraisal is needed then they can forward that information to the appraiser and a desktop can be performed with ease and accuracy. In their words, this is no different than an appraiser relying upon other forms of data in the report such as public records, MLS, etc.
I really do appreciate the perspective of some who want the idea of detaching appraisers from inspection data to be successful. But it is my belief that a few things in our world need more precision than others, especially when we are dealing with the largest investment of most families. I used to be an executive in the banking industry, and I get concerned when too many moving parts are tossed into any profession that impacts so many people, which happens in finance too often.
A really credible appraisal begins with really good data. If there is to be any delegation of roles in that process, then I like the idea of appraisers training inspectors in their firm to do their inspections. That makes sense to me, because a massive level of trust, liability, and responsibility exists between appraisers and their coworkers. Simply stated – I know my staff and they know my level of comfort pertaining to the data I require. I sign my reports – I’m ultimately liable for my opinions – My staff would be liable to me if something wasn’t done correctly.
That is where this conversation should go. Appraisers should be able to use their own inspectors with the understanding that, just as it should be, appraisers are liable for the reports they sign. Inspection information is NOT the same as public records, because there is somebody liable for inaccurate public records. Inspection information is NOT the same as the MLS because Realtors are contractually liable for MLS inaccuracies. If we are to make a third party inspector liable for the data they provide, then that industry will require some kind of certification, qualifications, and insurance which would then ultimately be priced much higher than we are seeing in one man shops today. If the goal is to be quick and save money, that would cease after the first set of new property inspector regulations are approved by the new agencies required to keep everybody between the ditches. I believe that would defeat many of the reasons we’ve heard which requires this change in the first place.
Why not look a little deeper into this – Why not just hire appraisers to submit the inspection information first? Then allow the FNMA’s of the world to decide if they want the appraiser to complete an appraisal or not as of that inspection date. Let the appraiser hire and train their own personnel to do the inspections, if that is necessary to keep up. There would need to be some language alterations in certifications and the such. But the appraisal firms already have that liability, insurance, and license without creating a huge chaotic system of additional steps in this process. If not, the idea of detaching everything will ultimately lead to even more regulatory steps to make sure everybody does the right things.
What a novel idea!!
By Glen Dale Floyd, Jr., ASA, IFA, MNAA. Glen is the owner and chief certified residential appraiser at Floyd Appraisal Works located in Hohenwald, Tennessee, which provides professional valuation services for several rural counties of central Tennessee. Glen has been directly involved in the Tennessee appraisal profession since 1986, while also working in the financial sector of the state. Glen is the former vice president, credit administrator, loan coordinator, and senior appraiser for Fidelity Federal in Nashville, Tennessee, Union Planters Bank of South-Central Tennessee, and Sentinel Services Corp. He has designations with the American Society of Appraisers, National Association of Independent Fee Appraisers, and the National Association of Appraisers and was one of the first in Tennessee to obtain his appraiser credentials after licensing laws came into effect in 1991. Glen is a graduate of the Southeastern Banking Schools at Vanderbilt University, and has hundreds of credit hours pertaining to the valuation profession. He is married to Cindy, and they have five children (Benjamin, Rachel, Mallory, Ashley, & Dawson) and two grandchildren (Henry & Jack Floyd).