It’s age-old and, while convoluted on the surface, is simple at its core. It’s a case of the Golden Rule; He who has the gold makes the rules. And the gold-holders (lenders) are attempting to re-shape the rules.

This then begs our industry attempt to maintain relevancy. If you look at public trust in Congress, coming at it as appraiser’s from that angle is likely useless. Actually, I’d sincerely wonder what the level of appraiser trust in the TAF is. Likely similar to that of the public and Congress on a percentage basis.

I interestingly enough had a conversation today with a good friend who owns an “oil change” shop. He’s pondering how the advent (albeit not prevalent yet) of electric vehicles will effect his business. Again, it’s relatively simple: Adapt and you survive if not thrive, or otherwise go the way of the dinosaur.

To be clear, I’ve actually completed a few reports for ValueNet and they beg me weekly to continue which, unquestionably, I won’t. They weren’t remotely crazy about the additional verbiage I added to remain what I deemed to be USPAP compliant. And 1/4 of the fee is, I believe, polite for what you’re actually paid for what they expect and the time it takes to complete it. Further, be aware the client isn’t remotely misled and, if anything, complicit. Certainly when they order these type reports for a purchase. Be further aware the AMC’s won’t cry to anybody as they have no clout, but the lender’s (banking industry) unquestionably does.

Interestingly enough, I’ve been dealing with AMC’s since 2000, before AMC’s were “cool”. Candidly, many of these companies are good and pay me fees that make my peers eyes pop out. The bottom line here is don’t go “Fukc” yourself. Complete only work you’re competent to do and comfortable with within the confines of USPAP and, above all, get compensated for it appropriately.

The only constant is change, but I don’t believe appraiser’s are going to become fossil fuel anytime soon.

There is nothing about the entire bifurcated process that is remotely a good idea. Just because a bunch of clowns got together and started valuenet in an attempt to rob the appraiser and create false misleading appraisals doesn’t mean we all have to comply.

Time to put an end to misleading the client and harming public trust. Just say no to bifurcated appraisals!

Let these amcs go cry to the government saying “we can’t get the appraiser’s to perform fraud for 1/4 the fee they should be paid.

I’m going to politely say all the amcs can go Fukc yourselves!

DW-Really? Name one. Pace Pro? Pick another.

A lender can do whatever third party inspection they want and sign off if they want.

Those are not appraisals. It is when they or people like yourself start pretending garbage products are legitimate that we take umbrage.

There is a huge difference between a skilled appraiser sending his or her own trainee out to inspect a property and then carefully reviewing the report with them. Both signed it and both had appraisal licenses. What used to exist is not remotely like the bifurcated hybrids being pimped today.

Seriously Danny, don’t you ever get tired of spreading misleading or false information about appraising around? BTW-Evals were not appraisals nor were they allowed to be referred to as appraisals.

I’ve commented in here before on how I had to “dip my toe in the water” so to speak and find out what these were all about. I’ve done a few of the “bifurs” for a few different AMC’s. One actually sent me 6 or 7 orders before I got one that I’d willingly sign off on the inspection. Not my cup of tea.

That didn’t stop them from sending them, although I just decline. While it would be extraordinarily rare to ever know the LTV on any loan for which an appraisal is ordered, I can tell you that a significant number of the bifurcated orders I was sent were for purchases. While I obviously don’t know, I suspect most, if not all of these orders weren’t for low LTV purchases. If we let them creep in, they will take over.

that’s is what’s been told to the great unwashed community of appraisers and others . Samples of desktop/bifur report formats i have seen doesn’t tell me that. I suppose its implied. The only answer to this trend is to resist the movement by not participating. to Quote Nancy Reagan “Just Say No!”

So, sending pallet-loads of cash to Iran for state-sponsored terrorism and nuclear enrichment isn’t “doing business with foreign customers”?

Respectfully, there are plenty of political blogs to vent on and I believe we’d be better served here to stick to professionally-related discussions.

Who was the “lawless” President in office during the last “crisis” when everyone got bailed out and no one went to jail? This isn’t to necessarily say the current President wouldn’t do something similar, but let’s give credit where credit is due.

I’ve been doing this long enough to have been through the S&L debacle and, let’s face it. The lending industry has been looking for scapegoats (appraisers) for the past 30+ years and I don’t see it changing anytime soon. Seriously sad, but glaringly true.

His reputation is what it always has been; he is for low quality and cares less about standards or ethics; he is a sell-out and has been one of the early turncoats, profiting on his lesser version of what an appraisal is expected to be and how our work is to be done properly.

Servicelink is probably ok for carpet cleaning, but I wouldn’t work for an AMC if I was starving; problem is, younger appraisers don’t know how important their reputation is in this profession. I couldn’t sleep at night if I compromised the standards and ethics developed after the Great Depression when appraisal organizations created high standards; then S&Ls went belly-up in 1989 and we got licensing; in the next financial crisis which was blamed on appraisers wall street was responsible but again, banks lobbied and lied so they could use our work as a profit center for their loan processing. The next bailout is being engineered now with hybrids and bifurcated “valuations” which don’t comply with current law, but with a lawless president they will deflect the blame as no bank executives or wall street gamblers went to jail.

you just keep supporting the crook in chief who is occupying our white house; President Obama had no controversial speech nor did he conduct business with foreign “customers”, or sell arms to the Saudis who hit our country with the worst terrorist event in our history. every time you join in the fake news created by the pig in charge, you show just how uneducated you are. wake up; he is de-regulating all our cabinet positions and controlling what you think when you repeat the crap you heard on fox news.

Before the gas leak or after Mike. The wind typically blows for three days in a row, during the wind smell is hard to identify. An inspector has to have had experience in the area or have reliable info (from MLS?) to be compliant. Not all government publications are obvious The bel levels of the federal community noise level studies are obvious. Frequently CNEL levels are hidden in building set backs (height restrictions), On the approach to the Riverside city Airport.

However it remains that the RESTRICTED appraiser may have had is civil rights tread upon.

All appraisers have the right to contract any kind of appraisal. The FORM (1004, etc) is contract limited, it seems that this contract is violated by both the agent, the client and the appraiser.

We appraisers must explain the job we are doing, the Function, the Purpose of the report and identify OUR client.

By the Way the community of Hinkley Had recognition and notoriety, and as a result? is UNsalable?

I see this as somewhat of a start, but not necessarily the answer. I think the largest issue here would be the differences between the scope of an appraisal inspection and the scope of a “home inspection”.

I know a few home inspectors personally, have read numerous home inspection reports and have conducted a couple appraisals for attorneys representing home inspectors in litigation. I’ve purchased multiple “fix & flips” beginning in the 1980’s and conducted the majority of the repairs myself. This isn’t to remotely say I’m a qualified building inspector, but rather to say I have reasonable insight as to how they conduct their business (and inspections).

There will always be the argument of not “driving the neighborhood” like appraisers do or, at least, with an eye towards what typical appraisers are observing. That’s a matter for another day.

A home inspector is actually seeking defects whereas an appraiser is only observing the dwelling and reporting readily observed defects and/or hazards. While I’m unfamiliar with home inspection licensure, which I’m sure varies from state to state, I reasonably suspect there are minimally acceptable professional inspection guidelines and likely similar reporting guidelines as well. Having accompanied home inspectors on their inspection, as well as conducting numerous appraisal inspections at the same time a home inspection was being conducted, it’s fairly obvious we’re not looking for the same things, at least to the degree a home inspector would be. Not that this is good or bad; Just fact.

I’ve never met a home inspector who could, in appraisal fashion, determine quality relative to chronological age or effective age relative to current condition. Similar to the majority of Realtors, most can’t spell functional obsolescence, much less define and report it. There are simply a considerably different set of factors an appraiser should be seeking as opposed to a home inspector.

This said, it poses the question whether a home inspectors requirements for an appraisal home inspection could be narrowed and/or scaled to meet that need and/or purpose. I don’t see a home inspector as currently licensed and under those requirements being able to complete a “bifurcated” inspection for the fees currently offered. Heck, most appraisers wouldn’t complete the inspection portion for the fees currently offered. This could, in essence, drive consumer costs up as opposed to supposedly down. Only time would tell, but I’d also suspect this would only increase turn time and, if not, would be virtually identical at best.

I don’t purport to have all, if any of the answers. What I undeniably know is that, and especially if my name is going on a report, if an interior inspection is required, I trust my eyes (and determinations) the most. I’d expect the majority of self-respecting appraisers feel the same.

They did attach a copy of the property inspection report that displayed, quite prominently on page 1, the following:

General Comments: If this inspection is to be used by an appraiser to develop an appraisal or appraisal report, any statements herein expressing the inspector’s opinion should not be incorporated into the appraiser’s work. Instead, the appraiser should make an independent evaluation of the facts reported herein in arriving at any opinions rendered in the appraisal or appraisal report consistent with the requirements of USPAP.

This is an inspector employed by a “subsidiary” inspection company of the AMC and you want me to rely on a 3rd party inspection that effectively says “don’t rely on it” or, at minimum, “don’t sue me, I’m just the inspector”.

Seems there may be a little trouble in paradise.

There was nothing wrong with limited scope, USPAP compliant desktop appraisals. They did not pretend to be anything more than they were. You had the leeway to disclose or assume as necessary and reasonable in order to produce a credible product.

And, like you said, fees were commensurate with the work. I’d do desktops for $250 all day long AND they would be better than the hybrid crap; and USPAP compliant. THAT is the problem. Lenders that want to defraud investors do not want honest disclosures about the products limitations. A decent desktop is more on the order of 3 to 4 hours rather than ten minutes (assuming HBU; zoning, supported market adjustments etc.)

Working from the back forward, ONE as opposed to TWO in my world has to do with multiple AMC’s I’ve in fact done numerous reports of this type for numerous AMC’s within the past 10 years without the “bifurcated” label and, while many included a client-prescribed form (some embedded in common proprietary appraisal software programs), none generated their own values nor restricted appraiser latitude until as of late. These actually paid well relative to time and scope (back when there was effectively no competition) and afforded the appraiser full control over what was contained in the report to include support and commentary, significantly similar to that of the current “canned” desktop report with any additional commentary I deemed necessary.

Somewhere along the line, this went sideways which, I’m quite sure had nothing to do with the banking industry (haha), I was never questioned when I remarked back then about the potential lack of qualifications of the “inspector” within the report, which I suspect is thoroughly unacceptable today. There wasn’t an ‘algorithm” that developed my conclusion of value, but rather I developed adjustments and supported my own conclusion of indicated value “back in the day”. And after having built and calibrated numerous valuation models for mass appraisal over my extensive years in this industry, I don’t want to remotely get started on the unreliability of the “algorithms” and AVM’s (cute buzzword for we have no conception of what we’re doing) that AMC’s request you rely upon today. See Zillow, Trulia, ad nauseum.

Your mention of the addition of a “fourth”, or additional supportive comparable being unallowable is both factual and ludicrous in many instances. Attempting to bracket (which they expect) the features of a somewhat unique (and God forbid rural at the same time) property with only 3 sales in any given 12 month sales period is asking for less than a significantly supportive value. Offering $50 or less to complete such an assignment within 24 hours with no more than 3 sales allowed is virtually guaranteeing, regardless of the appraisers expertise or competence, a significantly unsupported indication of value.

Appreciative of the fact things are significantly slow where lender work is concerned, I’d anticipate you could get 1 “normal” appraisal per week as opposed to needing 24 “bifurcated” reports for the same monthly income. I don’t necessarily concur, but can somewhat understand appraiser’s taking on this type of work in rather desperate times.

What I don’t (and won’t) understand is so-called Professional Appraisers accepting these assignments in any market conditions. I don’t remotely deny I’ve dipped my toe in the pool. Just didn’t like the fact I found it to be a cesspool.

Mark, short answer “Yes”. The Mueller product touts itself as being USPAP compliant. In the generic draft versions I’ve seen I found at least half a dozen areas that are definitively NOT USPAP compliant; or are not compliant as suggested in their online default forms. Your ‘laundry list’ points out some other factors I was unaware of.

The volume issue alone should be cause for ALL appraisers to decline these even if they were or could reasonably be made compliant. WHY ON EARTH would anyone do 6 x $50 reports for less than 75% of the cost of ONE normal appraisal?

The BEST that can be said about any bifurcated hybrid product is their phony pretense of ‘allowing’ an appraiser to add whatever they feel is needed. Try adding a fourth comp for example. Many ‘suggest’ a specific AVM derived value that the appraiser is ‘allowed’ to override…provided they explain why THEIR results vary from that specific value.

We are curious by nature so I understand why an appraiser may try out ONE of these. There is no excuse though for doing two.

Hey Mike,

Are you going to do a separate article on Mueller? They’ve been after me for months. I believe this has to do with the fact they have nominal business and even fewer appraiser’s in Wisconsin. This has become somewhat intriguing to me to sign up with these AMC’s just to see their business model and forms. My sticking point with Mueller is the fact you MUST be a W-2 employee to do appraisal work for them. I haven’t been an “employee” for over 20 years and I’m not sure I like the idea. I did speak with someone in one of the most heavily populated areas of Wisconsin and was told, while Mueller promised significant volume, for them over the past 6 months, 6 a month was average and 10 a month was a windfall.

Of rather interesting note is that many of these “bifurcated” AMC’s have the same “sign-up” requirements as most, to include background checks. I was declined by Clear Capital because of my background check and they refused to provide information, discussion and/or reasoning as to this determination. I’d certainly be the first to say my background check is no nomination for Sainthood. However, in over 30 years of holding multiple professional licenses I’ve never had a complaint relative to my professionalism and/or professional conduct. Maybe I’m not crooked enough for them?

In relation to declinations of assignments, it’s crazy. There’s a “lender laundry list” that says decline the report if it’s not located in “x” area, exceeds “x” indicated value, is a “unique X style”, displays “X or more acreage” etc. Don’t you morons ask these questions prior to placing the report request (rhetorical)? Nevertheless, the AMC’s still view this as a “declined assignment”.

It’s hard to know specifically what you’re dealing with until you’ve been in the “belly of the beast”. I’ve stared it in the eyes and sincerely don’t like it. Not surprisingly, it doesn’t like me back.

Another reader just sent me hybrid samples from Mueller. Deserves an article all alone.

Your post reminds me when I worked for United Title Insurance’s Specific Property Inspection Division as Chief Appraiser. We did 704’s for HELOCS-pre USPAP implementation though USPAP had come out by then.

I was declining about 38% of orders as inappropriate for drive bys. Large (now defunct) Bank complained. I was told flat out not to decline more than 25% under any circumstance, and optimally far less than that. Chairman sold off our division to a pair of snakes with zero morality…folks not bothered by any kind of standards. The discouraging part is that this attitude was typical of title companies operating in Los Angeles area. Some even own big appraisal software companies today.

True James. I’ve done a number of these type “desktop” reports over the years well before the “bifurcated” craze. Never once have I relied solely on the data collected (Property Condition Report) and provided by a 3rd party, typically a local Realtor. In fact, I’ve fully addressed their lack of qualifications in every report I’ve completed. Seem with this “bifurcated” dealio they’re using staff “inspectors” who are likely, if that’s possible, less qualified than a local Realtor. I believe the reason for “inspectors” is that many of these AMC’s are starting to offer interior inspections and they can bring employee’s in under the corporate insurance umbrella. They may end up insured, although that has absolutely nothing to do with qualified.