Things you don't know about appraisers (RE market, 2014, appraisal, sales)
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Tis is an article from MarketWatch citing things you probably don't know about appraisers and appraising. One other thing that the article doesn't mention. The Appraisal Management Companies that assign the appraisal orders now are by in large owned by the banks. So if the deal is not getting done, the bank can and does pressure the AMC.
My opinions below on another piece of trash writing that comes out quite regularly anymore! I see you are an Appraiser and I do honestly feel for Ya'll. Appraisers have gotten the short end of the stick for a long time and all Dodd-Frank did was shorten that stick more!
AMC's were nothing more than a knee jerk reaction to the problems being caused before by not only problem appraisers but others in the industry pressuring the Appraisers to "Make The Number"! AMC's are a MAJOR BANE on the RE industry and have done nothing to solve this issue. All it has done is create another layer in the appraisal process that collects money and quite frequently screws the Appraiser! AMC's were created to give the public something they could see as a "supposed" correction to the issue.
Thoughts on each point numbered here.
1. The Author appears to have a very narrow view of the problem and makes no mention of others who DID play a role in pressuring Appraisers or fudging information to "Make the number" for the loan.
2. One unintended (??) consequence of the Dodd-Frank reforms is that they managed to hose the Appraisal industry to the point that many good Appraisers have left and many who thought they might have wanted to become an Appraiser have chosen not to be. This is starting to cause an Appraiser shortage in areas outside of large cities. Performing appraisals on more rural properties has also become much harder for the Appraisers who typically get paid no more for all the additional time and work needed to provide a proper appraisal. As a consequence Appraisers are being sent from farther areas to make needed appraisal dates.
3. The new problems created by Dodd-Frank have intensified the number of disciplinary actions against Appraisers, even for actions beyond their own control, and excessively in many cases. Even with the creation of the AMC's the Appraiser's responsibility for the appraisal has not decreased but instead increased again even for items beyond their control. AMC's are not held as accountable as they should be and AMC's are attempting to influence appraisal results to make banks happy.
4. One of the unfortunate side effects of Dodd-Frank was that Appraisers are now being forced to enter a realm many are not trained or experienced in and that is extended condition inspection of a home! In the past Appraisers did have to reduce values based on obvious conditions they found while on site but the Appraisers now are being improperly and unfairly being forced to report on many items they do not have the time and/or experience to "Inspect" for.
5. "Get a second opinion" sure sounds like the very same problem that was experienced in the heygays of the RE market. Why should distressed sales nearby be excluded, or any other negative condition, when an appraisal is being performed? This suggestion is nothing more than a recreation of the original problem!
6. This is nothing more than another writer's attempt at justifying how much more valuable an Apprasier is over any other RE Industry participant to help solidify his story. Here he provides more conjecture and outright BS. Each participant in the RE deal is just as important as the other and each has many different requirements they must fulfill to obtain their license or ratings. What the writer is completely ignorant of is that many other RE Industry participants also have college degrees and advanced degrees as well as a great deal of other specialized training. The only hard part about becoming an Appraiser is finding an appraisal company or Appraiser willing to sponsor you as is required under various State license laws.
7. "Our ranks are shrinking" - WELL DUH!! That can be attributed to Dodd-Frank and the creation of the AMC's as well as the fact that a large percentage of Appraisers do obtain their work from AMC's. Who would want to work for an AMC under the conditions most impose on Appraisers?
8. What has this to do with Appraisers other than when they are called to perform an appraisal? How many consumers call an Appraiser prior to performing a major remodel and ask their advise if the remodel will increase their home value?
9. Yet another point where the author hasn't got a clue! Also how many times is an appraisal scheduled with the buyer to ensure the buyer is there during the appraisal? What value would the buyer have with participating in the on site appraisal activity?
10. Again another spewing of ignorant information from a writer who hasn't a clue. Google Earth is a good tool but is not a real time visual of the home and is typically well outdated for use in a anything more than some very small uses in an appraisal. "Big Data" software is only as reliable as the information put into it. Appraisers currently have access to any data they need for a proper appraisal. "Big Data" software will do nothing more than create inaccuracies in the process. As for drones I certainly hope the author is not inferring that a drone can be used to view the inside of a home, a feature or item close to the ground at the base of homes, etc.? Here the authour appears to possibly be referring to a roof inspection with a drone? If so here we go again with Appraisers having to go well beyond what they are generally trained or experienced to do, and all of that for a meager 60% of the average $350 - $500 price tag of the appraisal (item 3)? That is if the Appraiser is even making 60% of the appraisal cost for performing all of the work and taking all of the responsibility.
Dodd-Frank Act and AMC's are two of the main reasons I'm grateful to be a commercial (general certified) appraiser instead of residential. Good grief. I know of one banker (real estate lender) who retired and quit the business early because of the Dodd-Frank Act.
Wife and I are pretty much retired now, just doing one now and then to pay for the next cruise. Worked harder and made less since Dodd-Frank. Figure we will be replaced by AVMs in another 5-10 years.
For example, I have a listing right now that zillow zestimator says dropped $250,000, or 20% in value in the middle of 2013, when everything else the next street over was going up.
These big data anomalies will F things up.
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