BetterAppraisers

I am sick and tired of being sick and tired.

Mortgage clients have little work, so they want miracles from others.

Wholesale lenders are getting their butts kicked, surely it is not their fault!

Average Joe has no idea how the best investment of his lifetime lost value.

I hear you brother. Strange times indeed and everybody is the victim. It's funny, wonder where this lack of accountability originated? I think back to my grandparents, government dole (welfare) was shameful because it meant you couldn't manage and your neighbors didn't think enough of you to help you out. It has changed dramatically. Have you listened to the advertisments for new cars? "Buy a new car from us and finance enough to pay off your credit card debt"??? Next subprime melt down? Some of the vehicle loans are larger than some mortgage loans and couldn't possibly hold their value. It's time for a change and I hope it starts with some personal accountability.

Ok, lets steer this in a good direction... I'm trying to think of a positive experience. Anyone care to share an a positive encounter? I guess I kind of had one... had an order cancelled after I discovered and revealed to the client that the home was accessed by crossing a swinging bridge. This means no vehicle access, only foot traffic and high liability in case of fire or some other type of disaster. This was good news because most of these properties are cash sales or within families (non-arm's length) due to not being able to secure financing. Very, very few comps although this not a completely unique scenario.

Last week I had to turn down an AMC order for 65 acres, pre 76 doublewide, and multiple outbuildings. They wanted a 1004C. I suggested a Cert General to perform a FARM APPRAISAL.

I killed two deals this week and know I am killing one more tomorrow. These are all deals from national brokers. I see loan amounts and estimated values I bet I get an earful tomorrow.

Here is another subject that wears me out and I hope someone will lend a little clarity for me. I took a sales comparison analysis class some years back. The instructor showed us how to create excel spread sheets to isolate differences in properties and determine the effects on value and derive a market adjustment. Always seemed to work and to me it seems reasonable. Yesterday I had lunch with a friend, he's a fellow appraiser that is working on his general license. As a result, he has worked with a number of appraisers in different capacities. I had him critique a report for me. He says that the adjustments that are used in the sales comparaison analysis have to be based SOLELY on those comparables alone. I think he must have taken a litigation class but anyway, he said if an appraiser was sued and questioned about adjustments, everything has to be supported from the contents of that report and workfile. No external information, such as information contained in an excel spreadsheet, can be used. Is this really the way it is? I'm thinking that you are limiting your research opportunities by only dealing with the comparables in the report, however, it is certainly my intention to do things right. Any comments are appreciated, thank you!

I think (again) this is the problem with USPAP and the fact that the appraisal industry has been turned on its ear.......everytime I leave that 7 hr refresher course I feel like i never want to sign another report.

The standard methodology, correctly taught (but rarely utilized in the field) is the multiple regression technique for market extraction of adjustments. I could go on and on, but it is a standard technique that works marvelously where you have a large data sample, like large tract new construction subdivisions or large condo developments. Its a struglle in mature areas of the county like New England, where I work, any area with a mature mix of housing stock or less populated markets.

You should be determining your adjustments this way, and keeping a copy in your workfile. That being said, you dont need to redo this work for every appraisal, do it once for a market, keep it, refer to it in your workfile and update when conditions change.

I hope this helps !!!!

Thanks Coach, that helps a bunch! This is what I've been doing and I pulled out my old text book to be sure that I hadn't missed something relevant. I've not been printing a copy to keep in the work file. Gosh... I've been so discouraged because I have to believe in my work or I can't defend it if the need should arise. Happy Easter everyone, time to quit being so one dimensional and get out there and enjoy our families.

My first and only real rule of appraising is this

"Get the value right"...you know God managed the universe with just 10 commandments, and no advisory opinions, we managed to lay the framework for the United States on a single sheet of paper, neither one having any Advisory Opinions or supplemental standards.........

Virtually every ill that can befall an appraiser stems from this, incomplete workfiles, typos, minor transgressions, etc, lawsuits, unhappy clients....the whole kit and kaboodle all get de-clawwed if you simply abide by rule #1

Would you rather be the appraiser with the thouroughly documented workfile in court defending a value that is off by30% or would you rather be the appraiser with the bulletproof value.....they may catch you on a technicality, so be it, but if you have the value right at the end of the day and someone wants to sue you, if you got the value right, its darn hard to demonstrate damages, unless in the course of your assignment, you managed to do something unethical or unrelated to the value.


Much of what ails us these days is that virtually no one is focusing on appraising as a skill, the entire focus is on litigation, blame, mortgages, fraud, lawsuits, etc. It is a shame no one (but Better Appraisers !!!) talks about how to do this job and do it well.

Very well said and helps get it back into perspective. Coach, again, thank you. Peace of mind goes a very long way.

It has been so tough these last few weeks. I hate to be negative and I wish I could go into detail, but I can't say a whole lot because the posts are subject to being read by those I don't know. I've been doing review work, which I usually enjoy because it usually is only editing errors and human error with the report iself being pretty good. Not these last 2 and 1 broke my heart and will probably end up in the state board office. Then onto the pre-foreclosures. Then onto to foreclosures... I, quite frankly, am shocked. I have 2 I'm working on that were loans originated in late 2006 and early 2007. When we were aware the market was changing. Both of these loans were ARM's with a first and second. The sales prices looks like they were good at the time of the sale, but you can't make people pay their bills and some people should not be borrowing money if they are not responsible. It makes us all look bad. One place, the folks emptied all food into the sink and walked off about 3 weeks ago. You can imagine... The other place is just as bad but the food was left in the fridge so the smell is contained. I think I need a time out so I can regroup. Then all this about the HVCC... gloom, doom. It is like situational ethics run amok, all of the second guessing and positioning. I'm ready for the "All Good News" network.

Well,

In times of prosperity people find ways to pay on their mortgages that were not within old fashioned mortgage guidelines. Now that we are almost in a recession, struggling people are counting their losses as almost nothing by letting 100% mortgaged and higher go.

Not much of a loss to them, if they loose something they could barely afford in the good times. Add that to the people who counted on refinancing ARM's under similar mortgage underwriting terms and we have a mess.

I guess I am saying alot of fraud went unnoticed when the bill could still get paid.

This kind of thing like Deb described is wearing all of us out.

I had an inspection today of a foreclosed multi-unit that almost did not end so well. The place is a disaster, it has a main 2 story house that has been duplexed and a garage apartment that was somehow duplexed as well. The utilities were off and I declined actually entering the basement, I could see that it had standing water and was able to get good enough photos from the steps. Both floors had water stains on the ceilings and so I thought it would be due diligence to inspect the attic since it was accessed by a flight of steps. I hate to admit it but in times like that I sometimes talk out loud to myself and felt a bit like Dorothy trying to get back to Kansas, the attic was dark and I only had my flashlight. I got to the top of the steps and was about ready to take a picture when I heard a sound, a cat charged at me and scared me so badly I almost went backwards down the steps. I had left the front door open so I hope the cat found its way out... geez. I think it's time for a glass of wine. You guys be careful out there!