I recently had the opportunity to attend 'The Five-Star Conference & Expo.' It was my first time attending this conference, and I found it to be very different from others conferences I have attended in the past. Though this conference concentrated on realtors, asset management, and preservation companies, there were several sessions regarding valuations. One topic to note was in regard to the declining number of appraisers and the increasing number of realtors. If the number of appraisers does not start to increase in the next 4-8 years, lenders may start looking to realtors to provide valuation products. Another big issue raised was by lenders, concerning the extended turn times appraisals take when the market is hot and everyone is busy.
As appraisers we need to look to new valuation products for lenders to utilize. There is a lot of talk about evaluations, hybrid appraisals, desktops, etc. There definitely is a need for these types of products. Every situation does not call for it, but where a traditional 1004 / 2055 is not needed a shorter hybrid or desktop can be utilized. A hybrid, depending on the form and scope, may take anywhere from 1hr to 3hrs. Much shorter than completing a full 1004. This in turn would allow appraisers to produce more valuations in a shorter time frame. These types of products are ideal for HELOC and pre-foreclosure situations. Valuation products like this result in an increase in business for appraisers and provides a more stable and thorough product than a BPO, for instance. The price points for these products may not be as high as a 1004, but we must realize less time will be spent completing these. Approximately sixty percent of an appraisers time spent on a 1004 is data entry. This seems counter-productive. As appraisers, we should be used for our skills in analyzing and reconciling the data, not data entry. Why not design a product that concentrates on this rather than pages and pages of data entry? Consider this, a typical 1004 may result a fee of approximately $300 and take four to five hours to complete with field time and data entry which equates to an hourly rate of $60-$80 for an appraiser. A hybrid product would take approximately two hours to complete and see $60-$80 per hour to the appraiser. This would appear to be more efficient for everyone involved resulting in an increase in business to the appraiser and a leaner report with faster turn times to clients.
As the saying goes, the only thing constant is change. In this next generation of appraising, post recession period, we must become a part of the solution by creating new, leaner products, concentrating on the market data is necessary in this ever changing marketplace. Together we can provide better products, better utilize technology in our daily work, and build a better future for ourselves and the industry as a whole.