Allterra Group

Last month the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate released the Virginia Residential Real Estate Appraiser Remuneration Survey Results. We sat down with Drew Sanderford who was the primary investigator to discuss the survey itself, the results, and what it means to the appraisal industry.

Buzz: Thank you for joining us to discuss your recent findings. Can you tell our readers a little about your experience in the industry?

Dodd-Frank requires lenders to pay appraisers a Customary & Reasonable (C&R) Fee. The most common thread in appraiser comments on C&R is that it doesn't matter because there is no enforcement. So the natural progression is that one must first determine C&R before one can enforce it. For most states, determining C&R has been a challenge, but we have identified some states that have completed C&R surveys and published their results. Naturally, appraisal fees vary greatly depending on the market and type of appraisal product.

Relationships are important. The bonds we form with a spouse, children, friends, or business associates can be powerful and a strength. When trust is broken, however, deep challenges emerge. Divorce, separation, or permanent dissolution can be the end result when someone’s integrity is on the line. The trust factor between an appraiser and the client is essential if professionalism and continued business is to be amicable.

Appraisal Management Companies (AMCs) have a role to play in the brokerage, assignment, and management of real estate appraisals. That has been the case since the 1980's at least. For some of us, beginning in that era, we likely got our start by doing work for such companies. Having worked for my mentor for a couple of years, AMCs were instrumental in my being able to go out on my own, open my own company, and begin to make a decent living in the profession. That, along with the assistance of a great mentor who encouraged me, gave me a fast start in the business.

I posted the following true (and scary) experience on Facebook a few days ago:

A frequent complaint of appraisers is that they are not home inspectors but familiarity with residential construction is an important tool in the appraiser's arsenal. Knowledge of home construction and related techniques can be accomplished through CE (continuing education) courses and shouldn't place any additional burden on appraisers as they are required to satisfy minimum CE credits each licensing or certification period. There are a number of CE providers who offer courses related to home construction, ranging from a general overview of residential construction to green buildings.

One of the biggest complaints we hear from appraisers is about revision requests. We thought it would be a good idea to host a webinar for appraisers so they can better understand the reasoning behind such request and what can be done to avoid them. We've assembled an appraiser, an AMC representative, and a Lender representative to give us their point of view on this process. Our appraiser is Alan Hummel, SRA of Forsythe Appraisals. Our AMC representative is Kevin Lahr with Digital Risk. And finally, Beth Hoffman of Progress Bank is our Lender representative.

There are very few industries quite like the appraisal industry. An appraisal office is predominantly a small business in terms of size and volume that is heavily regulated. We always think of appraisers as individual islands in the valuation space. What if there was a place an appraiser could go to get that precious bit of information that could change their business. Possibly make them more efficient? Allow them to provide their client with a better product? A place where they could learn some of the insider secrets in the industry? But the source would have to be reliable.

Some appraisers are now being targeted in lawsuits by an entity named "Mutual First, LLC." It has filed about 40 lawsuits within the last year -- 17 within the last two weeks. Mutual First is not a bank, credit union or any kind of regular financial institution. It's an entity aiming to make money by suing appraisers. Based in Texas, it acquires foreclosed loans, mostly seconds, for small fractions of the original principal amounts.