There is an old adage that says knowledge is power. Never have I found another industry this holds more true. The more we, as appraisers, understand about a specific area, neighborhood, or subdivision the more accurate and credible report is able to be produced. Let’s face it, that’s why we are here… To provide accurate estimates of value. I want to encourage all of us to reach out to our fellow colleagues to discuss current industry changes, with questions, with that tough one you worked on last week.
For anyone who has spent any time around the water cooler at any number of the continuing education classes or conventions of late, it seems the hot topic of discussion has been the out of date forms in use. Many of us may have to take a glance down to the corner of the page to realize the last time the forms were changed was in 2005 and before that it was in 1996. We’re coming up on the 10 year mark so we should all be expecting an overhaul of the forms soon, or at least we hope so...
In today's technologically forward era, every day there is less and less human interaction. Something as simple as going to the grocery store, you used to give the cashier money or a credit card. You might have even made small talk while you waited for your change or your credit card to go through and to sign off on the receipt once they handed it to you. You are lucky anymore to see someone say hello or acknowledge the cashier’s existence for a split second, then slide their card through the machine and look down at the machine to follow the prompts.
Most everyone has experienced a slowdown recently. Some of us over the last few months, some longer. Volume in the marketplace being where it is, the basic economic theory of supply and demand comes to mind. In the summer of 2013 we were all very busy. Appraisers had the ability to dictate fees, to a certain extent, and often commanded much higher fees. Now that volume has dropped, AMCs and lenders are leveraging what work there is so that appraisers are willing to take a much lower fee for their services.
When you get a call and you see it’s the state’s real estate investigations department, for most of us I’m sure, it’s the last call you want to see coming in. Markets have made such large swings, rules and regulations have changed so much. It leaves even the best appraiser wondering which report will come back to bite us one day. So many states are understaffed and underfunded, it may take years to work through all of the complaints. With no one at the wheel, sadly there are complaints on the books with good appraiser’s right next to the bad ones.
I remember a time in the world, pre HVCC, when I would drive around to mortgage offices. I would stop in, introduce myself to every loan officer and staff member, hand out my business cards, and ask them to give me a try. I would repeat this pattern every week after that until they decided to give me a try. That was then and this is now...
In today’s, post mortgage apocalypse, market one would assume that the most important part of an appraisal is the accuracy of the estimate of value. By virtue of the data being utilized, its uniformity in how it is presented, the crackdown on form-filling number pushing appraisers, and all the tools we have at our disposal, estimates of value should be more and more accurate every day.
Mortgage volume has slowed down and in-turn appraisal volume has also slowed down. All the major lenders are having huge layoff's as well.
In the past two years over four AMCs have closed their doors and left appraisers unpaid. Some AMCs have done this in a very deceptive manner while others closed due to legitimate cash flow issues. When an AMCs continues to order appraisals knowing that they will not be able to pay for the work completed this should be looked at as a criminal act. My firm in Chicago has experienced this misfortune multiple times. In some instances we were able to get paid by the lender that engaged the AMC and other times it was a loss for the company.
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.