Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Think about it, how would you go about changing the current state of the appraisal business to make it better? Streamline reports? That is code for shortening the form, or shortening narratives to the “10-page report” format and it’s just another way to say that data we now believe to be necessary will no longer be included. Do users of appraisal reports really want less information reported? It sounds like a giant step backward toward the 1-page report. It’s my opinion that consumers don’t really care about the appraisal process, they just want a market value opinion and oh yes I have to be able to defend it in court or in front of the regulatory board if the opinion is challenged.
It appears that some appraisers have now decided in their wisdom that the combination of education and experience that were used successfully over the past years to form an entry barrier to those seeking an appraisal credential should now be changed. In an effort to wrench control from state governments who don't correctly "evaluate the quality of appraisal experience" it is now being suggested that more education should be required for commercial licensing but less for residential licensing. Of course, that makes perfect sense doesn't it?
The American Society of Appraisers (ASA) recently "reverted" my membership after nearly 25 years from a designated ASA member to a an Accredited Member (AM). Why? It's money of course. I have taken many courses but if ASA does not receive their blood money for "reaccreditation" then you as a member are now automatically reverted. ASA doesn't even want to deal with their members, they have set it all up through a third-party vendor. I guess it's to hell with the past members, they simply don't care. The organization (ASA) has no provisions or breaks for senior members, I guess if you are lucky enough to live to 75 they give you some break just before you die. But for those of us in our mid to late 60's its just assumed that we are as active as if we were 25. No break for us, pay the fees or get out, that's the message.
I just finished reading the latest Realtor article on owner value expectations and how they remain in many places higher than appraised values. The article talks about how appraised values were 1.35% lower overall than homeowner expectations in August of 2017. The numbers that are reported in the study are generally small, so you have to think to yourself, wow expectations are not being met in a relatively small number of sales due to what is perceived as appraisal problems. Maybe they should be focused on something else, like bank lending policies or economic development or something that they can actually change. As an appraiser I rely on the sales approach to value single-family residential homes. It's the methodology that appraisers have relied upon for many years. Is it perfect? No. Does it rely in any way on homeowner expectations? No. I don't take assignments, and I never will, worrying about homeowner expectations.
The American Society of Appraisers (ASA) announce that it has merged with the National Association of Independent Fee Appraisers (NAIFA) and that it’s near 4,900-member appraiser base will increase by about 700 to about 5,600. The organization will thus have about 1,400 real property members which is about 25% of its total membership. How does that compare with the Appraisal Institute (AI)? They currently have about 15,000 members, per a recent article, so ASA even with its additional real property members will have less than 10% of the AI’s. The Appraisal Institute lost 3,000 members in 2017 which is more than twice the number the number of ASA real property appraisers. Jonathan Miller has completed an article that details the recent decline in AI membership, the link is located below.
The government’s proposal to not require appraisals on loans below $ 400,000 sounds familiar to me, much like the Fannie Mae / Freddie Mac push to expand home ownership in 2005 to the not creditworthy masses. It sounds so ridiculous that you know it has to be about politics and profits and not about the safety of our banking system. I guess it’s also the latest run at solving the appraiser shortage “problem.” Not enough appraisers? It must be time to undermine the collateral that supports the banking system. Makes sense to me. Not. You don’t have to wonder for long about who benefits from a relaxation of the lending rules. It’s big banks, looking for another way to pull themselves out of their latest morass that only they could have created for themselves after years of bludgeoning their customers with outrageous fees.
Well it used to be the case that a reliable appraisal was considered to be “essential to loan underwriting and to the public’s perception of confidence in the nation’s real estate, finance, and mortgage insurance and investment industries.” (U.S. Representative Douglas Barnard (D-GA), but the comment was made after the S & L Loan Crisis) Of course comments like those are always made after there is a financial industry failure. The entire purpose of real property appraiser licensing was to protect the public from what the government perceived as a lack of financial institution oversight. Now we have the S & L industry basically excluding itself from having to appraisal most of its commercial loans. You have to ask yourself, “How does that happen?”