The Great Depression of 2006 blog has an interesting Point - Counterpoint discussion between an East Texas Appraiser and an Administrative Reviewer for a large Appraisal Management Company. Here's just a part of the original post and subsequent comment: (click here for the source post)
Appraiser: I live in East Texas and the local appraisal districts do not have a single licensed or certified appraiser on their staff. The appraisal review boards have no licensed/certified appraisers on their board either. However real estate loans are being made based on the valuation assigned by these groups.
Many banks make loans on real estate based on the opinion of a real estate broker or loan officer. Many real estate brokers have never taken an appraisal course in their life. Their opinions are used because they are cheaper and faster than a "real" appraisal. And, of course, everyone knows that real estate agents know everything about real estate.
Then there is the AVM's. Just give the size and zip code of your home and a computer will spill out the value. The computer will not know about the foundation problems or leaky roof.
Administrative Reviewer: The number of incomplete, inconsistent and illogical appraisals I see on a daily basis is astounding.
The industry is littered with economic hacks that perpetuate simplistic concepts that are passed down from their mentors. The coursework to gain an appraisal license is laughable (in most instances). The mentoring process (experience) is a joke as well; as bad habits and rudimentary data analysis is ingrained into the apprentices (in most cases).There is a strong aversion to complex statistical analysis that would make the appraisal process more 'science' than 'art' (appraisers like to talk about the process being a combination of art and science ?). Talk to an appraiser about even basic linear regression and r(squared) and your likely to receive a puzzled look.
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