GUEST AUTHOR: Dave Towne, Certified Real Estate Appraiser - Towne Appraisals. 16422 Britt Rd., Mount Vernon, WA Phone: 360.708.1196 eMail: [email protected] Web: http://www.TowneAppraisals.com
Appraisers….
Some things I’ve learned this past year:
a- AMC’s lie. And appraisers often let them get away with it. Some AMC’s ‘require’ you to add certain reporting items that they claim are “lender” requirements. In fact, some or most are not. They are additional scope creep items that they alone have inserted into the appraisal completion process that have nothing to do with the lender loan underwriting policies. Items like all kinds of additional photos, certain sale dates for subject and comps that exceed the Fannie/Freddie form requirements, certain words, etc. One AMC based in NW WA demands that previous sale dates for the subject and comps be reported, even if beyond the 3 year and 1 year period that Fannie/Freddie mandate. No other lender or AMC has this ‘lender requirement’ – I checked. I successfully called their bluff on this item, and will refuse to do it on future reports (if they still send me orders! J ).
b- QA Notices generated by an AMC can be challenged by how your reply is written. Sometimes all it takes is just a simple reply to clear the order in the system. In cases like (a), structure a reply to challenge what is being asked of you, and then don’t provide what the AMC wants. Often the QA Notice reply addendum to the report will just sail through their processing system without being reviewed or challenged. But…when you rebut a QA Notice this way, you’d better have an iron clad response as to why you are correct. You, not the AMC, are responsible for report content.
c- AMC’s and some lenders may be braking the law in how they ask you to modify a submitted report. The Dodd-Frank law is the appraisers’ friend. There are specifics in that law (Appraisal Independence Requirements) that give you the ability to challenge and rebut a QA Notice that DIRECTS you to submit additional comps, remove comps, or to change anything affecting the reported value or your conclusions, either in advance, or after report submittal. Google “Dodd-Frank law” and when you find it, save the PDF to your computer. Then go to page 2210 to read the AIR section.
d- Including full size copies of your license and E&O in reports is dangerous. These items can be forged and used by fraudsters and identity thieves. Again, too many appraisers just roll over and do it because it’s the path of least resistance. If appraisers would JUST SAY NO we would not be asked for these non-essential items. Your license info is on the signature page, and no AMC or lender needs to have a copy of your E&O in a report for loan underwriting purposes except as a way to more easily sue you. However, just to play the game, I have a reduced-size image of my license in the report (if enlarged will be fuzzy) but it’s with a statement saying why a full size copy is not included. Even when a QA Notice arrives with this ‘demand’ I tell them to go pound sand … politely of course! See (b).
e- Some AMC’s are scared, and fees appear to be increasing. I track all orders in an Excel spreadsheet and have seen fees creep up this past year. Again, just say ‘NO’ when you are offered an assignment for less than you consider reasonable – and reply with ‘your’ fee for service. AMC’s rake in millions from appraisers – that’s your income they are stealing. So steal some, if not most, of it back. Believe me, you will be much happier working for a fairer income than slaving away for peanuts. Appraisers who continue working for peanuts will ultimately find out it’s not worth the hassle. I talked with an appraiser today who did an assignment for about $10 per hour GROSS. Net income will probably be negative when overhead is factored in. So why do that? Push back when the ‘offered’ fee is too low.
f- Some AMC’s are actually nice to work with and treat appraisers fairly. Cultivate those relationships, and fire the other idiots. Let supply and demand work in your favor.
g- Relative to (e), don’t ‘work overtime’ for FREE. When the 15 pages of assignment conditions arrive with the order and you see items that are additional to what you consider ‘reasonable and typical’ (or Fannie/Freddie requirements), speak up and raise your fee accordingly – or decline the assignment. Some AMC’s ‘require’ a minimum of 4 or more sold comps in reports. See (a). If they require you to provide extra comps, that translates into additional time necessary for report completion. You should be paid appropriately. This happened to me yesterday and I told the AMC that I charge “X” more for their additional requirement. They agreed to the fee increase. Again, use the word ‘overtime’ when you discuss this with your client because that’s a term they understand. They are paid extra when working ‘overtime’ for their employer; why shouldn’t you be compensated in a similar way?
h- The number of Mortgage Brokers and Loan Officers has declined approximately 20% (WA State). This from DOL’s info about renewal license applications for them.
i- Strive to do good quality, well documented, USPAP compliant reports,. People in the industry know what a good report looks like. You will enhance your reputation and ability to receive assignments from current and referral clients. I am amazed that there are some appraisers who believe that a USPAP compliant report can be done in minutes just by checking the form boxes - when most quality appraisers recognize that it’s hours per report to add additional info to get it right. The Fannie/Freddie forms ARE NOT 100% USPAP compliant, and never have been. I have an approved 3 hr CE class (WA & ID states) about this in case you are interested.
j- Shed your bathrobe & bunny slippers and get out of your basement and meet your peers. Meet for lunch, coffee or a toddy once in awhile. We do this successfully in NW WA. Appraisers are really super people when you get to know them. With a peer group you then have a resource to use when you get stuck on an assignment. And you don’t have to reveal your client secrets. Attend live classes when you can … it’s a far better way to be a quality appraiser than always being sequestered in your basement in your bathrobe and bunny slippers.
k- Many appraisers say 2011 is finishing strong. It’s anybody’s guess what 2012 will bring. But some pundits are saying that things should start to improve overall for our industry, although commercial assignments appear to be slower than past activity.
Best wishes everyone for 2012!
Dave Towne, MAA
Certified Residential RE Appraiser
FHA Approved
10+ years experience
Member: Appraisers' Coalition of Washington
Member: National Association of Appraisers
Associate Member: Appraisal Institute
Towne Appraisals & Appraiser Education Service
Mount Vernon, WA
360-708-1196
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