I’m not an Appraiser, You just think I’m one

Ever see the AT&T commercial where the surgeon walks in and he says ” I Just got reinstated, Nervous? Thats ok so am I “. If not see here: https://youtu.be/1YT3erQZoq4

Or the late 1986 commercial with Peter Bergman that states ” I’m not really a doctor but I play one on TV”. If not see here https://youtu.be/ts0XG6qDIco

Well get ready Consumers because the person that is about to visit your home IS NOT an appraiser or just pretends to play one without the proper training.

See, Fannie Mae and the Appraisal Management Companies (AMCs) are ready to send appraiser imposters to conduct appraisal inspections on our homes.  These same AMCs were created to manage appraisal processes for lenders, but without laws, standards or accountability, their self-defined charters have morphed into other functions.

They sell their services as being the only way for a lender to procure the best “Qualified” appraiser for a particular assignment.  In fact, they will shop around until they find the cheapest appraiser.  Hey, we all like cheap, right??  We routinely shop for bargain prices on all kinds of things, but honestly, would you settle for the cheapest mechanic trusting he’ll keep your car safe, hire the cheapest plumber for you home’s systems, or seek out the cheapest lawyer to safeguard your interests??

We want the best car repair service, the one with the best reviews. We research the best qualified plumber to reduce the risk of more costly household issues later. And when we face a lawsuit, or have to sue to retain our rights, we pretty much want the best legal representation available, right? So why would we settle for low/no standards when it comes to our homes, the most valuable single asset most of us will ever own? 

That’s essentially what’s happening when an AMC sends a “non-appraiser” to photograph, measure, sketch, and observe a property, it’s quality, condition, and surroundings instead of using a qualified appraiser. That’s the AMCs’ bifurcated appraisal where the observation function is totally isolated from the valuation.

Don’t we have a right to expect that someone coming into our home, to develop an opinion of its value, is specifically qualified to do so? Aren’t we trusting that person to gather the information necessary to develop an accurate valuation of our real estate? And yet, are we willing to allow an AMC to instead send an appraiser imposter, someone who has little/no training, to perform the observations that will be the foundation for the value opinion of our home? 

As a consumer, ask yourself those questions another way: Am I really okay with someone coming into my home, expressly to determine its value, who has zero appraisal training, zero knowledge of what is significant to observe, zero valuation experience, and not insignificantly, zero liability? That party’s only accountability is to hand over their gathered info to an experienced appraiser who will then do their best, under severely limited circumstances, to come up with the value of your home.

Why not just have a real appraiser do it? The fully qualified, certified, bound to standards of ethics and competency, continually educated appraiser? Good question

Ask yourself that again… Are you ok with someone coming to your home that has 0 training, 0 knowledge as to what to look for and 0 experience only to hand that info over to an appraiser who may or may not be experienced to come up with the value of your home? Why not just have the appraiser who has all these qualifications already do it? Good question right?

Lenders and Fannie Mae along with the their Appraisal management companies have decided that to speed up the process, its better to have unqualified people go out and obtain the information on a property and submit that info to an appraiser to do a valuation. Read that again. “Lenders and Fannie Mae along with the their Appraisal management companies have decided that to speed up the process, its better to have unqualified people go out and obtain the information on a property and submit that info to an appraiser to do a valuation.” This is like me an appraiser coming to your house to tell you how to run your electric lines on your new addition. I have 0 clue but hey I’ve seen 1000’s of homes and should have some ideas right?

Their reasons? 

1) To speed up the process, in theory. The reality is that the AMCs are spending days and weeks shopping for the cheapest and fastest appraisers before an appraisal assignment even makes it to an appraiser’s desk. 

2) To make it cheaper. For a bifurcated appraisal, they’ll pay an unqualified person $25-75 to observe the property, and then have an appraiser do the rest at $50-150, all while charging the consumer far more so that the AMC can pocket the substantial difference. 

3) To take advantage of the available technology. They’re enamored with “Big Data” and are pushing appraisal waivers in lieu of appraisals. They think technology is great with all the appraisal data they’ve compiled over the years. However, look at Zillow and her sister sites where the estimates are based on broad algorithms and not property-specific. 

Frankly, if I had to guess, I’d say 90% of their valuations are over-inflated. Does it make any sense at all to depend on such a product? Is it worth saving a couple hundred dollars when the value of such an important asset—our real estate—is at stake?

Let’s be honest here. AMCs bring nothing valuable to the valuation process. They were put in place after the housing crash to serve as a middle man between the appraiser and the lender. However, they haven’t been regulated, and their main lobbyist group, REVAA (Real Estate Valuation Advocacy Association), seems to think they have some sort of power, now that they are creating products that ONLY benefit AMCs and not consumers. 

Want an example? Coester VMS, an AMC who has gone out of business, owes millions in fees to appraisers for jobs completed. REVAA allowed this company to be a part of their network, to be represented by REVAA, even knowing that Coester VMS had a poor history as a company. REVAA’s panel includes some of the most notorious, low-paying AMC firms, and those that have decided to be more than a middle-man and take advantage of the consumer. 

Don’t believe me? Here is another example.

Clear Capital. An AMC out of California that has a product called a ClearVal. I won’t belabor the description of this product as it has already proven to be not only deceptive but completely inaccurate. There are many articles written about this product and how the company uses out of state appraisers to perform the analysis.  So now adding unqualified inspectors to the mix, with the out of state appraisers performing the analysis….. What could go wrong???   

Think about this…. We will go out there and find the best TV to buy and pay for it. We will go out there and find the best lawnmower and pay for it. Why? Because we want the best so we don’t have to deal with potential issues down the road. But when it comes to valuing our home, does it make any sense at all to allow someone, with literally zero clue about appraisal, to be the individual making the observations that will inform the appraisal? 

Makes no sense to me…especially when that 50″ TV is sitting in the pawn shop or on eBay because I decided to allow Johnny-No-Knowledge to collect the data for my home for $50.00 and then expected an appraiser, who consequently had zero clue about my home and its surroundings, complete a valuation with uninformed secondhand data.

It amazes me how many people complain about the tax assessor increasing taxes based on incorrect info, and then they’ll carefully seek out someone experienced to solve that problem, typically an independent local appraiser with the training and experience to provide accurate market-reflective data. If we can be that outraged by the county assessor, then how can we NOT be outraged by the ill-advised shortcuts, the untrained individuals, and the non-experts doing our home inspections to value our homes?

I will end with this. When we choose to use these cheap and fast products and untrained people, we have no one else to blame when things go south, and they will. It’s exactly the same dilemma as buying a car without the due-diligence research or buying a home and skipping the home inspection. Those choices come with consequences, all of which rest on the shoulders of the consumer and nowhere else. Think About It!!!