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Everyday Problems of an Appraiser

By
Real Estate Appraiser with North Country Appraisal Services

With all the posts and conversation about poor appraisers, I just wanted to take a moment to provide some insight to exactly what appraisers deal with from AMCs and underwriters.  Remember, neither the AMC nor the underwriter have any local knowledge and limited, if any, appraisal training.

I recently I completed a very easy assignment within Traverse City when compared to most in Northern Michigan.  My comps were within blocks, adjustments within range, and all items bracketted.  I received the following from the Quality Control of the AMC:

Appraiser to provide at least two comparables that have closed within 90 days. If comparables are not available, appraiser to explain in detail on an addendum.

This was carefully and fully detailed in the report; but obviously the QC didn't bother to read the entire report.  My response was:

Do reviewers NOT READ comments on report. Northern Michigan has an annual dormant marketing season during the winter months which actually spans +/- 7 months with the active season being May - September. I find hard to believe that a reasonably educated person could read the following from the appraisal report "Comps 2 & 3 are dated beyond 6 months but used due to limited sales volume with the most recent 5 months being part of the annual winter dormant marketing season with little sales volume." and still make a request for two comparable sales within the past 90 days, which being the latter part of February, easily falls within this dormant period. Further, the following statement "Marketing conditions in Northern Michigan are largely connected to the seasons. The market essentially hibernates during the late fall, winter, and early spring months with properties generally not selling, but remaining dormant and renewing in the spring at previous value levels." is included in the Neighborhood Market Conditions Comment. We really need to apply some gray matter to the Quality Control process.

I deleted the original report from their website and reloaded the same report which their computer recognizing it as a "revised report due to QC issues" and was then accepted by QC and filed as complete.  Mind you, nothing was changed on the report.

Just another day in the life of a locally competent appraiser.

Dawn Pfaff
NYStateMLS - East Greenbush, NY
NY State MLS President

I am have the same problem on every report.  I think they are reading the report, but their guidelines still say 2 or 3 comps in 90 days, so in a CYA move they all ask for the comments again, even if they existed the first time. 

Feb 24, 2010 01:07 PM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser

I get that a lot, too (and same thing here, but to a lesser extent... sales in the winter are nearly non-existent from October through January).  There have been times where they ask for active listings in leiu of an honest to goodness comp (this is in addition to the active listings that I place in my report, not as comps, but to show the actions of sellers in the current market). 

Nearly every day I wonder why I don't charge $5 additional for every unnecessary, already explained comment a client (nearly always an AMC) wants me to add to the report.  That just might make up for AMC fee cuts ;-)

Feb 25, 2010 02:32 AM
Richard Glesser
North Country Appraisal Services - Gaylord, MI

The further insult was that yesterday afternoon, the AMC called for the same request from the underwriter.  I took the time to explain and they passed it on and it was done.  But don't you wonder why the AMC is even adding the unnecessary step of QC - just hire good appraisers!

Feb 25, 2010 02:42 AM
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

This is an issue that appraisers will have to deal with for some time I think.  The AMCs are not set up for doing the detailed reviews they seem to be charging for. I recently read that many are just doing an automated review using software & may not actually have a person even looking at the report.  Some of these software programs miss the comments sections & create this problem.  The other issue of course is that most of these AMCs are national & do not have any local knowledge of different markets.  Since the HVCC does not "require" a review by the 3rd party, being the AMC, it seems that there may be another market niche that is not yet really being filled, that you could call a "limited service" AMC.  Designed to meet HVCC, W/O alll the hoo ra & uneccessary reviews etc.  They of course could charge a lot less per order, & still be very profitable.  I think if the lenders catch on to this & realize that this is a possibility, things may begin to change.  We will hape. 

Feb 27, 2010 03:27 AM
Richard Glesser
North Country Appraisal Services - Gaylord, MI

There is a fairly new start-up company offerring just this service.  AppraiserFirewall is discussed on AF and is getting some good reviews.  Not at all intended to be an AMC but rather a go-between for lenders and appraisers to conform to HVCC. 

Also regarding your comment, I've often wondered how gray the line is between AMC "Quality Control" and Apporaisal reviewing.  It's my feeling, that no one unlicensed should have the power to evaluate an appraisal - including underwriters.  The second they say value is not supported without additional comps or whatever, aren't they actually performing an appraisal function which should be licensed.  We need to return to "Here's the appraisal from a qualified appraiser", now you make the loan decision but you cannot alter of request appraisal changes - sort of like the VA Certificate of Value which is issued for VA loans.

Feb 27, 2010 03:51 AM
Richard D. Ferris
AmcAppraisalsinc.com - Clermont, FL
Florida State Certified (FHA) Appraiser

Yup - when an AMC relies upon a reviewing software module, reading a PDF file, they are often missing important data.

I work with one AMC which converts the uploaded PDF into an ACI file, then runs the review, and then converts that back to an unsecured PDF.

Problem is (besides delivering an unsecured PDF to the client?!!!) - they always drop graphs, commentary, additional addendum pages, etc.

I ALWAYS keep a copy of my original transmitted PDF, a copy of their pdf, and a copy of the ACI file they create.  I will be the one with the most data on the court date when the end lender decides to sue someone for negligence. I will be proving that MY report was complete before the amc decided to monkey around with it!!

Mar 08, 2010 10:20 PM
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

But i see you conducted yourself with grace and got the job done. Congratulations.

May 18, 2010 12:16 PM