In early May, CNN reported on fraudulent home appraisals and the agreement between Fannie Mae, Freddie Mac, and Attorney General Cuomo. To see the video click on the following link http://www.cnbc.com/id/15840232?video=734374266
Alan Hummel, Sr Vice Pres and Chief Appraiser at Forsythe Appraisals, St Paul, MN was a guest in the report. Alan is a former President of the Appraisal Institute and is a national speaker on appraisal topics.
Alan spoke about using technology to be efficient in this industry. At BK Appraisal Services we are efficient with the use of online ordering, electronic delivery, and online data sources. Our website is packed with useful information for just about anyone.
Alan also spoke about competent/incompetent (under educated, under trained) appraisers. The appraisal industry saw a 30% increase in appraisers in the past 7 years. Although I have been in the appraisal business 3 years and am considered a part of the aforementioned 30%, my resume shows the numerous courses I have taken to keep current in the market as well as read numerous trade journals and economists reports.
Ronald Peltier, CEO of HomeServices of America, mentioned AVM's (automated valuation model). As Alan Hummel stated, AVM's may be ok for ‘cookie cutter' neighborhoods, meaning all the homes are similar in size, style, condition, and construction quality but they do not take into account location, or special characteristics each property may have. AVM's are used by lenders to keep costs down and to get a value quicker. Yes, an AVM is cheaper than an appraisal however this is a case of you get what you pay for.