Real Estate by Debbie Reynolds: The Business is Driving Good Appraisers Away

The Business is Driving Good Appraisers Away

Another Appraiser Plans Early Exit

Appraisers are leaving the businessThere are several long time appraisers in my area that are highly respected and do a good job for all the parties concerned. The system has changed and their pay has been cut and the hassle and paperwork has more than doubled. Some appraisers say they can't make a living anymore.

I was speaking with one of my favorite appraisers the other day. She called to gain access to one of my listings and I knew the appraisal would be done correctly and that her knowledge of the area and the comps would be accurate. She had been a Broker/Realtor for years and decided to focus solely on her appraisal business several years ago so her background was sound. Now she feels the business isn't for her any longer. 

She spoke about how hard it was to get any report completely finished because the lenders/underwriters feel like they had to challenge her opinions of value and choice of comps rather than relying on her experience and credentials and knowledge of the market. She said that most appraisals take reworking just to please the lender's underwriting.  

 

One underwriter told her to change her comps and told her which comps she wanted her to use. To me that was interference to the highest level and should be prohibited and reported. My appraisal friend stuck to her guns and refused to change her appraisal by adding she had done the job and expected to be paid.

All of the changes and the reduction in pay as a result of ordering through third party companies (they now get a piece of the pie) have made her decide to hang it up. It just isn't the same business it used to be, she told me.

 

She plans to start her own business of selling a high-end skin care line of products instead. I sure hate to see her and other quality appraisers leave the business. Will the quality of appraisals suffer? Will prices spike? Why has it come to this?

 

 Centruy 21 Platinum Properties2130 Wilma Rudolph Blvd.

Clarksville, TN 37040

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Comment balloon 37 commentsDebbie Reynolds • May 26 2016 07:54PM

Comments

Debbie Reynolds This complaint I have heard before from appraisers and that lender interfering is a direct violation of Dodd-Frank.

Posted by Sandy Padula and Norm Padula, JD, GRI, Presence, Persistence & Perseverance (Realty National) over 2 years ago

Debbie: It is a shame that our industry seems to be losing many experienced people who just do not want to put up with the headaches anymore.

Posted by Anita Clark, Realtor - Homes for Sale in Warner Robins GA (ColdwellBanker SSK Realtors ~ 478.960.8055) over 2 years ago

Good morning Debbie. Regulations passed by illogical politicians influenced by lobbyists with ties to greedy businessmen with no concern for the public! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) over 2 years ago

Debbie, That's insane that some underwriter who might be hundreds of miles away is attempting to dictate to a professional exactly how to do her job. 

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 www.LizTour.com) over 2 years ago

Debbie, I know of a few great appraisers who are no longer in the business for financial reasons, then I see some who drive 4-5hrs to do an appraisal in an area they really don't know but I guess that's not important.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) over 2 years ago

Interesting to hear from the other side.  We usually blame the appraisers for not knowing the area and for undervaluing many homes.  I wonder now if it's something to do with underwriters.  Wow.  Well, that should definitely be brought up to someone in charge.  

Posted by Brenda Mullen, Your San Antonio TX Real Estate Agent!! (RE/MAX Access) over 2 years ago

This is a sad fact of all the new rules in our industry.

Posted by Donald Urschalitz, P.A. Realtor ABR RSPS North Palm Beach County (One World Realty Inc.) over 2 years ago

This isn't good news. What a shame. The whole industry loses.

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) over 2 years ago

Different view of the business Debbie, but she may be on the right track. Spas and medi-spas are popping up all over!

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Condo & Home Sale Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) over 2 years ago

I hadn't heard of any of this.  It is interesting that the lending underwriters are imposing that much influence on the appraisers.  I would be interested in knowing if most of that pressure was to appraise higher or lower than the appraiser had valued???

I know of an something that occured recently.  It was a family member, who wanted to refinance their mortgage to a 15 year loan, and at a lower interest rate. When the appraisal came back, it was at the value it had been purchased at 5 years ago.  I did comps, and found the appraisal to be off by a couple hundred thousand, which would have put them just below the loan to value ratio which would have bumped the interest rate.  Was the bank influencing the appraiser for that reason - I don't really know.  However, my family member had a discussion with the lender, and prevailed at the originally agreed upon interest rate.  I looked at that appraisal, and just shook my head. A recent home sale in the neighborhood, with fewer square feet, fewer amenities and in poor condition, had sold for $85,000 more!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 2 years ago

Good morning Debbie. I think this is a sad story too. I believe when the honorable and local people get out the industry is changing.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) over 2 years ago

We have a local half dozen lenders that work best with the appraisers we have. When you introduce a gypsy lender from out of town, the servicing bogs down and delay, derailment happens because of turn around time going out the window. These lenders not used to the local turf have underwriters asking for comps all in the same town. The small rural town has less than 100 people and that is not going to happen for solds, listings to use in the what's it worth today. My dad was an appraiser and know the ups and downs that any industry has. The right bank, appraiser, lawyer makes the triangle ring the bell easier, quicker for the come and get it like on a western.

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) over 2 years ago

Hello Debbie, I know what you mean on this suggest, I have a friend that was so good that we could call and ask him questions all the time but he had to get out of the business because of the lack of money he made.

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) over 2 years ago

Hello Debbie ...

Interesting and I haven't heard anything about this and I wonder who is creating this problem for them and why?

Posted by Robert Vegas Bob Swetz, Las Vegas Henderson Homes for Sale (Realty ONE Group) over 2 years ago

Hi Debbie - We're seeing the same thing here as good appraisers suffer the same problems and come to the same conclusions.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) over 2 years ago

Debbie, I have spoken with quite a few in this area who say that they just aren't making enough to warrant staying in the business anymore. The amount of time that goes into the reports is immense and the ROI just isn't there. It concerns me for our industry.

Posted by Amanda S. Davidson, Alexandria Virginia Homes For Sale (Amanda Davidson Real Estate Group) over 2 years ago

I'm saddened to hear this - too many regulations, and a society where everyone knows how to do everyone else's jobs better than the professionals. 

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) over 2 years ago

Hi Debbie.  It is all about Dodd-Frank and the useless regulations.  I have stopped doing bank appraisals.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) over 2 years ago

A couple of my favorites have retired too Debbie Reynolds and we are stuck with out of town and even out of state appraisals that dont know the market, the neighborhood or teh trends. 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) over 2 years ago

Debbie Reynolds - Our market is experiencing the same issues - we're headed for some serious problems as experienced appraisers leave the market.  Great post!

Posted by Laura Allen, Lake Tahoe - Truckee Real Estate for Sale www.TahoeLauraLuxuryHomes.com, Tahoe Real Estate Agent Helping Buyers and Sellers (Coldwell Banker, Tahoe City, CA (530) 414-1260) over 2 years ago

Debbie Reynolds - I have heard the dissatisfaction as well.  My concern is that we are heading for an the realm of the appraisal algorithm.  The handwriting is on the wall. It is just a matter of time.  

Posted by Sheri Sperry - MCNE®, (928) 274-7355 ~ YOUR Solutions REALTOR® (Coldwell Banker Residential Brokerage) over 2 years ago

Debbie if the Underwriter tried to dictate the comps to be used, that Lender could find themselves in deep do-do if a complaint was filed with the CFPB. 

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 2 years ago

Debbie

The business (appraiser manage companies) have put them self into  the middle of the appraisal process. They have them self into the appraisal coordination business and collect a fee for assigning an appraiser to the file to do the appraisal. It now costs more for an the appraisers and the appraiser makes less . . . . so when it comes right down to the banks own the appraisal management company and make more money without providing a service the consumer need. 

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 2 years ago

Debbie I am seeing the same thing here, sort of kind of reminds me of 2004, but what do I know, I am just an old Beverly Hills Realtor, Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) over 2 years ago

This is a very important topic and it needs leadership attention.

My scheduled blog and reblogs were not posted this morning. If you have scheduled blogs, you may need to check on them.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) over 2 years ago

Hi Debbie.  I've seen and heard similar stories.  The way some underwriters work needs to be challenged.  They have ultimate authority and have no repercussions for bad decisions.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 2 years ago

It is happening all over and as Conrad Allen points out, all due to Dodd-Frank and government interference (and grabbing a piece of the appraisal pie). 

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) over 2 years ago

Wow, (not the good kind) seriously? Change your comps? Seriously, who has the license here. I'm floored.

Posted by KAREN SANCHEZ, ...Marketing your home like no one else will. ( Hamilton Landon Real Estate) over 2 years ago

Amazing! When we even suggest some comps, people get concerned with interference.  For the lender to insist is wrong!

Posted by Dan Tabit (Keller Williams Bellevue) over 2 years ago

Just another problem caused by "I'm from the government and I'm here to help you ". Clearly there were problems with the appraisal process before the crash, but the cure is almost worse than the disease. 

Posted by Tom Bailey (Margaret Rudd & Associates Inc.) over 2 years ago

We just had an appraisal take over three weeks to get completed. I'm betting part of the reason was overwork from appraisers leaving the business.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com) over 2 years ago

Hmm, appraisers - we could use a few extra good ones for sure - thanks for sharing

Posted by Jennifer Mackay, Your Bay County Florida Realtor 850.774.6582 (Counts Real Estate Group, Inc.) over 2 years ago

Debbie, I included this post in today's Last Week's Favorites!

Enjoy your long weekend!

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 2 years ago

Debbie, isn't it most amazing that the lenders are doing this kind of stuff again? And to think, we have this third party now in order to prevent this kind of thing. Sad, sad sad indeed. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) over 2 years ago

At a GREEA (Georgia Real Estate Educators Association) meeting I was at a few months back they said NO ONE is getting in the business in our state and they are quitting left and right.  So yes, we are seeing it here and I can't blame them. Time and time again I hear of them having to re-do, change, explain... it's ridiculous. 

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) over 2 years ago

In fact, lenders are not requiring heloc, short sale closing, reo, refin, or PMI removal with a full blown appraisal for sometime.  Old Republic, Fidelity pays $30 or $35 for a drive by BPO or $10 more on inside with adjustment. It is cheaper to order a couple to reduce the cost (30+30=$60).  That is all they are willing to pay.  The $15/hr reviewer wants you to change comps or justify why you do not use same complex solds from last 2 years!  They say they have no problem finding hungry brokers to do it.

Posted by Sam Shueh, mba, cdpe, reopro, pe ( (408) 425-1601) over 2 years ago

Debbie:

Appraisers in my area are also calling it quits.  The appraisers who are assigned to appraise my listings have not been local and they, too, disregard applicable comps.  What a mess all the changes have created.

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) over 2 years ago

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