Appraisal Articles

Can you believe it?

In the old days before USPAP, you could hold your arm up in the air and say, “I am an appraiser,” and no one would question it.

Can you believe it?

Some days I feel like this is still the case. There are appraisers that have the education and are doing appraisals, but there is still something fundamentally lacking.

In 2008 with 150 hours required to be an appraiser, I hope to teach an entire class on producing quality work as a part of my pre-licensing classes. This is the only way to solve the problem in the appraisal workplace today.

It is not just the old harp of appraisers doing work too cheaply, though it is a big part, but mostly doing appraisals poorly. Either they have overcommitted their workload and don’t have time to do due diligence or they simply don’t make an effort. There is no substitute for quality, consistency, and clarity.

Ten years ago when I took my pre-licensing classes it cost me $750. If you take pre-licensing classes right now, it will run you about $1400. In 2008, with the six or seven books you will have to buy, and seven or so classes to make up the 200 hours, it will run close to $2000.

So I ask you, in ten years have the price of appraisals tripled? No, and we get calls every day to ask why we charge so much…

Too bad, I say, quality costs more and if you don’t want quality, we don’t want to do your appraisals anyway. I can hardly wait for when there are fewer new appraisers unwilling to choke down the $2000 to get started, so that with the herd thinned, maybe only the qualified will remain.

Maybe at that time there will be fewer poor appraisals that have to be redone because they are so fraught with error. And then hopefully I will never have to hear, “I am just trying to make a living”, from an appraiser who uses cost to justify cutting corners. My motto is do it well, do it right, and get paid commensurate for the good work that you provide or don’t bother doing it at all.

If you have questions or comments, please email me.

Amanda Rivera

At our real estate and appraisal firm we have done something that most appraisers would consider business suicide… We have pulled all of our advertising in the phone book, no more links to our  online pages,  and we have eliminated all online advertising on “AppraisersRSomethingOrOther.com”

Can you believe it?

It seems like a bad idea at first, but let me digress a bit.

One, phone book ads are massively overpriced, our last year’s ‘renewal’ was going to cost us $1300 for a year. That is nearly what our Alamode Wintotal runs us for a year, and they give a whole lot more bang for the buck!

Two, anyone who is in the appraisal field for at least a week knows that the calls you get off the internet are completely useless. They either want FREE APPRAISALS, which they call pre-comps, or on the rare occasion we do an actual appraisal, they pay so badly we had to quit doing all of them except those paid at the door.

Note to newbie appraisers, if these out of state lenders are not registered on the NCCOB website as a company licensed to do business in NC, you will have no recourse for going after them when they don’t pay… Hard lesson learned here, look them up before taking the assignment, get paid at the door, and make sure the check cashes before you send the report. Bounced checks are really hard to collect with out of state lenders that already have the appraisal report marked as “PAID”.

Three, if we get one more fax saying that we have been Automatically Renewed by a www.com advertising, and that our credit card has already been charged, I cannot promise to be civil.

Four, once a week we get calls that offer to “help market our company better…” Now I just cut them off by saying, “Thanks, but we don’t need any more business, we are busy enough without advertising.” This stops most of them cold, but a hardy few press on, to which we say, “Why would we take advice from someone who is not an appraiser or after failing in the appraisal field decided to go into marketing?” Not pleasant, I agree, but these calls usually come in on my cell phone eating away at my minutes.

And so far it has worked, we don’t miss having to explain our policies, we don’t miss the bill from the Yellow Pages, and we certainly don’t miss trying to collect from deadbeats...

Comments? Send me an email.

Check out our only advertising at www.creeksidera.com

Amanda Rivera

I am fairly new to this profession, I have only been appraising since 1998, but I ran into to something today I have not run into before...

I was sent an order, by a lender I have done work for before, requesting a URAR. The conversation that preempted the order was that they had an appraisal done, but the previous appraiser was not on the list of the company they sold the loan to so they could not use it. They were willing to pay for a new appraisal. Sounds good. I also knew that this company required credit card payment from all applicants by paypal before the orders would be processed. Another good idea, the prepayment of appraisals... But this is where the good news ends.

I made a phone call to the number designated by the lender as a first person to contact. I was very surprised to find out that the number they gave me was the other appraiser, surely I had misunderstood.

Sadly, no, and this is the unbelievable part. The lender gave me the number of the previous appraiser so that I could charge the appraiser for the appraisal!

The lender's rationalization was that because the appraiser was not on the list (of the secondary bank not mentioned) that the appraiser should have to pay to have a new appraisal done.

I stopped right in my tracks. I could not believe it. I simply told the other appraiser that under no circumstances would I take payment for this appraisal from him/her and in fact I would call the lender immediately and turn down the assignment. I was appalled that the lender would have the gall.

It is my opinion that if lenders are allowed to deny payment or be reimbursed for a product they can not sell for whatever reason, it is a slippery slope. I told the lender that their request undermined our very profession, and if we did not believe in the principles and ethics under which we practice, what would that make us?

Your thoughts? Wish to contribute to next month’s newsletter? Send me an email.

Amanda Rivera

Many appraisers complain about the new forms, but we should look upon this as an opportunity, rather than a challenge. Starting November 1st, we should all make an effort to ensure that our customers are aware of this transition. Be informative, and help them understand how much work we are going to do for them, to make sure they have the best product possible.

Encourage them to look over the new forms and get familiar with the new layouts, and understand the usage of each form. Use the change as a positive, rather than a negative, and be enthusiastic. Most lenders contacted are pleased that we take the time to help and inform them. Perhaps your contact and personal touch may be rewarded with renewed business.

If you choose to reassess your fee schedule at this occasion, leave the details off your initial contact with the client. A more professional approach might be to point them to your website for more details. We can all make this a more profitable and rewarding experience for ourselves and our clients, all it takes is a little effort and a lot of patience!

Amanda Rivera

Our first comments on the newsletter have come in… I am very thankful everyone is enjoying it and sending in such good ideas… I hope to continue putting good stuff out there to keep everyone as up to date as possible, but I rely on you! Send me those ideas and keep up the good work…

Here are some of the comments:

“So glad to receive this newsletter! I really feel like this organization will keep the members as friends and not just as a source of income. I love the layout, easy to read and positive! The calendar of events is a good idea. Can't wait to go to the convention at Wilmington. Perhaps some vendors can also be at the convention to show us new technology...” Thanks, Mary Ann Allgood

“Simply an awesome newsletter! I took the URAR 1004 and 2055 how to fill out these new forms classes at Carolina Beach over the weekend and your name was mentioned and the situation that you addressed in the newsletter.

I cannot believe that a lender would have you ask another appraiser for a fee payment. Nor would I think the appraiser would even pay it.

In fact, this should be put in a letter and sent to the NC Banking Commission. Seems that the lender should "eat" the appraisal cost and get on with it. Anyway, keep up the good work! Glenn Day

“I just want to say, GREAT JOB on the newsletter!!!! It looks great. This newsletter will be a wonderful tool to keep the appraisers informed on what is happening in our profession.

I just wanted to take a few minutes to Thank You and keep up the good work……… Jennie Harless

“I think the newsletter is a great beginning. I really appreciate the time and effort that went into it. Thank you!

Also, I felt very fortunate to have attended the conference in Charlotte and thought it was well orchestrated and very valuable. Since I live in Wilmington, I would be very happy to help with next year's conference. If you are taking volunteers, then please add me to the list….

Best wishes on the newsletter—Janice Pepperman

Your thoughts? Wish to contribute to next months newsletter?

Amanda Rivera

Can you believe it? ...

For me this holiday season has proved to be very special. I thought for sure our appraisal company was going to get a lull in appraisal work because 1) due to our increased fees for the new forms and 2) of the general confusion regarding the new forms. But thankfully, none of these things have happened.

For this I am very thankful. I thought for sure that lenders and borrowers would start complaining and then eventually silence, i.e. no phones, no faxes.

But in reality, we are busier than ever. Most of our lenders were pleased that we took the time to explain the forms to them. Most homeowners have been happy to see how much work is going into their appraisal to protect them.

For the lenders, we put copies of the new blank forms on our website for them to download. In short , not one single person, lender or homeowner, has complained or not ordered, and most are ordering away, business as usual.

Can you believe it? ...

But by no means has the transition been easy for appraisers, so far the only new form we have not done is the co-op. Thank goodness we took Darrell Hignite’s class on the new forms! The lenders have so readily embraced all the new forms, that they are ordering them up like nothing happened. They basically said to us, “If that is the form you think I need, send it to me... If that is what it costs, send it to me…”

We were caught so flatfooted thinking it would be slow, that I had to revamp my thinking just to keep up. Several times this week we have had to quote really high on stuff, just to not get the orders! Who would have thought that would happen?

My only hope is that other appraisers have had the same reaction. I hope you have a pile of appraisals on your desk waiting to be done. And I hope that this transition to the new forms has not been difficult for you...

May your holidays be merry, your health excellent, and your fax full of orders!

Please send comments or suggestions to me at amanda@creeksidera.com

Let me know about those New Year’s Resolutions…

Hello to 2006...

Amanda Rivera

Can you believe it?

Another new year is here, 2006! The year in appraisal for 2005 was a blur, but we are still looking forward to the prospect of a busy 2006…

We have all had time to get used to the forms, but the interpretation of the conditions on the forms are evolving as situations come up that require more finesse than was expected. Every day a new situation arises that dictates we change the way we were doing things to comply with the new limitations. And thankfully agencies like AARO are helping us to address some of these challenging situations.

As mentioned last month, the only new form our firm has not had to do is the co-op. It has been a crazy time. The hardest part has been getting motivated to be busy during the holidays, historically this is a slower time of year.

And where is this supposed housing slump? If you are near Wake County or have been through it lately, it is nuts… Every time I drive to town I see a new subdivision road cut in for yet another new development.

Where are the people coming from that are supposed to be buying all these new homes? As part of marketing time analysis we look at absorption rate, and most areas are at the capacity of what they did last year. My fingers are crossed that growth can continue at such a rate…

Can you believe it?

So onward to 2006 and may it be one for the record books. And with this newsletter that was started in 2005 for NCPAC, we have laid the foundation upon which appraisers can build upon. Communication and ideas are flowing again. Some appraisers were riled up about a few of the articles in the Scope and that is a good thing. Whenever people get upset enough to do something, that is progress. It is not merely enough to criticize, you have to be willing to do something about it.

And to do so, I encourage all appraisers to help other appraisers by contributing articles of your own or something you saw that is relevant to appraising. Let’s try and get the word out if you have something important to share with others.

Happy New Year appraisers!

Amanda Rivera

Can you believe it?

My valentine wish for you is that you don’t have to deal with an AMC asking you to reduce your fees… I know we hit on this topic in previous months but it steams me up when companies like AMCs ask us to cut our rates. So I turn around and ask them to cut their fees or better yet charge no fees! So today this particular company wanted to add $100 to our costs for their “services” and by charging my normal rate that would cut into their portion.

Can you believe it?

Tough noogies, I say. I hope that NCCOB or some government sponsored overseeing agency finally gets control over these uncontrolled, unlicensed, rampant over-chargers. They fall through the cracks in the laws by placing all the responsibility on the appraisers performing the work, and then they aren’t governed by the NCCOB because they aren’t lenders. I ask you, is anyone watching the middleman?

Am I wrong about this, and horribly misinformed? I don’t think so, but let me know if someone out there sees an upside to AMCs making money off our hard work. I sure can’t see it.

This particular company that called today also then demanded 24 hour turnarounds after inspection, interior photos, and a REO repair addendum. All for the reduced price of “x”. So I told them “Kaching, Kaching, Kaching…” I charge more for all those things, not less. Who is doing these appraisals for less?… I certainly don’t want to take on all the responsibility of that much work, with repairs, multiple values on the REO addendum, and try and get it back in a day for “x”. You and I both know those are the appraisals that never go away. They need multiple addendums and conferences with underwriting, you will be required to stand on your left leg while rubbing your stomach, just to get it to go away…

So let’s go back and read Bert’s AMC article from a few months ago, and all of us try and toe the line and when the phone rings and the AMCs call with their ridiculous requests, and then they will hear from all of us, “NO, NO, NO, and oh yeah NO!...

Amanda Rivera

Can you believe it?

Since I returned from my honeymoon, I have been working on collections. I have to give credit where credit is due, Karen Mizell at the NC Commissioner of Banks is a dedicated individual. I have to deal with non-paying banks a few times a year, but she has to deal with them everyday.

Can you believe it?

It is not a job I relish, in fact I put it off as long as she recommends before I turn them in, which is after 6 months. So I am working on collecting genuine money due unpaid by crafty lenders and general deadbeats. My advice to you is don’t wait before turning some of these lenders in, it only gets worse if you do. My other advice is keep a paper trail. Do not delete an email requesting something done on an appraisal, it will help you to collect what is rightfully due. If you have to delete them for space, print a copy and put it in the file for backup. It will save you a lifetime of aggravation.

My advice to you, passed on to me by Karen, is don’t let a few bad lenders ruin your day. Just turn them in to the NCCOB, and let the NCCOB handle it, that is their job. And it will make other appraisers jobs easier if we can get rid of some of the less savory individuals.

And for those of you appraisers who are not familiar with the Mortgage Lenders Act of 2001, failure to promptly pay when due reasonable fees to a licensed appraiser for appraisal services when requested by the lender in writing is not permitted. If proven in a hearing that the lender did owe money, the NCCOB can fine the lender substantial amounts and possibly refuse to renew their licenses. Also attempting to influence or coerce the result of appraisal assignment is also not permitted, but that is a topic for another day…

May you have the Luck of the Irish and not have to deal with deadbeat lenders!

If you have an interesting story or mishap you would like share, please send me an email.

Amanda Rivera

Can you believe it?

It has been so busy that it reminds me of the refinance boom of 2003, despite me charging more...

Can you believe it?

On occasion I teach prelicensing appraisal classes and it seems to me that more people are hoping to become appraisers than ever before… I am not sure that it isn’t because the rules are changing in 2008, but I would hope that they want to become appraisers because the appraisal profession is becoming a more recognized and appreciated occupation.

Some appraisers would say that we should not keep teaching prelicensing to new appraisers, that the market is already flooded with trainees that no one can or will supervise. I say that without these new appraisers, our profession will have a huge gap in about 10 to 15 years. The average age of the appraiser right now is about 50. This is not a bad statistic, one would hope that experience and wisdom would be a good factor that went along age. However it is an aging statistic, in that 10-15 years from now, some of those people appraising may not want to do it anymore, having reached an age where retirement is a possibility.

And some would say that on the flip side we need better supervisors. And I could not agree more. I think that as an appraiser, I learned a tremendous amount about appraisal when I had to teach it to another person. And I am not talking about teaching, which has taken me to another level all together, but I am talking about supervising. I think supervising makes you a better appraiser.

It is like the mother with a child, when reprimanded, it is not enough for the mother to say “because I said so,” she often has to tell the child “why”. When you supervise, I find that you have to explain the “why” and learn the rules and USPAP to support your decisions and be able to explain it not only to your trainee, but sometimes underwriters…

So I will keep teaching, and I encourage some of you to become supervisors… If you have an interesting story or mishap you would like share, please send me an email.

Amanda Rivera

Can you believe it?

Coming back from doing an appraisal today, I was driving down the road and I had to pass a car pulled off on the shoulder, there were bits of tires shredded on the road, and two women standing by the car. I passed them, but slowed down to look in my rear view mirror to see if they needed help. As I watched in the rear view mirror, the car they were standing by began to roll down the road towards the pond at the bottom of the hill. I should have stopped to see if I could help, but I figured with the two of them running after the rolling car headed for the pond, there was probably very little that a five month pregnant person could do to help...

Can you believe it?

I am usually more helpful, it is the Southern girl in me, but these days situations like this are so common place I have become immune. I see weird stuff everyday, even though these days I am doing less active appraisals and more in office reviews. And I bet you do too, so I challenge appraisers out there to send me some stories of the crazy things we see on the roads and in homes.

People ask me all the time, “Don’t you get sick of looking at houses?” And I have to answer, “No, every house is different and I learn something or see something new in every one…”

I did an appraisal on a house one time in Middlesex, and I had to use my clipboard as a counter. I held it close so the owner would not see, and used it to keep track of how many animals were INSIDE the house. I counted 4 horses and 6 dogs outside the house, but that was nothing compared to the inside. They had 8 birds from cockatoos to pigeons, then they had 32 cats! It was unbelievable. I opened a bathroom door, and oh excuse me, this is our nursery for the kittens… 8 in that room.

I swear I opened a closet and there was a cat stuck on the top shelf. Evidently they raised Maine Coons and Sphinxes and planned to use the money from their refinance to purchase an RV with which they could travel WITH THE CATS to various shows and events to sell and display their various litters! I kid you not. You can’t make this stuff up, it is too real…

Send me your wildest and craziest stories, please email me.

Amanda Rivera

Can you believe it?

It has been an exciting two months for NCPAC and for me. First, I would like to thank everyone for being so patient. I am behind this month in getting the Scope out to everyone since Baby Joshua decided to come early. So I did have an early edition, it just was not the Scope...

Can you believe it?

Many thanks to everyone for their well wishes and continued support. It really has meant a lot to me over the past month to receive your emails and letters. I appreciate all of it, including offers to help write articles and work on the Scope...

And to answer the question that many have asked, I will continue to write this column and publish the newsletter, but anyone who would like to volunteer to help with the newsletter, your help would be greatly appreciated! Our organization is founded on volunteerism and your membership participation!

Secondly I would like to thank the outgoing 2006 NCPAC officers for a great year. Many wonderful things were accomplished this year that would not have been possible without them volunteering their time or without their continued dedication. Good Job everyone!

Thanks also to the Committee who chose to make me the recipient of the “Andy Ledford Award” this year. I did not expect to be honored for my contributions, my only hope was to simply make a difference...

And on to 2007 NCPAC officers, we have a busy year ahead of us…

Dale Smathers was announced as the chairman for next years annual conference in Asheville. At this years event, he painted a lovely picture of all the activities and surrounding venues the town of Asheville has to offer. We will look forward to enjoying the highlights and conference in 2007 as much as this year’s conference.

Darrell Hignite assumes the position of NCPAC president, and his goal is to increase membership through the coming year.

New members, returning NCPAC members, and the Officers and Board of NCPAC have outlined some great goals and plans for 2007 and I am glad to be a part of the progress…

Comments? Please email me.

 Amanda Rivera

Can you believe it?

Another year has come and gone… Where does the time go? This year my family has decided to try a new tradition, we are not buying gifts for Christmas.

Can you believe it?

Before anyone calls or emails and says we aren’t in the “spririt” of the holidays, lets take a minute to reflect.

Anyone who is an appraiser knows that time is money. If you have to spend time reworking an appraisal it costs you money. That is why at our company we try and cover all the contingencies before the appraisal goes out. We spend a little more time to get it as bullet-proof as possible, to save a lot of time on the back end to see that the report goes through the first time.

So what I am really referring to when I say we aren’t buying gifts for each other this year, is that instead, we are giving each other the gift of time. And that is something I can never have enough of, how about you?

So instead of me having to run around buying gifts and likewise my family have to spend time finding “just the right gift”, we are giving each other time. Time to bake cookies or trim the tree, time to reflect on the reason for the season not the booty from Mr. Sooty.

I am sure Santa won’t mind if we just take this year off. I am sure he could use a break too. If we don’t have to fight the holiday crowds at the mall, we have more time to spend with our family and friends.

So if you come by to visit us, please don’t bring us a gift. Save yourself the time and aggravation and just “say no” to gifts this year.

It may take awhile for this idea to sink in and it will be tough for the little ones, so if you must buy something, then buy something for them. Just not for us. We appreciate the thought, and value your time as much as our own.

If you do stop by and have been “NICE” this year we will probably have cookies and cocoa to share, baked in our ‘free time’. But if you have been “NAUGHTY” this year, perhaps you should take a ‘time out’ and reflect on the true meaning of the Holiday Season.

Comments? Please email me.

Amanda Rivera

Can you believe it?

Where did 2006 go? I just turned around and it was gone. Who is ready for 2007? But it is here anyway, and with it comes tax time.

Can you believe it?

I was reviewing the information sent by our CPA this year and it seems they are really putting limitations on all donation deductions for clothing and household items and cash charity contributions. First of all, qualified cash charity must be supported by a dated bank record.

That means you can put cash money in the collection plate at church, but you can no longer deduct it. It seems that to be able to deduct your church tithe, you now need to write a check so that there will be a bank statement or paper trail to back it up. I am not sure if you all heard about the 75 year old usher in Cary that was busted for stealing from the collection plate, but maybe writing a check is a good idea…

Second change this year is that you can still donate your Vera Wang dress that hangs in your closet, that you never wear, and you can get charity credit for it, but if it is to be valued over $500 you will need a qualified appraisal to do so. But now if you try to donate your desk with coffee rings or your used LLBean appraisal togs, you can forget getting credit for it. According to the IRS it has to be in “good condition or better”.

So very few good deductions are still in existence and I thought I should let you know that the Credit for Qualified Hybrid Vehicles is changing as well. In addition to changing which vehicles qualify for this credit, they are also reducing the amounts of the credits. So if you have any plans on buying a Hybrid vehicle in the near future, you need to check out this page from the IRS website which shows how they phase out the credits on certain vehicles in 2007.

http://www.irs.gov/newsroom/article/0,,id=157557,00.html

For those of you who write off mileage, the standard mileage rate changed to 44.5 cents a mile for 2006. And for 2007 the mileage rate jumps up to 48.5 cents per mile.

Last but not least, you cannot write off a wristwatch, per the IRS, even if it is a job requirement that you know the correct time… Oh well, I am never on time anyway...

Comments? Please email me.

Amanda Rivera

Can you believe it?

In this day and age with gas prices going up, up, up and fewer appraisers entering the field due to stricter requirements, it is hard to believe we still have to deal with pressure from lenders on our fees, using “other appraisers” fees against us…

Can you believe it?

What some appraisers don't realize is that they should be working smarter not harder, and certainly not harder for less. If they raised their fees a little they would find that they can control the flow of appraisals better.

For instance if they charged $400, a hypothetical amount for the purpose of this illustration, rather than $250, for example, they could be making 37.5% more per appraisal.

$400 x 30 = $12,000/$250 x 30 is $7,500.

Annualized the difference is:

$400 x 30 x 12 = $144,000

versus $250 x 30 x12 = $90,000

So basically they are leaving $54,000 on the table. I would be the first person to agree that 90k a year is nothing to sneeze at. However what is the hidden cost of doing business at these rates?

1) Undercutting fellow appraisers out to push the appraisal industry in to the next century rather than return to the dark ages

2) Denigrating the profession by accepting lesser fees; implies our services are not worthwhile

3) Enabling AMCs! AMCs profit when individual appraisers pay our own E and O, our self-paid benefits, our computer software, and MLS dues. It allows them to have "0" overhead, "0" liability, 100% profit. They can turn around and charge "normal" rates for those discounting their fees because they have enabled them to do so. The appraiser takes 100% of the responsibility for the costs of producing the appraisal and 100% of the liability, and the AMCS get 100% return on their investment because it cost them NOTHING>>>>

IF the same appraiser would simply charge more, they could do 12 less appraisals a MONTH. 12! Versus 30, at a lesser fee! That is nearly half! In other words they could work less and make more, not undercut their fellow appraisers, not enable AMCs, and promote the appraisal profession rather than denigrating it.

MY OPINION, of course....

Comments? send me an email.

Amanda Rivera