Appraisal assignments

[Nancy Price]

I am in the Cleveland, OH market area and workload has been slow. When I read blogging sites that state business for appraisers is booming I cannot figure out what is going on. Is there still moratorium on regarding foreclosures? I have not received a VA foreclosure in several months. Prior blogs have indicated that market conditions will weed out bad appraisers and the survival of the fittest will be worth the wait, however, I do not know if this is happening. I got state certified in 1993 and would like to continue working for another 5-10 years but I do not know at this point. I have tried to diversity with the attorney business and that is going nowhere.

[Pete Deatherage]

Hey Nancy, I'm slow too and I believe a big culprit is the HVCC. I talked to some of my old clients and they all say that the last 2 or 3 appraisals they've received came from appraisers 100+ miles away in major urban areas who commute to my neighborhood. I've seen the appraisals and they are very bare and just barely acceptable.

I think a lot of these AMC's have a core group of contract appraisers who will accept very low fees and they are all very busy and getting the majority of work. it's only when they are full or out of town that thy send stuff to the rest of us, even with if you are willing to accept lower fees.

[R. Scott Harritt]

It's good to see your name Pete. It has gotten really slow for me in the last couple of weeks also. You might be right about the AMC's having a core group of appraisers willing to work for low fees. I've also seen cases of appraisers coming from long distances to work in the areas that I cover. You know that they can't possibly be familiar with these markets but the AMC's have no liability for using appraisers in areas they are unfamiliar with. If it were to become an issue, they will point their finger at the appraiser and say that he/she shouldn't have accepted the assignment if they didn't know the area. It's unfortunate that those who are probably the most qualified to work in an area are not getting the work because the AMC's are looking for the lowest price and the fastest turn around time. It's hard to see how the HVCC is any kind of improvement over the old system.

[Pete Deatherage]

Scott! Hey Good buddy, nice to hear from you! I always wonder if you are still in the business, it's been years since I've dropped by to see you. Yes, this HVCC may kill me. I've decided I'm going to go back to school in the fall, hopefully I can generate enough business to keep me going till i can finish. July is usually my busiest month, but this is turning out to be my slowest month in a few years. I keep getting requets from AMC's to sign up with them, but they all have fees in the 250 or less range and I just can't see how i can survive on that.

We should get the old gang together again someday, It would be nice to catch up with everyone. see ya around!

Pete

[Nancy Price]

It is unfortunate that appraisers that have not been in the business long enough accept these low fees. It is analogous to the tax increases requested by most communities yearly. If you give them the money you will never get it back. By accepting these low fees we are condoning and it will be difficult to bring them up.

[R. Scott Harritt]

The only consolation, Nancy, is that I think many of the newer appraisers who are willing to work for the low fees will eventually realize they can't make it on what they are being paid and will either have to demand higher fees or drop out of the industry. I hope I can hang on that long.

[R. Scott Harritt]

Thanks for the response Pete. Let me know if you can get everyone together sometime. I know what you mean about the fees they are offering. I don't know how anyone can make it when you consider your travel expenses, E & O, continuing education courses, keeping your license active, and the cost of data. Some people say if you hang in there you will see a lot of appraisers drop out of the business and fees will have to go up. I've thought about going back to school too but I'm 54 now. It seems too late to try to develop a new career. What are you planning on studying>

[Nancy Price]

I have been hearing also that appraisers will drop out of the business, however, my revenue in 2008 dropped substantially and so far in 2009 I am on the same path. I am 54 also and too late to start new career. Wish we could predict how long the shake out will take. Any way to find out how may appraisers in 2006, 2007, 2008 and 2009 to develop a trend?

[Pete Deatherage]

Nancy, I have some figures from California that I have been keeping:

4/27/2008 ====
AT = 4,638
AL = 5,271
AR = 5,999
AG = 3,552
Total = 19,460

As of 06/30/2009 the numbers are as folows:
AT = 2,649 (-43%)
AL = 4,003 (-24%)
AR = 6,365 (+6%)
AG = 3,510 (-1%)
Total = 16,527 (-15%)

It's average about a 1% decline a month, which seems like a lot, but it's not. At that rate, assuming the market for appraisals themselves will be declining also, It will take years for the appraisal business to shake out.

[Larry Murry]

Hello All,
I am using Nancy's stream to add my two cents to the conversation and also add to Pete comments regarding appraisers in California, which is the state where I work and live as best I can. This may be a little long so bare with me.
I am a newcomer to Water cooler and I just passed my AL. More on that later. I notice many of you talking about a new career; well, this is my new career. I hurt my back a few year ago and got placed in a black hole call medical leave. It came to me that nobody would hire a fifty something with a bad back so it was either work for myself or Walmart. The choice was easy and even with the HVCC, it is still better than Walmart.
I personally have nothing against the AMC. I do however have a problem with the regulation mandating that I work only for them and cannot have my own clients. I know I can have direct lenders as clients, but most lenders are going to the AMC and not hiring direct; at least not yet. I have information that says that four (4) banks control 90% market share through the HVCC. You have probably seen the chart yourselves. So, how is this better for consumers? I also notice that nobody ever name AMC's that treat us with respect or otherwise. Is that sacred knowledge?
Although I have not been in the profession as long as many of you, from the start I have my own clients, so I am use to full salaries. Oddly enough, four of my five clients became my clients because the first client wanted me to hit the number and I told him there was no way. He went to another appraiser who was willing to do his bidding and the deal went south. He got back to me for a report and told all his peers they could trust my word and my work. By the way, there were those brokers that did not call me back. You see, I cared more about my license than I did their deal.
What really bothers me about the current situation is as appraisers what we do ideally is report what the market is doing. We did not create one financial instrument. We did not create ARMs, interest only or liar loans and it was not our responsibility to determine if the buyer could service the debt. That was not our job, it was the lender's job. So, I do not understand why we are being penalized. In reality, if every appraiser inflated the values, the lender was ultimately responsible for funding the loan.
To comment on something Pete said. The professional is losing from the other end of the spectrum in that the new AL exam is really difficult requiring multiple attempts to pass it; many are giving up. It took me three tries. The main reason I failed was I was not prepared for a six hour test the first attempt; on the second attempt I realized it wasn't about your knowledge as an appraiser, it was more your skill at taking a test. I found a program to decipher all the tricks and passed it with ease. If you have trainees, you might want to warn them not to go into the test thinking like an appraiser.
Finally, thank heavens, I want to share with you something my mother once told me. It was a pretty common adage which says, "if you start out wrong, you will end up wrong." That is how I feel about the HVCC regulation. It is ill advised and it will correct itself; unfortunately, my mother did not have a time frame.

[R. Scott Harritt]

Thanks for your comments Larry. You are one of the few people I have heard address the fact that appraisers did not create the financial instruments that drove property values up to the levels they were in California (and everywhere else) 3 or 4 years ago. For some reason a lot of people seem to think that if appraisers "had done their job right" what we see happening now would never have happened. There has always been pressure on appraisers to come in at a high value. Sometimes, there is pressure to come in at a low value. The thing that so many people don't realize is that there is a limit to how much a value can "stretched" and an appraisal report be considered credible by underwriters or review appraisers. In some parts of California we have seen property values drop by as much as 50% or more during the last 3 years. There is no way an appraiser could appraise a property for twice what it was really worth. Those high value were the result of the loan programs that were available at that time. When those programs went away, demand dropped and property values declined. I feel like we have been made the scape goats by the banks for their faulty lending policies and now we are the ones being punished. Any appraiser who wanted to continue to be an appraiser for the long haul realized that he had to create reliable reports or he would soon be out of business. I think you are right that HVCC will eventually be changed in some way (go away completely would be even better) but it may be several years. I wish you luck in your new career. If you can survive in this environment, you should be able to make it to retirement as an appraiser.

[Pete Deatherage]

Hey Scott, Yes, I am in agreement with you. I just don't know if its worth it anymore. If I'm going to make $15 bucks an hour then I might as well just go to work as a gigolo, lol, although I probably would be lucky to make that much!

I'm not sure what I'm going to do, but I'm thining Engineering, software or agriculture. I love all 3 of those subject's, so who knows.

[Nancy Price]

What state are you from?