An editorial by Michael Simmons
Two weeks ago I boarded a plane to attend the Appraisal Summit in Las Vegas and lead a panel discussion on ways to benefit your business by bringing aboard a trainee. Once the boarding doors closed the pilot announced that we would be delayed. It seemed that a plastic cowling around the plane’s window in front of the Pilot had come apart. We were told to expect an hour delay. 20 minutes later the pilot came back on the intercom and in an excited voice announced we were close to being cleared for takeoff. It turned out that they were repairing the loose windshield with a ‘good epoxy’ and something the pilot described gleefully as ‘High Speed Tape” that was good up to 1,000 miles an hour! Not surprisingly, the aircraft got what I would consider to be eerily quiet.
You know, appraisers are often berated for their lack of adoption of new tools and technologies; sticking with the ‘old ways’ because that’s what’s always worked while the world rushes toward the future embracing every new bright shiny object. Flying at 35,000 with our pilot’s windshield secured by some kind of uber-ized duct tape reminds me that the rest of the world – including appraisers – may not be so far behind as I once thought. Just for grins, trying googling ‘High Speed Tape’ and look at the pictures. You’ll find of all manner of pieces and parts of airplanes made whole with ugly (and temporary) little patches of tape. We live in interesting times as the saying goes.
Needless to say, I made it to the Summit in Las Vegas (obviously because we kept our airspeed under 1,000 mph). Not 10 days later I was traveling back to Vegas for CRN and Valuation Expo. That’s a lot of conferences and committee meetings and panels and intense unstructured and unscripted conversations about our world and the challenges that beset us all in such a short period of time. At the Summit I had the privilege to serve on a panel that addressed the question of whether trainees could be a cornerstone of rebuilding your appraisal business.
One of the panelists was an appraiser from Pennsylvania who had two trainees … one of whom she married. Putting aside the HR issues involved, her perspective was it not only spurred her to become a more focused appraiser and business owner, but it increased her net (yes, net) income by 40%. It also freed her to train her other employees and re-engineer her admin process to heighten efficiency. This is a great message from an appraiser to all the appraisers there – and now to all of you. For our part, AXIS offered our Supervisor/Trainee Inspection Program to any appraiser who wished to employ the program. (When I noticed a hesitancy on the audience’s part, I offered to charge them $100 cash if it helped allay any fears that there was some hidden catch to “free”). Curiously enough, that seemed to ignite a number of appraisers to ask to sign up … although they were now only interested in the free version.
CRN and Valuation Expo were a larger more intense version of what transpired at the Summit. The major topic centered around the growing use and demand for gap products – Desktop Appraisals and other alternative valuation products along like e-Valuations and AVM’s coupled with enhanced inspections. In fact, the entire topic of inspections had people squirming in their chairs. Both Fannie & Freddie spoke about the coming use of bifurcated appraisals where the inspection is done by a 3rd party. One point of contention was the potential liability on the appraiser’s part, particularly if the appraiser has no control over who the person is that is doing the inspection. The only unanimity around this issue was that there need to be some standards established for inspectors.
I’m going to pause for a minute to build the suspense…and then refer to AXIS’ Trainee Program. It’s called the S.T.A.R.T Program. (Insert a large drumroll here) … It stands for Standards To Assure Responsible Training. In the immortal words of that famous New Orleans Chef Emeril Lagasse, BAM!!!
I’m sure many of you have questions and doubts around the arc your business of appraising is taking. Us too. We find the zeal with which those decision-makers in Washington DC are embracing the use of Appraisal Waivers, AVM’s (because they’re more accurate than appraisals according to the Treasury Dept!), and e-Valuations both frightening and infuriating. Now more than ever it’s time to speak truth to power. One suggestion: if an assignment has the term ‘Appraisal’ in the title, accept it. If you’re an appraiser it was meant for you to do. These gap products are the result of the stratification of risk in markets … and they’re not going away.
One more quick thought before I start to prepare for our trip to Washington DC next week. To all of you who’ve made the commitment to support the HeadStart program – thank you. It’s helping immeasurably to restore confidence in the service levels for appraisal assignments – and it’s helping our lender partners better compete for the limited business. YOU have become the AXIS Advantage.
Most of our markets have been appreciating the past six years. The need for the 1004MC during the past six years was minimal. I find the timing interesting that FNMA is now “not requiring” the 1004MC as most markets are starting to soften, interest rates are on the rise, and the need for accurate information is at a premium. – from Bob S.
Bob, we couldn’t agree more – the timing is suspect! Other investors though have not chosen to get rid of the product at this time. And we will continue to require the 1004MC.