2010, an appraisal odyssey
2010 and a new decade is about to begin. Upon being asked to write the first Niche Appraiser column I was delighted to learn that this venue would become a regular part of the magazine’s monthly features. Yet I felt challenged with presenting a singular topic of interest that has not been belabored, agonized over, hashed and rehashed ad infinitum.
One of the most notorious topics that dominate financial sector discussions has been the Home Valuation Code of Conduct (HVCC) which is now a living legacy rife with ramifications and not expected to be removed from the lending business model.
Lenders, investors and government agencies involved in this seismic shift are still trying to figure out the best alternatives to sort through the chaos. Even the US Congress is befuddled.
Many appraisers are stunned and disenchanted about the future of their businesses as the industry changes faster than we can assimilate relative future value of the new bumper crop regulations.
There is reason for appraisers and users of appraisals to be optimistic about appraisal issues during 2010. In taking the longer view of the appraisal profession and looking back over the last 100 years, one fact becomes apparent. When times are good, appraisers and users of appraisals tend to focus on the business of doing business. They focus on productivity within their respective functions, be it appraising or the various businesses that commonly use appraisals such as mortgage lending, right of way work, litigation, etc.
It is when times are bad that the appraisal profession and the users of appraisals take the time to step back and re-examine the appraisal process and issues involving appraiser performance so as to improve the quality and utility of the appraisals being used in the marketplace.
It is during the aftermath of each of the economic busts that comprise the long term trends that the appraisal profession has identified and incorporated more stringent measures of professional conduct and practice along with more sophisticated appraisal methodology and applications. Today's appraiser has many more tools and a wider degree of access to relevant data to analyze that data than ever before. Generally speaking, each of those advances has occurred during an economic bust, not during a boom. Looking forward to 2010, we can expect more advances.
The appraisal profession has long acknowledged the principle of change as being one of the fundamental influences in the real estate markets, which themselves are dynamic and ever changing. Appraisers will recognize that a market for appraisal services that widens to include more types of "appraisals" for more types of uses, means that there will be more business opportunities for the average appraiser. When times are lean, an openness to the pooling of resources, economics of scope, expanded affiliations and new partnerships are the keynotes that not only engender innovation, they are crucial to survival.
Considering that this column will more often than not speak to the collective, I thought to seek some sage perspectives relative to past real estate cycles. While it is true that we will be working under unprecedented economic conditions, struggling with what seems extraordinary to us now, such change will fast become the ordinary.
The consensus offered herein is from forward looking veterans I queried. Those who can most definitely see an unlimited future:
“We are at a time of tremendous opportunity to participate in what the appraisal industry looks like moving forward. With volatility in our industry CHANGE is the rule of the day and we can be that change or allow others to write the rules for us. If you were your customer what would you want? Are you meeting or exceeding their expectations? Giving them outstanding service? We are a "service" business. Providing outstanding service and well written, researched and communicated reports is imperative to remain relevant. Networked communities of appraisers working toward a common goal can make a difference. Carpie Diem! Let's seize this opportunity to be the change we want to see! Cynthia Sulamo, Certified Residential Appraiser, CA
“FHA implemented a law that proscribed the use of licensed appraisers, allowing only certified appraisers to be on their roster of approved appraisers. The good news for the experienced appraisers remaining is that they will benefit from that tremendous shrinkage bringing supply back into balance with demand.” Randolph Kinney, Cert. Residential Appraiser, CA
“I have a 2010 New Years Eve Resolution for the appraisal profession:
“Shake it off and step up”. I often feel like I have fallen down the same hole as Alice in Wonderland. I agree that things are more than a little skewed in the world of the appraiser. However, I continue to say that the little guy (or gal, just a figure of speech) should only worry about what they can change, and not worry about what they cannot change.” David A. Braun, MAI, SRA, TN
Ending on a top note, I would like to thank Niche Report for providing Appraisers a medium to contribute their ideas and opinions within the framework of a broader based audience.
Carol Rockman, VP and Founder of National Valuation Service, has been involved in the Real Estate industry since 1978 and Appraising since 1982. National Valuation Service is a company that provides appraisal management services in 50 states; an organizational member of the NCBA in Washington, DC - utilizing the Cooperative business model principles; The Cooperative offers reliable valuation solutions to satisfy the Home Valuation Code of Conduct (HVCC) and FHA compliance to Mortgage Professionals, Lenders, CPA’s, Attorneys, Credit Unions.
