 |
“One of the best courses that I have had in 17 years!” -Amy H.> Switch to OREP E&O Insurance: Enjoy Free 14 Hours of Free, Approved Continuing Education |
>> Take OREP/Working RE’s Bifurcated Appraisal Survey
Listening to Appraisers
by David Brauner, Senior Broker OREP & Publisher Working RE Mag.
It is the goal of the Federal Financing Housing Agency (FHFA) to ensure the health and welfare of the housing finance system. FHFA oversees Fannie Mae and Freddie Mac and has, for the time being, paused the testing and development of bifurcated appraisals that bypass the participation of licensed appraisers (FHFA Puts Brakes on Fannie’s Bifurcated Program). I hope that this time the policymakers will try something they rarely seem willing to do: ask the experts. By experts I mean of course boots-on-the-ground appraisers.
OREP/WRE’s Bifurcated Appraisal Survey has over 4,000 responses to date. It’s still open and you’re welcome to participate.
Nearly half of those who completed the 3-minute survey were compelled enough to leave comments after completing the survey- you can find a link to the comments below. The commentary overwhelmingly suggests that appraisers believe that the bifurcated model and the use of unlicensed, untrained and unaccountable contractors for key elements of collateral assessment will adversely affect the health and welfare of the housing finance system, increase their own liability and damage the public trust. The vast majority of appraisers taking the survey say they don’t want any part of it. If you’d like a good representation of how and why, pick up the current print edition of Working RE (Winter 2020), which mails to most appraisers nationwide and to very OREP insured. Author Richard Hagar, SRA summarizes his test of bifurcated appraising and shows how, in his experiment, it lead to unreliable results (Why Hybrid Appraisals Don’t Work). It’s worth a read.
According to the survey 89% believe that appraisers who do not visit neighborhoods/properties are in danger of losing their ability to produce credible reports over time due to a loss of familiarity with markets, neighborhood influences and/or other factors. Most appraisers taking the survey say they won’t accept either part of the bifurcated assignment- property inspection or analysis- because of the increased liability and low fees. This comment is indicative: “I had the opportunity to later inspect a home I recently completed the valuation on in a bifurcated assignment. The inspector had failed to tell me the stairs to the second story lead into the roof peak to where you had to duck down as you climbed the stairs, the top step ending at only a 4′ height. They also failed to identify that the home was only 3′ away from the commercial building behind it—a zoning compliance issue in an area of 10′ minimum set-backs. Also failed to report mold growth and water stained ceilings. My second appraisal, after personally inspecting the home two months after the bi-furcated appraisal, came in 25% lower!”
According to appraisers, the solution regulators are testing for updating appraising will weaken the process with no discernable benefit to the consumer in speed or cost. We’ll publish the entire results soon.
Visit OREP E&O Insurance for low premiums, fast quoting and free Continuing Education (14 Hours).
>> Take OREP/Working RE’s Bifurcated Appraisal Survey
The completion rate of the survey is 100%, meaning everyone answered every question. The average time to complete the survey is three minutes. You can add your voice and comments by taking the Survey here.
About the Author
David Brauner is Publisher of Working RE magazine and Senior Broker at OREP, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 50 states (OREP.org). He has provided E&O insurance to appraisers for over 25 years. He can be contacted at dbrauner@orep.org or (888) 347-5273. Calif. Insurance Lic. #0C89873. Visit OREP.org today for comprehensive coverage at competitive rates.
CE Online – 7 Hours (AQB Approved)
Identifying and Correcting Persistent Appraisal Failures
Richard Hagar, SRA, is an educator, author and owner of a busy appraisal office in the state of Washington. Hagar now offers his legendary adjustments course for CE credit in over 40 states through OREPEducation.org. The new 7-hour online CE course Identifying and Correcting Persistent Appraisal Failures shows appraisers how to avoid CU’s red flags, minimize callbacks, save time, and earn more! Learn how to improve the quality of your reports and build defensible reports! OREP insureds save on this approved coursework. Sign up today at
www.OREPEducation.org.
Sign Up Now! $119 (7 Hrs)
OREP
Insured’s Price: $99
>Opt-In to Working RE Newsletters
>Shop Appraiser Insurance
>Shop Real Estate Agent
Insurance
Send your story submission/idea to the Editor:
isaac@orep.org