H.V.C.C.

 

Four simple letters that all appraisers have come to loathe. Implemented to save the industry's independence, it has instead been a godsend to all aspiring middlemen in America while simultaneously destroying long, established appraisal careers and businesses.

 

The premise for HVCC was that appraisers could not resist broker pressure to inflate values and someone or something had to intervene to separate the two.

 

As we know from grade school, the teacher can intervene and stop the bullying, but only temporarily. The only real way to stop the bullying is to toughen up the appraiser. The appraiser needs to have the strength, confidence and skills to fight back - and win. Only then will the bullying stop.

 

So instead of asking how we can intervene between the broker and appraiser, we should be asking how do we empower and strengthen the appraiser to fight back. What do we have to do as an industry to strengthen our professional appraisers to stand up and decisively resist bullying pressures from all corners of the financial industry? What do we have to do to level the playing field?

 

At Bradford Technologies, we believe the answer is straight forward. Appraisers need to move from the "art of appraising" to the "science of appraising".

 

Appraisers need to produce Statistically Supportable Appraisals and let the strength of analytics resist the bully. Even under intense pressure, it's hard to make 2 + 2 = 5.

 

Strengthen the appraiser with new analytical skills and strengthen the appraisal report with transparent analysis that supports the value conclusion. Then wrap it in technology to prevent identity theft and report fraud.

 

For the last three years we have been experimenting with different services to counter broker pressure, report fraud, identity theft, to analytically verify local market experience and bring analytics into the appraisal discourse.

 

Today, with our AppraisalWorld Services, the new CompCruncher computer-aided appraisal software and the new Collateral Valuation Report, appraisers can finally fight back against bullying pressure and deliver a superior, statistically supportable valuation.

 

The new Collateral Valuation Report (CVR™), which is a summary appraisal, has the following features:

 

1.         Displays the property photo on the front page

2.         Visually defines the market area on a map

3.         Provides data on absorption, sales and listing activity

4.         Graphically illustrates market trends

5.         Provide support for comps and listings selected

6.         Statistically quantifies the value components in the market

7.         Statistically provides a value range and most probable value

8.         Provides statistical metrics on the accuracy of the analytics

9.         Provides sales comparison approach

10.       Provides listings comparison by normalizing comps with sales/listing ratio

11.       Reconciles valuations from analytics, sales and listings

12.       Provides locations maps with selected comps and listings

13.       Provides flood map

14.       Provides top, north, south, west, east aerial views of property

15.       Optionally, provides a forecast based on economics for 90, 180, 270 and 360

            days out

16.       Signed by an appraiser whose identity has been authenticated and can be

            verified online

17.       Uses "On Document Verification" technology to prevent appraisal fraud

            (Similar to technology used by the postal service to prevent postage fraud)

18.       Performed by an appraiser whose local market experience can be

            analytically evaluated online

19.       Performed by an appraiser who had to become certified to use the technology

20.       Performed by an appraiser whose appraisal credentials can be verified

            online.

 

The benefit of this 20-point feature set: No more bullying pressure.

 

With a valuation product like this, it is difficult to inflate values even if you wanted to. Proper application of the analytics prevents the over reach (or under-reach). And if there is over reach of the value conclusion, the accuracy metrics will indicate a problem and the review systems will red-tag the report. Once you start working with the science of appraising, it's difficult to make 2 + 2 = 5.

 

The Collateral Valuation report is credible, transparent and provides a statistically supported value conclusion.

 

We believe this is the type of report needed by appraisers to withstand the bullying pressure of any industry participant and to regain the "trusted advisor" position that rightly belongs to every professional appraiser. We believe this is a much better alternative than HVCC.

 

The CVR Challenge

 

We announced CompCruncher™ and the CVR in November of 2009 to rave reviews from lenders and appraisers. More recently, we announced our War on BPOs. Today we are announcing the CVR Challenge.

 

Here's the background on the CVR challenge: AVMs and BPOs have taken over a billion dollars worth of valuations away from appraisers. This money used to go to appraisers. How did they take it away? The answer is that appraisers think they can only provide 1004s and lenders want something different. Something that is faster, cheaper and that is "good enough." They don't need the quality of a 1004 for everything. Hence BPOs and AVMs now generate over a billion dollars for their providers and those providers are not appraisers.

 

This is the challenge proposition: Credit unions and local banks are using AVMs and BPOs for Home Equity Lines of Credit (HELOCS). They would rather use an appraiser, but not pay for a full 1004. This is where the CVR comes in. A CVR report can be completed in less than an hour. You can charge $175 or whatever you negotiate. Bottom line is that you will be making anywhere from $100 to $150 per hour doing an appraisal.

 

The CVR Challenge will not cost you anything. You have nothing to lose and a lot to gain. Here's what you need to do:

 

1. Click on this link: http://www.appraisalworld.com/CompCruncher/SampleCVR.pdf

2. Print out the report. In color if you have a color printer.

3. Click on this link: http://www.appraisalworld.com/CVR/cvr_info.pdf

4. Print out the CVR Talking Points. It illustrates the features/benefits of the CVR.

5. Take it to a Credit Union or local bank that you do not work for.

6. Show it to the chief appraiser, ask them what they think about it and tell them you can provide this service for $175 and you want all their HELOC work.

 

If you are successful and get the additional business, you have just increased your income and discovered a new way to make $150/hour being an appraiser because it will take you less than an hour to produce the 20 point CVR report described above.

 

To lean more about CompCruncher, the education and training program, and the new CVR report format, go to www.AppraisalWorld.com.

 

We want to hear form you. Send your comments to cvr@appraisalworld.com.

 

It’s time to empower appraisers and demonstrate that we do not need or want more intervening regulation.

 

 

Jeff Bradford, CEO

Bradford Technologies, Inc.