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Editor’s Note: Take the NEW 2021 Appraiser Fee Survey online now at WorkingRE.com/2021survey.
Driving Comps: The Great Debate
by Isaac Peck, Editor
Rarely has there been a debate as passionate or spirited in the appraisal industry as the one raging now: should appraisers continue to be required to drive comparable sales (comps) and/or take comp photos? Here are both sides and a survey to see where the majority of appraisers come down on the issue.
Appraisers in favor say comp photos are a value-add that provides the appraiser with critical information about the neighborhood and comparable sales. Appraisers against it say that it is unnecessary, a waste of time, and puts them in dangerous situations.
Working RE recently published two opposing articles on the subject, Original Comp Photos: Dangerous, Unnecessary and Why Comp Photos? (find it at WorkingRE.com). The stories produced dozens of emotional comments, with appraisers heatedly debating each side.
Do appraisers take original comp photos just because that is what Fannie Mae, Freddie Mac, and lenders require, or is there a real value? Some appraisers argue that it is not even a Fannie Mae requirement, citing their website which reads: “Copies of multiple listing service (MLS) photographs are acceptable.”
To help gain some insight for the industry, Working RE recently published 2021 Comp Photo Survey, which asks appraisers their opinion on the subject. The survey takes less than two minutes. The results will be shared with the entire industry. (Visit WorkingRE.com/photosurvey to take the two minute survey.)
For now, the debate rages. And what better way to air out the arguments than the words of boots-on-the-ground appraisers? Here are the two sides of the debate, in appraisers’ own words.
Danger to My Family
I was taking comp pics in a typical tract subdivision which was not located in a “sketchy” part of town. As I was leaving the neighborhood, I noticed a guy getting out of the truck behind me and walking toward me. Just then the light turned green, so I took off. He ran back to his truck. A few seconds later, the truck is following me. A different car pulls up beside me with two people yelling at me, asking why I was taking pictures of their friend’s truck. I yelled back what I was actually doing and they seemed to have accepted my explanation. Mind you, this was explained driving alongside each other at 40 mph. I saw them all pull into a gas station as I continued on my day. About two hours later I get a call from my wife, who is at home, asking if I took a picture of someone’s truck! Apparently, the guy with the truck found out where I lived and showed up at my house and confronted my wife about why I was taking pictures of his truck. She explained to him what I do. He accepted her explanation and left without incident. But what if he hadn’t and decided to harm my family? Comp picture taking is absurd and dangerous. Next time any one of you who disagrees and accuses us of “whining” about taking comp pics, ask yourself how comfortable you would feel if an angry stranger showed up at your home. —Eric Fenlon
I think inspecting comps is a necessary part of our practice. Many times I see something that I would have missed in photos (power lines, sewage plants, etc.). With that said, I won’t take a comp photo if I see anything hinky and never if anyone is in the front yard. I just photograph the nearest intersection sign. When I had an unmarked car, I had several scary situations, but now that I drive a car with the company name on it, I rarely get asked what I’m doing. If I’m asked, I just point to the sticker on the side of the car and that solves it. However, when I do rural appraisals, I often risk my neck trying to get a picture of a mailbox. Many times the roads are curvy, or you have to stop after the crest of a hill, and most of the roads do not have shoulders. All this for a picture of the mailbox? —Jim Anderson
Waste of Time
The reason MLS pics are OK in the new bifurcated products is because that process would not be possible if comp pictures needed to be taken, so guess what? It’s magically OK to use MLS pictures. The appraisal can be done perhaps days sooner if you don’t have to drive the comps. I have been doing this for almost 20 years and can count on one hand the number of times it made a difference. I have, however, been confronted many times by angry people concerning the picture taking. —Diana Kan
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Just Put a Sign on Your Car
I was pulled over by a police officer while out taking comp photos. Someone had reported a “suspicious” vehicle driving slowly. Once I told him who I was he suggested I check into getting a Realtor® tag on my vehicle. In my area, to use our MLS, we need to be full members of the local Realtor® association. Being a full member, I am able to have a Realtor® tag on my vehicle. This has greatly reduced the aggravation and confrontations. Might be worth checking into. —Janet Jansen
Dangerous? No. In more than 35 years of doing appraisals, I’ve had exactly two instances of people being upset that I was taking photos. In one case, it was a woman who was in the middle of a divorce and thought I might be a private investigator. In the other, the lady of the house wanted to make sure I hadn’t taken a photo of her young son (I never take pics of people). Unnecessary? Maybe. But we have ourselves to blame. If appraisers were better at knowing the certifications they sign… and about not taking it upon themselves to decide that one or more comp pictures don’t matter… then the GSEs may not have insisted that we actually take original photos of the comparables. Let’s not pretend. We all know appraisers who routinely use MLS photos and never bother to drive by the comparables. —Stephen
I totally disagree with the author of the article about not taking comp photos. Particularly if you are in rural areas, you may not see everything but you have an opportunity to get a feel for the neighborhood. I have been an appraiser for over 50 years and completed many original and review assignments. Doing many field reviews shows me that some unscrupulous appraisers have manipulated photographs and maps to make comparables more or less desirable. To do away with the requirement of an appraiser inspecting comparable sales is an abhorrent idea. —John Underwood MAI, SRA
Thank you for writing this. In my 18 years in this business, I’ve had people sneak up on my car and bang on my window as I sat and took notes. I was stalked and hunted through a neighborhood a few months ago after taking a comp photo. He was relentless and I finally stopped and gave him a quick explanation. He apologized for scaring me and drove off, but as a woman in this business, I was traumatized. It’s making my heart race just typing this out. You are correct, we have all the tools we need to assess the location of a comp available to us on the Internet. There are times a photo of a comp is nearly impossible such as one on a busy street. We create unsafe driving conditions for ourselves and the cars around us—with all this beginning and ending with having to take comp photos. —Amanda G.
Get Higher Fees, Do It Right
I love you folks, especially when I’m in court watching you getting your butts handed to you in a sling. A lot of the time MLS/Google/etc. are five-eight years old and out of date but you go ahead and use them and when you’re called to defend your appraisal by a mad property owner or such, and you go look at your “comps” to prepare yourself (weeks or months later) and find, whoops, you blew it on one or some of the comps. I have been at this over 45 years, and have had the experiences you folks have and have gotten smarter about how to go about it. There are some tricks of the trade that time teaches. An easy one is drive a truck, not some go-cart. Good luck, stop whining, get higher fees and do it right. Or go do something else. —Jack Kennedy
Concealed Defects, Changing Neighborhoods
I agree, taking photos can be challenging at times, so much so I have become careful of my environment, time of day, etc., and especially of those observing me taking photos. It comes with the business. Maybe your company is purchasing loans originated in SoCal, up in the area off the Antelope Valley Freeway. There are a lot of oil derricks up there. You get sent out as the reviewer to take a look at the properties and much to your surprise, you find oil derricks in the open areas behind the homes, that somehow don’t make the MLS or appraisal photos. Nor are they mentioned in the reports or listings.
I cannot tell you how many times I went to a home that is fine in the MLS photos, but the adjacent properties are not, and this may have impacted the price of that property. There are many things you cannot tell from photos in the MLS. It’s been my experience that agents don’t place anything negative in those MLS pictures. Driving by the comps is not just about seeing the home, but about seeing its environment and perhaps motivating factors impacting the price paid. Like you, I don’t like having to drive all the comps. However, I recognize the importance of doing so, even if on occasion, I have to deal with someone who’s upset about me taking a few pics.
I’ve been appraising in my area for more than 40 years. I’ve been in some of these neighborhoods hundreds of times, yet I’m amazed at the changes I see happening in the area in the short time since I was last there. Having appraisers take a current photo is a check and balance system, designed to keep honest people honest, and it helps appraisers keep up with various principles of value at work in the neighborhood. —Patrick
Here’s another problem with comp photos that is not typically mentioned; it requires the appraiser to choose their comps before seeing the subject property. Can any professional appraiser make a credible argument as to why selecting comps before seeing the subject property is better than selecting them after? Of course you can’t; we all know it’s better to select the comps after seeing the subject property, preferably after the sketch has been completed and the appraiser has had a chance to confirm all the subject’s features and influences. You can select comps after seeing the subject property then drive the comps, but that isn’t feasible with the fees we’re paid and the time constraints to make an extra trip into the field to shoot comps. —David
Why Cut Your Own Pay?
As a vocation, I don’t get the argument that people make to take away a value-add. Is the end game that somebody else goes to the subject and everything else is online and all that an appraiser does is some market analysis, adjustments and offer an opinion? What will this take? An hour? So you get $100-$150 for an “appraisal”? You should be getting paid for the WHOLE PROCESS, so why cut out any of it? Spare me the “efficiency” concerns—if you think that a lender or AMC will not want to cut back your pay for this, then you are fooling yourself. They already want to cut pay for a 2055 even though they take no less time to do effectively; I can go inside and look and measure in less time than it takes to scour listings, assessor sites, etc. If you want to do less, somebody will want to pay you less, period. In the end, you will do the same amount of work in a different way… for less money. —Doug
Shotguns and Accuracy
You have eloquently expressed my thoughts and arguments concerning photographing comparable properties. I actually did have a shotgun pointed right at my face. I have been chased with people brandishing baseball bats, tire irons, and once, a sword-like weapon. I’ve been doing this almost 14 years and it never gets easier. It affects my mood, creates enormous anxiety and stress, and makes me feel like a pervert when kids are out playing in their driveways. I do not blame homeowners for attempting to protect their homes and neighborhoods. Furthermore, the comps are selected based on their time of sale so that corresponding photos are more accurate than “today’s” photos. Photographing comparables can be dangerous and does not contribute to the derivation of an accurate valuation of the subject. Thanks for writing a long-overdue article of such importance. —David Edward Cohen
About the Author
Isaac Peck is the Editor of Working RE magazine and the Vice President of Marketing and Operations at OREP.org, a leading provider of E&O insurance for appraisers, inspectors and other real estate professionals in 50 states. He received his master’s degree in accounting at San Diego State University. Reach Isaac at firstname.lastname@example.org or (888) 347-5273. CA License #4116465.
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