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Original Comp Photos: Dangerous, Unnecessary
by Damian Downie, CEO of Downie Valuation Services, Inc.
I’ve been meaning to write this for a long time and what happened today is the straw that broke the camel’s (appraiser’s) back.
As I do many times a day, I was taking comparable (comp) photos for an appraisal. This one in particular is a condominium, so I was taking photos of two condos in a competing complex. There was a gate into the property, so I stopped across the street and snapped a photo of the gate.
Three minutes later, about a mile from the site, I looked over to my right out the passenger window, and I saw a man holding his phone up and pointing it at me. I asked him what he was doing and he angrily asked me why I was taking pictures of his car. He had a scowl on his face and so much anger in his voice that I seriously expected to see a gun pulled next. In that part of Sacramento, it would not have been a shock. When I tried to politely advise him I was a real estate appraiser, and was only taking photos of comparable sales, he did not want to hear it. He seemed to get angrier saying, “I’ve got your photo (mother…F-bomb).” Fortunately, I was able to drive off without it escalating but it certainly could have.
Will it take one of us getting shot or killed to remove this archaic requirement of driving comps?
This was the third time I had been chased down by someone in the last year alone, and I’m not the only appraiser to go through this. I would bet most full-time appraisers have similar stories. This can and should be avoided. Each time something similar happens, the angry/concerned party has either willfully refused to listen to my explanation, or wasn’t able to comprehend what I was saying. Many people do not know what an appraisal is, and most do not understand what our job entails. In other words, because most people don’t know we take photos of comps they don’t understand why strangers are taking photos in their neighborhood. They are quick to assume we are up to something worse. Very few times a person will say, “Oh ok, I was just checking. Have a nice day.”
Ever since appraisals became necessary, we have been required to take photos of each and every comp that we use in our reports. The reason for this is so we can get a clear picture of just how comparable these properties are to the subject. To evaluate if they are comparable in location, condition, quality, design and appeal, among other things. When this requirement was set, so many years ago, we did not have the technology that we do today. Back then, we could not see detailed photos with the many tools we have on the Internet. We didn’t even have the Internet back then. We do now, and it’s time we all agree that photos from the Internet are not only more helpful than driving comps, they save appraisers wear and tear on their vehicles, remove worry or concern from homeowners or tenants, save us time and money and keep unnecessary traffic and often lost appraisers, from driving up and down city and rural streets where children play.
As competent appraisers, we need to be informed of all aspects of the neighborhood, in order to provide a credible report, but proof of our neighborhood inspection isn’t necessary. Many tools we have today allow us to get a very clear picture of everything a drive-by of each comp would, and more. One is Google Earth, that allows us to see everything around the subject property as well as the comps we would use or consider. We do not need to drive around each side of every comp to know they are on, or backup to a busy street, commercial property, have power lines, etc. Satellite images allow us to zoom in and see these things right at our desk, and most of the time, this is even better than a personal inspection. With regard to inspecting the exterior of each comparable property, I doubt that I am the only one who makes sure to go fast enough so as not to be noticed by a potentially angry resident. The need to move quickly reduces the value of the in-person inspection in the first place.
We cannot sit there for several minutes and take notes because we know that the longer we do, the more probable it will be that there will be a problem or confrontation. MLS photos not only show us, in detail, what that property is like, they show us what that property looked like as of the date of its sale. And that’s really more important, considering the fact that by the time we see them, it has been months or more since the sale, and improvements are likely to have been made. This, along with the other benefits listed above make online photos a much better alternative.
MLS photos, along with allowing the appraiser and the reader to see what the exterior of the property in question looked like, as of the date it was listed, allow us to see detailed photos of the interior. These photos are clear and we are able to zoom in or out so we can get a very strong idea of its overall comparability to the subject property. Driving by them and taking photos of properties owned by proud and concerned people, is completely unnecessary to provide a competent and credible value, and an overall supported appraisal report.
Many of us perform appraisals in rural areas with parcels of more than an acre in size. Typically, when we take photos of these properties, we cannot even see the improvements, and wind up with only a photo of a driveway. In these cases, we include the photo of the driveway and then supplement it with an MLS or other online photo. We sometimes spend an hour or more driving through these rural neighborhoods because the comps are so far apart and the majority of photos end up being of driveways. This is costly in multiple ways, and overall completely unnecessary because an MLS photo would have been more than enough for credible results in the first place. In the end, the MLS photo was the only real photo data provided for the reader.
Our industry is constantly changing, and it often adapts to technology. When I first started in this business 17 years ago, my supervisor told me stories of how he used to paste actual pictures to reports, and that he had to submit full appraisal reports via US mail. Why don’t we do these things today? It’s simple. We have adapted to technology. Our current technology allows us to attach digital photos to reports and submit them electronically. Why haven’t we adapted to the technology provided through Internet tools to eliminate the ridiculous needs of our clients and Uniform Standards of Professional Appraisal Practice to drive past and take photos? I hope we can get together and make this change for the better for all involved. Let’s embrace our current technology, and move forward towards safer and more efficient appraisal work.
When HVCC was put into place, appraisers lost a good portion of our fees to AMCs and other middleman type companies. With the abolishment of the requirement to drive past and photograph all comps, appraisers could free up hours per day towards better and more efficient productivity. Our clients insist we are making “customary and reasonable fees” but that is simply not true. Fees have come back up over the last 14 years, but they are still not where they used to be. Reducing this burdensome requirement could allow increased productivity that raises our bottom lines back where they were before 2006.
Of my 17 years in the appraisal business, I have been in the field for 12 years and spent five working quality control for an AMC. I know many appraisers and have spoken to most of them about this problem and need for change; not one of them has disagreed with my argument. I even discussed this with a staff appraiser from the California Bureau of Real Estate Appraisers, and he agreed with me 100%. He suggested that I write to Fannie Mae if I wanted to really help make a change. I will absolutely do that, once this article is published.
We have the technology to make a change for the positive, so let’s use it. It’s cost effective for those of us who deserve our customary and reasonable fees, so let’s get those fees. And it’s safer for appraisers and residents of our communities, so let’s be safer. That man from the Sacramento condominium complex did not need to have to worry about his property or safety, and I did not have to worry about mine. Let’s come together and make the right decision. MLS photos and other online tools are sufficient, so let’s use them.
About the Author
Damian Downie has been in the residential appraisal field for 18 years. He is the Founder and CEO/Chief Appraiser of Downie Valuation Services, Inc. in Roseville, CA.
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