For a number of years I was active in the real estate appraisal profession. When I first became an" appraiser" decades ago, it was considered a profession.
When I became a VA appraiser the goal was to be objective, honest and as accurate as possible. The VA had oversight and reviewed each and every appravisal.
The profession then demanded facts and verified documentation including documentation of comparable sales, and get this, with an inspection inside and out, of all comparable sales utilized in a final report.
Today, real estate appraisers are only required to drive by the comparable sales, take a photo and work from third-hand data such as MLS sheets, or assessor's records. Some wonder why or how did the "mortgage meltdown" occurred.
In a residential real estate appraisal the "comparable sales approach" is considered the most valid. Without a physical inspection of the interior of a residential comparable sale, the data, in my opinion, is totally useless.
However the golden rule today dictates the way the appraisal business operates on the old idea," He who has the gold, makes the rules." And in this case it is the mortgage firms who order and pay for the appraisals: the banks, and financial institutions.
They don't want an objective opinion of value, they demand a number that will justify the loan amount. Even though a borrow must reimburse the financial institution keep in mind that the appraiser "works" for the bank.
The appraisers are caught in a squeeze, if they don't give the banks, or mortgage companies what they demand, the predetermined number, the appraisers doesn't get more work from those financial institutions.
When I became a VA appraiser the goal was to be objective, honest and as accurate as possible. The VA had oversight and reviewed each and every appravisal.
The profession then demanded facts and verified documentation including documentation of comparable sales, and get this, with an inspection inside and out, of all comparable sales utilized in a final report.
Today, real estate appraisers are only required to drive by the comparable sales, take a photo and work from third-hand data such as MLS sheets, or assessor's records. Some wonder why or how did the "mortgage meltdown" occurred.
In a residential real estate appraisal the "comparable sales approach" is considered the most valid. Without a physical inspection of the interior of a residential comparable sale, the data, in my opinion, is totally useless.
However the golden rule today dictates the way the appraisal business operates on the old idea," He who has the gold, makes the rules." And in this case it is the mortgage firms who order and pay for the appraisals: the banks, and financial institutions.
They don't want an objective opinion of value, they demand a number that will justify the loan amount. Even though a borrow must reimburse the financial institution keep in mind that the appraiser "works" for the bank.
The appraisers are caught in a squeeze, if they don't give the banks, or mortgage companies what they demand, the predetermined number, the appraisers doesn't get more work from those financial institutions.
My decision to leave the field was based on this fact.
In the 1980's the US Congress was going to tighten the regulations controlling residential form appraisals but the banking lobby prevailed.
In the appraisal business there are generally two types of reports: The full narrative and the form report. The full narrative always costs much more but is more reliable.
Some appraisers today will give an honest and blunt estimate of a valuation of property.
Those who do court work, that is who will testify under oath, are well trained, totally open, honest and reliable do great work.
Be wary of bank appraisals. Remeber you can always retain your own real estate appraiser.
In the 1980's the US Congress was going to tighten the regulations controlling residential form appraisals but the banking lobby prevailed.
In the appraisal business there are generally two types of reports: The full narrative and the form report. The full narrative always costs much more but is more reliable.
Some appraisers today will give an honest and blunt estimate of a valuation of property.
Those who do court work, that is who will testify under oath, are well trained, totally open, honest and reliable do great work.
Be wary of bank appraisals. Remeber you can always retain your own real estate appraiser.
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