DO YOU WANT TO LEARN TO APPRAISE?

(OR, I WANT TO BE AN APPRAISER)

BASICS OF WHAT I DO

Those conclusions are analyzed in relation to the property being appraised. Does it conform to local market desires or does it differ, and does that difference add to or detract from that property's desirability and value? Those conclusions should also be supported by excerpts from, or summaries of the appraiser's data search.
Not all appraisers provide the same level of detail and support in their reports. Some will complete only the minimal necessary on the report form, asking the reader to accept on faith that the research has been done and the conclusions are credible. Good appraisers, the analysts, are communicators that write narritive addendums of a length and clarity that allow the reader to follow to the same conclusions.
Software used by appraisers permits the use of generic comments in place of thoughtful analysis. Appraisers that practice this approach are termed "form-fillers" and are able to turn out high volumes of work quickly, but sometimes with questionable or weakly supported value conclusions.
Residential appraisers rely heavily on the Sales Comparison Approach to value. This involves reporting several sales that are adjusted in dollar amounts for physical or functional differences from the subject property. The adjusted value prices of these comparable sales should indicate a narrow range of values for the subject property, and an explanation of the final indicated value within that range.
Ideally, those reported comparable sales should be similar to the subject property in most respects, the closing dates should be fairly recent in time, and the locations of those sales should be in close proximity or at least within the defined Market Area. Of those three requirements, the last is the most important because that is the one that reflects the local market. Use of sales from other neighborhoods or distant locations may suggest that the appraisal does not adequately support the value conclusion. Where the market may be changing quickly through appreciation or declining values having recent sales is of greater importance. If the local market has been described as "slow" the reader is prepared for older sales, less similarity to the subject property with greater adjustments to the sales, or more distant sales. In all cases the final value should reflect these market trends and in the final reconciliation the appraiser's duty is to communicate a summary of all that has led to the value conclusion.

There has always been, and always will be pressure on appraisers to commit to some requested value. There have always been, and always will be, some appraisers who will depart from the highest ethical standards and produce a report with the requested value. Level of license or years of experience are no guide to identifying those individuals. If a report has been prepared in this manner the only way to determine that is by addressing the questions: Does it accurately describe the subject property, does it accurately and thoroughly describe the market area, and are the comparable sales the best available, the most similar to the subject, and are the adjustments reasonable and adequately supported and explained?

In a side note, I had previously written in this site that I used the best and most powerful software available. That is no longer the case. As the versions of the software became more complicated and more powerful, and more subject to hijacking of data, I would spend days finding and disabling many of the features. Now, and for the past several years, I have been using the "dumbest" software that I could find. The reason is that it gives me the greatest control of the report I produce, and that every word, checkbox and phrase is individually selected for that assignment.

SANITY, DEBT AND HOMEOWNERSHIP

The sane approach is less often seen. The sane homebuyer or homeowner gets a mortgage to buy a home and pays it down, or refinances to improve the property value or get a lower interest rate or shorter term. The sane homeowner remembers that owning a home is a retirement investment, that when the home is paid for retirement is more secure.
The sane homeowner remembers that a home is a place that holds those memories after some have moved on, a place to return to on the holidays, a place to feel secure in old age.
I'm not trying to discourage people from owning their home or from refinancing it from time to time. That's how I earn my living. I feel a personal commitment to helping people into affordable housing, especially first-time buyers or those with marginal assets, because for many, homeownership is a way out from poverty and a way into a more secure future. But we need to do it with sound lending practices, and that begins with honest appraisals. The appraiser has a position of trust, not just to his client but to truth, and any breach of trust raises questions about the appraiser's ethics.
Let's just use a little common sense and bring some sanity back into the process.

I have been in the real estate business since 1982, both as a sales agent and broker and since 1986 as an independent fee appraiser after leaving government work as a Meat and Poultry Inspector for the USDA. I was a firefighter on the town volunteer fire department for nine years and was code officer for the two years I was First Lieutenant. I have a BA in Education and have continued to take appraisal courses and attend seminars that expand my skills. When licensing by the state became available, I was among the first group of appraisers to receive one, approximately 18 months before they were required for banking work.