Personally, I feel the most significant contribution we can make to our own success is the willingness to be open to change and see the positive benefits to enhancements and new technologies. To run a successful business we need to be determined, motivated, adaptable, and have creative vision. It certainly can be difficult to stay motivated when facing fee issues, Fannie/Freddie UAD changes, increased lender requirements, and a tougher job overall analyzing market trends and housing prices. What we need to remember is that we are important to the process and those of us with integrity will continue to be. Being adaptable and having a creative vision are probably the most difficult. We all get tired of change especially when it does not seem to benefit us. It is in being creative that we identify ways to take the changes and make them work to our advantage, and helps us to be better at our craft by expanding our way of thinking and processing data. New things are not always bad things – we can look back 20 years and know that is true. Digital cameras saved time and money and online data sources have made us more efficient.

I remember working for Bank of America roughly 20 years ago and had the opportunity to listen to Bill Rayburn, CEO of FNC speak at a company function. The talk was about AVMs and those scary models that were going to put appraisers out of business. Bill, of course, was delivering the message that we need not fear AVMs but be prepared to use them as a tool in the valuation process. In other words, the data they provide needs interpretation or validation by an expert – an appraiser. AVMs have been used in lending decisions but typically with low risk or low LTV loans or with portfolio analysis. They are used more for post funding purposes and many times still require the analysis of a skilled person. Nevertheless, they are here, have been here, and are staying here and they are not a threat to the appraisal profession.

According to Dodd-Frank, AVM use now requires an inspection of the property for condition assessment. There are still questions needing an answer as to exactly what the intended consequence of the Bill is; however, it definitely opens the door for additional hybrid services for appraisers. AVMs will require validation or the skill of an appraiser to identify their usefulness and the properties will need to be inspected. This is just one possibility for a new hybrid product. The CVR by Bradford Technologies is a great product and there are many appraisers across the country becoming certified to complete them. Many lenders and AMCs are working on hybrid products that are faster and more efficient to complete and are not always for loan funding but are for portfolio analysis or loss mitigation. There may be significant increase in opportunity for appraisers willing to complete these types of products and services.

From attending meetings and conferences in the past, I have heard much opposition from appraisers about completing assignments for $100. Yes, it comes down to money and pride since appraisers are accustomed to completing appraisal products paying $250 to $450 as a general range. I know it takes quite awhile to produce a credible 1004 and probably averages close to 6-8 hours. Therefore, if you are paid $350 for a 1004 that takes 7 hours to complete you are making $50/hour. There are hybrid products that take an hour to complete at your desk for $100. This is $100/hour. I am being very simplistic here and taking averages but, it seems to me to make sense to look at my hourly rate when accepting assignments. The amount of effort you spend, resources required, and the dollars per hour earned are the important factors in the equation.

Now we have addressed the economics of embracing new products. There is always a learning curve and time to develop new thought processes but the economies of scale would appear to be to the advantage of the appraiser – you and me. Personally, I find completing new products challenging but exciting at the same time. When I don’t have to drive 50 miles a day and pay astronomical gas prices, it is a good day. When I can help a client produce credible valuations that suit their needs, it is a good day. When I can continue to show the need for appraisers and show their expertise in a changing environment, it is a good day.

I am proud to be an appraiser despite it all and will continue to embrace change that brings good to the industry. You can trust that I will always challenge what doesn’t represent quality, integrity, or transparency.

First, you must realize that the user of your report is not the expert in your field. Therefore, you need to fully explain your analysis and report it completely. They should not need to guess or just take your word for it. I always use this analogy: we are like the paramedic in the field communicating back to he doctors in the hospital the vital signs of a patient. The doctor makes the appropriate decision that is critical of saving that person’s life. Imagine if some of the information was not conveyed or worse, the wrong information was presented. Now, I know we are not saving lives here but does that make our role in this wonderful world we live in any less significant? Appraisers are the eyes and ears of the user and they are using your product to make a critical decision to protect their risk position. This could mean millions of dollars over a period of time.

Be sure to click on the links within the instructions of the first page of the engagement letter.

Understand “all” of your clients’ requirements! At the least, read the engagement letter fully the first time for every client. Most requirements will be standard and redundant. Others will be specific to each client. Create a process worksheet for yourself and incorporate all requirements into your standard process. In 99.99% of the assignments, a client that does not typically ask for what, another client might ask for will not complain that you provided them that additional tidbit. Your report will also stand out over the others and you will be recognized and requested often. Once you create a standard, these requests are just part of your process and you greatly reduce the number of revision requests.

As for value, we hire appraisers who have many years of experience, are well educated, and who are competent to appraise. Therefore, we should not need to teach Appraisal 101 here and if we do, then QVS is doing something wrong in our vetting process. However, we as appraisers are sometimes challenged with a unique problem. I have always recommended to appraisers to get out and mingle with your peers. Take classes in person for at least a portion of your continuing education and align yourself with other appraisers that you can bounce problems off of from time to time. You also have a resource here at QVS. Whenever you have a unique situation that you know will be questioned by the lender, drop what you are doing and call us. Our staff appraisers can help you through the process and if needed, we can involve the client to get their instructions as to if or how they want to proceed. You should do this as close as possible to the beginning of the process. Remember, the clock is ticking and you are scored not only for quality but also for communication, and turn time.

There will always be revision requests. What can QVS do for you right now to help you eliminate 90% of them? I am going to open up my “cheat sheet” of items we consistently include in our revision requests. I strongly suggest you use this as a guide to add to your standard process. Of course we still review for value prior to sending the report off to the client but these will help a great deal to reduce the amount of revisions and in many cases eliminate them all together. Your scorecard will also improve which will mean more appraisal work.

The last item I would like to discuss is the business side of appraising. Quality is one thing but I cannot stress enough the importance of the contract you entered into when you agreed to accept an assignment. You are not only accepting the conditions of the assignment in terms of quality of product but you are accepting the time to which it is completed, and that the product is usable to our client. Our clients score us on a monthly basis and we are committed to honor our contract to deliver a quality product and quality of service. We ask that you respect that commitment as well. We are in a unique position to increase our volume with our current clients, however, we can only do this if we can deliver a quality product in the required time frame. This also means more business for you. Our scoring system mirrors our client’s expectations and we will reward the best producers who consistently deliver quality. That is our promise. I hope the list below helps. I truly feel that it will make your life easier and more productive. Thank you for working with QVS and please know that we truly appreciate all that you do.

CHECKLIST

AI READY
Please re-upload in AI Ready. Also, please remember to make sure you do not attach the invoice as this happens sometimes when converting to AI Ready.

INVOICE
We cannot send the file onto the client with the invoice in the appraisal. Please deselect it when converting next time. You do not need to send an invoice, but if you would like to for record keeping purposes you can email it to support@Qualvs.com.

TOP OF FORM

LOAN NUMBER:
Please provide the loan number as reflected in the engagement letter, in the upper right hand corner of page one of the appraisal report. QVS NUMBER IS NOT REQUIRED.

FHA CASE NUMBER – ALL FHA ASSIGNMENTS – ALWAYS REQUIRED!!!!
Please provide the FHA Case number in the upper right hand corner of page one of the appraisal reports. QVS NUMBER IS NOT REQUIRED.

SUBJECT SECTION

PUD
Subject is a PUD. Please mark PUD and fill out PUD section of the report

SPECIAL ASSESMENT
Please describe the special assessment indicated on page 1.

NEIGHBORHOOD SECTION
NEIGHBORHOOD BOUNDARIES: UAD requires N, S, E, & W boundaries.

PRESENT LAND USE
Always Describe “Other”

PRESENT LAND USE is not consistent with NEIGHBORHOOD BUILT- UP

LOCATION
Subject is noted in a ‘suburban’ or ‘urban’ location, however all indications are for rural, i.e., acreage, distance of comps, septic tank, photos.

EXTERNAL OBSOLESCENCE
All external obsolescence is a red flag and should be fully disclosed, analyzed, and appropriately addressed and adjusted for.

SITE

SITE DIMENSIONS / PLAT MAP
Most clients require that the site dimensions be placed in the site section of the appraisal whenever possible. This includes parcels, which may have more than four dimensions or are somewhat irregular. Please include site dimensions similar to the example of 50x100x25x10x40x120. Of course, the actual size of the site will also need to be reported. If the site dimensions are not readily available, please be specific in stating why they are not available. You May reference the Plat Map within this line if plat map was included however, plat map should show dimensions.

PLAT MAP
Most clients require a copy if the Plat Map whenever possible. If the Plat Map is not available, please state and as to why.

PRIVATE WELL
Please state if public water is available to the subject for hook up and if so estimate cost to cure.  If not available, please state

PRIVATE SEWER/SEPTIC
Please state if public sewer is available to the subject for hook up and if so estimate cost to cure.  If not available, please state.

SALES COMPARISON APPROACH

CONCESSIONS
Concessions must be addressed for each comparable and adjusted for. If adjustments are not warranted you must provide an explanation.

GROSS LIVING AREA VARIATION
The living area variation between the subject and comparable(s) is excessive (greater thanXX%); you should include a specific comment regarding this difference and why it was necessary to utilize sales with excessive living area variations.

VALUE RANGE OF COMPARABLE SALES
The adjusted price range of the sale comparables from $XX to $XX or (XX%) reflects a wider than desirable range of value; you should provide commentary addressing this condition and indicating specific where and how emphasis of value is placed.

ACROSS THE BOARD ADJUSTMENTS
Provide commentary for the across the board (+) LINE ITEM, & (-) LINE ITEM adjustments explaining how these adjustments were determined AND the inability to bracket these characteristics.

ADJUSTMENTS
Please provide commentary on NET and GROSS adjustments as they exceed typical guidelines.

PREDOMINATE VALUE:
Please comment on the subject being over the predominate value and any effect this has on marketability.

RECONCILIATION
Please provide a reconciliation of value addressing how each comp was weighted and why, thus addressing how the final opinion of value was arrived at.

VALUE CONCLUSION
Please provide a comprehensive value conclusion. A comment like “all comparables have been given equal weight” is unacceptable. Please provide an analysis conclusion indicating which comps are given the most weight and why. Please explain how the adjustments and value was derived.

OVER 1 MILE
Standard distance parameters were exceeded by one or more of the comparables. Please expand commentary on the need to use comparables over a mile away from the subject. Could this be considered rural?

LISTINGS

LISTINGS “ALL CLIENTS”!!!
1) Per the engagement letter, please provide a pending sale and/or current listing.
2) Please adjust for List/Price Ratio. If you feel adjustments are not warranted then please explain.
3) Listings represent the current market and therefore should support the final value estimate. If not, then a detailed analysis and explanation is required.

1004MC vs. PAGE 2:
Sales on top of page 2 should be consistent with the 1004MC. Please either correlate or discuss why these are different.

COST APPROACH
ALL clients ask that the cost approach be completed, on all forms, which provide for its inclusion. Regardless of the age of the subject property. Please complete both sides of the Cost Approach.

PHOTOS
Please provide specific labels for photos (i.e., bathroom, bedroom, Living room, etc.)

PUD
Appraiser to fill out PUD section, Also, report the HOA assessments and compare to subject project, comment on condition of common elements & analyze how they compare to common elements of competing projects.

SKETCH

SKETCH
Please show all improvements including porches, desks, patios, sheds, and outbuilding with dimensions on sketch.

SKETCH
Some clients require you to include basement with dimensions in sketch. You may want to make this a standard.

FHA
FHA ITEMS: These are required on ALL FHA Loans!!!!!

1) Appraiser will need to comment to the effect of “a head and shoulders inspection has been completed

2) Appraiser will need to comment to the effect of “property meets minimal property standards according to HUD/FHA Handbook 4150.2

3) Appraiser will need to comment to the effect of “all mechanical systems and utilities were working properly at the time of the inspection

4) WELL AND SEPTIC – Appraiser to verify subject well is a minimum of 50 feet from the septic tank, 100 feet from the septic drain field and a minimum10 feet from any property line.

APPRAISER INDEPENDENCE– Required Statement on all Assignments!!!
In order to be compliant with Appraiser Independence regulations, we are asking that you include the following Appraiser Independence certification as noted below: “No, employee, director, officer or agent of the lender, or any other third party acting as a joint venture partner, independent contractor, appraisal management company, or partner on behalf of the lender has influenced or attempted to influence the development, reporting, result or review of this assignment through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, bribery or in any other manner. I have not been contacted by anyone other than the intended user (lender/client as identified on the first page of the report), borrower, or designated contact to make an appointment to enter the property. I agree to immediately report any unauthorized contacts either personally by phone or electronically to Quality Valuation Services.

LICENSE
Please provide a current copy of your license in the report.

UAD
Please include the UAD definitions pages in the addendum.
RUN YOUR UAD RULES BEFORE SUBMITTING!!!

SIGNATURE/CERT PAGE
SIGNATURE/CERT. PAGE (No AMC) – In the signature area, the Client Name field indicates “No AMC” or is blank. Please be sure QVS is noted here!!

CARBON MONOXIDE DETECTORS – CALIFORNIA
Carbon Monoxide Detector (CA) – If the subject does not have a Carbon monoxide detector, it must be reported. Please read your engagement letter to see if the lender requires the report to be made subject to installation of a carbon monoxide detector.

Technology innovation is one way we at QVS drive efficiencies and improve our operations and results to our clients.  Our approach is to listen to our clients and build solutions that address their pain points.  This month we are expanding our analytics and reporting capability as result of client feedback and suggestions.

 Our new analytics page includes information showing average turn time, fees by product type, and the proximity of our appraiser to the subject property.  Graphically, our clients can now see their appraisal services on a Google map and by clicking on the property address, show the driving distance traveled by our appraisers.  We are excited to offer this new capability to our clients and we thank them for their feedback.

There has been much debate regarding Geographic Competency lately and after talking to many lenders, appraisers, underwriters, and end users of valuation products, I still feel that there is still a mis-understanding of what “Competency” is all about.   Back in the 90s, you almost never heard the word “Geographic” in the definition of “Competency”.   We know that for anyone to demonstrate successful job performance no matter what they do in life they need to have core competencies within that field.  This includes a practical and theoretical understanding of the subject matter including basic principles, theory, standards, and rules, they need to have knowledge and understanding of the tools available to them such as software and data sites and of course know how to use them effectively. We must develop our skill sets and in our case requires the need for quality education and as appraisers work under a supervisor for several years so we can master complex tasks.  We need to be able to identify the problem to be solved, determine the scope of work, and apply the work necessary to develop a credible assignment. Other elements could be discussed including customer service, communication, leadership, personal effectiveness such as organizational skills, time management, ethics, and continually leaning and improving with help from our colleagues.  This might be a good topic in the future.  So, let’s get back to “Competency” as it relates to the appraiser.  The 2010-2011 Edition of the Uniform Standards of Professional Appraisal Practice or USPAP) has a clearly defined COMPETENCY RULE that states:  An appraiser must: (1) be competent to perform the assignment; (2) acquire the necessary competency to perform the assignment; or (3) decline or withdraw from the assignment.  The appraiser must determine, prior to the assignment, that he or she can perform the assignment competently which requires the ability to properly identify the problem to be addressed, have the knowledge and experience to complete the assignment competently and recognition of, and compliance with, laws and regulation that apply to the appraiser or the assignment.  So, where does geographic fit in?  Under this section the Appraisal Standards Board provides us with a comment that states, Competency may apply to factors such as but not limited to, an appraiser’s familiarity with a specific type of property, or asset, a market, a geographic area, an intended use, specific laws and regulations, or an analytical method.  If such factor is necessary for an appraiser to develop credible assignment results, the appraiser is responsible for having the competency to address that factor or for following the steps outlined in Acquiring Competency to satisfy this COMETENCY RULE.  So is “Geographic Competency” relatively a new concept, not at all.  After all, we are providing analysis that is geographically centric in most cases right?   Out of curiosity I went back to my “2003” USPAP book and there it was.  “Geographic” was there under comments within the COMPETENCY RULE.  Thinking back to my days of 101 and 102 we discussed how important it was to know the market we are appraising.  This is not a new concept.  It is a practical one.  What is new is that the word “Geographic” has become somewhat a “buzz” word kind of like when underwriters would quote USPAP when they never even glanced at a copy of it.  The other day we received a rebuttal or (request for reconsideration of value) from a lender and prepared by the borrower.  The borrower stated in the first sentence, “I do not feel that the appraiser was Geographically Competent”.   This became a new weapon in the lender’s, borrower’s, broker’s arsenal to contest the appraisal with the hopes to get the “deal” done.  In this case, the appraiser lived less than 5 miles from the subject and has been appraising there for over ten years.   However, does the appraiser’s physical address automatically deem him or her Geographically Competent?  Here lies the misconception of what Competence is all about.  Just because you live close to the subject property does not mean you are a great appraiser and the opposite holds true if you live 50 miles away certainly does not make you a bad one either.  I see policies written by lenders that require the appraiser to live in the same county or even town.  WHAT?  Others dictate the appraiser must be within 10 miles of the subject.   Living in Rhode Island, a state that is only 1214 square miles (48 miles north to south and 37 miles east to west) We have only one Multiple Listing Service that not only covers the entire State of Rhode Island but parts of Southeastern Massachusetts as well.  We have 39 municipalities each having its own form of local government.  That is 39 school districts and 39 tax rates.  Oh, I do have to boast that as small as our state is, we have over 400 miles of shoreline on the Atlantic Ocean and Narragansett Bay.  Can you imagine requiring an appraiser to live within the town that he/she appraises here in RI?  As for distance, Rhode Island appraisers not only specialize in specific communities that may or may not be located near where they live but for the type of property being appraised such as historic or ocean-front homes. We have appraisers that live in Bristol County, Rhode Island that specialize in areas like Bristol County, Massachusetts rather than an appraiser that might live in Bristol County Massachusetts that will go anywhere to get an assignment.  Who would you use?  Who is more competent? You see, “Geographic” Competency is not as simple as you think.  What I do know is that most appraisers would rather stay close to home whenever possible. At QVS, proximity is heavily weighted and monitored throughout the process. We can also report average distance of each assignment to the client. However, proximity is not the only criterion that ensures geographic competence. The appraiser’s historical performance for that specific region is also monitored and utilized. In addition, QVS identifies niches (i.e. appraisers who specialize in 2-4 family properties, historical properties, water-front, reviews, or retrospective assignments) through on-going surveys to determine the most appropriate appraiser is chosen for the assignment. This is important because at the end of the day we are confident we are using the best appraiser for the particular assignment.

Does Geographic Competency matter?  Of course, it does but what we should spend more emphasis on is if the appraiser is “COMPETENT” period!

There has been a great deal of discussion around geographical competency as of late; however, what does it mean to be competent in general?  There are plenty of definitions to define competence but for the purposes of this discussion and application to the appraisal world we will define competency as, the ability of an individual to perform a job properly.

There are numerous aspects that go into completing a competent appraisal report but one that is often overlooked is service.   Being fully competent to complete an appraisal assignment entails primarily understanding how to define the problem, gather and analyze data, perform the approaches to value and report the conclusions. None of these components are to be understated; however, so often the service component goes without adequate attention and focus. To complete an appraisal assignment properly, the following components of service should be considered.

• Understanding the Business
• Results Focus
• Customer Service
• Teamwork
• Interpersonal Communication
• Leadership

Focusing on the above service oriented components will enhance business growth and attract clients.  Understanding the appraisal business does not only mean grasping the technical aspects of appraisal completion but comprehending the needs to the parties involved in the transaction.  This has nothing to do with the value of the subject property but rather valuing the people that you work with.  Take the time to understand client specific requirements, as in the end it saves everyone the headache of corrections.  Take priorities and commitments seriously – do not over promise and under deliver.

Focusing on results means to pursue your work with energy and drive.  Always seek ways to improve efficiencies and offer up ideas to all of those you work with to enhance the process for all.  Provide critical but constructive feedback when given the opportunity to make a positive difference.

The provision of good customer services boils down to being a professional.  Respect is one of the keys to great service.  Always respect the people you are dealing with in any transaction. We don’t always have to agree but should not lower our personal levels of respect for others and ourselves. Delivery of products and services in a timely and accurate manner are very important to meeting expectations; thus, providing great customer service.

Teamwork fosters service in that building relationships and sharing visions for a common goal bring people together.  Ask for help and be willing to provide your expertise to others.  Appraisers tend to be isolated but there are many ways to get involved and partner with your clients and fellow appraisers.  Collaborative efforts on challenging assignments make the process more rewarding and build the foundation for lasting cooperation and partnerships.

Open communication is absolutely critical to the process. Communicating openly, honestly and effectively will make the entire process flow smoothly. Be clear, concise and present information in a timely and organized way as this promotes trust and credibility. Try to be positive in communication and set the tone for a good transaction.

Even as independent appraisers you can take on a leadership role by leading by example.   We all influence others by our demeanor and attitudes.  Acting ethically and with integrity provides confidence in those around you.  Set a high standard for yourself and always honor commitments.  Never be afraid to ask for assistance, for we learn and grow when we acknowledge our shortcomings and areas of improvement.  Leaders are also humble and value team work.

Being a competent appraiser means different things to different people but from a QVS perspective it means mostly exhibiting the components of service listed above combined with the talents required to complete solid, supported appraisal reports.