Time for an Appraiser Union?

Much talk has occurred lately on a variety of injustices incurred by appraisers through scope-creep, indemnification clauses, decreasing number of appraisers, lawsuit volume increases, and the like. Naturally, there are a whole lotta unhappy appraisers out there. Surely, there are many things to be concerned with, but there is a greater fear that overrides all other issues; the fear that there ain’t a dang thing we can do about it.

The lack of ability to make changes to those things we view as wrong is a debilitating feeling. As small business owners, we are used to getting things done our way. The ability to see a problem and then implement a plan to fix it is in our very natures. On the opposite side of the coin, seeing a series of major issues with our industry, yet having our hands tied as to their solutions, leaves us feeling frustrated, angry, and powerless.

I just returned from a conference of high-power ‘suits’ in the appraisal industry. For 1.5 days, these thought-giants listened to speakers, broke into workshop roundtables, and tossed around ideas on such important issues as appraiser fees, scope-creep, litigation, and more. There were some strong opinions voiced and some great ideas shared. After the conference, I spoke to one of the participants in the hallway (I will keep his name confidential as you would recognize him, and I do not have permission to share his words). During our brief meeting, I told him how impressed I was with the caliber of individuals and the great ideas that had come forth. I then asked what happens now. Who now has the power to begin implementing these great solutions? His answer was only slightly disheartening. To paraphrase, he said, “Well, no one really. We are more of a think-tank. Our purpose is to discuss problems in the appraisal world and come up with possible solutions. It may be that some of the people in that room have contacts in government and other institutions and might catch the ear of those that can implement changes, but that is all.” Oh, boy. Now, don’t misunderstand. I think it is great that these types of brains come together periodically to have these kinds of collaborating conferences. I am simply disheartened by the fact that they really have no power to make any of the changes they spent hours hammering out in the end.

Furthermore, it is not just the intellectuals with all of the good ideas. As The Appraiser Coach, I spend a good deal of time interacting with appraisers across the country, and they are concerned with the same problems that you and I are. Furthermore, the solutions I hear from Mr. Appraiser in Columbus, OH or Ms. Trainee in San Diego, CA are sometimes better than the ones I hearfrom the experts in the many conferences I attend each year. The problem? Well, it is the same on all levels of our profession; we have no power in the big scheme of things to make any meaningful changes.

Is it time for an appraiser union? Now, before I go any further, I should outline my general philosophies in regard to unions. There has been a lot of bad press lately on the topic of unions. Rightfully so. I believe the majority of private unions (and ALL public unions) are corrupt at their core. Union bosses are in bed with politicians, union membership is forced in non-right-to-work states, and union dues are often funneled directly into legislation that directly benefit some while harming the rights of others. However, private and voluntary unions have their place. There is power in a large group of like-minded individuals gathering together to fight for a common cause. That is the American way. Our Founders depended upon it, and our country was established on that very foundation. It is protected even in the First Amendment. Yet, words carry emotion, and since the word ‘union’ has a generally bad connotation in today’s society, I will refrain from using it throughout the remainder of this paper. Instead, let’s use the word ‘coalition.’

Is it time for a national appraiser coalition? I think so. Now, some will argue that such an organization already exists. Though I would agree there are many good and helpful appraiser groups, none rise to the level that I am advocating here. There are national groups who do some of what is necessary, and there are local and regional groups who do most of what will be required to turn this ship around. The problem is; there is no group(s) big enough to make a national splash who is/are actively doing all that must be done to really cause the wheels of change to begin turning.

What I am promoting is something similar to the size and scale (ratio-wise) of the National Realtors Association TM. Now, I realize there are many more members of NAR than there are total appraisers in the U.S. (many of us are even members by nature of our affiliation with local realtor boards). I also realize the NAR has a lot of problems (beginning with their obvious disdain for appraisers), but I am not advocating we copy them. I am simply pointing them out as a model of what we might consider in forming our own coalition. We need a group with strong leadership, clear goals, connection to Washington and state governing bodies (the right way), and one which benefits appraisers in such a way that nearly all of us will not be compelled – but desirous to join and pay our dues with pleasure.

I imagine a powerful organization who meets with its members, listens to its members, and has the ability to make changes that actually affect the lives of its members. If we have concerns about fair pay for service provided, we should be able to express those concerns and not feel that our cries are falling on deaf ears. I foresee a group who has the resources and media time to educate and inform the common man on what an appraiser is and what an appraiser is not. I see an organization with the kind of clout to cause movers and shakers to take notice when they speak. I HAVE A DREAM that some day… (sorry, got a little carried away there).

The fact is, we can (and should) do much better than we are currently doing. This coalition could come about in one of several ways. It is possible (with the right leaders) to begin from scratch and develop such a society from the ground up. This is not likely, however, as it is difficult to gain membership without traction, and it is hard to gain traction without membership (the old catch-22). It is more probable that this type of problem-solving society will rise from either a current organization (by making major changes to their foundational structure) or the voluntary combining of two or more contemporary organizations (by one or both of them humbling themselves and realizing the power in unity).

This paper is not intended to have all of the solutions. Rather, it is an attempt to begin the process of discussion. Why are we not having these discussions? It seems to me that, if we put as much energy into pushing for organizing such a coalition as we do complaining about what is wrong with our current industry, we might see something come together for our good as a whole.

So, where are the leaders ready to step up and cause it to happen? When will the heads of current appraiser societies begin talks with their peers? Who is willing to make the first move? Anyone? Anyone? Bueller? Bueller?

Now, go create some value!

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Dustin Harris is a multi-business owner, but he has found most of his success as a self-employed, residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker and consultant. He owns and operates The Appraiser Coach (www.theappraisercoach.com) where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth.  He is also the Founder and President of Your Appraisal Office (www.yourappraisaloffice.com) which implements some of the systems he has developed to help lower costs and free up time for real estate business owners.   He and his wife reside in Idaho with their four children.

8 Comments on “Time for an Appraiser Union?”

  1. Dustin; I couldn’t agree more and I nominate you. We need to organize for the sake of the nation. I have just published this article as I believe that this is a much deeper American Free Enterprise issue than we realize. And until appraisers are fully independent and out from under the thumbs of the Bankster’s AMC’s our economy and our profession will continue to faulter.

    HVCC in Sheep’s Clothing
    The Truth behind our Real Estate Recession

    I just heard that 2012 will be great for Real Estate because “they” are going to loosen lending regulations. But isn’t that what got us in trouble in the first place, says a local expert now turned activist. According to Loring Greene, a local developer, Real Estate agent and State Certified Appraiser, our Real Estate recovery should have gained a lot more traction by now.

    Ask any Realtor or homeowner if they are happy with our lending regulations and they are all in agreement that we are all in a “world of hurt” because of a new practice that very few consumers are aware of.

    Buried under the Frank Dodd, financial reform act of 2011 are the effects of the HVCC, Home Value Code of Conduct, which is obstructing the natural market appreciation that grows from increasing interest and participation in real estate.

    What has subtlety happened is that we have lost one of our implied rights that are part of the original “Bundle of Rights” in land ownership. The freedom to choose is basic in the free enterprise system; you get to choose your own religion, doctor, attorney, CPA, geologist, surveyor, the list grows exponentially in a free society but the freedom to choose your own Real Estate Appraiser has been taken off the table.

    Not to mention that appraisers like Greene can no longer market themselves to homeowners, loan brokers and banks who would like to hire a State Certified Appraiser as their local expert. This legislation discriminates against a long standing, noble professional, the Real Estate appraiser as well as loan brokers and has created a vacuum of accurate appraisals.

    The HVCC which affects us nationally was the result of a little known law suit by Mario Cuomo, Jr. who was the New York State Attorney General and the end result was the HVCC, whose policies were promulgated by the GSE’s, Fannie Mae and Freddie Mac.

    The HVCC went into effect May 2009 and although it has expired its adopted practices still prohibit homeowners, lenders and their agents from knowing their appraisers. Lenders must schedule appraisals through third-party AMC’S, Appraisal Management Companies. The effects of the HVCC have replaced experts like Greene with neophyte appraisers, who will work on the cheap and fast to break into the business at the cost of the consumer.

    True professional appraisers are being driven out of the business in favor of inexperienced appraisers often compete against each other, bid on-line for jobs or are selected by the AMC’s who often take up to 50% of the appraiser’s fee.

    The result is artificially deflated appraisals for a variety of reasons by inept appraisers who are often not familiar with the neighborhoods they are assigned.

    Originally the HVCC was a good idea so as to protect the appraiser from pressure to hit a certain number. But it has backfired on us and is an over correction of massive proportions.

    You have to ask yourself, is it really the appraiser’s fault that banks were lending on stated income programs to anyone who could and often would lie about their income to get a loan.

    “The “Banksters” as Greene likes to call them and the government collectively threw out years of regulations that prohibited such lax lending and now want to place the blame on the ground troops in the trenches doing all the grunt work fighting for our values.

    Investing in a home can be one of the biggest financial decisions most Americans will ever make and the loss of this freedom to choose now makes homeownership a much more daunting prospect.

    Americans have lost two basic economic freedoms, the right to choose their own representation and the right to free enterprise for an important profession in our economy. Our free enterprise system has made us the most powerful nation on the planet so why are we messing with it?

    But if losing your freedoms doesn’t put a burr under your saddle maybe the loss of your money will as it can often take two appraisals to get a loan approved, doubling the cost to the consumer.

    Irate homeowners and real estate brokers are calling Greene to perform a “rebuttal appraisal” for a lender’s “reconsideration of value” to save their deals. The rebuttal is more time consuming and costly as it requires a full review and critique of the first appraisal and a whole new appraisal. But not all banks will allow a “reconsideration of value” from an outside appraiser leaving many deals to fall dead which is stalling our recovery.

    Real Estate is the flagship of our economy; no one can afford to stand idly by. We have to roll the clock back says Greene who has been boycotting the lending industry.

    Homeowners need to pressure Realtors and we all need to pressure our elected officials or our nation’s economy may never fully recover.

    Loring Greene provides appraisals and expert witness testimony for living trusts, rebuttals, probates, divorces, dissolutions, bankruptcies, casualty loss, tax and litigation support and can be contacted through his website http://www.realworks.biz or at 818-236-3697.

  2. I AM A VERY HARD WORKING WOMAN APPRAISER WHO HAS BEEN STRIPPED OF ALL DIGNITY, RIGHTS, RESPECT,EARNING ABILITY,AND CONSTITUTIONAL RIGHTS, I FEEL LIKE I AM IN A COMMUNIST COUNTRY. IF I SAY THE WRONG THING TO ONE OF THE TWITS IN THE “MANAGEMENT COMPANIES” THAT HAS NO RESPECT FOR US, WE ARE DROPPED FOR TALKING DISRESPECTFUL TO SOME IDIOT. (WHICH JUST HAPPENED BY C**** C******, ONE OF THE WORST I HAVE SEEN.) THEY EXPECT YOU TO BE ON THE PHONE TO THEM CONSTANTLY AND IF THEY SAY TO CALL OR HAVE A REPORT IN BY 2.36 THAT IS THE TIME THEY WANT IT. I SAID THAT WAS SILLY SINCE I HAD TO BE AT THE HOSPITAL AND COULDN’T MAKE A COMMITMENT TO SUCH A TIME. SO I AM BANNED FOREVER. DOESN’T MATTER. THE MOST THEY PAY IS $225 FOR A FULL NOT ENOUGH TO PAY THE BILLS. I AM READY TO RETIRE BUT STAY WITH IT BECAUSE I HELP MY SON WITH THE COMPANY. THE ONLY THING THEY DON’T DO, IS HAVE US REPORT FOR A LASHING (PROBABLY AT 6;23) FOR NOT DOING A “CORRECTION” FAST ENOUGH THAT ISN’T A REAL CORRECTION BUT SOMETHING ADDITIONAL THEY CAME UP WITH BECAUSE THEY DON’T UNDERSTAND APPRAISALS. FROM WHAT I UNDERSTAND THEY HAVE PART TIME KIDS WITH A LIST. THEY GET PAID $25 PER APPRAISAL TO FIND MISTAKES (THEY HAVE NO IDEA WHAT A MISTAKE IS) THIS GOVERNMENT IS ALLOWING IT AND BENEFITING BY IT. IT IS ALL GREED AND CORRUPTION BY THE BANKS AND POLITITIANS. THEY DON’T CARE IF WE LOSE EVERYTHING. BY THE TIME IT GETS CRITICAL, THEY WILL HAVE MADE A BUNDLE OF OUR MONEY AND THE ECONOMY WILL GET WORSE BUT THEY DON’T CARE.
    ALL APPRAISERS WILL HAVE TO REFUSE TO WORK TO GET THIS BACK IN LINE. ANY INSIGHT IS VERY WELCOME AND I WILL JOIN ANY UNION THAT IS FORMED TO STOP THIS BRUTALITY. NO OTHER INDUSTY WOULD TOLLERATE THIS ABUSE. WELLS FARGO HAS BEEN PAYING THE SAME $189 FOR 20 YEARS THAT I KNOW OF AND BANK OF AMERICA’S EXEC SHOULD BE IN JAIL.INSTEAD THEY GIVE THEM MORE OF OUR HARD EARNED MONEY AS A BAILOUT. IF THEY GET AWAY WITH THIS, WHO WILL THEY ATTACK NEXT? MAYBE THE AUTOMOBILE INDUSTRY. THEY COULD MAKE SOME GOOD MONEY TAKING HALF OF THEIR PROFITS OR MAYBE A THIRD PARTY DOCTORS GROUP TO TELL THEM WHO THEY CAN DEAL WITH. THEY ARE ALREADY TRYING TO DO THAT.I USED TO BE PROUD TO BE AN AMERICAN NOW THESE
    SICK PEOPLE ARE RUINING OUR COUNRY.

    1. Joan, your comments are EXACTLY how my husband and I feel about what has happened to our formerly profitable business. Our dignity and earning power has been taken away, our ability to get our own clients has been taken away and we work for the pittance that AMCs pay these days. We are barely hanging on, as the AMCs are CONSTANTLY harrassing us to lower our fees, and yet we can barely pay our bills or keep our business afloat each month!! It has been so demoralizing, especially since there is NOBODY to stand up for Appraisers! 20 years building our own business, and with the swipe of the magic wand of ONE MAN—implementing HVCC—our business has dropped by approximately 75% since 2009. If there was another viable business we could do, we would most definitely quit appraising simply because we as a group have no organization or representation to mandate our rights.

  3. Fast forward to 2018. I was given an Appraisal Waiver by my mortgage company on a refinance. I had paid upfront here in Michigan $482 for a small detached condo 1200 sq ft . It will be returned to me. My daughter works in real estate and says that is the way they are handling appraisals these days. Not everyone needs an appraisal to complete the underwriting process. Some lenders routinely waive the valuation for low-risk transactions. With no formal public announcement, on June 19 2017 Freddie Mac began phasing in its plan to transition to appraisal-free mortgage for certain loan applications. Though limited initially to some refinancing, Freddie expects to expand the concept to home purchases in the coming months. Under the program, borrowers no longer will have to pay hundreds of dollars for a professional appraisal — a reversal of long-standing mortgage industry practice. There will be no traditional appraisal charges at closing and lenders no longer will be required to assume responsibility for the accuracy of home valuations. The program currently is limited to refi applicants who have at least 20 percent equity in their homes and are not pulling out cash. Fannie Mae and Freddie Mac are confident that they are introducing appraisal-free mortgages carefully and responsibly. Appraisers have serious doubts.

  4. I agree, I have a middle man that gets work from the AMCS that take a cut of the fee and then he takes 45 percent. The reason Appraisers don’t stick together is competition between them to get work. They turn on their own peers for a Buck. I just got back into the so called profession that I left, and now I remember why I left it. We have to speak out together to make a change or their won’t be any Appraisers. In the time it takes to be a certified residential Appraiser, you may as well spend a few more years in school and become a Doctor. When do we start sticking together?. I’m sick of cry babies, let’s just do it.

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