Tag Archives: Appraisals
by Dustin Harris, The “Appraiser Coach”
Maybe you have grown accustomed to those filing cabinets against the southern wall of your comfy office. Hey, some people really dig olive green and beige. Perhaps you enjoy the constant hum of the printer. It is soothing. It is comfortable. It feels like home, and to not have those paper and ink cartridge bills anymore, well, that just wouldn’t feel right- would it?
Finally, papers and folders spilling all over your desk as well as cluttering your vehicle have become a way of life. An appraiser without a slew of manila folders is no appraiser at all. If this is you, this article may not be for you. On the other hand, if you’re an appraiser who is on the constant lookout for ways to save time and money, then keep reading: making a conversion to a “paperless” or “more paperless” office will be of interest.
First of all, if you do not know what the term “paperless” means, you need not be embarrassed. You are in good company. The term has not been around for very long, and you can be grateful that you will learn it here in the privacy of your own reading. There is nothing worse than sitting at the bar with your buddies when one of them makes a wisecrack about a paperless office, and you have to pretend to know what he is talking about. Going paperless is simply that; paper – less. Using “less paper” is what it is all about.
Saving Money – No More Ink
Let’s face it, paper is not cheap. A ream will run you anywhere from five to nine dollars depending on weight and quality. The real travesty though is ink. To spend $250 or less on an inkjet printer is nothing compared to the thousands you might spend feeding it cartridges over the course of a year. I am pretty sure there is a conspiracy between the makers of printers and the makers of ink cartridges. Oh wait, they are the same companies! Like razors and razorblades- razors are giveaways but razorblades are so costly these days they keep them locked up behind the glass door at Rite Aid. I guess there is no conspiracy after all–just smart business. If you want to be smart about your business, going paperless will help you reduce expenses, and in a day and age when many appraisers are struggling just to pay the bills, a few lower bills is a blessing for sure.
Saving Time: Workfiles Created Automatically
A big misconception about going paperless is that it takes more time and slows you down. This is just not true. Getting rid of the paper and moving to an all-digital workday certainly takes some getting used to, but will actually save you time in the long run. The biggest time-saver you will experience is in your workfile. Appraisers are generally fearful that going paperless will somehow cause them to no longer have a workfile (and as we all know, a workfile is a USPAP necessity). Well, you will still have a workfile (it will just be a digital one), and if you set things up correctly, it will create itself automatically! No more time spent organizing and building the workfile. It just happens effortlessly. Furthermore, it is always there (and searchable) forever whenever you need something from it again.
Learning Curve vs Big Payoff
As you may know, I am a huge advocate for “mobile appraising,” which is using a laser and computer at appraisal inspections. Without question, the biggest hurdle for most people in going mobile is the huge learning curve. It is not easy to switch from a tape measure to a laser device. Going from a clipboard and pencil to an iPad™ is even more daunting. Some who try it, give up before they become converted. Incidentally, nearly all who commit to my Ten House Challenge™ never go back. There is no difference in going paperless. In the beginning, you will find it a bigger pain than you would have hoped. It is a new way of thinking and takes some real adjustments. I began the transition to a paperless office nearly five years ago. Many times in the first few months, I almost quit. Many of the people in my office resisted the changes. How glad I am that I stuck it out. I have now gone paperless in nearly all aspects of my life including church, relationships (yes, I have a paperless marriage- that’s another story), hobbies, and just regular life productivity.
Well… Maybe not 100% Paperless
Potential converts often ask me if going 100 percent paperless is really possible. The answer to that question is a bit complicated. The answer is “Yes!” (Okay, maybe that was not all that complicated, but here comes the complex part.) It may be possible to go 100 percent paperless, but you probably don’t want to. In other words, creating a digital version of everything you currently use paper for may be possible, but certain things just need to stay status quo. Let me give you one example; when I get a phone call and need to write something down, it is just easier to pull out a sticky note than it is to pull out my iPad. Now, if the note is something I want to keep, it will be converted to the digital version quickly but I still keep some paper on hand. Also, though you might choose a paperless lifestyle, you cannot force others to do the same. There are many times that a borrower will hand me a spec sheet or an attorney will mail me case documents. Though those types of papers will soon be converted to digital files, I cannot profess to be 100 percent paperless. Though I like to claim we are 98 percent paperless, the truth is probably closer to 92-93 percent, when all aspects are considered. Still, it is a far cry from where I was just a few years ago.
So how does one go from the traditional to a digital office without being overwhelmed by the transition? The answer may be found in the old parable of how to eat an elephant… one bite at a time. Begin with something small. For example, set up digital backups for your files on multiple levels. Remember that “two is one and one is none.” I personally have five backups of everything I do. Once that is done, move to the next step. Start scanning your documents into a digital file when you are done. In other words, keep doing things the way you are now, but just add the step of digitizing your files and throwing the paper files away. You do not have to jump into the pool with all of your clothes on right off the bat. Dip your toe and then start wading. You will find that the more you move from paper to paperless, the more you will want to take additional steps.
It Gets Easier
You could say that I was paperless before paperless was cool. My affection for technology and all things efficient spurred me to go digital long before most appraisers even knew what that meant. In those days, it was not very easy and it looked much different than it does now. A slew of new technology has made going paperless very doable (note, I said “doable,” not “easy”). Though it still takes some getting used to, scanners, dual monitors, smartphones, tablets, software and apps have made the transition so much simpler.
In summary, paperless is key to the future for appraisers and other professionals who want to flourish in the years ahead.
If you want to save time, become more efficient at what you do and save a boatload of money at the same time, consider making this year the year to begin weaning yourself off file cabinets, manila folders, and hum of the printer for good and move into the digital age.
Now, go create some value!
About the Author
Dustin Harris is 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 also owns and operates The Appraiser Coach where he personally advises and mentors other appraisers, helping them to also run successful appraisal companies and increase their net worth. He and his wife reside in Idaho with their four children.
by Diana Jacobs
It’s a curious time in which the appraiser finds themselves practicing.
There is greater oversight with demands for shorter turnaround time. There are appraisal management companies (AMCs) that shop the appraiser’s turnaround time and price.
There are software companies that download data the appraiser enters with graphs, market conditions analysis, regression analysis and a wide variety of maps and pictures, which makes it appear as though the appraiser has chartered a plane, shot an aerial view, contacted governmental agencies and obtained tax information, flood information, environmental information, a soils survey, zoning and of course, provided a complete breakdown of the current Multiple Listing Data.
All of this information is at the very finger tips appraisers, who are being encouraged to consider, in the future, having someone else do their inspection while they work with the data from their desktop. The trend among users and providers is to have the appraiser focus on their “critical thinking” time. So just how much time is involved in an appraisal and how many decisions does an appraiser have to make?
Using the form 1004 residential form (most widely used form for a large majority of lending practice) the appraiser has numerous decisions to make in roughly six to eight hours.
It breaks down like this:
Page 1: 206 decisions (134 without the condition and individual blocks of choice)
Page 2: 205 decisions (potential blanks to be completed)
Page 3: 41 decisions (narrative blanks for the possible additional comments)
1004MC: 71 decisions/blanks to complete
Total: 523 possible decisions (451 without condition of materials and blocks of choice)
All of these decisions are without directions on what the appraiser must do when inspecting the neighborhood and the subject and the comparative transactions or the Limiting Conditions or the 25 Ethical Obligations of the Signed Certification Page, which at a minimum, has to have an additional item #26 for the history of service disclosure.
Keep in mind, you have to plan your inspection and never leave a neighborhood the same way you came in. Why? Because you stated you inspected the neighborhood: how did you do that if you didn’t drive all of the streets or charter a plane to fly over to ensure everything is the same or similar in terms of maintenance, condition, and general conditions that create and affect the value?
What’s the running total? 523 Decisions on the form. Twenty-six (26) Ethical Obligations to promise and be held legally accountable for by up to 30 years in prison and a fine of up to $1 million, according to Title 18 U.S. Code Section 1001 or similar state laws.
Whew! Now it’s time, of course, to consider the remaining decisions;
- 3 Directives of USPAP SR 2-1
- 12 Directives of the Written Report in SR 2-2 (a) of the 2014-2015 USPAP Appraisal Report
- 10 Directives of SR 2-3 but we aren’t going to count those 10 as they are part of the 26 on the Supplemented Form.
There are four USPAP Rules and each has very specific decisions and directives which appraisers are required to prove they have taken into consideration and/or performed. The Ethics Rule has three subsections; the Record Keeping Rule includes nine items of musts. The Competency Rule has three directives on being competent; three directives on acquiring competency and three directives on what to do if you discover you’re not competent. The Scope of Work and Jurisdictional Exception rules both have multiple directives of exhortations and prohibitions (do’s and must not do’s).
We’re not through yet. Mortgage lending comes with a host of additional decisions which result in approximately 130 pages of assignment conditions of which about 40 pages relate to the residential appraisal report form and each page adds its own specific directive on the additional requirement of performing and reporting an appraisal in the secondary market. There are easily 100-200 additional considerations that must be made under those assignment conditions.
Oh, lest we forget, 67 of those fields of the 1004 form must be UAD compliant.
784 Decisions to Make, 784 Decisions
My count, and it doesn’t break down the multiple directives of the assignment conditions or specifics of the Statements of USPAP or the Scope of Work Rule, etc., is 784 decisions for the appraiser in every residential assignment.
Don’t get me wrong, I’m all for maintaining quality management and quality control over this most serious issue of performing an appraisal assignment. When an appraiser makes a mistake they should be grateful for the opportunity to correct the error. In the event the error was discovered after the fact, the appraiser needs to accept accountability.
Often the appraiser, in an effort to get the job done in time, will fail to keep the appropriate documentation in their workfile. It’s not always about the intentional act of trying to withhold or mislead. It’s simply a time issue for the appraiser. In the appraiser’s mind if it’s available through Internet research why does it have to be printed out when it can be retrieved if needed? Of course, that has proven to be the Achilles Heel of many state-disciplined appraisers as the workfile is the evidence needed to prove compliance with all of the regulations in those many decisions that have to be made during an assignment.
Now, may I ask you this question? Is the appraiser really getting the respect, support and monetary remuneration for the service they provide? Isn’t it time for the users of the appraisal services to recognize the work that goes into the appraisal product? Shouldn’t the users of appraisal services and the regulators of appraisers recognize the obvious potential for errors when so many decisions have to be made in such a short amount of time? Isn’t that what our forefathers thought when they stated in the development rule of SR 1-1 (c) “Perfection is impossible to attain, and competence does not require perfection”?
About the Author
Diana Jacob currently lives outside Hillsboro, Texas on a small ranch and has been involved in real property appraisal since the latter part of the 1980s. She holds the Certified General Certification from the states of North Carolina, Georgia and Texas and a Residential Certification from the state of Louisiana. She is a certified USPAP instructor and represents the Texas Association of Appraisers at The Appraisal Foundation Advisory Council (TAFAC).
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