SHAKE IT OFF AND STEP UP!

David A. Braun, MAI, SRA

I have a New Years Resolution for the appraisal profession: Shake it off and step up! I have seen a lot in my 35 years as an appraiser. Take for example this tidbit from the last issue of the Tennessee Association of Realtors Newsletter: A licensed real estate agent can by Tennessee law testify to the value of property for court purposes. I watched for 10 years as lenders relied on millions of AVMs and Tax cards which did not meet the minimum federal lending regulations. I often feel like I have fallen down the same hole as Alice, and am now in Wonderland. I agree that things are more than a little skewed in the world of the appraiser. However, I continue to say that the little guy (or gal, just a figure of speech) should only worry about what they can change, and not worry about what they cannot change. I wrote and presented a white paper at the Appraisal Institute National Summer Conference that took place in Washington DC. This paper addressed the shift in lender use from comprehensive appraisals to less costly and quicker collateral assessment products. Here is a small portion of that paper which addresses the appraisal industrys inability to produce a competitive low cost appraisal product: The appraisal industry must never be inept again. Whatever the cost, we must be able to serve our market. If we are to achieve this goal, four objectives must be reached by each appraisal company over the next three years: (1 our work product must improve, (2 the dollar cost per appraisal must be reduced, (3 our turn-around time must be shortened, and (4 we must be able to handle more volume. This seems quite timely, dont you think? Did I mention that this conference took place in 1997- over a dozen years ago? It would take a major world recession that started with a housing crash to change the system- No wait that did happen two years ago and lenders are still using BPOs. Premise Number 1: Our political system is so inefficient that the illogical structure that appraisers work in is not likely to fix itself any time soon. So, if change is to occur it will have to be from within the profession not from without. Appraisers will have to simply shake it off and step up.

My suggestion is for each and every appraiser is to embrace and improve on the proven categories of appraisal best practices: Strong Moral & Business Ethics Good Judgment Professionalism Hard Work Ethics Knowledge & Training, and Automation

The AQB has made a great start for the profession by increasing both the qualifying and continuing education requirements. Each of us can improve on most of the best practices listed above. The good news is that a career is like a long journey, it is not judged by the first few miles. While each of these best practices is important, I feel that the automation of the valuation process and the related knowledge and training continues to be the weakest link in the appraisal profession today. This is not to be confused with modern form filling which has become very efficient over the past decade. It appears the profession is beginning to move in this direction as many appraisers are beginning to learn how to use a spreadsheet. I attended an Appraisal Institute conference in Las Vegas in 2000. My company Automated Valuation Technologies, Inc. was a vendor. I brought a CD full of useful Excel templates to sell and I demonstrated an expert system valuation application that I had programmed into Excel. Things did not go well as 98% of the appraisers first question was; What is an Excel Spreadsheet? The use of the word Automated Valuation in my company name and the expert system were misconstrued to be an AVM that a lender would use resulting in this comment; Youre an appraiser why would you invent an AVM to put us all out of business? To add injury to insult my pocket was picked on that trip as well. My wife and I spent the first night trying to get the hotel to let us have our room and closing all of our credit card accounts. My $700.00 gambling money was gone! But, I am pretty sure that was not coming back with me anyway. I now find that most appraisers have evolved from that ignorant, obstinate state of mind I faced in 2000 into proponents for advances in the automation of valuation process. This is good for me because I have never stopped working on the needed (low end) USPAP compliant collateral product. This project basically combines (fuses) the appraisers knowledge, experience, and market savvy with regression analysis to produce a low-end USPAP compliant appraisal. The final product is called Fusion for obvious reasons. Premise Number 2: The appraisal industrys needed changes will first have to come from within.

I would like to close with the fo l e ollowing sto ory:

A FARME ERS PARA ABLE A parab is told of a farmer who owned an old mule. The mu fell ble f w ule into the farmers we After ca ell. arefully ass sessing the situation th he farmer sympathized with the mule but de s d m ecided that neither the mule nor the well was wo saving. Instead he called his neighbors w orth h s s together and told th r hem what had happen h ned. He enlisted their help to haul dirt into the we and to bury the old mule to put him out of his t ell f misery. Initially, the old mule was hyst terical. But as the far t, rmer and his neighbors continue shoveling dirt on his back, a th ed g s hought hit h him: Every tim a shove load of dirt landed on his back, he would s me el shake it off and step up. He did this blow after blow. Sha it off an step up...shake it of d ake nd ff and step up...shake it off and step up, he repeated to encoura himself No matte p e age f. er how pain the blows or distre nful essing the situation se s eemed, the old mule fo ought off pa anic and kept right on shaking it of and stepp ff ping up. It w wasnt long before the old mule, g e battered and exhau d usted, stepp over th wall of th well. ped he he Although it seemed as if the dirt would bu him, it a h d d ury actually ser rved as his way out of this dilemma all becau of the way he hand ause w dled his adv versity. As it is with lif if we fac fe: ce our prob blems and respond to them positively, and re r efuse to giv into pani bitternes or ve ic, ss self-pity, the advers sities that come along to bury us have the p c potential to benefit us instead. wn Author Unknow

hink about the best pra actice categ gories listed above. W What are yo ou CONCLUSION: Th t ember that a chain is only as stro as its w o ong weakest link. Choose a weakest in? Reme class yo need or read a book anything that will all ow self-imp ou r k, provement. I have recently seen a distinct and de eliberate movement in the appraisal profess n sion toward ds increasin the educ ng cational sta andards and in the aut d tomation of the valuation process f s. Yes, the train is mo e oving (chan is occur nge rring from w within); all a aboard! Pre emise Num mber 3: Appr raisers will have to shake it off and step up! s f God Ble and Hap New Ye to each of you! ess ppy ear h