http://www.realestateappraisertips.com/ - Real Estate Appraiser Interview With Dave Towne, Owner of Towne Appraisals in Mount Vernon, Washington. Dave Also Offers Wisdom, Advice and Food For Thought For Home Appraisers Heading Into 2010!
Editor’s Note: Dave Towne has been a fantastic contributor to Real Estate Appraiser Tips in 2009 always engaging appraisers to think more about their profession, their processes of working smarter and the statements to add to your reports to help cover your assets! Dave is always doing what a “Trust Agent” is supposed to be in the process of doing and that is “adding value to others”! I look to Dave as a grandfather figure in this business and glean much from his appraiser emails. If you’d like to be added to Dave’s email list, email Dave at dtowne@fidalgo.net with the subject line, “Dave, Please Add me to your email list”
The Questions Below Were Developed By Real Estate Appraiser Tips Based On The Feedback From Appraisers in 2009! Thank you, Dave, for taking the time to answer them!
1.) Tell us who Dave Towne is and about your family? In the photo is Dave & Karen Towne off Maui, HI
I’m older than dirt. Wife Karen has put up with me since 1976. We have a married son who lives in eastern WA. I have another married son by prior marriage who lives in the middle of the country. My background is basically 30 years in sales before entering appraising in 2001. Was fortunate to become an apprentice working for a former business acquaintance who had gotten into the appraisal biz about 8 years before I joined him.
I am an Associate Member of the Appraisal Institute, Seattle Chapter. In 2005 I began the process to start a new ‘branch chapter’ for them with the intent to offer more live CE education in my area so that appraisers would not have to drive into the Seattle area. I was the first Chairperson for the branch chapter, but have since turned the baton over to others.
I believe appraisers should be in contact with others in their region, rather than being so independent and suspicious of one another. I try to have lunch with appraisers from different areas I serve when I’m working there. The second purpose of forming a branch chapter was to help area appraisers meet one another.
And I have also begun an associated business, Appraiser Education Services, which is a facilitator for approved live CE education in my area. I hire qualified CE instructors and do the planning and set up for each class. As time allows I may develop some self-written classes and get them approved through the state. (NOTE: For more information on Appraiser Education Services in Washington State, contact Dave at 360-708-1196)
In the process of starting the Branch Chapter and AES, I have collected names and e-mails of many appraisers regionally, and around the country. Due to my interest in staying current in this industry, I find and re-distribute many appraiser/appraising related articles to those on my list. This info often is days or weeks in advance of when it appears in other sources or newsletters.
2.) Tell us about Towne Appraisals in Mount Vernon WA?
After working for my mentor and another office, I started my own ‘single shingle shop’ in May 2006. I do only residential appraisal work for mortgage lenders and private clients. I stay geo-competent by working in a defined area of about 35 ZIP Codes in 4 counties. Few ‘one developer subdivisions’ exist in my area, so virtually every assignment is different (and report cloning is almost impossible!). Assignments range from waterfront cabins, urban dwellings, up to log homes on 20+ acres, and everything in between. Early years in the biz took me into more distant areas which I prefer not to work in now, primarily due to driving time which is wasted productivity, especially if it’s an AMC assignment for a lower fee.
3.) With the advent of HVCC, what has 2009 been like for you?
Due to the multiple clients I work for, including some AMC’s, 2009 has been good. Billing is actually ahead of 2008, so I’m not complaining. Due to my sales background I have learned not to put all eggs into one satchel, as too many other appraisers have experienced. However, had it not been for one major bank client we used to work for directly prior to 2004-05 who was forced to use their in-house AMC, I probably would not have started working for AMC’s. But I have a minimum fee that I will accept from AMC’s. I have carefully tracked my work assignments & hours and cannot accept a fee that is below my minimum fee due to the hours it takes to do reports properly.
4.) How have you survived the Mortgage Meltdown and Virtual Housing Market Collapse Since 2008?
Our area in NW WA State has been fortunate to be more stable than other parts of the country. We did not experience the massive NINJA loans and other bad lending and economic situations that have impacted many parts of the US. However, values have dropped since 2007-08, anywhere between 5 – 30% or so. So I have survived without experiencing a major drop off in business, doing primarily refi’s for assignments. I also accept other types of assignments that some appraisers don’t want to do. As an example, I’m doing several retrospective appraisals for homes affected by a landslide which the jurisdiction intends to buy once the appraisals are finished. I’ve done attorney related work, and recently had to attend a mediation session to defend my report for the attorney’s client.
5.) With approx. 117,000 real estate appraisers, per ASC’s roster, are there too many appraisers now? Do you see a thinning coming?
Thinning has already begun, beginning last year as the economy nearly shut down, and then more due to the ‘commerce’ section of the HVCC which limits how appraisers can receive work assignments. The reality is there have been too many appraisers for the amount of work, and the oversupply has resulted in fee erosion as appraisers cave in to the low AMC fees and other pressures. The ASC roster may be somewhat overstated due to some appraisers being counted 2 or more times since some are licensed in 2 or more states. But the reality is a drop in the number of appraisers overall. This is borne out by numbers I have seen in WA and also CA, plus reports from other states, which have reported declines in appraiser population. WA state has had to raise the cost of license renewal fees due to the decline, as our regulatory agency is self-supporting, not feeding off the state general fund.
6.) What percentage of your business is mortgage lender related and non-lender related?
Probably 90% lender related.
7.) Is it possible for most appraisers to survive on just non-lender related clients?
“It depends.” If the prior and existing business model was developed around non-lender clients, than possibly. However, most ‘new’ or younger-in-the business appraisers don’t have that clientele base to draw from, so it may not be possible to ‘survive’ with limited clients. But appraisers should consider marketing their services to non-lender clients at any point in their appraising career. Always carry your business cards!! You never know when you will meet a potential client.
8.) What advice would you offer to appraisers nationwide accepting $130 for a full FNMA 1004 with MC struggling to feed their families?
If that’s all clients will pay…or another way to put it…if that’s all an appraiser is willing to accept, then it’s way past time to find other work that pays better. I realize that’s easier said than done.
But when one carefully calculates the hourly income after fixed and variable expenses, the hourly income at that fee is below the federal minimum wage and probably the state’s minimum wage also. This of course assumes that the report is being properly prepared and is fully USPAP compliant (which most are not). Appraisers have been cutting corners in their reports to save time, and thus many reports are pure junk in terms of a properly reported valuation document. As a result, Lenders hold appraisers in very low regard, using us only because they ‘have’ to. Professionalism has taken a back seat to fast and cheap, which has resulted in a decline in quality. Alternative valuation products have been developed by Lenders because they don’t trust appraisers to do good work, even though the alternative products have severe problems also.
This is a good moment to ask “what is a customary and reasonable fee” for your appraisal service? FHA has stated that appraisers are entitled to be paid a customary and reasonable fee, and to state that fee in your report. Is that what you are willing to accept from the low ball AMC’s, or is what you would charge a non-mortgage client in your area … which would be similar to other area non-AMC appraiser fees for the same service? Acceptance is different from charging, initially. If you accept a low ball fee, then you are less professional than you should be, in my opinion. If you just ‘accept’ a (low) fee, you’re merely a technician working for wages; if you are a professional you know what you are worth and charge accordingly. Yes, I do turn down assignments when the fee offered is junk.
The difficulty in the current situation is many ‘good’ appraisers are exiting the business, leaving less-skilled folks to continue on. This just exacerbates the problems as noted above.
Meanwhile, education requirements have increased (to try to enhance professionalism) but fees are declining (at least currently … this may change), and thus many believe new trainees into the business will diminish in the near term. It may be too soon to really know if this is happening. Data will have to come from the states as to the number of registered trainees entering the profession.
9.) Besides the appraisal business, where else do you focus your efforts and time?
I’ve been a member since 1987 and very active in my Kiwanis club, which extends to involvement in our District and International. Currently I am club secretary, am a past club president, a past Lt. Governor and have also held two different ‘District Chair’ positions. I’ve been fortunate to have had travel experiences to various Kiwanis conventions around the country and within our District. I really enjoy traveling to different places. I also like to read all kinds of ‘stuff’ but due to the hours involved with my business, seldom actually read books anymore.
10.) How long do you plan to ‘hang around’?
Good question. I qualify for the minimum SSI payment but have not seriously considered signing up for that, yet. I’ll probably continue shooting the laser beam and stretching tapes for 5+ years or so. As noted I may develop some classes and present them, as I have had experience teaching and leading seminars. I actually enjoy working for myself, despite some of the unpleasantness that we experience from some clients, and the long hours. But that occurs no matter what we do in life. This biz allows me the opportunity to earn a decent income and to do some traveling. By the way, try to couple a training class with your vacation travel. That way you can write off a portion of your trip!
Dave Towne, Certified Res. RE Appraiser, WA State
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