http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! The Future of Valuation Blog – Of 1004’s and One-Trick Ponies: The Rise of Alternative Valuation Reports
Appraisal World and Mark Linn’e have a new Appraisal Blog named “The Future Of Valuation” . The “About” section states: “We are pleased to announce the new AppraisalWorld Blog. This blog is authored by Mark Linne, EVP of Analytics and Education at AppraisalWorld. We are sure that you will find it insightful and very informative.”
Mark has a new post (a long article) entitled, “Of 1004’s and One-Trick Ponies: The Rise of Alternative Valuation Reports“. Here’s a snippet:
“I’m going to Arizona on Friday to talk about Alternative Valuation Products.
What are Alternative Valuation Products? In a nutshell, the term is used to describe any product that provides a valuation to a lender, but is not intended to meet the guidelines or format of Fannie and Freddie. In other words-anything besides a 1004.
Ah yes-the venerable 1004. One of the most difficult challenges facing residential appraisers is that they have been forced down the cattle chute of conformity in what type of report they provide to clients. Maybe I’m making this statistic up-but I think that 93.675% of all residential appraisers provide a 1004 appraisal to any client-regardless of the intended use and the intended user. Lenders, lawyers, consumers-it’s always a 1004.
Does that make sense? Is the 1004 the all-purpose appraisal report format? I think not. The 1004 is intended for the needs of Freddie and Fannie. It meets their internal needs, their requirements. It’s not the all-purpose appraisal; but it is the default format for residential appraisals.
I have spoken to thousands of appraisers over the last several years. When I talk about the 1004 or forms in general – I mention that I think that forms have been the ruination of an industry; That residential appraisers have been pushed down a path that makes them really good form-fillers, but often stifles their skills at producing an appraisal. We have been focused far too long on the presentation layer – the report. We have been lead to believe that the report is the appraisal. We have lost sight (some of us at least) that it is the analysis, the process of determining the valuation of a given property that is our job. The form is merely the outcome of our appraisal findings. Form vendors have worked hard to make the form as efficient as possible and they have done a good job.
But at what cost? There are times when I am amazed that so many in our industry look to the 1004 and lament about appraisal fees that are dropping; that volume is down and that the industry is on the ropes.”
Read the rest of the article here!
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