The appraisal profession came about because of the Great Depression and our relevance is still strong today. Exceptional circumstances such as the current pandemic create a need for temporary allowances for information gathering for the valuation of collateral. The appraisal community has come together to insure our clients’ needs are met. Be it extra precautions with masks and gloves or owner assisted property inspection software. Appraisers have once again adapted to market conditions in order to provide critical collateral analysis all within a reasonable timeframe.
While interior inspection software used by homeowners may be an accepted temporary alternative for information gathering in the time of a virus pandemic, it is less reliable than an interior observation performed by a credentialed appraiser during normal market conditions. Technology provides efficiencies and support of conclusions however it is inferior to the natural senses. It is known that photos and video do not reveal everything about property condition and photo shop technology is built into most cell phones right there at your fingertips. The natural senses allow for significant attributes to be observed with certainty:
Sight – upgraded appointments/quality features as well as deferred maintenance/cracks/sloping floors/leaks/deterioration/items effecting structural integrity & health and safety
Smell – Mold, mildew, pet damage
Hearing – floors creaking/mechanical issues with HVAC or plumbing
Touch – doors not shutting or opening, stuck windows, spongy floors due to deteriorated sub floor
VaCAP is proud of our members who have adapted unconventional methods to provide valuation services to clients. We do caution you that the reliance on these alternative tools come with some additional risks. Make sure the proper disclosures are within your reports and any altered certifications or limiting conditions adhere to your compliance with USPAP. Remember, despite what you may hear, no form is USPAP compliant. Only the appraiser can be USPAP compliant.
We have not even begun to see the fall out in the real estate market. Will prices continue to rise? Will credit score and down payment requirements continue to rise? What will happen with the millions of loans already in forbearance? How many foreclosures will we encounter? Will unemployment recover in the short term? Will lenders sell their REOs on the open market or will they be bundled and sold to corporation investors? How will this financial crisis impact non-bank lenders and servicers? Will Appraisal Management Companies survive? Will they be held liable for the quality of the appraisal?
All said and done, when the financial markets settle, and real unemployment takes hold, appraisers will be in more demand than ever. We must look for our local clients that engage us directly and avoid those who wish to capitalize at the expense of others. Community and Regional Banks, attorney’s and private money lenders, all are good resources to help your business and community grow. Appraisers – stand strong, be resilient and continue to be an asset to your clients during these challenging times.
VaCAP encourages each of you to support your local independent businesses. These are our neighbors and friends. They are the back bone of our economic success.
Thank You for Being Part of VaCAP!