CURT THOR –
7-31-2006
I began appraising with the
Marin County, California Assessor’s Office in 1984 and started my
own Appraisal Company (North Bay Real Estate Appraisals) in 1986 while
associating myself with a very well-respected appraiser, Sue Ellen Adams,
RM. She guided me through the process of appraising for Lenders,
Banks, Lawyers and many other clients. I had a new 35mm Pentax
Camera, a clip board, cloth tape measure and pen as standard property
inspection gear. I hand drew every floor plan; double stick taped
my photos to the reports; stuck colored dots on copied maps & put
original signatures on everything. I also had an account at the
local Photo Shop; ordered hundreds of rolls of film at a time; looked
up comparable sales in MLS Books; used a microfiche reader to look up
deed numbers; made many… many phone calls and copied and wrote information
down for everything. My office walls were covered with zoning
maps and I hand wrote my reports for typists that would pick-up my work
in the evening and return it the next morning. I typically printed
3 sets of an appraisal including photos, signed the reports and hand
delivered as many of them as I could. It took me 2-3 years of
having Suzy sign by my name before the banks and lenders started placing
me on their lists. I would send in appraiser approval packages
to every bank my clients thought they might send an appraisal to.
The packages included a resume and appraisal samples among many other
requested items to gain the bank/lender approved status. The Banks
and Lenders all had their own appraisal panels and some were very tough
to get on. I gained approval by the majority of the popular lenders
during the slower appraisal ordering periods.
Technology quickly came along
and brought us DOS run appraisal programs which printed text onto preprinted
forms with the noisy Dot Matrix printers. These printers presented
us with the very difficult process of lining up the preprinted forms.
However difficult the forms were and expensive the monster PC’s were,
we were saving time and money. Soon we had drawing programs, windows
based appraisal programs, dial-up then DSL access to MLS information,
digital cameras came and bye - bye developing costs and endless trips
to the film store. This world of improving technology has been
here ever since.
During this great time of technology
changes, the Licensing of appraisers by the States were imposed.
Soon after Licensing many lenders began to drop their private appraiser
approval lists. The acceptance of just licensed, certified or
general appraisers was becoming more and more the lenders only requirement.
The grooming of appraisal lists to locate competent appraisers for different
types of assignments and locations was slipping away. An oversight
in the California state licensing requirements which will now be adjusted
in 2008, allows for an unlimited number of training (AT) appraisers
to work under any of the three other licensed levels of appraisers.
This allows appraisal companies to grow at a great speed as they are
nourished by lenders looking for quicker and quicker turn times and
lower fees. Many of the lending companies have more recently noted
problems and imposed exclusionary lists which were made to exclude the
appraisers that have submitted substandard reports. I see the
lending industry poised for failure with large numbers
of approved loans that were completed by geographically incompetent
and improperly trained appraisers.
The State moved too slowly
to adopt reasonable licensing changes and many lenders dropped their
appraiser approval panels, making it difficult if not impossible to
keep a hand on quality. Now we are faced with many poorly trained
appraisers who have gained enough hours of appraisal work to become
certified or licensed. These poorly trained appraisers often lack
a proper understanding of the careful process that protects the public
and provides an unbiased accurate appraisal within the appraiser’s
areas of expertise and competency, whether based on property type or
simply geographical location. The rising number of home foreclosures
is an indication of a failure in the lending process. This will
get much press and, in fact, changes in the system are imminent.
I believe reconsideration of the loan process and appraiser selection
process is an absolute necessity for the industry and to protect the
public.
My company was greatly impacted
starting just over two years ago, by the loss of lender business, a
problem that my company is still impacted by. The majority of
our work had been lender based. There are a growing number of
appraisal management firms. I choose not to sign most contracts
these new firms offered, due to the fact that the
appraisal contract fees that the management companies were offering
me was far below my general fees, and was also a contingent type of
fee schedule, which is a direct violation USPAP. Some of these
management firms were also up-charging the appraisal fees which show
on the borrowers fair lending statements as higher appraisal fees that
are not being paid to the appraiser. Many of the lenders have
turned the appraisal portion of the process into a profit center and
subsequently nipped the appraiser’s profit margin. This has encouraged
corner cutting by many appraisers and appraisal companies. The
use of training appraisers has been abused in many cases to keep office
income up by accepting and quickly turning cheaper appraisals.
This is not the case with all appraisal companies and it is not the
case with mine. I benefit greatly by training appraisers who have,
for the most part, stayed with my office for years and I hope years
to come. I continually train and open new types of assignment
problems to everyone in the office to encourage the quality of reporting
and knowledge to improve for every appraiser. When
I am corrected by associates or new ideas are brought up and I see things
flowing, I know all over again that having others to share my office
with is by far the best thing I have done with my business.
My review of appraisals by
geographically incompetent appraisers is not uncommon and outright misguided
appraisers are also a common find. We have also seen and caught
appraisers who have signed as physically inspected the interior of a
subject property when they have only sent a trainee appraiser to the
property. I don’t like to turn appraisers into the State Appraiser’s
Office, but we need to police ourselves to protect the stability of
our industry and to protect the public.
What more have I done to correct
or change things in this market? I had been speaking regularly
with Ben Harris, who is heading development of the Appraisal Advocacy
Coalition, a grass roots movement that gained momentum since January
2006 and slowed toward the end of this year. They have been building
the AAC to create a focal voice point for the Appraisers to lobby our
needed changes. I also noted the positive direction of the Center
for Responsible Appraisals and Valuations. This is the best way
of saying to the public and our industry that the right thing needs
to be done without pressures! I am proud to have CRAV backing
me and my company, because being responsible in this industry is what
Appraisers are really hired for. Good appraisers are still out
there, but a dying breed due to the current market conditions that are
in need of quick change. CRAV is here to protect the honest and
unbiased Appraisers in this pushy and unbalanced process we are faced
with.
With these associations I was
becoming involved from earlier this year, I was also voted in as the
President of the Sonoma County Appraiser’s Association in late 2005.
I invited hundreds more of the appraisers in and around the county to
join and attend our monthly meetings. The meeting sizes grew from
15+/- to over 60 and the membership is now exceeding 250 members.
This prompted me to re-establish the Marin County Appraiser’s Association
which had not met since the late 1990’s. The first meeting had
50 in attendance and now that Association has more than 110 members.
Both association meetings are focused to the members needs and have
had topics ranging from the Scope of Work writing requirements to speakers
on Tiger Salamanders, Title Reports, New Developments, a proposed Train
System, Septic Systems, Solar Photovoltaic (PV) Systems, Assessor’s
Office, Office of Real Estate Appraisers and more. Best of all,
appraisers are getting together, voicing opinions, asking for help and
getting answers. After more development of our group and connections
with other associations a common link needs to be made. We, together
as appraisers, can create a great voice to the lending community, the
appraisal industry and beyond. We encourage education, focusing
on the local issues, markets and instilling greater professionalism.
With continued attendance the development of more informed local experts
to better serve the public and protect the lending industry will improve.
I encourage appraisers nation
wide to get involved with any local appraiser group or start a new association.
We need to unite, make changes, lobby for changes and keep on top of
new issues that affect our industry. I would be happy to assist
appraisers that have interest in building a local appraisal group.
Other small things you can do are speak to local real estate agents,
mortgage bankers, brokers and agents about the importance of using a
local expert appraiser. Who knows your area better than you?
Become an expert, keep building your knowledge and contacts and expand
your expertise. Be proud to let your clients know you’re an
expert in your area or property type. With our voices we can come
out ahead and make changes to the industry that is choking us today.
We can better protect the public and economy with more reliable appraisal
services. Don’t cut your quality of work and don’t go out
of your area of knowledge without proper steps to gain the knowledge
a local expert has. You can’t fight this alone but together
we might be able to fight these changes and future changes that are
detrimental to our industry, while supporting changes that enhance our
skills individually and our profession as a whole and, most importantly,
protect the public from incompetence and exploitation by those in the
lending process.
Curt Thor
Owner – North Bay Real Estate
Appraisals
President of the Sonoma County
Appraisal Association (CA)
President of the Marin County
Appraiser’s Association (CA)
Partner’s Council Member
of the Center for Responsible Appraisals and Valuations
w- 415-892-1914
www.northbayreal.com
c.thor@northbayreal.com
