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Virginia Regulatory Town Hall
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Department of Professional and Occupational Regulation
Guidance Document Change: Providing guidance to real estate appraisers and AMCs on the use of hybrid appraisals
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6/26/19  12:25 pm
Commenter: Ed Dischino

The largest purchase in your life desrves a credible opinion of value
 

The hybrid appraisal first and foremost lacks common sense. Hybrid appraisals typically utilize untrained and unlicensed people to perform inspections for very little money (typically $75-$90/assignment). This leads to a mental devaluing of these assignments and quite often a "get in and get out" mentality to "just get it done" on the unlicensed individual's part while conducting the inspection. I have taken part in these hybrids in the past to see if it would be something I would have interest in long term. Unfortunately, I have learned of the caliber of the individuals conducting the site inspections from emails from an Appraisal Management Company admonishing/advising the untrained/unlicensed inspectors for all kinds of issues. Some were common sense items such as "be sure to have a picture of every bathroom in the house" to completely unprofessional behavior such as "We had an inspector request a measuring device from the homeowner. Never request a measuring device/tool from the home owner." (Yes, that was a quote from an actual email to these unlicensed, untrained inspectors). Next, these non-appraisers are often confused by the borrower as the actual appraiser. Appraisers are asked questions quite often during inspections such as "What do you think it's worth?" Licensed appraisers know how to handle these common questions while untrained/unlicensed people do not. This can lead to certain expectations on the homeowner's part or even a verbal appraisal (which only licensed/trained appraisers realize is an actual thing). This, combined with the fact that they don't always know what to look out for while conducting the inspection creates valuations of real estate that can become misleading as the actual appraiser is forced to use sub par inspections/information/photos as the basis for developing a credible opinion of value.  For example, 2 identical houses of the same age with the exact same amenities and features may have a different value if one is next to power lines, a noisy train station, airport or some other external obsolescence while the other is not. An untrained person doesn't know or in some cases care to point out these factors while it is common practice for a licensed trained appraiser to not only look out for these (and many other) factors, but how to value them as well. The appraiser in hybrids is also paid far less than the customary fee while having to utilize inferior information in which to develop a credible opinion of value. Banks are looking to save a few dollars on the least expensive aspect of a home sale while requiring the borrower to make what is in most cases the largest purchase of their life by utilizing an inferior process which is likely to give a less accurate opinion of value.

CommentID: 72741