Comment Detail

Comment

A common theme among many respondents to the RFI is the idea of having either appraisal trainees or other real estate professionals who are not appraisers conduct property inspections on behalf of the certified appraiser who would conduct the appraisal analysis using the data and information gathered by the trainee or other real estate professional.

In my view, this is a first step in a logical direction whereby other aspects of the appraisal process could be broken into their component parts and performed by other people with particular specialties. At Bradford Technologies, we generally describe this concept as “team appraising”.

There are many potential advantages to all stakeholders in valuation by having multiple parties involved in any given appraisal assignment. However, a first and very required step for appraisers to move in that direction will be working with The Appraisal Foundation and the GSE’s to develop an appraisal certification that is flexible and would allow parties to certify only to the portion of the work that they actually performed in a given assignment. Unless and until the current certifications are also modernized, modernizing any other aspect of the appraisal process will leave a very significant roadblock in place.

There are many advantages to be realized in the appraisal process through the division of labor. As was pointed out by some participants, most appraisers engage in a variety of activities that are necessary for completing an appraisal but do not require the skill, experience and training of the appraiser. Another way this is expressed is that there are many things an appraiser must do to complete an appraisal that simply do not require an appraisal license to be done effectively.

Even dividing up tasks that do require an appraisal certification can result in many benefits. For example, some respondents mentioned that cost approach to value and income approach to value are not used in today’s appraisal process. We certainly believe that better appraisals would result if all three approaches were used but a variety of current constraints prevent that from happening.

In a team concept, an appraisal firm could have a skilled and certified appraiser who specialty is developing replacement cost estimates to be used in a cost approach by another appraiser. This firm could have a site value specialist who could also contribute to the cost approach by providing supported site values. Another person could specialize in developing estimates of effective rent and gross rent multipliers to be used in a residential single-family income approach to value.

Not only does the appraisal process get better and get done more quickly, but in any situation where specialization exists, refinement and advancement within that specialty is much more likely to occur when people are focused exclusively on that piece of the process.

The door to this improved pathway cannot be opened without a significantly revised approach to the certification included in every appraisal report. Certifications are valuable and beneficial to all parties; we do not suggest eliminating them, rather they simply need to be revised to reflect a modernized appraisal process that recognizes the participation of multiple qualified parties in one appraisal assignment.

Respectfully submitted,

Bill King
Chief Valuation Officer
Bradford Technologies
302 Piercy Rd
San Jose, CA 95138
206.409.5017 cell/text