Tuesday, 13 April 2021 | The Latest Buzz for the Appraisal Industry

Challenges and Changes of a Real Estate Appraiser

After being introduced to the profession by a good friend, Gary Crabtree, SRA thought he would give it a try. In 1962, he started working for Paramount Savings and Loan Association. The beginning wasn’t easy for him, he was working full-time and in the evening driving two hours each way to take courses from UCLA at night. In the end, he built a successful real estate appraisal business in Kern County, California.

Buzz: First off, thank you for sharing your story with our readers. Tell us a little bit about your experience?

Crabtree: My experience parallels the history of the appraisal profession over the last 50 years. When I first entered the profession, appraisals consisted of a 2 page “hand printed” report called the “green hornet” with physical characteristics, a cost approach, a very simple 3 sale sales comparison approach, a sketch, a “hand drawn” plat map and 1 Polaroid picture and a database that was printed on 3 X 5 cards published once a week. Today’s appraisals are multi-page reports with “mountains” of exhibits with state of the art analytics in an electronic format that any and all computer databases can digest, analyze, scrutinize and challenge an appraisers judgment, experience, competence to prepare a credible report.

Buzz: You have been able to witness a lot of changes in the appraisal industry over the years. What is one event or outcome that changed the industry overnight?

Crabtree: Speaking as a residential appraiser, I would opine that the one specific thing that changed the profession forever was the advent of HVCC / Dodd-Frank that gave rise to Appraisal Management Companies. Not until Dodd-Frank is either repealed or enforced properly will the appraisal profession become economically feasible to obtain young new entrepreneurs in the form of independent appraisers.

Buzz: I read in a recent article how you helped end a case of massive mortgage fraud. Can you tell us a little bit about that?

Crabtree: The case was one of the ten largest “equity skimming” mortgage fraud cases ever prosecuted in the country. In 2005, while performing “due diligence” in researching comparable data, I noticed a series of sales that were purchased by buyers from one large real estate brokerage and two months later sold to other members of the same brokerage or straw buyers for, on average, $200,000 to $250,000 higher with 100% sub-prime financing. I was able to compile a list of names and addresses of properties, buyers and sellers with one common denominator; they were all associated with either the brokerage or their subsidiary mortgage company. After completing research on over 132 properties and compiling evidence, I reported my findings to law enforcement. It finally ended up with the FBI and the U.S. Attorney with indictments of 2 principals and 11 other co-conspirators. Two appraisers were responsible in the preparing of fraudulent appraisals, yet they were never indicted. In fact, their licenses were never revoked but instead, they were placed on probation by the state licensure board. The case took 8 years and 2 months from beginning to sentencing with the principals receiving 17 ½ years in Federal Prison and the others received sentences ranging from probation to 5 years. The case resulted in lender losses of over $33 ½ million dollars. It didn’t take long for my name to become attached to the case through the media.

Buzz: Was your business impacted by your involvement in this case?

Crabtree: Yes. When my name was released as the “whistleblower”, I immediately experienced a reduced demand for my services. Real estate agents, brokers, lenders and loan officers who were involved in the same frauds, but on a lesser scale, stopped using my services. I also reported my findings to lenders that were being defrauded, assuming they would want to know and order “true” valuations of their “bad” loans. As it turned out, they didn’t want to know the truth and I was shunned by those lenders.

Buzz: What challenges have you experienced recently?

Crabtree: The greatest challenge is making a “decent” living in today’s competitive market and the lack of trust that I’m shown by lenders and clients who demand written proof and documentation of everything that is included in my appraisals. It seems like I’m in the data gathering business rather that the valuation business.

Buzz: What keeps you so young?

Crabtree: I’m still in love with my profession. Every day is a new day with a new appraisal problem to solve and no two are alike. I still take my job seriously and pour everything I have into each report knowing every time I sign an appraisal, a piece of me goes with it and the client can rest assured than I did my best to protect the “public trust”.

Buzz: With 55 years of experience in the industry, what advice would you give to appraisers new to the industry?

Crabtree: First, I don’t consider appraising as an industry, it’s a profession and we are professionals who are experts in the valuation of real estate. To those who wish to join the profession, I would recommend you obtain the best valuation education possible and find a good mentor. Also, be prepared for a period of hard work and low earnings until you reach the experience level that demands higher fees. Finally, join a professional appraisal organization and seek a designation that will set you apart from the “herd” out there.

Buzz: Thank you so much for taking the time and sharing your story with us.
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