This article was originally published on December 10, 2018. A correction has been made on December 13, 2018.
The argument of using MLS photos or shooting your own photos has been debated by appraisers for the last few decades. You, as appraisers, want to be sure the comparables you are using are of the correct house and also look as the MLS illustrates. Most importantly, you want to make sure the house is still standing. The listing agent’s job is to sell the house. As the salesperson they will highlight all the positives and leave the negatives up to the imagination. This is one of the main reasons it is extremely important to not solely rely on MLS when utilizing comparables.
Several appraisers have landed in hot water with their state boards or clients by only relying on the MLS photos. Craig Capilla, a former prosecutor for the IDFPR (Illinois Department of Professional and Financial Regulation) recently hosted a webinar along with ProxyPics. During the webinar he shared an anecdote of an appraiser relying only on MLS photos. In this instance, the agent and MLS had incorrectly shared the neighboring property instead of the correct subject.
When brought in for a board meeting, rather than accepting the defeat, the appraiser lied and said he had taken the photos himself. There is a common misconception that not taking your own comparable photos is a violation. USPAP, Fannie Mae, Freddie Mac, (and many others) do not state anywhere that you personally, as the appraiser have to take the comparable photos. As long as you feel the photo is accurate and the service you are using is credible, you can use a tool that help you spend more of your valuable time on the analysis rather than spending unnecessary time driving.
I’m going to have to use the B word in this next paragraph. Bifurcated appraisals is the next hot topic after Customary and Reasonable fees. Bifurcated appraisals are important to mentions because they appear to be one of the avenues the GSE’s have been exploring for four years and may be the future of the industry. One of the main reasons the GSE’s are moving in this direction is not only the decreasing number of new appraisers but also the extended turn times in hot markets.
In the summer of 2016, during the refi boom, appraisals took 4-8 weeks in Oregon for a typical SFR. There are horror stories of people losing out on their dream home, rate locks expiring etc. At the time Oregon had 200 plus new residents per day. Appraisers could not, understandably, accommodate such a large surge in business. We need to put the public at ease and let people know there are new technologies that will avoid these issues to occur again. With tools like MLS data imports and third party photo services we have the ability to meet high and unexpected demands.
Appraisers need to spend more time on the analysis of a report rather than spending time being an Uber driver. We need to take advantage of new technologies that will help expedite the appraisal process. Appraisers will be able to spend more their time appraising, simply put. By welcoming changes like these the industries surrounding us will have more confidence in what appraisers do and will decrease the talk of eliminating the appraisal industry and more time focusing on what we can learn from the appraisal industry.
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