The Upside of Appraisal Waivers

Less than a year ago on November 20, 2017 a letter was addressed to the Appraisal Standards Board.  It stated, “Please consider this letter as TriStar Bank’s official request to receive a one-year waiver of the appraisal regulation’s requirements to utilize a certified appraiser…”  At first blush, you might think this is a “not so very bright” idea, but let’s look at the big picture.  TriStar does put forth some viable alternatives to replace appraisers.  The letter goes on to present 3 options:

  • “Obtain an estimated value from a realtor”
  • “Obtain an evaluation”
  • “Our Senior Officer will research comparable sales”

Essentially, they could have their real estate collateral valued by people on the fringes of real estate valuation, rather than people trained and licensed to appraise.  This would certainly cut down on cost!  TriStar’s letter states since 2013, the price of “appraisals/evaluations has increased 23%.”  Good point.  Why put up with those higher prices when they could simply get their valuations done by non-appraisers?  Once you begin to understand the brilliance of this solution one may ask themselves, “Why not apply it to other professions, as well?”  Consider the following…

The U.S. Bureau of Labor Statistics states medical care costs are 13.37% higher since 2013.  According to HHS.gov, the cost of health insurance premiums increased 100% since 2013.  So, instead of paying these higher prices for medical care, we could request a “Medical Waiver” in which a non-licensed medical expert could serve as our doctors and surgeons.  Imagine the money you could save if your gall bladder was removed by the cashier at your pharmacy, instead of an expensive and qualified surgeon.

Instead of being closed-minded, why not give “Appraisal Waivers” a chance?  My only recommendation is that we first test the concept with some other professions.  Here are some possibilities…

• Shortage of Dentists – Allow non-certified Dentists to perform dental work as long as they are familiar with the proper tools.  A machine shop worker would have plenty of experience with drilling.

• Shortage of Orthodontists – A Portrait Photographer would certainly know what a good set of teeth look like and would be much less expensive.

• Shortage of Attorneys – There are many people currently incarcerated who are very familiar with how our legal system works.  Why waste that experience just making license plates?

•  Shortage of Doctors – Minor surgery could be performed by anyone who has seen at least three seasons of Grey’s Anatomy.

Once we confirm that lowering standards could work in the above scenarios, we could be confident that “Appraisal Waivers” make just as much sense!

The ASC has now opened an informal 30-day comment period regarding the TriStar Bank’s temporary waiver request.  Until April 9, 2018 commenters are able to voice their concerns through written data, views and arguments. Please follow the link provided to leave your comment. Instructions on how to submit your comment are located in the Addresses section of the Notice.

Comments

About Tom Boice

Tom Boice
Tom Boice, SRA has been doing residential appraisals for over 30 years in Georgia, California, Utah and now Nevada. After 9 years as a reviewer for a large AMC, he has recently re-entered the fee appraiser world. Tom’s affinity for sarcasm has never been fully accounted for.

Check Also

Existing-Home Sales Rise 7.2% in February

While the report is positive, a new study paints a grim picture moving forward due …