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Working RE magazine, which you now hold in your hands, is published by OREP Insurance. As we’ve grown over the last 21 years, so too has the number of claims and complaints that are filed against our insureds.
While lawsuits against appraisers have declined over the last decade—as the fallout from the 2008 real estate crash has shaken off—on a strictly proportional basis, OREP now sees a significant percentage of all complaints and claims filed against appraisers. (Today, OREP serves over 10,000 appraisers across the U.S.)
Even though we have a team of claims adjusters, attorneys, and USPAP experts who stand ready to defend our insureds, I often take the role of the “claim intake processor” myself. That means that I am frequently one of the first people to speak to OREP’s insureds about the complaints, demand letters, lawsuits, investigations, and/or difficult situations they find themselves in.
I do this for a few key reasons. Firstly, I remember the saying, “Insurance is something you buy that you hope you never use.” Insurance is a promise. If you carry insurance for years, and then the time finally comes when you do need support, professional advice, and legal defense, you want your insurance carrier and your agent to live up to that promise. You deserve to talk to someone knowledgeable as soon as possible, have the process explained to you, and feel comfortable that
you’re not just a number to the insurance carrier.
Secondly, standing on the frontlines of our appraisers’ defense team allows me to stay primed about the exposures and risks that OREP’s insureds face. I can then bring that information full-circle, keeping both our insureds and the appraiser profession at-large informed about what they can do to limit their liability and protect themselves.
Facing a claim or regulatory investigation is almost always an incredibly stressful experience. When I speak to appraisers in these situations, they are often frustrated, afraid, and sometimes angry. In the case of the latest issue facing appraisers—discrimination complaints—many are hurt and outraged by the accusation that they are “racist” just because their opinion of value was lower than what the complainant hoped. Being able to lend an ear and support these professionals is very meaningful for me.
As you already know, today we’re seeing new exposures and threats facing appraisers. The prospect of hybrid and desktop appraisals is creating new
liability considerations, and we’re also seeing a sharp increase in discrimination complaints and lawsuits against appraisers (See HUD Discrimination Complaints Skyrocket, pg. 6).
My advice to appraisers is to keep the faith and try to embrace the change that has come to the profession. Some AMCs and lenders have introduced lists of over 50 words that are now considered biased (See Industry News, pg. 38). The standards and requirements that appraisers are being held to have evolved considerably over the last two years and are likely to continue changing. Even the forms are changing. Keeping up-todate, attending conferences, taking the latest education available, and staying connected with your peers are timetested ways to ensure your success in the years ahead.
Lastly, ensure you’re covered properly—so you’re protecting your business and assets. When it comes to your E&O insurance, it pays to insure with a program that has decades of experience serving appraisers. If there’s anything I can do to help or support you, please email me at isaac@orep.org WRE
Women in the Appraisal Industry: Interview with Kathy Walsh
Thanks for this article, as women are very unrepresented in the appraisal industry. I was trained in 1994 by Georgina Hurtado; she was one of the few early appraisers in Florida and an amazing mentor. Her eldest son now works for Fannie Mae and her two daughters are also excellent appraisers with decades in the industry. Georgina was a tough teacher but always fair; she demanded attention to detail in all aspects of the job but was always generous with her time and made sure concepts were thoroughly understood. I was lucky to have her and her daughters train me; since it was a family business, there was also a great sense of camaraderie. We still talk
regularly and help each other figure out problems on the job—it feels more like family than anything else. All I can say is I owe Georgina a debt of gratitude and a career that’s ongoing now for thirty years. I wish we had many more great women appraisers out there and the industry supported them. —Richard H.
I found that the women-to-men ratio of 33.5% interesting. I work as a commercial appraiser and think it is much lower for the commercial side of appraising. Based on what I see in classes and events, the ratio is closer to 20% for women to men. —Yvonne
O.For how long do Fannie Mae, Fred-
die, and the mortgages want to continue stealing the fees from the appraisers? Until when are we going to put up with their inefficiencies?
Anonymous
Faster and Cheaper: Fannie Says Appraisals
No Longer the Default
I, for one will not do hybrids or property data collection, or sign any appraisal I have not personally inspected and worked on from start to finish. I hope all Certified and Licensed appraisers will do the same for the good of our profession and more importantly for the good of the public. The people in charge at these institutions are simply fools and the public will pay dearly in the end. —Jim WRE
T here is a growing liability threat from HUD that appraisers need to be aware of.
Definitive numbers are difficult to come by since the Department of Housing and Urban Development (HUD) has failed to respond to public record requests on this question. However, Working RE ’s “off-therecord” conversations with HUD officials, plus our own experience at OREP Insurance serving over 10,000 appraisers with E&O insurance every year, has given us an inside look into what has otherwise been an obfuscated prosecutorial process for appraisers.
OREP and Working RE estimate that over 300 complaints alleging appraisal discrimination have been filed against appraisers with HUD— just in the last two years.
The vast majority of complaints (but not all) stem from an appraisal that comes in below the contract price or the targeted refinance “number” where the homeowner, or even the buyer, identifies as part of a minority racial or ethnic group.
Unlike state boards, generally HUD is not pre-screening the complaints for validity before opening a file, starting an investigation, and sending an appraiser a letter demanding a response within 10 days.
This issue isn’t new. Since Joe Biden issued a Housing Plan that took aim at “racial bias” in appraisals in early 2020—it’s been a whirlwind.
Discrimination-based lawsuits, HUD complaints, and even complaints with the Consumer Financial Protection Bureau (CFPB) against both lenders and appraisers have skyrocketed.
Here’s an inside look into the increasing liability and risk that appraisers are facing from lawsuits and HUD discrimination complaints.
Since the White House itself has taken such a keen interest in this issue, HUD appears to be handling appraisal discrimination investigations differently from regular fair housing complaints.
Craig Capilla, Partner at Franklin, Greenswag, Channon & Capilla, LLC and an attorney on the frontlines of defending appraisers, reports that he is personally handling over 20 HUD appraisal discrimination complaints that are all still open, pending matters. “After the initial interviews and document requests, there has been no action whatsoever. None have been dismissed and no determination has been made in favor or against any of my clients. Unlike a typical fair housing violation, such as rental discrimination, which can normally be vetted and addressed at the regional level, valuation-related complaints appear to be being handled differently. It feels like regional offices don’t have the authority or the discretion to make determinations. All the valuation complaints are being sent to the Washington D.C. office. The D.C. office is taking the lead on these,” advises Capilla.
The delay is uncharacteristic of HUD because their own internal
Peck is the Publisher of Working RE magazine and the President of OREP, a leading provider of E&O insurance for real estate professionals. OREP serves over 10,000 appraisers with comprehensive E&O coverage, competitive rates, and 14 hours of free CE for OREP Members (CE not approved in IL, MN, GA). Visit www.OREP.org to learn more. Reach Isaac at isaac@orep.org or (888) 347-5273. CA License #4116465.
As appraisers grapple with the newfound risk of being sued or facing down a federal regulator over claims of discrimination, it raises the question: Who is defending appraisers?
policy is to resolve discrimination complaints within 100 days of receipt. “On every file I have, I’ve received a letter from HUD that they will exceed that deadline because they need more time to ‘conduct more investigations and analysis.’ The letter then provides an updated projected date for completion with the caveat that the date is also subject to change. I received one such letter in November 2021. The matter is still open and their last estimate on when they would conclude their investigation was May 2022. When I reach out to HUD it is common that the case has been handed to a different investigator or they simply do not have an update,” Capilla reports.
Not unlike many state appraisal board investigators, the majority of HUD investigators have not received any training in valuation or appraisal methodology. “It is difficult for them to read an appraisal report and decide if the appraiser was performing the appraisal with malice. Months ago, I heard that HUD was planning to hire experienced appraisers for their D.C. office so they could have an independent review of the material, but I haven’t seen that occur on any of the cases I am handling,” Capilla reports.
The result is a painstakingly slow process where appraisers have had a HUD discrimination complaint hanging over their heads for years. Some appraisers have faced onerous requests to furnish hundreds of appraisals to HUD, including demands to provide every appraisal an appraiser has completed in certain neighborhoods for the last few years. Capilla says there is no magic bullet to speed up the process or bring these matters to a timely conclusion.
Visit OREP.org/HUDcomplaint for the appraisal discrimination template that HUD is sending to hundreds of appraisers across the country.
HUD’s resistance to dismissing any cases means that very few HUD investigations have been dismissed todate. In lieu of a dismissal, the goal for HUD is to force a settlement between the appraiser and the complainant.
Given the prolonged nature of some of these cases, some appraisers (and their legal counsel) have decided to settle with HUD rather than face another year or two of legal limbo and the corresponding legal fees. So far, these settlements have been in the $10,000 to $15,000 range. One of the challenges for appraisers, even when settling with HUD, is that unless the appraiser specifically negotiates a confidentiality provision, the Consent Order that the appraiser signs with HUD will be public and potentially have a long-lasting impact on that appraiser’s career.
John Smith (name changed for privacy), an appraiser in Texas who received a HUD complaint in 2022, says that the experience of being accused of racism has been a nightmare for him. “It has been incredibly stressful and frustrating to have these accusations hanging over my head for nearly a year with no end in sight. The entire complaint is baseless and was just filed because the borrower didn’t get the value he wanted on his refinance. Now, when I fill out applications with my clients, I am forced to disclose the complaint and I believe it is damaging my ability to get work,” Smith says.
In Smith’s case, the HUD investigator didn’t appear to know much about appraisal methods. “It was clear from the interviews that the investigator lacked general appraisal knowledge and had little to no experience in real estate. The process is horrible. The investigator continually vilified
me and repeatedly insinuated that I had done something wrong. I am just doing my job! I have spoken to a few lawyers about filing a countersuit against the complainant for defamation but I haven’t found an attorney willing to take the case,” says Smith.
In an environment where hundreds of discrimination complaints are being filed against appraisers, what can an appraiser do to protect themselves?
Capilla advises that the single most important preventative measure an appraiser can take is to go back and read their reports and the narratives they are using in their appraisals on a regular basis. “Take some time and read your reports and read through your addendum. Consider the words that you’re using to describe the appraisal process, the neighborhood, the properties, and your conclusions. The explanations that the appraiser gives are going to be most scrutinized when and if a discrimination complaint is filed. The use of subjective terms like ‘inferior,’ ‘superior,’ and ‘well-maintained’ are all turning into red flags for lenders and the GSEs,” Capilla says.
The solution for appraisers is to focus on the words that are being used in their reports. “Words matter and it’s highly advisable for appraisers to start reporting the objective facts instead of using subjective descriptions. Terms like ‘well-maintained’ or ‘well-kept’ are now being flagged for having undertones of racial bias. In many cases, appraisers were trained to use subjective language across the board. Appraisers now need to stick to just the facts. As an example, instead of saying ‘within walking distance,’ appraisers can specify the exact distance. The use of subjective adjectives and descriptions is a red flag for Fannie Mae and Freddie Mac, page 8 8
and will be a hurdle for any appraiser who is facing a discrimination complaint. The more objective you can be, the better,” says Capilla.
Another recommendation from Capilla is for appraisers to spend more time on the construction of their workfiles. “Now is a good time for appraisers to build stronger workfiles. One weakness I see in workfiles a lot is that appraisers often preserve the sales they included in the appraiser report, but they don’t save the comparables that they considered but didn’t use. You should be keeping a full list of all sales considered and analyzed, even if you didn’t use them in your report. At a certain point in these HUD investigations, there will be a question as to why you used this sale. Why didn’t you use that sale? Including information that you considered but DIDN’T use is as important or more important as including the information you did use. That way, you can explain your rationale years later,” Capilla advises.
Beyond HUD complaints, Capilla also reports that a new round of Fannie Mae complaints being sent to state licensing boards are all discrimination and bias specific. “Fannie Mae is now reporting appraisers enmasse to their state licensing boards for using words like ‘gentrification’ to describe the neighborhood—the suggestion being that the word has racial undertones and that it warrants an investigation of possible bias. We’ve seen these complaints filed in multiple states with state boards,” reports Capilla.
What should you do if you are on the receiving end of a HUD appraisal discrimination complaint, or even a state board complaint involving discrimination? First and foremost, Capilla
says you should reach out to your E&O carrier. “Regardless of whether discrimination claims are excluded or not, there is an obligation of the insured to notify the carrier that the claim has arisen. Then you want to assemble your team. Too many appraisers have gotten to me too late in the process. Sometimes they’ve already made a bunch of statements, given an interview, sent three written responses, and tendered a bunch of documents to HUD. Rather than just charging in and trying to answer the questions immediately or participate in the interview, it pays to get professional advice,” says Capilla.
Having a seasoned attorney who has been through the process before and knows what to expect can make all the difference—whether you are responding in writing or you’re doing an interview with the investigator. “The interview is with the appraiser. As the attorney, I don’t get to feed the answers or respond on behalf of the appraiser. However, I can still help lead the conversation. Oftentimes the appraiser doesn’t know much about fair housing complaints and the investigator doesn’t know much (if anything) about the appraisal process, so they can talk themselves into something that’s problematic. It’s helpful for both sides to have somebody else in the room in the conversation that can bridge that gap,” says Capilla.
Lastly, be respectful. “Investigators at HUD are not there to find somebody guilty. Many appraisers are loath to acknowledge that. Maybe people in particular political circles or higher up the food chain have certain motivations, but field level investigators are there to investigate. Where possible, we should help them do their job. If the appraiser is evasive, combative or stonewalling, that’s going to get written up in their investigation report. Alternatively, if the appraiser
is polite and cordial and responsive, that also gets written into the report. Character matters. Be kind, be cordial, and be responsive. Put yourself in the best position to succeed,” recommends Capilla.
Capilla is the preferred defense attorney for the 10,000 appraisers insured with OREP Insurance. OREP Members enjoy a free one-hour consultation with Capilla when facing a HUD discrimination complaint or a state board investigation. (To learn more, visit OREP.org/appraiserdefense.)
While commercial appraisers have, for the most part, avoided the flurry of HUD complaints and lawsuits alleging appraisal discrimination—that might be changing soon. Leading civil rights firm Katz Banks Kumin LLP on behalf of the NCRC and Terry Horton, a Black property-owner in Cincinnati, Ohio, recently filed a complaint alleging appraisal discrimination with both HUD and the CFPB. The HUD complaint names the appraiser, the AMC, and the lender. According to the complaint, Horton is Black and the owner of a multifamily property in Ohio that is fully occupied by Black tenants who are on Section 8. When trying to do a cash-out refinance of his multifamily property in 2022, Horton did not get the value he was looking for.
Horton and the NCRC allege that the appraiser made a series of egregious errors, including misstating the square footage of the property, misreporting the rents, misreporting the number of bedrooms, and selecting inferior comparables. The NCRC hired a Cincinnati appraiser to review the original appraisal and who issued a report stating: “It is our opinion that some degree of bias is apparent in the reconciliation of values, which fall squarely on the very low end of the value spectrum,” and concluding
that “the appraiser was negligent and violated the competency requirement in USPAP.”
Capilla says we can expect to see more of these types of complaints. “Discrimination in lending on the basis of protected classes is illegal. It doesn’t matter what type of lending we’re talking about. We’re going to see these claims in the commercial space. I further anticipate we’ll see this in rural and agricultural lending as well. Whether it is farming and crops or livestock and herding, anywhere there is the potential for a certain segment of borrowers to have negative outcomes more commonly than other borrowers, the potential for these claims exists,” Capilla advises.
In addition to the hundreds of HUD discrimination complaints filed against appraisers, a number of lawsuits have been filed as well.
These lawsuits include:
• Tate-Austin v. Janette Miller and AMC Links, LLC, et al. Both Miller and AMC Links have settled with the Tate-Austin’s out of court. The amount of the settlement remains confidential.
• Washington v. Accurate Appraisal Services and Wells Fargo et al. Wells Fargo settled with the Washingtons outside of court. The amount of the settlement remains confidential.
• Connolly & Mott v. Shane Lanham et al. This case is still ongoing. Lanham has countersued Connolly and Mott for defamation and for ruining his business by going on national television and calling him a racist.
• Janifer v. Appraiser. This is a local case in Maryland wherein a homebuyer made offers, and entered into contracts on two properties. The same appraiser was hired on both contracts and did not appraise the properties to the contract price in both cases. The homebuyer was not able to purchase a home and is suing the appraiser for discrimination.
• Class Action Complaint vs. Wells Fargo. This is a class action complaint against Wells Fargo Bank alleging widespread discrimination relating to the bank’s approval rates for Black and minority borrowers, including appraisal discrimination. The law-
suit cites Andre Perry and the Brooking Institution’s studies in its amended complaint.
In the majority of the lawsuits listed above, the United States Department of Justice (DOJ) has filed a Position of Interest brief with the court, reiterating that fair housing laws grant plaintiffs a private right of action to sue the offender.
As appraisers grapple with the newfound risk of being sued or facing down a federal regulator over claims of discrimination, it raises the question: Who is defending appraisers?
Many appraisers are learning that their insurance policies do not provide any coverage for claims and complaints alleging discrimination. In the same way that fraud is excluded in almost every professional insurance policy, the majority of professional liability (E&O) policies exclude discrimination.
This is a massive problem for appraisers given the sheer volume of HUD discrimination complaints and claims their profession is seeing. Facing a discrimination claim in open page 10 8
court or being called to the carpet by HUD without insurance is a very costly business.
While some E&O policies simply exclude discrimination, others offer a significantly reduced sublimit, such as only providing $50,000 for “Discrimination Claims.” (A sublimit is a limit within the policy that reduces or limits coverage associated with particular claims.)
OREP, a leading provider of E&O insurance for appraisers, has stepped up and worked with its primary carrier to provide an individual appraiser policy with $200,000 of discri-
mination claim coverage and firm policy (two or more appraisers) with up to $500,000 for those appraisers that want to ensure they are properly covered. (Ask your OREP agent for details).
Do you have questions about how you can limit your liability and ensure you are properly covered in today’s litigious environment? Feel free to email me with questions at isaac@orep.org . Stay safe out there!
>> “BAD” WORDS: The list of words that appraisers are being instructed not to use continues to grow with
I n his initial housing plan in 2020, Biden cited a report by Andre Perry of the Brookings Institution, The Devaluation of Assets in Black Neighborhoods, which has now been quoted hundreds of times by the media, think-tanks, and non-profit organizations alike— including being cited extensively in the landmark discrimination lawsuit currently facing Wells Fargo: Class Action Complaint vs. Wells Fargo . The Brookings report notes that “Homes of similar quality in neighborhoods with similar amenities are worth 23 percent less ($48,000 per home on average, amounting to $156 billion in cumulative losses) in majority Black neighborhoods, compared to those with very few or no Black residents” and attributes the entire difference in value to racial discrimination on the part of appraisers.
Academics Junia Howell and Elizabeth Korver-Glenn, as well as Redfin, have conducted similar studies and drawn very similar conclusions as Perry.
Now, the American Enterprise Institute (AEI) has published a report aimed at debunking the core arguments made by the Brookings Institute, using their same dataset. AEI added two additional control variables onto the 23 control variables already used by Perry: (1) One Adult Borrower Share and (2) Average 2013 Equifax Risk Score.
By adding just the Equifax Risk Score (ERS) as a control in Perry’s dataset, the explanatory factor of discrimination is reduced to a -0.3 percent variance in property value. Or as AEI puts it, not significantly different from zero.
ERS is a type of credit score and according to Equifax’s website “delivers a multi-faceted consumer viewpoint based on length of credit history, depth of credit information and delinquency history.” AEI explains that the ERS is highly correlated with the income of the borrower.
Consequently, by using Perry’s own
some lenders sending appraisers lists of over 50 words they are now required to avoid. See pg. 38 for an example of one such list. WRE
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data, AEI argues that the devaluation that Perry identified due to discrimination “disappears” or is “at a minimum, seriously overstated.” In other words, instead of racial discrimination being the reason for the difference in home values, income and credit score might be a better explanation.
For their part, the Brookings Institution researchers appeared to brush off the AEI’s latest analysis, with Jonathan Rothwell, one of Perry’s co-authors, telling the American Banker that AEI is simply trying to silence discussion about racial bias in the housing market. “No matter how nuanced and compelling the research is, no one can publish anything about racial bias in housing markets, without our friends [Tobias] Peter and [Ed] Pinto insisting there is no racial bias in housing markets. Everyone agrees that there used to be racial bias in housing markets. I don’t know when it expired,” Rothwell remarked to the American Banker. WRE
Short-Term Rentals (STRs) are a great alternative for people who don’t want to stay in a hotel. Maybe it’s cheaper for a large family who needs multiple rooms? Perhaps it’s more fun for a group to stay in a large home with numerous amenities such as a private swimming pool and a tricked-out kitchen? There are a variety of STRs that even include surfboards, ski equipment, golf carts, lakeside dock, jetskis and even a few with a boat. The amenities that STRs can include are endless.
Imagine all of the furniture, TVs, stereo equipment, dishes, pots and pans, cooking utensils, blenders and a mocha Frappuccino machine all set up in a home waiting for the family on vacation or a place where you and 30 friends can party over the weekend. No problemo. Jump onto one of the dozen websites, ogle at the nice photos, pick the place with the most personal property & highest rating, use your credit card to book your next weekend stay, wait for the approval by the owner, and then it’s time to party!
Now, here comes the problem for residential appraisers appraising these properties, along with their elevated income, as “typical” residential properties. The requests involve homes in numerous vacation spots ranging from Sedona, San Diego, Montana, Lake Tahoe, to Miami, New York, Seattle, New England, and every vacation spot in between.
Appraisers are being told by their AMC clients and loan officers to appraise these as residential properties.
They are told it’s fine to use the total yearly income and “simply divide by 12” to produce a monthly income that can be used to value these places using a Gross Rent Multiplier (GRM). But is it really that simple? Short answer—no. Long answer—it’s complicated.
First of all, the value of an STR has three major components:
1. the real estate,
2. personal property, and
3. the business.
The business side includes replacing worn out or damaged furniture, window coverings, bedspreads, towels, the property’s internet listings, credit card processing, weekly cleaning, and daily management decisions involved with running the STR business. On top of that, what if the credit card is stolen and the last party animal damaged the house or fell off the deck and wants to sue the owner for a defective deck railing? STRs are far more than real estate; they include a business also known as a “going concern” or intangible property.
There’s conflict and confusion because clients, AMCs, and lenders want what they want, and standard appraisal practices and definitions are standing in their way. They want the property value higher and believe that using a daily rental rate will increase the value of a house. The result is misleading statements such as: “This appraisal isn’t going to FNMA so…etcetera.” However, they still want you to use a FNMA form. So, if it’s not going to FNMA, how about we use a GPAR form and see what happens—I bet they demand the use of the 1004 form. In other words, appraisers are being misled by ignorant people willing to throw us under the bus so the
There’s conflict and confusion because clients, AMCs, and lenders want what they want, and standard appraisal practices and definitions are standing in their way.Richard Hagar, SRA, is an educator, author and owner of a busy appraisal office in the state of Washington. Hagar now offers his legendary adjustments course for CE credit in over 45 states through OREPEducation.org. The 7-hour online CE course “How to Support and Prove Your Adjustments” shows appraisers proven methods for supporting adjustments. Learn how to improve the quality of your reports and defend your adjustments! OREP members save on this approved coursework. Sign up today at OREPEducation.org.
client can make a profit. A lender’s confusion might relate to income. Lenders can use total yearly “STR income” to qualify the borrower, but “monthly rent income” must be used to qualify the property. I’ve had lenders tell me, “See, see I told you that you can use the STR income.” They don’t appear to understand that monthly income is the income received once a month based on real estate, not a business, personal property, and real estate. They are the ones confused, not us. Maybe some definitions and regulations will help explain things.
Here’s a sample state law: “Short-term rental” means…a dwelling unit, or portion thereof, that is offered or provided to a guest by a short-term rental operator for a fee for fewer than thirty consecutive nights.”
Webster’s Dictionary. Business (noun) ~
• a usually commercial or mercantile activity engaged in as a means of livelihood.
• a commercial or industrial enterprise.
• dealings or transactions, especially of an economic nature.
From the Appraisal Institute, The Appraisal of Real Estate:
• A usually commercial or mercantile activity engaged in as a means of livelihood.
• A going concern [value] is an intangible that attaches to the tangible assets [real estate] of some businesses.
• Going-concern value refers to the total value of a property, including both real property [tangible] and intangible personal property attributed to business value. This is where lenders and others become confused. Just because it involves real estate doesn’t mean you include intangible value when valuing the real estate. Appraisers can value these, but USPAP has some
requirements and one of them is separating the value of the real estate from the added value of the personal property and business.
USPAP / AO-29
Within appraisal practice, there are three disciplines:
1. real property,
2. tangible personal property, and
3. intangible property including business interests
USPAP SR 1-2(e)(iii) requires appraisers to “identify and consider the effect on value of any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal.”
SR 1-4 (g) states: When personal property, trade fixtures, or intangible items are included in the appraisal, the appraiser must analyze the effect on value of such non-real property items.
The Federal Interagency Appraisal and Evaluation Guidelines states it as: The appraisal must:
• Be based upon the definition of market value set forth in the appraisal regulation.
• The definition of market value assumes that the price is not affected by undue stimulus, which would allow the value of the real property to be increased by favorable financing or seller concessions.
• Value opinions such as “going concern value,” “value in use,” or a special value to a specific property user may not be used as market value for federally related transactions. (Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA))
There are additional considerations regarding how the appraiser should handle an STR in the cost and income approaches; both approaches require extensive explanations that I can’t supply here. So, while we can appraise STRs, we must separate the real estate’s value from the business venture’s value. Typically, this isn’t the area for residential appraisers; it is a commercial appraisal where they deal with the complexities of valuing furniture, business, and real estate. Clearly, a $700 appraisal fee only covers cramming some of this additional work and information onto a 1004 form.
There’s one more consideration when appraising an STR—the comparables. Suppose your comparables are sold as working STRs. In that case, the appraiser must separate out the value attributed to the personal property and business venture (going concern) from the real estate value of the comparable. Anyone dealing with these comparables must, absolutely must, obtain more information than the simple sales price and square footage listed in the MLS. Failure to separate out the real estate value from the value contributed by the going concern is considered misleading, a major USPAP failure and grounds for revoking your appraisal certificate.
Appraising STRs is a viable business segment for any competent appraiser; however, doing it wrong will lead to over-valuation and that can be considered criminal. Ouch!
Business is slow, so if you are considering appraising in this area, start by watching my 2-hour Webinar on STRs (Workingre.com/Webinars).
Once you go through the webinar, you’ll have a great starting point for appraising STRs, if that’s a path you want to go down. There’s a demand for this type of appraisal and the fees are two to four times what you can earn for appraising a typical house, but you must know what you are doing, or it can be extremely detrimental. I’m trying to keep you safe out there. WRE
Appraisers don’t need a data scientist to tell them that the appraiser profession is experiencing a record-breaking slowdown. Indeed, we have not seen anything like this in recent history—at least for the last 12 to 15 years.
The American Enterprise Institute (AEI) publishes data tracking the mortgage and appraisal production numbers of both Fannie Mae and Freddie Mac (the GSEs) going back to 2013. AEI’s data shows that GSE appraisal volume is at the lowest point since they started tracking it.
For example, in February 2023, total GSE valuations dipped to just 111,000 for the entire month, with appraisal waivers and property data collections making up 14,000 of those “valuations.” This left appraisers with
just 97,000 appraisals from the GSEs. According to Freddie Mac’s “Appraiser Capacity” report, just over 30,000 appraisers were active on UCDP in February. The simple math works out to roughly 3.2 appraisals per appraiser— for those appraisers still working for the GSEs.
AEI’s data shows a “peak” of 544,000 actual appraisals completed in November 2020. Compared to February 2023, the decline in appraisal volume is over 82 percent. In other words, the appraisers still standing only have 18 percent of the business that they did during the height of the COVID-19 “boom” times.
Of course, AEI’s data doesn’t capture the entire appraisal landscape. The Department of Veteran Affairs (VA),
Real estate market pundits have predicted that the American public will ultimately adjust to higher interest rates and/or that the Fed may ease rates in the next year or two.
the Federal Housing Administration (FHA), private lender appraisal work, direct lender appraisals, and commercial appraisals all exist outside the GSE’s domain. Nevertheless, the GSEs handle over 60 percent of all mortgage
transactions—meaning that the data is largely representative of the market as a whole.
Here is some data that tells more of the story—at least in terms of what is happening at the GSEs.
Appraisal volume through the GSEs has been dropping precipitously over the last two years. Appraisers saw unprecedented volume during the COVID-19
boom years of 2020 and 2021. Total mortgage and appraisal volumes began to taper off in 2022 and bottomed out in February 2023. See Figure 1: Appraisal Volume from July 2021-July 2023 (pg. 14) to see how the number of appraisals ordered by the GSEs has changed over the last two years.
Since February 2023, appraisal volume appears to have rebounded slightly. Real estate market pundits have predicted that the American public will ultimately adjust to higher interest rates and/or that the Fed may ease rates in the next year or two.
The use of appraisal waivers by the GSEs reached 49 percent during the height of COVID-19. Thankfully, the use of waivers has dropped dramatically. Over the last six months, appraisal waivers have been hovering around 12 to 13 percent of all GSE mortgage transactions. See Figure 2: Appraisal Waivers from July 2021July 2023 (pg. 15) to see how the use of appraisal waivers has changed on a percentage basis over the last 24 months.
Many residential appraisers are very alarmed about the recent promotion of the GSE’s Appraisal Waiver + Property Data Collection (PDC) options, however AEI’s data reveals that the actual number of PDCs being performed is so small as to be nearly insignificant. In fact, in the last 12 months, the number of PDCs ordered by both GSEs combined has averaged less than 1,000 per month. See Figure 3: Property Data Collection Reports from June 2022July 2023 (pg. 15).
In terms of the total valuations (including waivers) the GSEs have processed in the last 12 months, PDCs have made up between 0.17 percent and 0.57 percent of the total, depending on the month.
Despite the incredibly low numbers of PDCs being accepted by the GSEs, over a dozen technology companies and appraisal management companies (AMCs) have been chomping at the bit to develop and roll out a plethora of home measuring applications and an army of property data collectors.
Perhaps they know something we don’t? In any case, many of the companies that have been vigorously preparing for a world of heavy PDC volume over the last several years must no doubt be—at least for the moment—incredibly disappointed.
Of course, PDCs (or similar versions of them) are currently being used in the private market for portfolio analysis, HELOCs, collateral checks, hard money and investor purposes, and other lender functions, so the fact that the GSEs are barely using them does not mean that there isn’t any business to be had. It is also possible that the GSEs are still running pilot programs that are not being disclosed and hence, not included in the AEI reports.
In response to suggestions by technology company executives that a rapid expansion of PDCs is just around the corner, in private conversations GSE representatives have parroted what Lyle Radke, Senior Director of Collateral Policy at Fannie Mae, has said earlier this year in his public appearances. Fannie Mae is not targeting specific percentages for the use of PDCs—they have an eligibility box and if a loan is within that box, it is eligible. Right now, not many loans are within the eligibility box.
So far, the GSEs seem sensitive (at least somewhat) to the plight of the boots-on-the-ground appraiser and are keeping waivers and PDCs as a smaller percentage of total volume.
Another consideration is that many larger lenders do not have the
systems in place to begin ordering PDCs. Wells Fargo, for example, is currently ordering a full appraisal when given a “Waiver + PDC” option from the GSEs because their systems are not in place to procure PDCs. Consequently, it is reasonable to expect the percentage of PDCs to creep up, even if only marginally, over the next year or two.
What does the future hold longterm? We’ll have to wait and see. WRE
A relatively new appraisal firm that has experienced meteoric growth over the last few years is RSDS Appraisal Diversity. Since starting in 2021, the firm is now operating in 40 cities, has over 100 appraisers, has graduated over 35 trainees, and has another 40 active trainees.
What is the vision behind such a rapidly growing appraisal firm, and why is diversity such an important part of its ethos?
To better understand RSDS’s mission and what sets them apart, Working RE sat down with Dr. Randy Flowers, the Vice President of Operations at RSDS. Flowers has a Doctorate in Education and was previously working as an Assistant Dean for Baker University before he was hired as one of RSDS’s first employees and tasked with assembling RSDS’ team and designing the educational framework that would become a core tenant of RSDS’s appraiser trainee program.
The genesis of RSDS was the barrier to entry into the appraisal industry, Flowers explains. “RSDS strives to integrate trainees into the appraisal profession. Over the last 30 years, there has been a decline in appraisers coming into the industry. Those individuals entering the profession typically have been family members or friends of appraisers, creating a lack of diversity in the profession. Our vision at RSDS is to recruit the next generation of appraisers. Not only are we looking to recruit the next generation of appraisers, but we’re also looking to build a diverse company with people from various backgrounds. We
want to see more appraisers of color, more women represented, and increase the number of military veterans active in the profession,” says Flowers.
With a mind towards recruiting and training trainees, Flowers says RSDS has graduated 35 trainees over the last two and a half years and expects to graduate another 30 to 40 trainees in 2023. “The majority of the company now consists of people who are currently underrepresented in the appraiser profession: appraisers of color, women, and military veterans. If I had to pick one word to describe our teammates, it would be passionate. In many cases, these individuals had been trying to get into the industry for two to three years and had hundreds of people tell them ‘No.’ RSDS is that ‘Yes’ for them,” Flowers says.
Sharing some of the stories of RSDS’s new appraisers, Flowers beams with satisfaction. “One kid took his last dollar and bought a flight to Arizona to interview with RSDS. He got hired on the spot and is now a Certified appraiser making six figures, and is able to go back and help his family. He’s now having a generational effect due to his career progression. We have a certified trainer who was going through personal difficulties, was a stay-at-home mom, and completing two appraisals a week. After she joined RSDS, she can now completely take care of her family. She’s financially successful and now has graduated four Certified appraisers under her,” Flowers shares.
Flowers joined RSDS with a background
“Our trainers have an average of over 15 years of experience and each trains one to three trainees. We’ve built out an entire training program that outlines day-by-day what a trainee should be learning.”
in higher education, and part of RSDS’s mission was to create a professional educational environment for their trainees. “We’ve built our own education program and we have our own learning management software. Our trainers have an average of over 15 years of experience and each trains one to three trainees. We’ve built out an entire training program that outlines day-by-day what a trainee should be learning. It builds off of previous knowledge gathered. They have to learn a lot before going out into the field. They have to be with the company for no less than 90 days and have completed a minimum of 50 appraisals before they can be considered to inspect alone. All of this occurs in an office environment, which facilitates shared learning and a sense of community,” Flowers says.
One of the lodestars of RSDS’s success is its commitment to servicing its clients promptly and professionally. “We’ve been obsessed with customer service since the first day of opening. When the market was on fire, and you could get endless order volume, we would only accept work we could turn around in five business days. While some appraisers load up their queue and pride themselves on being booked six to eight weeks out, we actively turned down work if we couldn’t deliver it to the client in five business days,” says Flowers.
RSDS’s clients respond to its service-focused model, too. Flowers says the firm is currently sitting at 90 percent utilization as a company, and they continue to turn all appraisals around in five business days.
Their commitment to service also extends to communication with the client. “We update the status of orders every day by 9 a.m. local time, and our clients never have to call us. They always know what’s going on. In April, we did nearly 3,000 appraisals and
only received 17 phone calls for the entire month, and delivered 99% on time. Our clients are the best in the industry, and we work closely with each other to develop a business partnership. We meet clients consistently to review performance and explore new areas of growth. Conversely, we don’t work with clients who call 20 appraisers for a bid and only care about who will accept the lowest fee. One analogy that we use is airlines. Think about two airlines: one is Delta and the other is Spirit; they have very different models. If you want a firstclass experience, pay for it, sit back, relax, and enjoy the ride. Or you have the other option, enough said. RSDS is delivering that first-class experience in the appraisal space, on every assignment, every day,” says Flowers.
As demonstrated by the firm’s name— RSDS Appraisal Diversity—diversity is a key part of the company’s philosophy. “Diversity is important to us, not only diversity in representation but diversity in thought. We want to have a team of appraisers that look like the neighborhoods they’re entering—that resemble the cultures and beliefs of the people they serve. We believe that is critical,” Flowers says. According to Flowers, the lack of diversity in the appraiser profession needs to be addressed. “One of the biggest issues being discussed currently is appraisal bias. It is time to catch up with the times and build a labor force that matches our world. Many people are promoting diversity but aren’t doing anything to change it truly. We are going into women’s colleges and historically Black colleges and universities. We’re sponsoring diversity events, going into these communities of color, educating them about the appraisal profession, and providing an opportunity to come into the profession,” reports Flowers.
The drive for diversity of appraisers also extends to bringing younger people into the industry. “Right now, we are educating college students a lot about the appraisal industry, and long-term, we’d like to start outreach to high schools. We need to start educating the younger generation on the appraisal profession. Many kids think about being a doctor or lawyer, why not an appraiser?” Flowers questions.
Flowers believes that part of what needs to change in the mortgage industry is a wider acceptance of trainees. Some states prohibit an appraiser trainee from inspecting a property alone, and many lenders currently have rules against even having a trainee involved in the appraisal! This hurts the appraisal profession overall, Flowers argues. “We meet with state regulators regularly and advocate for trainees. We are always educating our potential clients, too. It is detrimental to the learning experience if clients don’t even allow trainees to be on orders. Trainees are allowed by Fannie Mae and encouraged. Fannie Mae completed a survey analyzing appraisal reports and determined that quality improves when a trainee is involved in an assignment. If you don’t’ allow trainees to do work, how are you educating the future generation?” Flowers points out.
To connect with Dr. Flowers, email him at randyf@rsdsllc.com WRE
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by Kendra Budd, Editor
Every appraiser knows it all too well— to get started in this industry you must be trained. It often feels like an uphill battle when you’re trying to find an appraiser to train you, let alone get the required experience hours or necessary education requirements. Then to top it all off you have to retain all of that information. It’s exhausting! Well, one appraiser in particular noticed the struggle many trainees were facing and found a better solution.
Melissa Bond, an appraiser for over 30 years, is the developer and manager of the Mississippi Practical Appraiser Training (MPAT) program. MPAT is a practicum geared toward educating and providing experience for the new generation of appraisers; it is highly focused on obtaining meaningful experience in a controlled environment. This practicum is education with hands-on experience.
The Appraiser Qualifications Board (AQB) of The Appraisal Foundation (TAF), adopted the criteria for a practicum over 15 years ago. Melissa Bond is the first appraiser/education provider to utilize the practicum option by developing a course which was approved by the state of Mississippi. In January of 2021, the AQB adopted a change to the practicum requirements from 50 percent non-traditional client experience to up to 100 percent non-traditional client experience; this change created the additional flexibility needed for a practicum
course to be developed. The forwardthinking of the AQB established this amazing alternative pathway for licensing.
The Appraisal Subcommittee (ASC), through its current grant program, provided funding for MPAT. The ASC uses its authority to make grants that improve the state regulatory processes and advance the appraisal industry through grants that support high-quality, impactoriented programming by State Agencies and partner organizations identified in their proposals. Mississippi utilized these granted funds for development and for implementation for the MPAT 2022 program. Mississippi’s focus was on recruiting and training a more diverse population of aspiring appraisers; thereby better reflecting the overall general population of the state. The ASC State Support Program allowed the state of Mississippi to deliver a practicum program that allowed for an increase of appraisers of diverse backgrounds who historically experienced barriers to entering the real estate appraisal profession.
The Mississippi Appraisal Board and Mississippi Real Estate Commission were overwhelmingly welcoming and encouraging to Bond when she presented the proposal for a practicum program that could train up to 20 individuals each cycle. The Appraisal Board and state agency sought grant funds from the ASC.
MPAT is the first program of its kind and provides aspiring appraisers the opportunity to train for licensure through a non-traditional scope. Thus far, 17 trainees have completed the program and are well on their way to paving the future path of the appraisal industry.
MPAT is the first program of its kind and provides aspiring appraisers the opportunity to train for licensure through a non-traditional scope.Kendra Budd is the Editor of Working RE magazine and the Marketing Coordinator for OREP, a leading provider of appraiser E&O insurance—trusted by over 10,000 appraisers. She graduated with a BA in Theatre and English from Western Washington University, and with an MFA in Creative Writing from Full Sail University. She is currently based in Seattle, WA.
Bond’s innovation is currently being considered by other states as a pathway to licensing. But why did Bond start this program? What makes it different from the Supervisor/Trainee pathway? Why has it produced such success?
Working RE magazine was able to sit down with Bond and learn more about her program in depth and her fascinating story of how it all started.
When you’re first starting out as a trainee, locating a supervisor to train you can be a daunting task. Bond noticed over the past 15 years it was becoming increasingly difficult for trainees to find the experience they were so desperately needing in order to enter the appraisal profession. Oftentimes when a supervisor was willing to train someone, it was more “watching” than hands-on experience. “I realized what we were missing: trainees were still in that antiquated mode of an apprenticeship. An apprenticeship is just watching someone perform his/her tasks and emulating what they do as they carry out their duties. There didn’t seem to be a deep dive of learning the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP is all about competency and should be an integral component of the training process,” Bond enlightened.
Typically, supervisors are preoccupied with performing quality assignments and ensuring they are delivered to their clients in a timely manner; of course, this prohibits a supervisor from slowing down and explaining all aspects of researching, analyzing and reconciling to the trainee. This is just a common business practice for all— finish one assignment because several others are on the log sheet waiting to be performed. That’s when Bond got what she calls a “God-given vision.” She began to wonder, what if an appraiser stopped taking orders and focused only on educating and providing
purposeful experience to the new aspiring appraiser? “We could deep dive with them, truly teach concepts—the WHY—rather than just how to be an effective form filler,” Bond envisioned. This vision became reality to Bond; at that point, there was no stopping her. Along with Bond, six other instructors that assisted with the development and implementation of MPAT, including Pamela Teel – TX Certified General, Diana Jacob – Certified General, etc.
At Bond’s request, the Mississippi state board approved up to 20 aspiring appraisers were allowed to enter the MPAT program. At that time, Mississippi had more appraisers exiting the profession annually than new appraisers entering. The Appraisal Subcommittee (ASC) through its grant program funded the development and the implementation of MPAT 2022. “We had less than 800 practicing appraisers in Mississippi in 2020. The Mississippi Appraisal Board agreed that this MPAT program could solve some of the appraiser diversity issues, could provide welltrained appraisers in under-served areas of the state, and could produce a new generation of appraisers,” Bond recalls.
Bond’s vision was slowly marching forward. The training was intentionally quite rigorous and fully handson; the trainees would do the work and the instructor would oversee and guide. They were exposed to various types of assignments:
• FHA
• USDA
• VA
• In-house
• Conventional
• Non-lender clients
Exposure to and an understanding of all the necessary overlay guidance for each of the assignment types was reinforced. “I would tell them ‘This appraisal you’re doing is FHA guidelines, go to the HUD handbook. This one is VA,
read the VA chapters 10 to 13.’ I gave them specifics, while allowing them to learn on their own,” Bond tells us.
Then came the site visits. “We would go out together and physically measure a house then spend two or more hours on-site identifying construction components, discussing types of mechanics, noting the difference between single crown & triple crown, flooring types, functional utility, ceiling types, and so much more. So, basically, we would spend this inordinate amount of time discussing how each of these contribute to value,” informs Bond.
“MPAT’s trainees were well-trained and fully prepared when they sat for their licensing exam. These trainees are educated straight out of the gate with that brand new license smell,” Bond happily boasts. Her trainees are greatly prepared for their exams and confident in their abilities—which makes them the perfect candidates for the next generation of appraisers.
Now, it is no secret that trainees find it increasingly difficult to get an appraiser to take a chance on them. A larger percentage of appraisers prefer not to take on even one trainee. Bond is aware of appraisers’ reluctance and theorizes that there are two main reasons for it.
The first reason appraisers don’t want to slow down their business to take on a trainee. “Time is money. It doesn’t matter what the appraiser is doing; the trainee is going to have questions, which is going to cost time,” Bond explains. Many appraisers fear that the constant stop and start of training while on the job, will cause an income deficit to their practice, and many can’t afford to take that risk.
The second reason is the one we hear time and time again: trainees will only steal away future work. Many appraisers fear that the newer generation will sweep them under the rug and take
work from them. This fear not only hinders trainees, but the future of the appraisal industry as whole. “Here’s what we have to realize as appraisers, someone trained you, someone trained me. Also, let’s be honest, we are much like other professions that have a largely aging workforce that may be looking for retirement within the next decade or so. “We should feel a responsibility to replenish our own human resources,” Bond clarifies.
The Future of MPAT
Mississippi’s MPAT program has proven to be a viable method for gaining meaningful experience and quality training. Currently, MPAT is the only program of its kind and has yielded great success. First-time testing scores exceeded the national average for the National Uniform Licensing and Certification Exam.
So, what is the future of MPAT?
Well, Bond hopes for it to expand across the nation. “The initial vision was for MPAT to be duplicated in other licensing jurisdictions. I made the wheel turn, and I can assist others to make that wheel turn for them too. It needs to be an education provider to develop the program and an instructor/manager/residential appraiser to run the program. Effective communication skills for the instructor are key to success,” Bond tells us.
Not only is Bond’s goal to expand this program across the country, but
also to bring in more gender and ethnic minority groups into the appraisal industry. As a woman in this line of work, Bond understands the hardships of getting started when you don’t see yourself reflected in a room of your peers. “When I first entered this profession, I was an extreme minority. I would go to continuing education classes and be the one woman out of 100 men,” Bond remembers. However, she acknowledges that this wasn’t an intentional agenda of the appraisal industry, it’s just the way it was. As Bond says, “people just tend to gravitate toward training their own— whether that was a relative or friend— then it would progress generationally— typically from male to male. If we take programs like mine and we pull in those minority populations, this affords the opportunity for each of those minority individuals also to build generationally,” Bond envisions.
Of course, the door to this industry has never been locked. Many have tried to jiggle the handle when they weren’t invited in—but to no significant avail. MPAT can open those doors for aspiring appraisers that may feel like it has historically been closed on them.
What started as a seemingly impossible feat became an incredible success story. Especially because, according to Bond, this practicum isn’t for the faint
of heart. “I had three individuals that pulled themselves from the program, because this intense learning doesn’t work for everyone. They realized they didn’t have the necessary available time. Although it requires extreme commitment, there is great reward when success comes in the form of a new stateissued license,” Bond recalls.
In fact, Bond has one success story in particular that has helped her stay motivated, “I had a student that was so worried he wasn’t going to pass the national licensing exam because he wasn’t a good test taker. However, he was committed to studying incessantly and reviewing my lesson videos daily. When he took his exam, he passed it the first time! Beaming with pride, he turned to the receptionist at the front desk and said, ‘Stand up! Somebody must hug me right now!’ Bond happily remembers.
Maybe someday soon, other states will be able to follow in the footsteps of Mississippi; this would allow for an even wider open door—just as Bond envisioned.
To be clear, without the Appraisal Qualifications Board (AQB) adopting a practicum and the Appraisal Subcommittee (ASC) funding the development and implementation of MPAT through its grant program to licensing jurisdictions, it would not have taken wings and changed lives as it has done.
Stay safe out there! WRE
by Timothy C. Andersen, MAI
It is common to hear that appraisers are to protect the public trust. Therefore, by extension, it is also common to hear that protecting the public trust extends to protecting the client—whether that be a lender/GSE, the homeowner, or the borrower. As basis for this claim, appraisers cite USPAP’s Preamble, which states, “[T]he appraiser’s responsibility is to protect the overall public trust…”. However, for good or bad, the Preamble does not make it clear which public trust we are to protect. Nor, in its wisdom, does the USPAP document itself define, explain, or describe what it means by public trust.
But, really, it does, and we’ll get to that in a minute. So, let’s examine the concept some appraisers have that it is our job to protect the lender. Spoiler alert: it’s not our job.
USPAP’s definition of a client is clear, in that there is nothing to persuade anybody that The Appraisal Foundation expects the poor, alreadyoverburdened appraiser to take up the shield of a champion, thus to protect the lender. There is nothing currently in the three components of USPAP’s Ethics Rule that is any more persuasive than the definition of client. A word search in USPAP for the phrase “protect the client” yields zero responses. This same search in the Fannie Mae Selling Guide also resulted in a zero. In
USPAP, a word search for “protect” yields 19 hits. Yet none of these is any more persuasive than USPAP’s definition of client; indeed, most of them refer to the Preamble or the definition.
But what about HUD/FHA? John Dingeman, chief appraiser for Class Appraisal , and a recognized expert on the HUD/FHA sales guide, said that while the word protect appears sixty times in the HUD/FHA Selling Guide 4000.1, not one of those is in the context of the appraiser protecting the client. Some of those entries are in the context of the appraiser supplying data and information the client can use to protect itself and HUD/FHA, but none of those references cast the appraiser as the lender’s champion.
When we look at USPAP’s definition of an appraiser, there is nothing there to suggest the appraiser protects the client (or anybody else, for that matter). Indeed, that definition requires the appraiser to be competent, independent, impartial, and objective in providing a value conclusion. A champion, one whose charge is to protect the client, therefore cannot be independent, impartial, and objective when it comes to protecting the client. There must be a zealotry in that protection, not the detachment of the above three qualifications.
Let’s switch now to the second concept—protecting the consumer (i.e., the borrower, the homeowner, the buyer, etc.). It is true that, if an appraisal comes in lower than the purchase and sales agreement, the borrower may get a
The conclusion that the appraiser must protect the public trust has no basis since this incomplete context presents no meaning to the term.Timothy C. Andersen, MAI, MSc, USPAP instructor and CEO of TheAppraisersAdvocate. com, is the instructor of of How to Raise Appraisal Quality and Minimize Risk (7 Hours CE) at OREPEducation.org (OREP Members enjoy the course at no cost. Andersen has been in real estate and consulting since 1975 and is an AQB-certified USPAP instructor, USPAP consultant, author, instructor and expert witness. Andersen can be reached at tim@theappraisersadvocate.com.
chance to renegotiate to secure a lower purchase price. In this, the appraisal may have helped the borrower. But because the appraiser and the borrower had no contractual relationship or mutual obligations, this benefit indeed accrued to the borrower, but not out of any fiduciary duty from the appraiser to the borrower. Rather, it was nothing more than the workings of the law which requires the lender to provide the borrower with a copy of the appraisal report.
Now, here is an interesting question: if it is the appraiser’s burden to protect the client, and it is simultaneously the appraiser’s burden to protect the borrower, how is this possible when the client (the lender) and the borrower are opposing parties in the mortgage lending transaction? Can anyone seriously conclude the appraiser can advocate the lender’s position, as well as the borrower’s opposite position, at the same time in the same transaction, yet still remain independent, impartial, and objective? Logic and common sense both say no.
Now that we have proven the appraiser has no obligation, ethical, fiduciary, or otherwise, to protect the client or the borrower, let’s get back to the concept of public trust
Although USPAP does not define public trust , it does place the term into a context. Placing it into a context, therefore, gives its undefined meaning outside of which the contextual use of the term does not extend. To put it simply, USPAP’s context draws a box around the term. Outside of that box and context, its meaning to a real estate appraiser may change. So, let us open the lid and look inside the box to understand what public trust is in the context of a real estate appraiser.
USPAP has 29 references to public trust . Each is in the same context as in the Preamble . None of those
references, however, is any more of a definition that is in the Preamble , which has no definition. In its full context, USPAP makes it clear that “[T]he appraiser’s responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical obligations on those who serve in this capacity.” This is the only context into which USPAP places the term public trust
In this context, the conclusion that the appraiser must protect the public trust has no basis since this incomplete context presents no meaning to the term. In Lewis Carroll’s poem Jabberwocky , the opening two lines, “’Twas brillig, and the slithy toves/ Did gyre and gimble in the wabe…” sound wonderful, but they do not mean anything outside of the context of the poem. But in the context of Carroll’s verses the opening lines set an ominous and somber state. Why? Because the narrator’s son must find and then kill the Jabberwock, all the while avoiding the Jubjub bird and shunning the “frumious” Bandersnatch. We have no clue what moved the Bandersnatch into a frumious state, but in the context of the poem, the Bandersnatch would be a lot more convivial if it were “afrumious” (and, in the end, it would still be alive, too).
Another wall of this box is in the Ethics Rule. Its first two lines clarify that when appraisers “…observe the highest standards of professional ethics…”, in turn, that act “…promote[s] and preserve[s] the public trust inherent in appraisal practice…” Then, another wall in that box is in the Conduct section of the ETHICS RULE. From that, we learn that “[an]appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.”
So, what is the context of USPAP’s admonition to protect the overall public trust? From the entirety of its context, we see USPAP charges appraisers with protecting the public trust, but in the context of what we appraisers do, how we do it, and why we do it, but in no other context. So, we protect the public trust in real estate appraisal by producing appraisals that are credible, accurate, reliable and reproducible. Then we communicate to the client/intended user(s) the results of those appraisals in reports that “…clearly and accurately set forth the appraisal in a manner that will not be misleading”.
So, no, we do not protect the public trust (since nobody knows what that is). Rather, our professional and ethical challenge is to protect, preserve, and promote the public’s trust in what we appraisers do by conducting our appraisal in a manner that is independent, impartial, and objective. In turn, this makes the appraisal credible, accurate, reliable, and reproducible. So, when we report the results of the appraisal, that report is clear, accurate and not misleading.
Just like how Jabberwocky makes no sense outside of the context of the entire poem, USPAP’s admonition to “…protect the public trust…” makes no sense out of its context either. But, within its context, it becomes clear the appraiser protects, preserves, and promotes this trust by independently, impartially, and objectively producing appraisals that are credible, accurate, reliable, and reproducible. Then, the appraiser reports that appraisal to the client in a manner that is persuasive, clear, and non-misleading. In this manner, we appraisers give the public reason to trust us, trust what we do, trust how we do it, and trust why we do it. Appraising and reporting in these manners just makes sense, don’t you think? WRE
by Isaac Peck, Senior Broker of OREP.org
Insurance! It’s definitely not a topic that makes one the life of the party. But if you ever need it, having a good understanding of how your insurance works pays off in spades.
Here at OREP, I regularly speak with boots-on-the-ground appraisers about the challenges they are facing (read: claims, complaints, and investigations), listen to their stories, and share risk management and liability advice (when I can) to help put them in the strongest possible position in the event that trouble comes their way.
OREP works with over 10,000 appraisers every year—primarily helping with their E&O insurance—and over time I’ve observed several common E&O insurance missteps that end up being very costly for appraisers.
To help save you the heartburn and the potentially financially disastrous costs associated with such problems, here are the most dangerous and costly mistakes to avoid with your appraiser E&O insurance.
This is easily one of the most important aspects of your appraiser E&O policy. All appraiser E&O policies will include a “Retroactive Date” (also referred to as your Prior Acts) which is the date you purchased your first E&O policy and it is the first date where coverage is effective for your operations and activities.
Appraiser E&O insurance is written on a “Claims Made” basis. This is an insurance term that basically means you must maintain continuous coverage until you either retire or get out of the
business, at which time you will need to purchase Extended Reporting Period (ERP) unless you qualify for free ERP (Many OREP Members qualify for free ERP when they retire).
So as long as you (1) maintain continuous coverage and (2) insure with companies that honor your Retroactive Date, you have coverage going back to the date when you purchased your first E&O policy.
There are two main ways things often go wrong here.
First, if you fail to renew your annual policy or let it “lapse,” you will lose coverage for all your past work. Even if you have carried E&O insurance for five, 10, or even 20 years, letting your policy lapse or expire can lead to years and years of past coverage going up in smoke. If you don’t have current coverage with a Retro Date going back to your original start date, you don’t have coverage for your past work.
Secondly, there are some “low cost” or “insurtech” E&O providers that actually offer appraiser E&O insurance without Prior Acts! This type of insurance is practically worthless since over 90 percent of claims against appraisers occur years after the appraisal was performed. If you purchase a policy that doesn’t provide Prior Acts (Retro coverage), you are basically only covered for appraisal work you do in that 12-month policy period. The appraisals you performed last year, or five years ago, are not covered.
Appraisers are sometimes afraid of shopping their insurance or switching providers for fear of losing their past coverage. OREP (and any re-
Appraisers are sometimes afraid of shopping their insurance or switching providers for fear of losing their past coverage.
putable provider) will always honor your Retroactive Date. So, the lesson here is to be careful when you’re shopping and make sure any quote includes coverage for your past work and that your original Retroactive Date is listed on your new insurance Declarations Page. Remember that the lowest price is often the lowest for a reason.
And don’t let your insurance lapse either. That’s one of the reasons OREP is so fanatical about reminding our insureds many, many times about their insurance renewal dates. We don’t want you to lose coverage for past work.
2. State Board Complaint Coverage
State Board Complaint coverage, also referred to as Disciplinary Proceeding coverage, is a separate coverage item within your policy that provides for defense and payments associated with defending you from an investigation or complaint from your state appraisal board or another regulatory body.
This is a situation where it helps to read your policy carefully and scrutinize the coverage being offered when you are shopping insurance.
Last year I spoke to an appraiser who was facing a state board complaint and was appalled to learn that
his insurance policy didn’t provide any coverage for it! He was then left defending the matter without any legal or risk management support and ultimately had to come out of pocket many thousands of dollars to defend himself properly. (He switched to OREP right after!)
OREP’s primary individual appraiser policy includes $10,000 of Disciplinary Proceeding coverage at no extra charge and our firm policies include up to $25,000 per incident.
With real estate agents, home sellers, buyers, AMCs, and lenders able to easily file state board complaints against you with nearly no credible justification, as well as the HUD discrimination complaints being filed against appraisers, this is not a coverage you want to go without.
This one is a problem that has only developed recently—within the last two years—as more and more appraisers are facing discrimination complaints and claims.
In the same way that fraud is excluded in almost every insurance policy you can think of, the majority
of professional liability (E&O) policies exclude discrimination.
This is a problem for appraisers given the sheer volume of HUD discrimination complaints and claims appraisers are seeing. Facing a discrimination claim in open court or being called to the carpet by HUD without insurance would likely be very costly for an appraiser.
While some E&O policies simply exclude discrimination, others offer a very reduced sublimit, such as only providing $50,000 for “Discrimination Claims.” (A sublimit is a limit within the policy that reduces or limits coverage associated with particular claims.)
OREP’s primary individual appraiser policy provides $200,000 of discrimination claim coverage and our firm policy provides up to $500,000 for those appraisers who want to ensure they are properly covered. (Ask your OREP agent for details.)
I hope these tips have been helpful and I encourage you to send me an email if I can be of service. My email address is isaac@orep.org
Here is my final bit of advice: In page 308
an environment where real estate prices have begun to fall (which we’re in presently), we typically see claims and complaints against appraisers begin to rise. Add to that a Molotov cocktail of discrimination allegations and HUD complaints, and we can see that liability and risk for appraisers is increasing.
It pays then, to take a second look at your E&O insurance and make sure you’re properly covered. In addition to verifying that the coverage is there, I would encourage you to purchase insurance with a program that has deep expertise in defending appraisers and a network of professionals available to assist—if trouble comes knocking.
If you ever face a claim or complaint, who you take advice from on these issues is tremendously impactful as to their outcome. If your license or livelihood is on the line, you don’t want to be taking advice from a claims adjuster or attorney who can’t tell a real estate appraiser from a home inspector. You don’t want to be trying to educate your “assigned attorney” on what an appraisal is and
what USPAP says. Appraisers are a specialized professional field and they need specialized defense and legal support.
That’s one of the reasons OREP has partnered with trial attorney Craig Capilla, a former prosecuting attorney for the IL Real Estate Commission who has been working specifically on the defense side for over a decade— defending nearly 1,000 appraisers in cases across the United States. In addition to being on OREP’s litigation panel in several states, OREP members enjoy a free one-hour consultation with Mr. Capilla when facing a state board investigation, HUD discrimination complaint, or any other regulatory matter.
We’ve put in the work to build a network of attorneys and USPAP experts that we can rely on to defend our insureds. The goal of the coverage we provide and the support we offer is simple: to defend you and your livelihood. Let me know if I can be of service.
Stay safe out there! WRE
If you are struggling to reach your insurance agent with a simple question or just to renew your policy, wait until you have a claim!
In business for over 21 years, we still know the meaning of customer service.
It’s time to shop OREP.
Appraisers following the “appraisal discrimination” issue may recall the mystery shopper experiment that the National Community Reinvestment Coalition (NCRC) conducted in Baltimore, MD in the Summer of 2022. (Read Appraisal Bias? The Inconvenient Truth of a Flawed Report.)
The experiment went like this: unsuspecting appraisers were hired to appraise properties that had been “whitewashed” or “blackwashed” (as the NCRC puts it), and then the appraisals were compared. The NCRC’s report conclusively reported that appraisers are “racially biased” and “undermine Black wealth” because in their total sample size of 12 appraisals, a 1.7 percent variance was noted between the “whitewashed” and “blackwashed” homes. NCRC then filed a series of HUD discrimination complaints against several of the offending appraisers.
The problem? The two most glaring examples of discriminatory appraisals performed in the experiment were performed by the same appraiser and that appraiser is Black. (We’ll have to see how the HUD discrimination complaint turns out!)
Furthermore, removing this one appraiser as a data point actually flips the data the other way and suggests that appraisers (on average) favor Black homeowners and assign their homes higher values.
Now, appraisers can expect to see more of this high-quality, selective testing.
In March 2023, the U.S. Department of Housing and Urban Development
(HUD) issued $54 million in grants to 182 non-profit organizations to fight housing discrimination. Over $40 million of the total grants is dedicated to what it calls its Private Enforcement Initiative (PEI). The PEI provides dedicated funds to “non-profit fair housing organizations to “conduct intake, provide testing, and investigate and litigate fair housing complaints.”
One might assume these grants are focused on discriminatory housing practices more generally, but HUD’s press release makes clear that appraisal bias is a key focus of the $40 million in PEI funds. The sub-header underneath the announcement reads: “Ahead of [the] anniversary of PAVE Action Plan, some grants empower organizations to test for appraisal bias and educate local communities.”
HUD’s release applauds the PAVE Action plan as the most wide-ranging set of commitments ever announced to advance equity in the home appraisal process and specifies that “Eligible activities for the funding awarded today included testing for appraisal bias.”
For its part, the NCRC received $425,000 in funds specifically dedicated to its “Private Enforcement Initiative.”
Working RE reached out to NCRC for a comment. We asked whether NCRC knew that the appraiser who performed the most glaring “anti-Black” appraisals (in their view) was, in fact, a Black appraiser and asked what they thought about the fact that if this apprai-
“We that work in Fair Housing and Fair Lending know that testing will be essential to root out appraisers that discriminate,” McCracken said.
ser’s data point was removed, their study actually showed that appraisers (on average) assign higher values to Black homeowners.
NCRC did not reply to Working RE.
Nevertheless, it is clear that NCRC considered its first experiment a glowing success.
In an online webinar, the Director of Fair Housing at NCRC, Tracy McCracken, argued that testing appraisers is an important goal going forward. “We that work in Fair Housing and Fair Lending know that testing will be essential to root out appraisers that discriminate,” McCracken said.
In the same webinar, both McCracken and Jake Lilien, NCRC’s Counsel for Fair Housing Enforcement, urged other Fair Housing organizations to run tests on appraisers and specifically recommended additional test-
ing in Alabama, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina.
“There are certain things I don’t want to say publicly about how we did the testing because who is to say we’re done testing appraisers? I have a feeling other groups may try to use our same practices and we don’t want appraisers to know what these practices are. So, I can’t necessarily share with you specific details about how we contacted appraisers, what excuses we gave, etc. But if you work for a Fair Housing organization, reach out to me and I’d love to talk to you,” Lilien urged.
Their methodology is so good, that they’re eager to share it.
And now HUD has put up $40 million to help make that happen. Be careful out there, appraisers. WRE
Afew months ago, we received a call from an appraiser who was distraught! He’d just had a state board complaint filed against him and now he needed professional help to defend himself.
The problem?
He was NOT insured with OREP and was SHOCKED to discover that his current policy had NO disciplinary proceeding (state board complaint) coverage!
Don’t let this happen to you. Insurance brokers that don’t understand the risks appraisers face (or just don’t care!) may sell you a policy that is missing absolutely
KEY coverages that you need as an appraiser. No state board complaint coverage, no Prior Acts, no coverage for discrimination claims…the list goes on.
OREP was able to help the appraiser with a policy that includes $10,000 of Disciplinary Proceedings coverage. In fact, ALL of OREP’s primary individual appraiser policies include $10,000 of coverage for state
board complaints. This means if the state comes calling, you don’t have to go it alone. (P.S. We also match your Prior Acts, include $100,000 of discrimination coverage, include $100,000 of bodily injury and property damage coverage, and more!)
The Best Part: At OREP, you don’t have to CHOOSE between Price and Coverage. Premiums start at just $401.
Fees are a necessary evil that every appraiser, lender, and buyer has to deal with. But what if there were a way to lessen the blow a bit? What if, the AMCs didn’t hold as much power as they currently do? Well, David Cedar, President of The Private Asset & Management Group (PAM), has designed a software and non-AMC model along with his team that will save buyers money while making lenders and appraisers more. The kicker? It’s perfectly legal.
In fact, PAM has transitioned since 2008 from a successful AMC to becoming a “partner” with Lenders across the country and helping and assisting them with creating their own Appraisal Panels in all the states and geographical market sectors they lend in.
Cedar felt that the states held too much power when it came to the AMC model, and thought it was long overdue for a change. Here is what he told us:
Q: How does your non-AMC model work? What makes it so different from a traditional AMC?
Cedar: We are doing something that’s very different. This isn’t being done by anybody else in the country. Yet, it’s a very simple idea. We have been an AMC since 2008 and prior to that, we were just an appraisal company that got tired of all the fees that were being thrown at us. After COVID died down a bit, I started looking at ways to improve the AMC model. The idea centered around benefiting the three parties
involved in the appraisal transaction: the lender, the AMC, and the appraiser—without compromising the three in any aspect of the appraisal.
Usually how it works is, the AMC gets the order from the lender, then the AMC assigns it to an appraiser they’ve used before. Often, they find the cheapest one and the lender is not all that much involved, and neither is the loan officer. Instead of using an AMC, what we offer is a self-managed software that has zero cost to the lender and greatly reduces the appraisal fee to the borrower. How we do that is by helping the lenders set up their own appraisal panel, instead of the AMC setting it up. Lenders don’t realize they’re legally allowed to do this. Many are afraid that their state will hold them liable for running their business this way, but the truth is there’s no reason, especially legally, why they can’t do it. This isn’t a law or a rule that came out of DoddFrank that forbids it. So, what we do is give this software to the lender for free. We don’t charge them anything. We help them set up their own appraisal panel. They literally have coverage for every county, in every state, whether it’s one state, two states, or 50 states that they’re in—everything is available on one dashboard.
Now what are we going to do as a non-AMC? We provide the appraisal software to the lender. We do it for free, we absorb the cost, we will continue to collect the appraisal fee from the borrower this way. In fact, we have adopted a policy to pay the appraiser
Instead of using an AMC, what we offer is a self-managed software that has zero cost to the lender and greatly reduces the appraisal fee to the borrower.
the next day after delivery. Let’s say it’s five o’clock—everything that comes in today until five p.m. our time will get paid tomorrow. Which if you think about it, the appraisers might push themselves a little bit to get those orders in. Everybody likes cash flow!
So how do we make money? Under the old rule if you order an appraisal today under an AMC and we accepted it as an AMC, we’re probably charging $625 for a typical single-family house. We would pay the appraiser anywhere between $350 and $400, while we’re making around $200 per appraisal. Here’s what we do instead. We charge a flat fee of $99 for a full appraisal in this model—essentially, if an appraiser is getting $375 to do an appraisal, that now becomes a $474 price appraisal with our fee. While typically an appraisal would be around $600—it’s quite a bit less. As, an example, let’s say we got an order from an
AMC yesterday in Brooklyn. It’s a $1.8 million purchase—a three family house and we’re charging $1250. Now the appraiser is getting $700. So, we’re making $550 on that deal. However, if that was ordered under our new model, that $1250 becomes $799 for the buyer instead—that’s quite a bit of savings. As a lender, who wouldn’t want to have the advantage of being the lowest cost appraisal in the market area? We’re able to do this and make money because we don’t have licensing requirements, and we’re now not getting charged all of these other fees.
That’s what we do. I mean, that’s as simple as it is. The software is a big part of it, and it’s been around since 2008. So, all the bugs and the kinks have been worked out of it and now it works seamlessly. It’s a model that makes sense, it’s compliant for every lender in all 50 states, and it’s legal. So why isn’t everybody jumping on the bandwagon?
Q: What inspired you to start your non-AMC model?
Cedar: Back in the day, there wasn’t any licensing, but some states began to require it. They used it as an opportunity to charge a ton of money. Not only do you have licensing fees annually for every single state, but now vendor panel fees—it’s a lot of money. Prior to COVID I had gotten a letter in the mail from Virginia essentially telling me they were going to assess each of my appraisers for $50 each. We had 128 appraisers that were on our panel in Virginia at the time, so it would total $6,400. So, I called up to ask them about it, and they said, “Well, we need to make sure their licenses are in effect.” I tried to tell them that we already do that—as an AMC, that’s part of our job. In fact, every company, every bank in America, wants a copy of the appraisers’ license in an appraisal page 40 8
T he list of “naughty” words that appraisers are being instructed not to use is growing exponentially. In its June 2021 Appraiser Update newsletter (Bit.ly/ appraiser-update), Fannie Mae seemingly started the conversation, writing: “Readers may perceive certain subjective words as proxies for demographic composition… Appraisers should avoid using words that lend themselves to biased judgments. Instead, the appraisal report should document objective facts.” Fannie Mae specifically highlighted several subjective words and phrases as problematic, including “desirable neighborhood,” “crime-ridden area,” affordable neighborhood,”
Affordable Neighborhood
African
African American
Age
Alaska Native
American Indian
Asian Baby
Bad Credit
Binary
Bisexual
Black
Blind
Buddhist Bullets
Catholic
Caucasian
Cheap
Childbearing
Children
Chinese Christian
Church Citizen
Colored
Crime
Crime-ridden
Crippled
Cuban
Daca
Deaf
Desirable
Desirable Area
Desirable
Environment
Desirable Location
Desirable Market
Desirable
Neighborhood
Disabled
Discrimination
Diverse
Economical
Ethnic
Ethnically
Ethnicity
European Exclusive Female Food Stamps
Foreign
Foreigner
Fraud
Gang
Gay Gender
Gentrification
Ghetto
Good Location
and “integrated community.” Since 2021, many appraisal management companies (AMCs) and lenders have taken Fannie Mae’s initial guidance much farther—with some building out long lists of words and phrases that they are now prohibiting their panel appraisers from using. While these expanded lists are client-specific, the appraiser profession as a whole is being pressured to avoid a wide range of subjective and descriptive words that could be classified as being biased against a particular protected class. Below is a list circulated by an AMC that an appraiser recently shared with Working RE WRE
Good Neighborhood
Graffiti
Handicap
High Crime
Hindu Hispanic
Hoard
Hoarder
Hoarding
Homeless
Homogenous
Homosexual
House Of Faith
House Of Worship
Illegal
Immigrant
Indian
Inexpensive
Integrated
Integrated Community
Islam
Islamic Japanese
Jewish
Latino
Lesbian
LGBTQ
Low Cost
Low Income
Marital Status
Married
Maternity Leave
Mature
Mexican
Middle Eastern
Mosque
Muslim
National Origin
Nationality
Native
Native American
Native Hawaiian
Negro
No Pride Of Ownership
Non-binary
Old
One Parent
Pacific Islander
Paternity Leave
Poor
Poor Neighborhood
Pregnant
Pride
Pride Of Ownership
Projects
Public Assistance
Public Housing
Puerto Rican
Queer
Race
Racial Religion
Retired
Senior Sex
Singles
Slum
Social Security
Spanish
Spouse Students
Synagogue
Temple
Transgender
Transient
Undesirable
Undesirable Area
Undesirable
Environment
Undesirable Location
Undesirable Market
Undesirable
Neighborhood
Unmarried
White Woman
Women
Young
report. So, I asked them, “What else are you going to do with this $50?” They told me they were going to enforce E&O insurance. It was insanity! We do that already too! We have a copy of the E&O insurance in the report as well as the front document page.
I had to write out that $6,400 check to Virginia and we weren’t getting anything out of it. We had already paid around $3,500 a year to be licensed in the state and now we have this extra fee on top of it. They’re not the only states to do this or something similar. It just becomes a money grab. So, I came up with my business model to put a stop to these predatory fees.
Q: What are some additional benefits to your business model?
Cedar: Our software is the only software that has direct access to the VA. The software integrates with their
LMS system. Another bonus is it dramatically lowers the cost of the appraisal to the consumer. Additionally, the job will be completed faster for the consumer because they are dealing directly with the appraiser instead of the lender. If there’s a correction or a revision, usually the lender must contact us and send a request, which we then send to the appraiser. Then the appraiser has to return the corrected form to us, then we send it back to the lender.
There’s no reason for all those steps. What if it could go right from the lender to the appraiser? Well, our software allows for the lender and appraiser to communicate with each other directly. Plus, there are no more additional employees you have to hire in which to do this. There are no more computers that you have to buy—you don’t have to spend any money! It’s just
simply the software will get set up by the software company.
Q: Is there anything else you would like our readers to know?
Cedar: There’s nothing to construct here. This would be a very simple integration and switch over from whatever it is you’re using now into this platform; it’s not complicated at all. I’m passionate about this and I would welcome anybody who reads this and says, “Oh, let me reach out and get more information about this.” Anyone can contact us at https://pamvalue.com/ to get any questions answered.
I don’t believe in jerking people around. These AMCs are hurting people. That’s why this is so worth it to me. I don’t want anyone to be taken advantage of. We partner with lenders and appraisers, and that’s what we want to keep building—a partnership. WRE
“After joining the Dream Team Mastermind, my revenue increased by more than 75%.”
—Matt FrenthewayCome enjoy three unforgettable days in the sun on the stunning island of Kauai.
This is our first-ever VIP Mastermind, and trust me, you don’t want to miss it!
Join
We’ve secured a beautiful Boardroom at the Sheraton Kauai Coconut Beach Resort in Kapaa (with special room rates for you to book), so you can relax and learn in style.
• 3 days of Masterminding collaboration with fellow appraisers.
• Expert advice and classes from Dustin and other successful appraisers.
• Catered lunch on us both Monday and Tuesday.
• A breathtaking sunset cruise to the N�pali Coast on Wednesday, with a high chance of spotting whales! Plus 1, 2, or 3’s are welcome. ($180 per person paid via PayPal invoice)
Take advantage of this opportunity now, and book your airfare and hotel, as this exclusive opportunity is limited to 15 seats!
All Masterminds are led by Dustin Harris - The Appraiser Coach, who turned his business into a multi-million dollar appraisal firm.
