Las Vegas Sun

March 28, 2024

LOOKING IN ON: REAL ESTATE:

Appraisers say post-boom market keeping them busy

These are good times for Marsha Scofield, who appraises the value of homes.

She’s been working up to 18 hours a day — walking through homes and poring over listings of comparable sales — to evaluate real estate whose values have plummeted 35 percent to 70 percent from the height of the boom. (Many of these properties are up for a short sale — where the lender forgives a major portion of the loan principal to facilitate a sale — and the banks that have hired her need quick appraisals.)

Scofield says she is as busy as she was during the building boom, when homes emerged like a bumper crop.

“It’s always a time issue with appraisers,” she says. “You’re a machine.”

Aside from the workload, much has changed since the peak of the housing market in summer 2006.

Homes — especially foreclosed properties — are in disrepair, some branded by graffiti.

During the boom, independent mortgage lenders often drove the appraisal industry. Now, it’s the banks doing so — or appraisal companies acting as intermediaries between banks and private appraisers. (And home sales of less than $250,000 are increasing, so appraisals are picking up in this sector of the real estate market, too).

“In the past, loan officers would feed your business but expected something in return,” says appraiser Don Crowell, alluding to the offer of gifts in exchange for inflated appraisals. He said he never acceded to such demands. “It was a sticky wicket. Things are now done more at arm’s length.”

Most of the pressure to bump up appraised rates today comes from upside-down homeowners — or those with mortgages higher than the value of their properties. These homeowners typically have loan-to-value ratios greater than 105 percent — the limit to qualify for government aid.

Homeowners may be in such a tight spot they would consider bribing an appraiser for an inflated home value, but a bribe of a few hundred dollars “isn’t worth losing your license over,” appraiser Phil Dwyer says.

Charles Jack, an appraisal consultant, thinks most in his profession who are still working are those who “scrimped by” during the boom — the people who shunned pressure applied by loan officers or even bribes. This is a theory held by half a dozen appraisers interviewed by the Sun.

“If they’re still in business, they stuck by their guns,” Jack says. “They probably knew this (crash) was coming: There’ve been ups and downs the past 15 years.”

• • •

One reason today’s appraisers are busy is that there are fewer professionals in the business. The number of appraisers licensed by the state has dwindled since 2006.

In fiscal year 2005, the state licensed 1,753 appraisers, according to Gail Anderson, administrator of the state’s Real Estate Division. The following year, there were 2,140. The number fell in the ensuing two years: 1,959 in fiscal year 2007 followed by 1,738 the next year. Through March 31, the number dropped again, to 1,674.

So between fiscal year 2006 and March 31, the state lost 22 percent of its appraisers.

Jack, the appraisal consultant, holds to the theory that vulture-appraisers were driven out as the bottom fell out. Maybe so. But it’s important to note that these figures provided by the state aren’t differentiated between general, residential and commercial.

Over this same period, the number of complaints against appraisers rose every year except fiscal year 2008. There were 24 complaints in fiscal year 2005. Two years later, the state recorded 182 complaints. The number of complaints in fiscal year 2009 figures to be markedly lower: Through nine months, the state noted 32 complaints.

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