English
Evolution of Assessment: From Traditional to Modern Practices
Traditional Real Estate appraisal❓: The Old “Golden” Era (1980s)
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Equipment and Tools:
- Clipboard: Containing a blank URAR form, notes, and graph paper.
- Pencils: For note-taking and drafting.
- Tape measure: For measuring property dimensions.
- Camera: polaroid❓ (for savings and loan staff) or 35mm camera (for independent appraisers).
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Workflow:
- Day 1:
- Appraiser arrives at the property, takes front, back, and street photo❓s.
- Measures the house and sketches a dimensioned floor plan on graph paper.
- Inspects the interior and enters wall lines on the sketch.
- Enters general house information on a blank URAR form.
- Spends 10 minutes to half an hour asking the homeowner about repairs and improvements, noting items to add to the final report.
- Searches “comparable books” for similar properties.
- Takes pictures of selected comparable properties.
- Day 2:
- 35mm film is sent for developing and printing.
- All information is transferred to a clean URAR form in pencil, and adjustments are made.
- A clean ink sketch is drawn on graph paper for the final report.
- Reports are given to a secretary/stenographer for typing.
- The report is returned to the appraiser for error checking.
- When the photos (three copies each) are received from the lab, they are pasted onto photo sheets.
- Finally, reports are collated, a copy is made for the appraiser’s files (old files are kept in storage), and then delivered to the client.
- Day 1:
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Efficiency and Productivity:
- Savings and loan staff: One job per day, five jobs per week total.
- Independent appraisers: 3-5 inspections per day, 10-15 appraisals per week.
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Education and Experience:
- No appraisal license was necessary.
- Education was minimal, consisting of a class or two from a recognized appraisal organization or land appraisal classes at a local community college.
- Experience was the most important requirement, gained by becoming an apprentice❓ to an established appraiser.
Chapter Summary
The chapter discusses the evolution of real estate appraisal❓ from traditional methods in the 1980s to modern practices influenced by technology and new laws.
Traditional Appraisal (1980s):
- Tools & Methods: appraisers❓ used manual tools like clipboards, pens, measuring❓ tapes, and cameras (Polaroid or 35mm). Reports were prepared manually using the Uniform Residential Appraisal Report (URAR) on paper. Data was collected through site visits, photos, and property measurements.
- Workflow: Appraisers visited properties, took photos, measured, drew a detailed plan, and filled out the URAR manually. Comparable data was obtained from paper “comparable books,” and photos of similar properties were taken.
- Efficiency: An independent appraiser could appraise 3-5 properties per day, completing 10-15 appraisals per week. Report preparation took two❓ days, including writing data, drawing plans, compiling photos, and sending the report to print.
- Qualification: Licensing was not mandatory, education was limited, and the profession relied heavily on experience gained through apprenticeship.
- Economic Situation: Income was relatively good, but appraisers had to cover equipment, car, and fuel expenses.
Radical Changes (Garn/St. Germaine Act):
- Deregulation: The Garn/St. Germaine Act, supported by President Reagan, deregulated savings and loan institutions, allowing them to engage in riskier lending and investment.
- Savings and Loan Collapse: This deregulation led to the collapse of the savings and loan industry by 1986 due to reckless investments and fraud.
- Government Intervention: Government intervention was required to save the industry, leading to stricter lender oversight and the enactment of licensing and regulation laws for the appraisal profession (FIRREA). The Appraisal Foundation was also established to set uniform standards of practice (USPAP).
Technological Developments:
- Mobile Phones & Fax Machines: The emergence of mobile phones (though primitive) and fax machines sped up communication.
- Personal Computers: The emergence of personal computers and office software allowed appraisers to prepare reports faster and more efficiently, with the beginning of digital cameras.
Consequences:
- Job Losses: The collapse of savings and loan institutions and stricter licensing laws led to the loss of approximately❓ 50% of appraisers. Technology also eliminated secretarial and printing jobs.
- Shortage of Qualified Appraisers: Due to the economic recession and the loss of a large number of appraisers, there was a shortage of qualified appraisers, leading to higher appraisal prices.
- New Generation of Appraisers: The emergence of a new generation of better-educated appraisers with experience in using technology.
Conclusions:
- The appraisal profession has undergone significant transformations due to economic, legal, and technological changes.
- The Garn/St. Germaine Act led to the collapse of the savings and loan industry, resulting in government intervention and regulation of the appraisal profession.
- Technology has improved the efficiency of the appraisal process but has also led to job losses.
- Modern appraisal requires in-depth knowledge of technology, laws, and professional standards.
