IS THIS THE END of the real estate agent profession? A fair question if you are a broker or agent, especially if you are one who advocated the use of online valuations and appraisal waivers because you did not believe appraisers brought any value to the real estate transaction. If this is you, you question because you do not value what you do any more than you valued what appraisers do. And just like with appraisers, you are wrong, but in the end it may not matter. The threat of the demise of every profession is real, has always been real, because change is inevitable. A Little History Is technology the end of my profession? It is a question appraisers have asked themselves for the past 25 years, and with good cause. As the only unbiased and legally required honest participant in a real estate transaction, appraisers have been under attack by agents, loan officers, lenders, builders, banks, buyers, and sellers since the day I entered the profession 24 years ago. The day I started my training I received a magazine in the mail proclaiming the end of the profession was here as AVM's were gaining popularity. Over the past 24 years I have read an article a month on how I am being replaced with a variety of valuation tools, including appraiser modified AVM's, AMC's, BPO's, Zillow, and appraisal waivers. The articles always cause me a little stress, but with a little cognitive reasoning, I always come to the same conclusion. As long as the Lender is responsible for the loan, they will rely on appraisers that cannot be manipulated like data only valuation models, a.k.a "Big Data". Where does Big Data Come from? Well, for the most part, appraisers and real estate agents. 15 years ago, a few AMC's forced appraisers to sign an agreement that once they sent their appraisal in, it no longer belonged to them. Appraisalport, an appraisal delivery platform, required this as well. Six years ago, the largest appraisal software firm was sold to the largest provider of data only valuation models, Corelogic. The purchase stipulated Corelogic could not data mine the appraisals of those who used the platform (Thank you Dave Biggers). Undeterred, Corelogic purchased Appraisalport in at the end of the same year. But that only gave them access to the data in a portion of the appraisals, so in early 2023 they introduced a voluntary program where appraisers could share their data between each other, all they had to do was agree that Corelogic could also use the data. I still get a couple emails a week asking why I have not agreed to this. Yes, even my appraisal software company wants to replace me lol. This all became possible because in 2010, in response to the real estate market bubble bust, Fannie Mae introduced the Uniform Appraisal Data set and required all appraisals be completed using uniform terminology so they could compare one appraisal to another to determine if there was fraud. The alarm was sounded by several appraiser organizations, and subsequently Fannie Mae assured appraisers they would not use the data collected from the appraisals to create their own online valuation model. Three years later they began offering appraisal exemptions if they already had an appraisal on the property. Those appraisal exemptions evolved over the past few years into appraisal waivers and as of April 1st, Fannie Mae allows anyone trained, not licensed, to provide a property inspection if the lender is willing to accept the data from the inspection. When combined with a data only valuation, Fannie Mae no longer requires an appraisal on any property. The deterrent for the lender is they have to accept the both the physical and data only property data as being accurate, and if it's not, they may have to buy the loan back from Fannie Mae, which I am assuming would only be discovered if the loan went into default. I have evidence that 1/2 that equation won't be an issue within the next year. Fannie Mae's has current online job postings for AI developers totaling over $50 million a year in salary offerings. It appears they are building their own valuation model using the data from the appraisals they promised not to data mine. When Appraisers are gone, no one will look out for the consumer, unless.... AI will replace appraisers within the next three-five years unless the programmers and owners of the AI are held responsible at the same level appraisers are. (i.e. If they are found to have been used to inflate values by intent or through gross negligence, the programmers and owners are each subject to loss of career, a $1,000,000 fine, and up to 30 years in prison). That should include those who work at and run Fannie Mae. I believe a class action antitrust lawsuit will happen after the next housing market decline. The question is, will it be too late to save the appraisal profession? All you talked about was appraisers, what about real estate agents? You are right. But I believe my journey is relevant to yours. I like to think. And I also think I'm intelligent. Over the years I concluded that if lenders were willing to spend millions of dollars and increase their risk to get rid of appraisers to reduce costs, turn times, and increase the number of loans they make, they would be willing to do the same for the two most time consuming and largest cost in a real estate transaction, the agents and the loan officers. The change in real estate commissions is only the 1st major change, softening you up for what's to come. I have long envisioned a system where you look online or in a neighborhood for a home, text a number, and the closest uber driver comes to let you in. "Showingtime" is a huge step in that direction. You think you can't be replaced? Forms have become standardized, mls is available to anyone, there are multiple platforms for uploading your own photo's, measuring, etc. All the tools are there to replace agents and brokers, and the only thing slowing them down is the NAR. Why you, (and they), are wrong, but it won't matter. Like appraisers, honest and ethical agents bring enormous value to the transaction. Agents can help see through the mountains of "selling points" and advise buyers on the market, the neighborhood, the schools, even the neighbors, based on their own personal knowledge. They can help sellers get the most for the home by advising them as to what repairs they should make, providing decluttering and staging tips, and explaining up to date marketing ideas. Agents often have a network of people they work with including different loan officers for different types of loans, staging companies, landscapers, handymen, oops, handypersons, and even appraisers who will get accurate ANSI measurements, listing pricing for complex properties, and buying price for cash buyers. In short, honest and ethical real estate agents are critical to ensuring a seller gets the most for the property and a buyer gets the best deal. But in the end, it will not matter. Like the Blake Shelton song, you would call me crazy if I shared how I grew up. We were not wealthy, and for things that would wear out quickly, my parents took us to Kmart. But for things that mattered, like Toughskin jeans, appliances, tools, and tires, they shopped at Sears. Because when it mattered, they wanted quality over price. When I started adulting, I followed the same pattern. I bought all my tools and appliances at Sears, and they lasted. But then along came box stores and cheap imports, and the consumers bought into them for EVERYTHING. Sears was gone when I needed appliances in 2020 for my kitchen remodel, so I bought the highest quality box store appliances I could find. They were pretty, but they do not work as well as my Sears Kenmore Elite had, and 4 years later the stove needs replacing. Ugh. Consumers have switched to choosing price over value, even for long term items. And that is why I believe that although it may take 10-15 years, quality real estate agents and loan officers will be replaced with unethical ones. Because providing value takes time and money, and consumers prefer Walmart to Sears.
Our wildfire crisis has forced many changes within the insurance industry over the past several years as they struggle to be profitable. Most insurance companies have a standard formula they use to ASSIST you in determining how much coverage you need, but it is up to you to determine if it is correct. If you have made improvements, these numbers may not reflect the true replacement cost of your structure. And in the case of disaster, you may be out tens of thousands! If it has been more than two years since you had your home appraised for insurance purposes or you have made any substantive improvements, don't take a chance, get an appraisal before updating your coverage!
Let Eagle Appraisal Services help you determine REPRODUTION COST value for insurance purposes
A typical appraisal for mortgage reports replacement cost which is the cost to rebuild your home using similar materials. Reproduction costs takes into account the exact materials you used in constructing your home, and more importantly, the cost of the upgrades you have made.
It's easy to protect yourself: Hire a professional appraiser to ensure the property has the right amount of insurance coverage.
The number one question homeowners ask an appraiser is "How can I increase the value of my home?" After almost 20 years of appraising and studying what improvements have the greatest contributory value when a home is sold I have concluded the definitive answer is....... Proper Home Maintenance! National averages suggest a remodeled kitchen can add 80-85% of the cost to value when you sell, and a remodeled master bath can add 60-65% of the cost, a properly maintained home will recoup 100+% of the cost when you sell. This is generally true even if you wait until something breaks before you fix it, but if you really want to get bang for your buck, tackle those maintenance jobs that (let’s face it) some of us forget or put off until it’s too late.
So get out your tool kit, because we’re about to take you through the essentials of home maintenance.
Okay, first think of the necessities—water, heat, cooling and the roof over your head. These are year-round needs for all households, and the things that make them possible require love and attention!
Budget every year for the cost of an expert to service your HVAC unit and water storage heater and to check your roof. Let’s take a closer look at each of these services and how much they cost.
The HVAC is that boxy, noisy thing that sits outside your home, doing its job day in and day out. It gives you cool air in the summer and heat in the winter. The major parts inside an HVAC unit typically last between 10 and 25 years, so you need to have it serviced annually to make sure things are running smoothly.
How much does it cost to have it tuned up every year? That’ll run you about $49 to $199. But if you need to replace your HVAC unit, it will cost you $4,000 to $8,000 and up to buy a new one and have it installed. So it’s well worth paying for the annual checkup, especially if you spot a problem before it’s too late.
Just like the HVAC, you should have a professional look at your hot water heater every year. A tank lasts 10 to 15 years on average, and a new one can cost from $800 to $2,500 depending on the type you need.The average cost of installing a new tank is about $1,200.
During the annual service, the professional will flush and drain the tank (to remove sediment built up inside) and check the pressure relief valve. The cost of a service should be in the range of $100 to $200.
Have an expert inspect your roof every year, especially if it’s on the older side. And if your home is framed by large trees, keep your gutters free of gunk and blockage with a cleaning once a year. If you’re fine with heights and have a sturdy ladder, you could do this yourself. Or, for around $100, you could opt to have a pro take on the task.
Now, here’s what you can do yourself to keep your home running like a well-oiled machine inside and out! Do these jobs to get the most out of your appliances and fixtures. It’ll help your biggest asset—your home—hold onto its value!
Use store-bought sachets or throw a cup of white vinegar into an empty machine during a hot wash cycle to banish limescale and soap scum. Leave front-loading machine doors open after a wash to prevent mold from forming around the rubber seal.
Run some ice cubes through the disposal to sharpen the blades. Do you have a persistent odor problem? Vinegar and baking soda make a sizzling combo for breaking down food and grease buildup and refreshening the whole thing.
Hair. Soap. Limescale. Ugh! Rid your sinks, showers and bathtub drains of these things by using the vinegar and baking soda trick, or grab a store-bought solution if you have a slow-flowing or pungent drain.
If you love to cook (and even if you don’t), the extractor hood filter soaks up all the grease and aromas, so give it a clean every month to keep it running well.
The amount you use your HVAC really affects how often you need to replace your air filters. Some folks will replace their filters every couple of months, and some do it monthly. But, at minimum, you should do it quarterly. Experts agree if you use thinner filters and change them more often, they’re easier on your HVAC (Remember what it costs to replace that item!) compared to thicker ones that use more energy.
Dirty aerators on the end of your faucets could mean limescale and dirt are blocking the water stream, and that can affect water pressure. The same goes for shower heads!
This filter in your machine picks up larger bits of debris and lint from your clothes. Unscrew the filter and clean it every few months to keep your machine running well.
Alarms come with a test button to make this a quick and easy job. You should also replace the batteries every year, even if the low battery beep hasn’t kicked in yet. Or splurge and buy 10 year detectors that have sealed batteries, just don't forget to still test them monthly.
Garage doors have moving parts that need dusting and proper lubrication every few months. Visit your hardware store to grab some heavy-duty white lithium grease to do the job.
Usually, in your bathroom and kitchen, you’ll see outlets with buttons that say test and reset on them. These are ground fault circuit interrupter (GFCI) outlets, and they monitor the electricity flowing through them to prevent shocks. Press test and then reset every few months to make sure the trip function is working correctly.
If you have a water softener unit (it removes minerals that cause hard water), check the salt levels inside every few months.
Ants? Termites? Spiders? Wasps? It’s worth keeping your eyes peeled for signs of pests inside and outside your home every few months. You can take care of some problems with over-the-counter products, while some might require professional attention.
We already covered the big-ticket items you should check every year. But what about other annual outdoor maintenance jobs?
If you’ve got a wooden deck stained with a thinner, transparent varnish, restain it every year or so. And remember those fences, too!
If your home has wooden siding, inspect it annually for any signs of damage or peeling paint. Also, check for cracks around the foundation of your home. It’s better to find them now before they turn into bigger issues.
Close your crawlspace vents at the start of winter to protect pipes underneath your home from cold and dry conditions. Then open them in the spring to stop moisture buildup in your crawlspace.
If you live in a cold region, cover your outdoor faucets with an insulating cover in the winter to avoid frozen and bursting pipes.
Monitor trees and shrubs that might be a bit too close to your house or are in need of a trim. Get in touch with a tree doctor to check on the health of your trees if you need to.
The vent for your clothes dryer should be free of dirt and lint. While you’re running a load of laundry through the dryer, go outside to make sure the vent is doing its job. It should be releasing lots of fresh-smelling air!
Your garage door should have stop and auto reverse motion detection to sense if an object is in its path. Get a 2x4 piece of wood and place it underneath the open door, then close the door using the button on the wall. The door should stop closing once it detects the wood and go back up.
Let’s step inside your home for a minute to go through those annual indoor maintenance jobs.
If you have an attic, get up there at least once a year to clean, check for pests, and rule out leaks after heavy rain.
Get your carpets cleaned professionally every year or so to keep them looking great and to remove allergens and odors.
Retouch caulking around your bathtub and shower if there are places that need it.
If your shower floor is tiled, clean the grout every year. There are lots of grout cleaners out there. Apply a sealant to protect the shower floor from all the water.
Clear away any dust and cobwebs from around extractor fans.
Do you know those coils on the back of your fridge? You should gently vacuum them once a year to stop the fridge from working overtime.
Clear away dead bugs from between your bug screen and window pane. Check window screens for holes and replace them if needed. Check the condition of weather stripping around your windows and doors, too. Any big gaps could mean loss of heat in winter and cool air in summer.
Whether your fireplace works with real wood or is gas-powered, get your chimney swept and have your flue inspected every year.
If you have in-window units, clean them every year. Also, think about covering them in the winter if you’re not storing them away from the elements.
Basements can be a bit “out of sight, out of mind,” but try not to neglect them! Give basements a thorough cleaning every year and check for mold and cracks in the walls. Clean window wells outside any basement windows, too. You might have a sump pump (it removes accumulated water from the area), so inspect it every year. I know the list seems long, but most items take just a few minutes to maintain. I sincerely hope this list helps save you from a costly repair down the road.
Whether you're a homeowner, loan officer, realtor, trustee, or appraiser, we've all thought it. "The weather report says it's going to be nasty, is the appraiser still coming?" For me the answer has always been "Yes". I have inspected properties in howling winds, pouring rain, and in the snow in near white out conditions. Maybe it's because I grew up on a ranch where the animals had to fed, fences repaired, and chores completed regardless of the weather, or how during my early years when I was working construction I wished I could work in the rain in order to keep food on the table during those lean winter months. For me, regardless of the weather, I don't cancel appointments, and neither should you. Here are four reasons why.
1. The homeowner/realtor's time is important. You had them commit to an appointment for which they have already taken time off from work, school, or did not accept another appointment. Canceling may cost them money, and even if it doesn't, it will cost them time, which is even more valuable.
2. Your client relationship is impacted negatively when an appointment is canceled. Canceled mortgage appraisal appointments lead to canceled loans (and canceled appraisals) approximately 40% of the time. Sometimes this is due to a borrower changing their minds on obtaining a loan but the vast majority of canceled appraisals are due to the borrower seeking a loan elsewhere, and that number is on the increase due to the instant availability of data on borrowers applying for home loans. When you cancel an appointment your client holds his/her breath and hopes another loan officer doesn't convince their borrower to switch to different lender.
3. The weather forecast is rarely right. How many times have you shown up for an appointment and despite the gloomy forecast, there was no rain at all? Or how many times have you arrived at the subject property when it was forecast to be cloudy but not raining, yet it was pouring, but since you're there you inspect the property in the rain? Here's something to consider. The weather forecast will be equally wrong about whether it will be raining, or not, at the time of your appointment.
4. Technology has made it easier than ever to appraise in inclement weather. Gone are the days of jammed up tape measures, soggy sketches, and rain blurred notes that read like Marie's good-bye letter to Navin in "The Jerk". By using a high quality laser measuring device, a small tablet or large phone, a rain slicker, slip on boots, and a little patience, you can inspect the exterior of almost any structure without compromising the integrity the appraisal.
As a business owner I know you understand the need to keep your clients happy. But more importantly, before you cancel an appointment, consider how that may impact the appointee. Be considerate of their time, and treat them how you would like to be treated. For me that means being there when I say I am going to be. Even if sometimes it means I end up wet and cold.
How do you manage and grow a successful business and maintain a home life balance? Well first off you have to prioritize them. For me, and what my advice and insights are based on, my priority is my home life. In fact, the reason I have grown my business to where it is today for the purpose of providing a successful home life.
What does your successful home life look like to you? Knowing what you want in life enables you to better understand what you need to do to enjoy it. Mine includes concerts, weekday trips, camping, vacations, Disneyland, the beach, holiday dinners, working on the yard, spending time with my family, and the newest addition, Tuesday date nights. These all take two things, time and money. I tell you this not to boast about how awesome my home life is, but rather to demonstrate that you can have both a successful home life and a successful business. You just have to be smart with your time. Here is how I did it.
In the beginning. All businesses have a starting point. Mine started on an old desk picked up for free off Craigslist in the corner of a small dining room, with a land telephone line, an old computer, scanner, printer, and digital camera. Yes, a digital camera. They were new to the industry, and the quality was poor (or maybe it was the photographer), but boy did I think I was cutting edge! As my business grew so did my investment in technology. My computer kept freezing due to its inability to run the software upgrades, so invested in a newer, faster computer. My printer was constantly running out of ink so I purchased an all in one printer/fax/scanner that used less than 1/4th the ink. My neighborhood only had dial up internet available due to antiquated phone wire, so I researched and talked with local internet providers, and was able to get DSL by installing new phone wire in my house, from my house to the phone box, and from the closest hub to the phone box by my house. All of these investments served the purpose of saving me time. Time I now had to spend with my family. The point is to always be looking into new technologies and don't let obstacles prevent you from using them. I have tried and failed at using several, pocket pc's and original tablets to name two. But my successes have far outperformed my failures. Yours will too.
As I grew. Do you use technology to make you faster? Over the years the technology in my industry has changed. Computers are faster, my all in one printer/fax/scanner is obsolete, and digital camera's have been replaced with smart phone's. Of all the advances, the smart phone has been the greatest time saver of my career. But as with all technology, you have to learn how to use it before it will save you time. Spend the time needed to learn how to use it, the company you purchased it from should be able to demonstrate all the functions. Learn how to use all features of your software on it, and equally important, learn how not use it for non-essential functions as these will 'spend' the time you saved plus some. Stay away from the gaming and social media temptations and you will find you will have more time for home life and business growing.
Bill Gates once told Congress a business that wasn't trying to grow was going to eventually fail. But how to maintain balance? We've all experienced it, you have to grow the business before you hire people or invest in technology to maintain it. How on earth is it possible to take a day off, go the beach, or (gasp!) take a full weeks vacation when you're in the midst of growing your business?! Well, consider this. You should be in the midst of growing your business at all times, so you better figure out how to make time for your home life while doing it. In the early years I would get up at 4:00 am and use the hotel computer to respond to emails, schedule work for when we returned, and appease my clients needs. A few years later I was able to wait until 5:00 am and use my laptop (another great innovation) in the hotel room. Today I am able to handle most items with my smart phone, which I recommend planning a couple time slots each day to do this, which enables me to enjoy my vacations while still maintaining and growing my business.
The future is made today. This applies to both business and home life. Don't wait until tomorrow to get started on your future. Spend some time researching and learning technology, get your thumb off the social media and gaming functions, and use your time to make today, and your future, amazing!