What a great start for 2005!  I'm sure we all stared out this year with some trepidation, wondering if interest rates would rise and just how strong the real estate market would be with the increasing energy prices, etc.  With half the year under our belt, it looks like all is well in the great northwoods of Wisconsin!  With that being said, there are a lot of other things going on in the appraisal business that need to be discussed with our clients to let them know what to expect and how we plan to address the new developments that will have an immediate impact on how you and I do business.
 
New Forms: The appraisal foundation has adopted new forms for all types of services offered for 1 to 4 family residential property, including condominiums.  Mandatory use of these forms will begin November 1, 2005.  The most significant changes in these forms are:
 

1. An expansion of the 1004 form includes some of the work items that were required of appraisers, but not reported on the old form.  Items such as competitive listings have been added to the new form, as well as more definition of how lot values were determined.  The cost approach is no longer a part of the 1004 form but is available as an option if the appraiser deems the approach to be applicable in the assignment.

2. The 1004C form for manufactured housing has been incorporated into a separate form for such appraisals, and has been expanded in its requirements.

 

3. The 2055 form has been modified and will now only be used for exterior inspection appraisals.  Form 2055 will no longer be used for interior inspection appraisals.

 

4. Form 1025 form -2 to 4 family residential properties has also been expanded in a fashion similar to the 1004 form. The condominium forms have been expanded as well.

 

5. The requirements for form 2000 field reviews have been refined and expanded.

Our staff appraisers will be attending training classes August 1^st to ensure that we will be able to properly complete these new forms and meet the challenges presented by these form changes.  Our firm plans to begin use of the new forms on August 15, 2005.  If your underwriting staff is not ready to accept the new forms by this date, please make sure that you specify use of the old forms when placing your appraisal order. We will accommodate use of the old forms until the mandatory use date of November 1, 2005.  We anticipate a smooth transition from old to new.

Analysis of the time frame involved in fulfilling the requirements of the new forms indicates that there will be a substantial increase in the amount of time needed to complete appraisal assignments.  As a result of this increased time requirement, our fees for appraisals will increase effective with use of the new forms.  Please check our fee schedule as of August 15, 2005 for details of the changes in our fee structure.
 
If you have any questions regarding these forms and our approach to using them, please contact us at any time.
 
Our office is one of the few multiple-appraiser offices in the area.  The decision to be a multiple-appraiser office was made for a number of reasons.  The potential of more profit was one of the reasons considered in this decision, but was not the major one because it takes a substantial amount of growth to make such a move profitable.  The addition of each new appraiser in the office requires the generation of approximately $60,000 in gross revenues to be even slightly profitable.  The major reasons for the decision to be a multiple-appraiser office were client-oriented and are as follows:

1. Continuity – With a single-person office, the client will receive service as long as the appraiser is available.  What happens when it is vacation time, training sessions are attended, illness strikes, times are very busy, or the appraiser dies or retires?  A multiple person office addresses these issues in an obvious fashion.  If you want a firm to do all, or most, of your appraisal work, it makes good sense to have more than one option at your disposal.  Why put all your eggs in a “one-person” basket??
2. Total Service:  Our office has appraisers with credentials ranging from Licensed Appraiser to Certified General Appraiser.  This range of licensing allows our office to meet all your needs, from residential mortgage appraisals to complex commercial property appraisals and even business valuations.  How many other firms can offer this full line of service??
3. Diverse Expertise: A multiple-person office enables individual appraisers to become extremely proficient in certain areas or property types.  They can then apply their expertise to individual assignments, or assist other appraisers in the office performing assignments with their particular expertise.
4. Better Service:  Wouldn’t it be nice if you needed 3 appraisals per week, each and every week of the year?  In reality you may need 156 appraisals per year but half of them are needed in June, July and August.  A single appraiser is likely to fall behind during times of peak demand while a multiple-person office has the resources to help limit the slower turn-time that is often prevalent.

Our staff has been busy trying to find ways to provide better service to our clients. Since spring, we have taken courses in data analysis, appraising convenience stores, and how to properly complete the new forms.  In addition, we have just joined our 4^th MLS service that will enlarge our service area database to cover about 1/3 of the state.  Check out our website to see the total educational background of each of our staff members.