Mike Herwood


A Little History About Appraising

Virtually all of the appraisers in my age group learned their trade working for banks and doing loan work. With every downturn of the real estate markets, the appraisers were blamed, partly because they are at the bottom of the food chain. New rules and regulations were promulgated, which mostly made our jobs more difficult. Probably 90% of United States appraisers do mortgage loan work. Fanny May and Freddie Mac tightened their requirements and the Dodd Frank legislation made it even worse.

My Experience with the Appraisal Process

I have been through many of these watershed events. In a property sale, it is a crisis for the buyer, the seller, the brokers on either side of the transaction, and the mortgage broker. That’s five crises to deal with emotionally. The Dodd Frank Act brought about Appraisal Management Companies, to keep a separation between the lender and the appraiser – and to collect half the fee. So the appraiser needed to do more jobs to keep his or her income level. More crises. The quality of the work has deteriorated, because of the time pressures.

My Approach to Appraising Today

When I was appointed as a California Probate Referee in September of 1966, I began to realize that the bureaucrats no longer made the rules for my appraisals. There are still standards and rules about ethics, but a much shorter report will be sufficient. Generally the clients would know more about the property and its neighborhood than I can ever tell them in my report. I no longer do bank appraisals, or that style of appraisal (well maybe occasional for legal work), so I can keep my fees lower. Trust appraisals are more fun as well.