[Chip Wagner is third generation appraiser from Chicagoland who is a public figure and well respected within the appraisal industry. Along with his business partner, Bob Headrick, they run the firm [Headrick-Wagner Appraisal Group](http://www.headrick-wagner.com/), which has been providing appraisal, consulting and research services throughout the Chicagoland market for more than 35 years. I met both Chip and Bob through [RAC (Relocation Appraisers & Consultants)](http://www.rac.net). When I met Chip in the late 1990’s we both spoke together at a national conference about our appraisal web sites, both among the first in the country. I have learned a lot from Chip and I am thrilled to use his firm’s market stats on my Matrix blog and post his Chip Shots column on Soapbox. Like me, he has an enthusiasm for market analysis.
In this week’s Chip Shots column, he expounds on the proverbial Verbal.
I can hear Jerry Seinfeld right now. “Did you ever wonder why the client calls us for ‘The Verbal?’ What is a verbal? Is a verbal a noun or an adjective?” Better yet, how can this guy write over 1,000 words complaining about “the verbal.” I digress.
This past Friday afternoon, a client called me at 4:45 p.m. looking for the appraisal report that I inspected the day before. When I told them my report would be completed within 5 business days from inspection, exactly as agreed on their order form, they said “how about ‘just’ a verbal” right now? JUST a verbal? Our clients obviously must think things are so slow right now that their assignment is our only assignment to work on. And they obviously do not know the steps that must be taken to produce a credible and competent appraisal report.
Does anybody else see the client instruction that states “we need your report in 7 days, but we need your verbal in 3 days?” Face it, that instruction should just be amended to “we need your report in 3 days.”
I cannot begin to tell you how many times I have told a client that by the time a verbal is ready, my complete report is just a spell check, a PDF and an e-mail away. They don’t get it. Never. I have explained this to the same client, the same processor, the same person dozens of times but they still always call to ask for “the verbal.”
Who is giving them these verbals anyways? To me, a verbal is the number (opinion of value) we give to our clients about 3 minutes before we e-mail our report to them. It certainly does not constitute a Verbal Appraisal according to USPAP, but we, as licensed appraisers, are held to that standard.
According to Wikipedia.com, Verbal may mean:
* Non-finite verb, a verb form that functions both as a verb and as another lexical category.
* A word or group of words that functions as a verb by serving as the head of a verb phrase. (In some languages, adjectives are verbals.)
* Pertaining to language in general or to speech in particular.
* A major character in the 1995 film The Usual Suspects.
* One part of the Japanese hip-hop duo m-flo.
Or, according to the on-line dictionary, Verbal may mean:
1. Of, relating to, or associated with words: a detailed verbal description.
2a. Concerned with words only rather than with content or ideas: a merely verbal distinction.
2b. Consisting of words alone without action: a verbal confrontation.
3. Expressed in spoken rather than written words; oral: a verbal contract.
4. Corresponding word for word; literal: a verbal translation.
5a. Relating to, having the nature or function of, or derived from a verb.
5b. Used to form verbs: a verbal suffix.
6. Of or relating to proficiency in the use and understanding of words: a verbal aptitude test.
The definition really does not exist so what is a Verbal? It must be an appraisal-term that our forefathers in this profession made up many eons ago? We all know what is meant when our client looks for a verbal.
It seems like definition number 2a. is the closest “concerned of words rather than with content or ideas.” That is what is being provided to the client communicating the opinion of value.
But what can the client really do with a verbal anyways? They cannot make a loan on a verbal. They cannot offer a buyout to a transferee with a verbal. They will not settle on a legal dispute or eminent domain case with a verbal. They can do NOTHING with a verbal except perhaps find out the appraisal is or is not going to come in at a value that they are looking for – for one reason or another (appraisal independence that is an entirely different topic). Why get the news without any reasoning or support? And who out there has given a verbal before delivering the report to have the client say, “great, cancel the assignment, I cannot make the loan.”
I don’t know about how ALL of the other appraisers write, process and produce their reports, but pretty much every appraiser I know in 2007 is now automated and digital. To compete in the highly competitive residential appraisal marketplace, we must provide our appraisal quickly which usually also means electronically.
The verbal in appraisal-speak to me is an ancient term in the industry just like the IBM Selectric typewriter, the one-hour photo labs, the Polaroid instant camera, and the press on arrows.
When I started in this business, which was before the fax machine, appraisal orders arrived in the mail or on the telephone. The appraisers handwrote their reports and turned over the reports to a team of data-entry assistants and secretaries that lined up the form reports into the typewriter. The appraiser was 100% done with the report handwritten and turned the report over to the typists. Once typed, the reports were pieced together with exhibits such as the hand drawn sketch, the double stick taped on photos (or rubber cement in my office) and the copies of maps with press on arrows. Then, the report was copied in your old Photostat or Xerox machine to make a duplicate.
Then, it was packaged in a legal-sized envelope, weighed for correct postage and placed in the mail. The US Postal Service then delivered our report to our clients in 2 to 5 days after placing in the mail box. Remember all that work prior to the digital age?
What step did I miss? The ‘Verbal.’
Just about two decades ago, the verbal was a part of our vocabulary and a daily part of our service provided to our client. Once we handwrote our value into the report to be typed, we picked up the telephone and called in a verbal to our client. This was done because it was going to be mailed two days later (and not overnight-mailed that service was cost prohibitive) after it was typed and assembled and it was going to take 2 to 5 days to get to the client in the mail so almost a week later, they would get their report.
That is not how business is typically done today.
Am I naive to think that my appraisal competitors are providing verbals to my clients and then giving them their reports 4, 5 or 6 days later? I don’t think so. But the clients seem to think so. Is this an archaic instruction on appraisal orders that has lasted longer than USPAP has been around? Well, look on the bright side our appraisal fees are still about the same as they were back then. So, who checked out m-flo?
Tags: Soapbox Blog, Chip Wagner
“Well if that’s your verbal value, then cancel the order. Stop work now, we don’t want to pay for the completed report.”
Hmmm… I’ve had that one before! You too?
Chip-during my days in the Appraisal Dept @ JP Morgan Chase I used to get similar requests but only when the fee quoted by an appraiser seemed too high for the borrower. The request would be: “well can’t the appraiser just do a drive-by”? My retort always was: “the only drive-by I know of is usually a shooting and that’s not allowed by FIRREA”.
Only once in my first year of appraising. I had the lender FAX over his cancellation, noted the workfile and invoiced him the full fee minus $5 for postage and handling. Which they paid.
I totally agree, I just love it when my cell rings as I am driving away from the subject property and yes its the loan officer “hey how did it go, whats the value, can I get a verbal” oh… and yes dont forget this one “so I’ll have that today right?” GRRRRR
I am happy to say I have been appraising now for a mere four years, however (dont hate me now) I was one of them……….As a loan officer I would not even think of the crap they do today to the appraisers. As Appraisers we get “NO RESPECT!” And it is about time that changes!!
FROM WHAT I SEE OUT THERE IN THE VARIOUS REPORTS AND OPINIONS THE FINGERS ARE POINTING AT APPRAISERS AND UNLESS WE ALL COME OUT OF OUR BASEMENTS AND STAND TOGETHER SOME MORON IS GOING TO ATTEMPT TO IMPLEMENT A BUNCH OF NEW RULES AND REGUALTIONS ON APPRAISERS, POSSIBLY FORCING LENDERS TO US APPRAISAL MANAGEMENT COMPANIES. I have the benefit of being a loan officer (big resume) for over 15yrs. I know what happens in the mortgage companies offices, the bottomline in my opinion is:
1. Start inforcing the regulations that are already in place, ever see the crappiest of crap report, or see the most fraudulant purchase and sale ever…. Well try turning them in…. if you want to do liar loans and liar appraisals come to Washington State they where the do NOTHING!!
2 Reform the lending industry that is where the loan starts and finishes that is where a can of worms will be opened, Hello underwriter a dude with a greencard working at McDonalds will not ever in his/her lifetime at McD’s make six grand a month.
3 Require loan officers to have a code of eithics and ENFORCE IT, Dahhh…. require them to have an apprenticeship and take hours of classes, C.ED’s, take an exam and pass it. Washington is just soooo greedy they just made all of the loan officers and processors pay out $100.00 and get finger printed, ok good start now all the felons dont have jobs (great, back to their old jobs, thank god i have a pit bull and a gun)
4 Stop allowing Real Estate Agents to play both fields you are and RE agent or a loan officer not both, that is BULLSHIT SINCE DAY ONE.
5 Have some pride in what you do, have some respect for the industry and the future you create in it, we all work in it together. As an appraiser I will not allow the BIG CORPERATE BANKING industry to point the finger in this direction they need to look at their companies, the presure put on the loan officers to produce and charge huge fees, we as appraisers make the LEAST amount of money in this game of real estate we pay out the most in licensing fees, THE TIME TO STAND UP IS NOW.
SO I ASK YOU APPRAISERS OUT THERE WHO HAS OUR BACKS?? CAUSE I REALLY WANNA KNOW.