Usually once or twice in a person’s lifetime, they nervously let an appraiser into their home to photograph each room and take notes to assess just how much their nest egg is worth.
Appraisers are not required to provide identification, even a driver’s license, when they come to a house, do not always look the part and can cause alarm if not expected. One Orange County, California, company says that is a problem.
Six months ago, Mission Viejo-based Comergence rolled out something the appraisal industry has never had — shiny ID badges.
By looking at a badge with an appraisers’ Comergence number and photo, home and business owners can verify who appraisers are through Comergence’s online system, which may end up being its major benefit.
But, does anyone actually need a badge?
Since the service started, just 22 of roughly 300 appraisers in San Diego County have signed up and the head of local industry group, the Appraisal Institute, says she thinks she knows why.
“A badge doesn’t identify you any differently than a business card does,” local Appraisal Institute president Susan Merrick said. “It’s pretty much typical operating procedure to give a business card when you go to the door . . . From a residential standpoint, it’s totally useless as far as I’m concerned.”
Merrick said most appraisers are hired by a lending institution so most homeowners are expecting an appraiser to show up at their door.
Comergence president Greg Schroeder said he came up with the idea after lenders told him they wanted background checks on appraisers before using their information to issue loans. His company is probably known best for software used by lenders to monitor and approve mortgage originators.
For $59 a year, appraisers can sign up with Comergence. After uploading documents — like a copy of their appraiser’s license and sample of their work — it is verified by the company and the profile is then included in its database with a badge ready to be ordered.
“Business cards don’t have pictures on them and anyone can print them,” Schroeder said.
The state Bureau of Real Estate Appraisers says there is no law requiring appraisers to carry identification and has no opinion on Comergence.
Bureau head Jim Martin said he is not aware of any recent occurrences, at least in the last two years, of someone posing as an appraiser.
The ID roll-out comes as the appraisal industry slowly recovers from the subprime mortgage crisis. There are 11,157 appraisers in California, down from more than 20,000 in 2007, according to the bureau.
Martin said the number of licensed appraisers has declined as housing sales have slowed.
But, many appraisers also point to the high costs associated with regulations that followed the Great Recession for the decline in their ranks.
The new regulations prohibit mortgage brokers from ordering appraisals themselves, forcing them to work through a mortgage lender.
Lenders order appraisals through in-house staff or appraisers hired by outside firms known as appraisal-management companies, or AMCs. But neither may talk to the appraisers about the value of the property they’re evaluating to discourage inflating the value, a practice that was partly blamed for fueling the housing bubble.
Since 2009, California banks have mostly used AMCs that assign houses to appraisers. The AMC then collects a fee from the appraiser.
Adding to that cost, banks that use the AMCs want background checks on appraisers before they use their work. The situation appears to favor Comergence’s secondary function, the database of verified appraisers.
Benjamin Clements, an appraiser with 12 years of experience in San Diego County, said he is paying up to $50 for each background check per AMC and he signs up with up to five a year to keep business flowing. He said he signed up with Comergence because it allowed him to just pay the one-time fee to get verified and have all the AMCs use the website to verify him — the same way homeowners can.
“It’s a way for them to access that background (check) without you having to pay again,” he said. “It seems like (AMCs) want a new one every year. It seems like a way for the background check companies to make money.”
Clements said even though he has signed up with Comergence, he has yet to upload a photo to get a badge. He recalled a few times people came out of their house to yell at him for taking pictures, but the situation was always diffused with a business card.
Schroeder said he wasn’t surprised with how his business was gaining traction, expecting the badges to gain popularity as appraisers go to them for cost savings.
There seems to be a market for badges, even if it is small. A San Diego commercial appraiser with 30 years experience, Gary Rasmuson, has pushed for a badge for the industry for years and even created his own. He had not heard of Comergence until contacted by the Union-Tribune but thought it was a great idea.
“I just noticed people are more comfortable with the fact I’m walking around taking pictures of the property,” he said of having a badge. “They don’t seem as antsy or anxious of who I am when they can see I’m an appraiser with my picture on there.”
