Tuesday, September 26, 2023 | The Latest Buzz for the Appraisal Industry

Modernizing Appraisals: Collaborative Valuation

This article was originally published in the Fall 2021 Appraisal Buzz Magazine here.

Our profession has been abuzz the last year or two with regards to the GSEs being mandated to modernize the appraisal profession. Many stakeholders in the profession have given their opinions on what that means. But the one place that no one seems to be looking towards is the actual practitioners themselves. Why are appraisers essentially being excluded from the conversation about modernizing the profession? Doesn’t the idea of the free markets dictate that the best answers often lie in the private markets finding a solution?

There are already several appraisers and companies within the profession that have reached a commonality that will essentially help solve the mandate to modernize the profession. In a couple of words, it’s collaborative valuation; in a description it’s bringing together a team of professionals to tackle each appraisal report in concert. The old idea that many hands make lighter work.

What is Collaborative Valuation?

For many years, I’ve been implementing a system within my own office that allows me to write a decent volume of work, at a much higher quality level than the majority of my local peers. My system was born out of my frustration with writing reports. Once I had a handle on the fundamentals of Valuation, I realized that my most valuable attributes were both my analytical abilities and my professional experiences.

My frustration centered on the mundane tasks such as setting up files, data entry and getting the data into the analytical tools used to develop and support adjustments. The bottom line to me was that my decade or more of experience at that point in my career was valuable, but the efficiency I needed to be successful in mortgage work was devaluing my time from an efficiency perspective. Left to create files, enter data, call on data and follow up to vet the data, building analysis in Excel and other programs, etc. the amount of tie an appraiser has to spend on a given file is pretty in depth.

My solution was to hire and train a few folks that could help me develop and support my workflow and processes. But as a we all know it is essential that the appraiser, me in this case, be in control of the entire process. Having been an instructor on residential topics for a few years, I felt that the best way to go was to hire and train individuals that wanted to become appraisers.

The Problem with Trainees

The problem with trainees in most GSE and agency (FHA, USDA, AND VA) related work is that trainees cannot inspect properties. Fannie Mae and Freddie Mac do not forbid it, but many lenders do as part of their assignment conditions overlay. Lenders can add on extra requirements as they see fit, so long as they adhere to the minimum standards. For many years, prior to the mortgage debacle over a decade ago, trainees were used for proxies for appraisers to do site visits to the subject property.

Note: the VA has recently implemented a program that allows the appraiser to utilize a staff member to inspect as long as the lender is okay with it. Kudos to James Heaslet (the Chief Appraiser) for implementing such a paradigm shift. If it is good enough for VA to allow trainees, then why isn’t okay for others?

That system did get abused in some cases. There were appraisers around the country that set up “appraiser mills”. It resulted in some unsound practices that rewarded bad behavior. While the failure lies with the bad actor appraisers, it also lies on lenders and AMCs that failed to vet and review reports for soundness. In that climate, appraisers were rewarded for facilitating transactions rather than for well-written and supported reports.

The pseudo-moratorium on trainees has hampered both the residential firm and appraisal profession significantly. For those of us that were actually using trainees in the correct way, not being able to utilize them really in any fashion has made trainees into a non-viable pursuit for most appraisers. And with training being a secondary or tertiary thought for the profession, no one is hiring new trainees (although we are and will continue to do so as they matriculate through our program). This cannot end well for a profession where the median age is closer to retirement than to post-graduate ages. At some point, no new blood means a death knell for appraisers, which is why we must innovate and keep them coming into the field.

The reason that I bring up this issue, is because we have many stakeholders advocating for bifurcation. Some of the biggest opponents to trainees are gung-ho over hiring a third-party inspector that has no relationship with the appraiser, to do the inspections. That is unfortunate and disingenuous. But that is the reality. Bifurcation with non-appraisers is not an answer, in fact it will allow the bad actors on the lending side and AMC side to push harder. Inspectors would be a brand-new entity to the process and there are no regulations in place to actually oversee what they do in the process.

How I work with Trainees

In my office, I have set up a team system where I am researching, inspecting, leading analysis and reviewing every report that we do. I keep trainees and non-licensed researchers on staff and have spent many hours training and help hone their skills. It takes a while for them to train like this, but in reality, I like training them this way. They learn the most important skill we have, analysis. Inspecting a home is a crucial part of what we do, but I am actually building better appraisers like this. The ability to write well to research properly and build analysis is where the impetus should be for most participants.

With mortgage related work, we get an order in and it goes to my office administrative team. They are responsible for logging the order, creating the primary file, and handling the logistics of scheduling the appointments. From there it is assigned to the appraiser, and the team. The team consists of a researcher and a writer. Both can be trainees, but sometimes the researcher is not a trainee. The writer must be a trainee in my system, as they are helping make some decisions at this level. Mind you, the terms researcher and writer are terms of art. Neither person is doing primary research or final writing, that is left for the appraiser to do.

As the appraiser I am pulling the comparables alternatives for the sales comparison approach and the income approach when applicable. I am defining the market boundaries and pulling the competing property information and neighborhood composition information. The market analysis data is compiled by the most senior person on the team, then handed to the writer to run the data through the proprietary analytics programs that we use. In the meantime, the data entry is being done by the researcher along with other report information such as maps, aerials, etc. This can work great because I can have them enter more comparable properties then I end up using, so they can be tested in various

ways to see what the market is actually saying. So, while I may end up not using them, we have verified the sales and added them to the database where we often get to use them in other reports.

The market analysis, market conditions, highest and best use (HBU) (on most residential properties) and the initial build of the sales and income approaches can be ready for the appraiser to take over the file and finish out the analysis or redo it when needed. If redoing is needed, the writer is included as a coaching opportunity. Afterall, the point is to train and help them through the decision-making process on how to solve the defined problem. As the writers get pretty far into their training, they are trained completely on land analysis (which they have to know for HBU) and then on doing the cost approach.

By having this setup, one is able to actually take the comparable data and run it through various models that we have built that include things like sensitivity analysis, depreciated cost, extraction, allocation, trending and other various methods. The idea is that the appraiser is left to dig in deeper into the analysis rather than burning up energy on setting up the files and doing data entry. Of course, this system only works if the participants on the team are well trained and have direct access to their supervising appraiser to ask questions. In the virtual office world, this can be accomplished via phone calls, screen sharing meetings, conference calls and texting applications.

This is a legitimate way to allow an appraiser to handle a higher amount of volume and to write better quality reports. It does take a long time to setup and get it running smoothly, but it is an investment that can help a firm run more efficiently. Thus, it does help practitioners move towards solving the modernization of the profession and keeps the appraiser in control of what is going on. Can it be abused? Sure, there are many that will take any opportunity to cut corners, but in the end, bad actors will be bad actors. It is certainly a better ides than allowing third parties to inspect a home that has no professional standards to follow, or any relationship with the appraiser writing the report.


While we use lots of technology, I am remiss to list exactly what we use as I am not endorsing any products in this article. But I will state that order management and accounting software is a must. As are programs such as Excel, and some other off the shelf analytics and data importation software that are available to appraisers. Simply stated, good technology is as important as the collaborative process. You nee done to help the other. Investing smartly in technology can make a huge difference.

I will offer a word of warning regarding analytics software that assist in making adjustments in the approaches. If you cannot reasonably and easily explain the methodology/technique used to develop and report an adjustment, then either learn it backward sand forwards or do not use it. Off the shelf systems are great but they are useless if they are more sophisticated then the appraiser’s understanding. In fact, they could be misused and ultimately end up in a competency complaint with a state board.


Collaborative valuation is a natural step in modern appraisal firms. With it, you are able to handle a workflow that is meaningful to a revenue stream. But in our world, quality must outpace quantity, and I believe that we are doing it eh right way. I know several others that are doing something similar, and they are seeing success with it. It makes sense working within a firm framework when you have this type of system set up. And for those that are not happy working alone, many firms doing this are hiring certified appraisers to run these teams. I hope everyone is having a prosperous year and stays safe.

Have any comments or would you like to submit content of your own? Become an Appraisal Buzz Forum Member and comment below or email comments@appraisalbuzz.com.