Friday, January 07, 2011

Featured Appraiser of the Month

Appraiser profile: Alvin “Chip” Wagner of Chicago, Illinois

By: Ronald Huiskamp
Published: January 6, 2011
Categories: Appraiser profile

Name: Alvin “Chip” Wagner, SRA, SCRP

Company: A.L. Wagner Appraisal Group, Inc.

Experience: Real Estate Appraiser since 1988

Area: Chicago Metropolitan Area; focus on Western and Southern regions

Credentials: SRA Designated Member – Appraisal Institute; Senior Certified Relocation Professional (SCRP) – Worldwide ERC

Please share your professional and educational background, industry experience and any designations and professional groups.

I received my B.S. in Business from Bradley University in 1990. They did not offer a real estate minor, but I took 15 hours of real estate related courses as an undergraduate. I have over 28 years of experience, which includes 21 years full-time as an appraiser, and 7 years part-time during high school and college while working for my father’s real estate appraisal company. Currently hold the Appraisal Institute’s SRA Designation and am serving as the Chicago Chapter President in 2011. Earned the Worldwide ERC©’s SCRP designation; active member in the Relocation Appraisers and Consultants (RAC) and have held nearly every position in RAC including President in 2004. Also a member of the Chicagoland Corporate Relocation Council (CRC), a regional relocation group, and am the only appraiser to ever preside as President of CRC (in 2001).

What are your specialty appraisal areas, i.e. relocation, estate, tax, others?

My business has always specialized in relocation appraisals. My father joined ERREAC (original name for Worldwide ERC) in 1965; between us, we have attended every ERC conference for over 35 years. Through the years my residential appraisal business has expanded and contracted as business opportunities have changed. Currently, over 90% of my business is relocation appraising, and the other business is private party appraisals, some attorney/litigation work, and one lending client’s wealth division, where I bid to complete multi-million dollar complex properties.

I have published an annual Supply/Demand market study since 1993.

What led you to pursue a career as a professional real estate appraiser?

Literally I was born into this business and doubt whether I could have controlled my destiny. My granduncle Percy E. Wagner received his MAI in 1934 and was national president of the American Institute of Real Estate Appraisers in 1964. My father, Alvin Wagner Jr., SRA, SCRP spent his entire career as a real estate appraiser. While working with and for my father, I signed my first appraisal when I was a sophomore in high school after spending previous summers assisting my father on appraisal inspections, learning techniques for data collection at the subject property as well as the comparable properties. One day my father said, “Why don’t you fill out the form yourself?” After I turned in the report, he reviewed and made changes, however, he kept my valuation the same then put my name on the “Appraiser” line and his name on the “Review Appraiser” line. I still have that file with a lot of his notations and changes in red pen!

My senior project (in college) in ‘Entrepreneurship Class’ was “The Benefits of Computerizing a Real Estate Appraisal Business.” Right after I started working for my father full time, I computerized his business. Since I had already been writing appraisals for a few years I enjoyed the flexibility of the job. My father started treating me like a “partner” versus an employee, and eventually settled into my career.

Like father – like son? This past summer I took my 5-year old son on his first appraisal inspection and taught him how to use a laser measuring device; when I was his age I had to hold the dumb end of the tape! The next generation has it so easy!!

What do you find is the most rewarding part of the appraisal profession?

For the majority of my career, I feel like I have been helping people to buy homes. If it wasn’t worth what they were paying, I was helping them financially from making a poor decision by overpaying. In relocation, I truly believe that I am helping the transferee during their complicated and stressful process of being relocated.

Most recently, it has been a difficult period in my career. One gets the feeling that everything that is done is questioned and challenged, and nobody is happy with the final product. It is often a thankless daily environment.

It is on rare occasions that clients will take time out of their day to thank appraisers or give positive feedback. It can be a difficult environment to work under, but appraisers have become accustomed to it. Most appraisers are working out of their homes, and/or are small one or two person operations, allowing little opportunities for daily dialogue.

This is why I am very proactive in various groups and associations. An old analogy, “the more you give, the more you receive.” I have given countless hours to the relocation industry, and it has rewarded me with a generous volume of relocation appraisal work, and I have made friends throughout the industry.

Day in and day out, I enjoy the challenges of always working on something different, speaking to someone new, learning from some, and teaching others.

What attributes make for a client that you enjoy working with?

A client that does not micromanage the entire appraisal process is ideal. Constant calls or e-mails for status updates, even when an appraisal is not due for a couple days can be challenging. Stopping to answer that call, or return a message causes the appraiser to stop what they are doing to address the client’s questions.

Once expectations are set, and the appraiser meets or exceeds them, the client should not be micromanaging the process. But it is also a two-way street; the appraiser must communicate any challenges or potential delays immediately.

As simple as it sounds, but I enjoy working with a client who reads my reports. Most often it is quite obvious when a client reads our entire appraisal report or only looks at a few key areas during the review. Good appraisers spend a lot of time to research and then write a thorough report – many people just want to see the final number and back into questions from that.

Having worked for numerous clients in different industries for different purposes, I truly enjoy working with clients in the relocation industry the most.

How would you describe the current market conditions in your area?

The Chicago market area seemed to peak in the 4th quarter of 2005, and in retrospect, problems started at that point. We didn’t initially see declining values for another couple of years, and then as unemployment grew, the markets worsened. I believe that 2009 will go down as the worst year as far as property value declines, and 2010 will be the year of the beginning of stabilization.

In tracking the various communities in the entire region, as well as analyzing sub-markets and price ranges, it is clear that about half of the region has not hit the bottom yet, and half of the region is showing signs of improvement. Improvement could include falling inventory levels, declining days on market, and stabilizing or increasing price trends.

Some areas, especially areas that had a lot of new construction heading into this great real estate recession, are still having real challenges. Less established areas are suffering from builder bankruptcies, foreclosures and short sales and continue to have high inventory levels and extended market times. Communities with good schools and proximity to public transportation and Interstates are doing better – especially in favorable price ranges. In the more established areas, I am seeing fewer problems with resale and inventory levels are half of what they were 1-2 years ago.

One cannot throw a blanket across the entire region for a clear picture, each sub-market is different, and the client relies upon the relocation appraisal specialist to convey the message.

How do you foresee your market changing over the next year?

Favorable interest rates are helping, but tight lending standards have muddied up the waters. I continue to believe that the housing market is directly tied to unemployment and underemployment. Once people earn a fair wage, they will be able to afford their house payments and many of the problems will fix themselves. We have seen modest improvement in unemployment, but many of those employed are settling for jobs making far less than what they used to, so they are underemployed.

As markets try to improve (bottom out, start seeing appreciation, etc.) there will be new challenges because the typical mortgage appraiser is not trained to read the market like an experienced relocation appraiser. And due to the seasonality of our marketplace (especially in the snow belt), trends might not be affirmed for 3 to 6 months after they started.

The continued talk of the “shadow market” and homes that are in the process of foreclosure but have not hit the market is a continued concern. This is because nobody can really put their finger on the impact and the number of homes in a given market area. I see the next year as a continued challenge, with continued “good new, then bad news” that we have seen in the media.

What’s do you feel is the biggest challenge facing the appraisal industry?

There are so many new issues and challenges in the appraisal industry, and the more regulation and intervention, the worse it is. It started with the sub-prime industry, and was a snowball effect across the rest of the lending industry, eventually leading to the HVCC and other regulations. The end-users of appraisals no longer trust the appraiser. They do not want to know “what the home is worth,” but rather “will it fit into their underwriting standards.” Much of the blame can also be put on the appraisers who have not provided an adequate product. It is for these reasons that I have stepped away from mortgage lending work, and concentrate on the business that embraces the quality of work that I do, and clients that trust my value.

I feel the biggest challenge of the “relocation appraisal industry” in 2011 is the release of the new ERC Summary Appraisal Report which goes into effect on 1/1/2011. I was privileged to have worked with ERC and relocation appraiser legends Arnold Schwartz, Jay Delich, Jeff Barta and Craig Gilbert to design the new form. This form will force appraisers into a more in-depth market analysis. It will take some time for appraisers, reviewers, and consultants alike to get used to the changes, but at the end of the day, the winner will be the client who will benefit from this new improved format.