Appraisal Management, In Reverse

By Colleen Sullivan, Banker & Tradesman Staff Writer.
Monday, September 12, 2011

Burton Kliman spent more than 30 years as a real estate lawyer in Newton. But now he’s adding a new role, as branch manager for a national appraisal management company, Landmark Network. The Boston office he oversees will be the second East Coast branch for the California-based firm.

Name: Burton Kliman
Title: Branch Manager, Landmark Network; Boston
Age: 55 Experience: 30 years as a lawyer, 3 months as a branch manager

You obviously have a lot of experience in this area – what made you get interested in the appraisal side?

Well, we’re running parallel tracks. A lot of people in this economy try very hard to work on complimentary businesses. I had a connection with the owner of Landmark. Landmark is headquartered in California, but what they’ve been doing is, they’ve been trying to reach out across the industry, across the country, to create branch offices. The whole idea of a branch office, for an appraisal management company, is somewhat unique. But in the appraisal world, there’s an interest, I think, in having some local presence. Because notwithstanding that everything is managed out in California, the idea that you can interact with local lending institutions, with the vendor-manger, talk to them about their issues, talk to them about their concerns – and believe me there’s a lot of concerns about appraisals these days – and be able to address it in person, I think is a big advantage.

Why New England?

[Landmark’s owner, Erik Richard] comes originally from Maine and he worked here for many years. One of the things that Erik knows being a New Englander is the regional attitude that a lot of local institutions have. They want to connect with someone locally. California has this reputation, especially on the East Coast, as sort of being this place where everything’s centralized. I think Erik more than anyone else is sensitive that you can’t really always control the relationships or enhance the relationships, coming from California.

The past several years in the appraisal industry have seen a lot of turmoil, and a lot of appraisers blame AMCs for some of the problems with their profession. What made you think now would be a good time to get involved with one?

This is the best time to get involved with AMCs. There was a recent article in the Wall Street Journal [which discussed how AMCs are blamed for helping to drive experienced appraisers out of the business]. That is the key issue right now. There’s a lot of discontent in the appraisal industry with AMCs. There’s a lot of discontent among lending institutions with AMCs. And it boils down to what the Wall Street Journal summarized, that entire relationship is based upon a division of fees. Let’s say the appraisal management company might charge $450 as a line item, and the AMC might keep $300, and the appraiser might get $150. Which is terrible. Landmark has reversed that process, in that they are taking much less of a fee, paying much more to the appraiser. The end result is obvious: You’re going to get better appraisers, better return of phone calls, better reports.

Do you have any strategy for working with the appraisers out here? We have such a diverse housing stock, with lots of older homes, that I’d think opinion comes into it more.

Absolutely. That’s one of the problems with having everything so centralized, is that everything is really, really local. There was one situation I heard about recently, where the lender ordered an appraisal in Brookline, and the AMC put in the code letters BRO [into their proprietary software]. The appraiser that was then selected was from Brockton. He undervalued a $2 million property by about 50 percent – came in at a million. I don’t know what he was thinking in terms of Brockton numbers, but it obviously creates immense problems between the borrower and lender and between buyer and seller. When you’re that far off, something is wrong with your internal systems. [At Landmark] there’s a lot of focus on consumer support, and a real need for that right now.

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