Sam P. Wood’s career has revolved around the local real-estate market for more than two decades, first as an agent and, since 1996, also as an appraiser. But his exposure to the industry goes back to childhood conversations at the dinner table.
“My dad was a real-estate broker in the ’50s and ’60s, and I worked on his properties as a kid, painting and cleaning them up.”
Wood, a Lewis and Clark High School and Eastern Washington University graduate, describes Spokane as “an island unto itself” where real-estate prices are concerned.
“My whole life, and my dad’s life, Spokane has typically seen a good 3 to 5 percent annual appreciation,” Wood said, “and I expect to see that again.”
Wood believes the local housing market bottomed out more than a year ago, and that values have been climbing since last spring.
He discussed his profession and outlook during a recent interview.
S-R: What is a real-estate appraiser’s job?
Wood: My job is to determine the probable market value of a property if it were put on the open market.
S-R: How does someone become a certified appraiser?
Wood: You take over 200 hours of education, followed by 3,000 hours of experience under a licensed appraiser, and then you sit for a state exam to become certified.
S-R: How did you learn about real estate?
Wood: Just being around it as a kid – hearing the terms and the phrases. And then formal training.
S-R: You started out selling real estate. Why did you switch to appraising?
Wood: I like analyzing property values more than running around on weekends being a taxi service.
S-R: Did appraisers have any role in the housing boom?
Wood: Some had a part in that. Some were not ethical, and played into (supporting inflated values). But from my perspective, it wasn’t that prevalent.
S-R: You worked for Washington Mutual for eight years. Were you ever encouraged to inflate appraisals?
Wood: No. The appraisal department was separate from the loan department, and we operated independently. I was never once pressured to come up with a certain value or (risk) being fired.
S-R: Has the appraisal industry changed since the housing bust?
Wood: Yes. There’s a lot more regulation. One change was to create a buffer between appraisers and lending institutions. They’re called AMCs – appraisal management companies. We deal with the management companies, and they deal with the bank and loan officers. The bank has no direct contact with the appraiser.
S-R: What has been the result of that change?
Wood: Like any government interference, in my opinion, it has complicated the system, slowed down sales and created more expense.
S-R: How many appraisals did you do in 2006, your last year with Washington Mutual?
Wood: Probably 450 to 500.
S-R: How many appraisals did you do last year?
Wood: Two-eighty to 300.
S-R: Is that a reflection of the slower market?
Wood: No, it’s a reflection of the time it takes to do an appraisal now, with the more complicated forms.
S-R: What does it take to succeed in the appraisal business today?
Wood: Contacts – who you know. You can’t work directly with banks, but they tell management companies which appraisers they want on their list. I’ve succeeded because loan officers from Washington Mutual went to a lot of different banks, and those banks use a lot of different AMCs, and I get on the lists of AMCs because I knew those (Washington Mutual) people.
S-R: What’s an appraiser earn in a year?
Wood: If they’re busy, probably $120,000.
S-R: What’s the biggest challenge the industry faces?
Wood: Being replaced by computer modeling. I think they’re trying to take opinion out of the process, and they want to use computers to do it all. It’s quicker and cheaper.
S-R: Are there any common misconceptions about your industry?
Wood: People think the appraiser somehow determines what a piece of property is worth. The buyer and seller determine that. The appraiser simply interprets the market.
S-R: Do you know the sale price before you appraise a property?
Wood: We’re required to have that information. The buyer and seller have agreed on what they think something is worth, and my job is to determine whether the market supports that.
S-R: Can a home’s sale price be different from its market value?
Wood: Yes, and I have one today I’m struggling with. This isn’t an exact science. But, in my opinion, this particular buyer has offered too much. I’m missing (the sale price) by five grand, and I am not going to fish around for comps (comparable home transactions) outside the neighborhood to support their sale price.
S-R: Does your appraisal sometimes kill a deal?
Wood: Yeah, and this one might. I’m assuming the buyer is getting his loan costs from the seller, because he has no cash to cover those costs. So the seller is luring in the buyer with concessions, getting him to pay a higher price than he would had he had cash. I labor over these deals, because I know there are people’s lives involved – two parties really want this deal to come together. But the bank wants a good investment, and it wants someone to come up with an honest, unbiased appraisal. That’s my job.
S-R: If I know an appraiser is coming to my house next week, is there anything I can do quickly and inexpensively to increase the value of my house?
Wood: Clean up around the house, mow your grass, paint, shampoo carpets – first impressions affect everyone, even though we try not to be swayed by cosmetic things.
S-R: Do you think the local housing market has turned the corner?
Wood: Yes, and the statistics bear that out. March’s median sale price was up 2.6 percent over the same period last year, and sales volume was up 8.7 percent. Foreclosures are creating pressure on the market right now, but we’re washing them through the system, and I’m optimistic.