Thursday , 3 December 2020

State of the Industry Update

As many of you may be aware, I have been collaborating with Joan Trice, members of CRN, members of the National Appraisal Congress and the National Association of Appraisers to raise awareness of concerns relating to the future of the appraisal industry.

In conversations with chief appraisers and senior management at various lenders and appraisal management companies, many are reporting increasing challenges outsourcing appraisal assignments in a growing number of markets around the country. Changes in the acceptability of trainees and licensed appraisers have exacerbated the problem.

In reading recent articles and listening to presentations on the subject, the focus has been on the number of credentials on the Appraisal Subcommittee National Registry and the message is that the number of appraisers is actually increasing.

The ASC National Registry contains data reflecting state licensed and certified appraiser credentials. It does not contain data on the number of trainees. It also reflects the number of credentials, not practicing appraisers.

At the recent AARO conference in Phoenix, Arizona, Jim Park, Executive Director of the Appraisal Subcommittee indicated the ASC data shows approximately 8,000 to 9,000 trainees nationwide, but also advised that data is based upon their annual compliance reviews of the various state appraiser regulatory agencies so some of the data is not current.

Prior to the AARO conference, I recently conducted a survey of the state appraiser regulatory agencies asking for data relating to the trending of appraiser trainees and shared the survey results with those in attendance at the April 14th Collateral Risk Network meeting in New Orleans. What follows next in this article is much of what was covered in that presentation.

The title relating to Appraiser Trainee credential is also referred to by the various states as Provisional Appraiser, Associate, Limited, Appraiser Intern, Apprentice, Appraiser Apprentice, State Licensed Real Estate Assistant, and Appraiser Assistant. For the purposes of this study, they will be referred to as Appraiser Trainees.

None of the five Territories – Guam, American Samoa, Mariana Islands, Puerto Rico, Virgin Island, have Appraiser Trainee Credential programs or reported data relating to a trainee credential program.

Of the 50 states surveyed, 46 have some form of credentialing program for Appraiser Trainees.

Of the 46 states surveyed, 34 responded to the survey request.

Missouri began credentialing trainees in 2014 and Wyoming began credentialing Trainees in 2015 so limited data was available.

  • 20 states reported they are experiencing declines in the number of credentialed trainees
  • 4 states reported they are experiencing an increase in the number of credentialed trainees
  • 8 states maintain no appraiser trainee trending data
  • 1 state reported a 26% swing in the rise and decline resulting in the same number of credentialed trainees between 2010 and 2015
  • 1 state is still gathering information

Below is the list of states reporting declining numbers of appraiser trainee credentials or applications, the time period of the survey and the rate of decline over that time period.

StateTime PeriodTrend ResultsRate of Decline
Alaska2005-201514 / 1-93%
California2011-2015450 / 294-35%
Connecticut2006-2016588 / 112-81%
Florida2011-2015903 / 486-46%
Illinois2005-20151231 / 55-95%
Kansas2010-201325 / 11-56%
Kentucky2013-20165222 / 188-15%
Louisiana2009-2015487 / 169-65%
Maine2008-201659 / 25-58%
Minnesota2011-2015389 / 231-40%
New Mexico2012-201510 / 6-40%
North Carolina2010-2016469 / 346-26%
North Dakota2012-201646 / 35-24%
Ohio2011-2016279 / 266-05%
Oklahoma2010-2015136 / 82-39%
Oregon2011-201569 / 68-01%
Pennsylvania2010-201572 / 52-28%
South Carolina2008-2015600 / 150-75%
Utah2008-2016592 / 72-77%
Washington State2010-2016435 / 188-57%

Whether you are looking at the rate of application, renewal, or the actual number of trainee credentials, the survey results received from the state regulatory agencies confirm the concerns the Collateral Risk Network, the National Appraisal Congress, and the National Association of Appraisers have been expressing relating to the potential appraiser shortage that will be facing the industry unless significant and immediate changes occur within the regulations governing entry into the profession.

We are not aware of any other compilation of this comprehensive Appraiser Trainee data, and the significance of the alarming trend it reflects should be a sobering reality to the inability of the appraisal industry to respond to an increase in market demand for appraisal services within a very few short years as the number of appraisers continue to leave the industry and the number of potential replacements is declining at an even greater pace.

So that brings us to the next question – is there really a shortage of appraisers, or as suggested, the number of appraisers are actually increasing, not decreasing?

We are currently working on an answer of how many appraisers are actually completing appraisal assignments nationwide for mortgage lending assignments. Until we have those results, a deeper dive into the data on the ASC National Registry will provide a bit more clarity into the recent discussions regarding the number of credentials.

As mentioned at the beginning of this article, the ASC National Registry contains data on licensed and certified credentials. To drill down to the number of appraisers, a snapshot of the ASC National registry as of 4/12/16 revealed the following:

97,334 = Total Number of Credentials
73,541 = Number of Appraisers Licensed / Certified in one state
8,996 = Number of Appraisers Licensed / Certified in more than one state
23,803 = Number of credentials represented on the National Registry by the 8,996 appraisers
17,119 = Difference in total credentials vs. individual appraisers.

In response to state licensing requirements and concerns over reputational risks, a growing number of chief appraisers and AMC senior management indicate they are requiring their staff reviewers to be licensed in multiple states, which would suggest the number of credentials on the ASC National Registry is not a reflection of additional appraisers, but rather a reflection of the increase in the number of appraisers obtaining multiple state credentials.

As we analyze the number of appraisers available to complete assignments for mortgage lending transactions we also have to take into account the number of certified appraisers working in administrative, management, internal review roles and as such, do not complete appraisal assignments. That number is significant. An example includes a regional bank who informed me they recently hired eighteen certified appraisers representing some of the best and brightest in their market area for internal positions. A polling of members attending the CRN Conference in New Orleans revealed a majority being in administrative / management positions and not completing appraisal assignments for several years.

Now let’s talk about the plight of licensed appraisers.

Earlier in this article I mentioned regulations governing entrance into the appraisal profession as well as the challenges facing licensed appraisers. When Congress mandated that HUD only accept appraisers with certified credentials for the FHA panel, it was the beginning of the end for licensed appraisers.

Not only are they cut off from FHA assignments, most lenders now require appraisal assignments to be completed by certified appraisers in the event a conventional loan may ultimately end up going FHA.

The adverse economic impact to licensed appraisers has been significant and if not resolved in the short term, the approximately 8,000 licensed appraisers will either have to upgrade to certified status or eventually leave the industry for economic reasons. There is however, a slight glitch in that scenario. As of 1/1/2015 an applicant for state appraiser certification must have a 4 year college degree. A noble objective for those aspiring to raise the status of the industry and the caliber of entrants. The reality is that those licensed appraisers who do not have a 4 year degree and failed to obtain their certification credential prior to 1/1/2015 must now obtain that 4 year degree.

To put that into perspective, an appraiser in Texas shared the following…..

He has an associate degree. Sold his home in Austin, Texas, moved to a small community with a 4 year college. Quit appraising and attended college full time. Will obtain his bachelor’s degree in business in 2016. He estimates that between the loss in income for not working for two years and the college expenses, it will have cost him approximately $85,000. Even if he worked part time and extended the time frame to obtain the degree the cost comes out about the same. But with the decline in available work as a licensed appraiser time was not on his side. So now I ask the question, how many of those 8,000 other licensed appraisers, many in their 50s and 60s, are in a position to stop appraising, or even appraise part time, to obtain that 4 year degree – at an estimated loss in income and education cost equivalent to approximately $85,000?

We need an alternative path for licensed appraisers in good standing with their respective state appraisal boards. So I encourage everyone reading this article who is in agreement with me to write to the AQB and encourage immediate development of an alternative path for the licensed appraisers in this country who have been completing highly credible appraisal reports for years and would represent a significant loss to the industry if they cease to provide appraisal services in their respective markets.

And while you are at it, remind all the lenders and AMCs you do business with there are no prohibitions in the Dodd-Frank Act regarding the use of appraiser trainees.

When drafting the AMC Final Rule in 2015, the agencies deliberately included the following comment – The Agencies continue to support the use of trainee appraisers as long as they work under the supervision of a State-Certified and or State-Licensed appraiser as long as they have met the qualifications established by the appropriate State and the AQB. They go on to state  The final rule amends proposed §34.213(b)(2) by substituting the term “engage” for the term “use” to clarify that an appraiser may work with a trainee appraiser on an appraisal, but only the appraiser may be “engaged” by the AMC to perform appraisals.

Not only are there no federal regulatory prohibitions to the use of trainees, but from a business perspective, we have undisputable data showing that supervisory appraisers working with a trainee have higher score cards for quality, fewer revision requests and faster turn times than appraisers not working with a trainee.

In summary, the most recent data available is indicating a significant decline in the number of appraiser trainees currently working toward appraiser licensure and certification to ultimately be replacing the appraisers leaving the industry. We have concerns relating to the plight of licensed appraisers and the misconception lenders and AMCs have regarding the use of trainees – all of which have an adverse impact on the future of the industry. The AQB also needs to develop an alternative path to certification for the practicing appraisers holding state license credentials who are in good standing with their respective state appraiser regulators.

So I encourage those in agreement to communicate these concerns to the AQB and to help educate lenders on the ability to use appraiser trainees in complete compliance with Agency guidelines.

In a presentation also at the CRN Conference in New Orleans, David Bunton, President of The Appraisal Foundation indicated the AQB will be publishing an exposure draft on potential changes to the Criteria in the next 30 to 60 days. Whether you communicate individually, or collaboratively, the AQB is anxiously awaiting our public input.

Have any comments or would you like to submit content of your own? Email comments@appraisalbuzz.com

Comments

About Greg Stephens

Greg Stephens
Greg Stephens, SRA, MAA, CDEI, is a recognized subject matter expert in appraisal regulations and standards whose 37 years in the industry include owning a regional appraisal firm in Northern California, national lender QC/compliance and most recently as Chief Appraiser, SVP Compliance for Metro-West Appraisal Company LLC.

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43 comments

  1. Avatar

    No shortage really. Plenty of great appraisers out there that refuse to work for bottom feeding middle-men like Metro-West Appraisal Management Co. AMCs that are at the beck and call of the big lenders through lopsided national contracts should never be allowed to hire dog-on-a-lease trainees! Let AMCs choke on thier own poor decisions and flawed business model, they just add unnecessary overhead to the industry.

  2. Avatar
    Darcie Cash Johnson

    I would think the appraiser shortage has more to do with lower fees than 10 years ago while an ever increasing amount of work per report. The appraiser shortage has to do with appraisers leaving the profession and it being a less attractive profession to attract new appraisers. I am still being offered fees that haven’t been in the industry for 20 years and telling the AMC that it is below state mandated fees does nothing but simply have the assignment picked up by someone that is either new in the profession or less reputable. A shortage of appraisers should increase the fees again by the formula of supply and demand. Making the field more numerous in trainee acceptable tasks will once more increase the numbers and intensify the already existing problem of lower fees with more work. Why would you be wanting to attack the fee/workload problem from and angle that would make it worse? Work on making reports less lengthy and fees more in line with a time adjustment from 10 years ago? Higher fees and less work will attract new appraisers and help the shortage problem in a very natural economic way.

  3. Avatar

    The certification requirements are only part of the issue here. I think you are missing an even bigger issue – the potential income / revenue for people entering the industry long term. AMC’s drive such a great percentage of appraisal work at wholesale fees – our income has gone down or plateaued at the same time supplemental reporting requirements by lenders has increased. As someone who has trained probably 50 – 60 appraisers over a 37+ year career in as an appraiser (working for national corporations and eventually as a business owner) – I have gotten to the point where it is hard for me personally to look an appraisal trainee candidate in the eye and encourage them to enter this industry. The future does not bode well for the carreer growth of an individual appraiser.

  4. Avatar

    Well, you hit the nail on the head with the licensed level appraisers. I lost about 85% of my client base within a few months of the FHA roster purge in 2009. I struggled back and replaced some clients who had abandoned me with new clients, but typically through AMCs that paid a reduced fee and required ridiculous assignment conditions. One of my AMCs has a combined assignment condition list over 50 pages! Now here’s the issue for me; I’ve never had an interest in going to college. I’m educated, I consider myself somewhat intelligent, and just thought that 13 years of school was enough. Why would I change that mindset, attend four years of classes, to continue to do a job that pays what I earn in the appraisal industry? If I’m attending to get a degree, wouldn’t the smart choice be to look for a career that pays a higher wage? I mean, it takes me hours to complete an assignment, and unless you’re cutting corners, it probably should. So when you factor in the time to accept an assignment and set up an appointment, travel time to the work site, the inspection, travel time back to the office, and the assembly of the report, I can do two reports on a good day if I stay in my office until well after the sun goes down. Great, no family life to speak of, no social time, no anything time except for the work load. No, if I’m going to go back to school for a degree, it’s going to be for something that earns me a living at a 9 to 5 job that I can forget about when I walk out the door. No more headaches, no more billing issues and late payments, no more thousands of dollars out the door for a suite of services (MLS, E&O, annual software fees, etc.). I enjoy the business of appraising, but it’s becoming difficult to justify the expenses, and I’m not speaking just of the monetary expenses. Does anyone realize how much more difficult it is to become and remain an appraiser than it is to become and remain a real estate sales associate? And they deal with a lot more financial risk than does an appraiser. Yes, the industry is faltering, and it will continue to do so until someone comes up with a better incentive to get into appraising. It’s sad, but your numbers tell the story. We’re a dying industry.

  5. Avatar

    “We have concerns relating to the plight of licensed appraisers”. I’m sure they are losing sleep over them. I think we all know the deal here. I have plenty of capacity to increase my work volume it’s just that fees are so low that I have more rewarding things I’d rather do.

  6. Avatar

    Why are my comments being deleted?

  7. Avatar

    Let the free market work this out. When and if there is ever a shortage of appraisers the AMC’s will be forced to pay a higher fee and new appraisers will be attracted to the industry.

    • Avatar

      The market doesn’t work in a market based on artificial demand. There is no real need for a lender to get an appraisal. The demand is based on regulation. If fees get too high or they can’t find an appraiser to work at slave wages then the banks will pressure the regulators to raise the de minimis and cause more appraisals to become evaluations. The banks want low fees and quick turnarounds not real analysis.

    • Avatar

      Actually, Wally, point of this article is the author is trying to make a case that AMCs should be able to hire trainees and that the Government should force Fannie, Freddie and therefore most lenders, to allow low-paid trainees to complete appraisals (which is NOT the case now). This is an obvious attempt by a senior member of Metro-West Appraisal Management Co., a national AMC, to subvert the usual ‘free market’ forces of supply and demand.

      • Avatar

        Once again there is no real market because, at least in the financial industry, there is no real demand for an appraisal. Artificial demand for valuation services in the financial sector is created by regulation. If the banks can’t find an appraiser to work at slave wages then there will be a hue and cry of a shortage of appraisers and the regulators will tweak the demand side of the equation i.e. raising the de minimis.

      • Avatar

        I agree with you. My point is nothing needs to change, including allowing a trainee to perform and appraisal on their own. In the free market prices will go up when their is a shortage. Prices have not went in years so how can anybody claim a shortage? Perhaps they are comparing the number of appraisers who were needed during the refi boom to today’s numbers when less appraisers are needed and the low fees have forced many to leave the industry.

    • Avatar

      Wally, there is no free market. The major players in the industry will point to a lack of appraisers and be allowed to use alternative valuation types in lieu of paying higher fees.

  8. Avatar

    I was an early licensee in MD, over 25 years ago. The company I worked at required appraisal courses, leaving me with few courses to take to test and obtain my license. As it turns out, I was one hour short of being able to take the certified exam and have only been licensed to this day. Nobody’s fault but mine. The difference in exams was additional emphasis on appraising income properties. I handled the multi-family appraisals in our office and had no problem with that section of the licensing exam. I have a four year degree from Penn State. Being licensed has hurt my business tremendously and I will call it quits when my new license expires 1/16/2019. Fortunately, I have saved much of what I made when there were fewer restrictions.

  9. Avatar

    The HVCC (and later Dodd-Frank) attempted to create appraiser independence; however, an unintended side-effect was to create appraiser more dependence – on AMC’s. Prior to these laws, many experienced appraisers (including myself) had the ability to market their services to clients who could supply them with enough appraisals to be able to hire trainees. Today we see an entirely different business model wherein appraisers are given assignments in a piecemeal fashion as if on an assembly line or wait at their computer for a broadcast email to be the first to accept the assignment. It not only reduces the professionalism of the appraiser, it makes it much more difficult to build a true business that allows for the hiring of trainees. Newly licensed appraisers can open up shop and are immediately equal to veteran appraisers in the assignment rotation. In one way that is a good thing, in another, it ends the learning process that results from collaboration with their more experienced mentors. In my opinion, the appraisal profession is the worse for it. Oh, and what Mike Turner’s comment said also.

  10. Avatar

    43 years (and counting, sad to say) in the business. Used to take pride in taking on trainees to grow new appraisers for a profession I was proud of. No more! Lender/AMC/State restrictions on trainee & supervisory appraiser, as well as income potential for appraisers as compared to other professions (now that a 4 year degree is required) has virtually dried up trainee applicants.

  11. Avatar

    There is not a shortage of appraisers. Just a shortage of appraisers who are willing to work for the extremely low fees that the larger AMCs are paying. The AMCs are going to use the “appraiser shortage” as an angle to be able to hire trainee appraisers as employees to benefit their business.

  12. Avatar

    “the potential appraiser shortage that will be facing the industry unless significant and immediate changes occur within the regulations governing entry into the profession.” This is an erroneous and unsupported conclusion. “Appraiser shortage” is one thing, but the real question is why. Is it due to entry into the profession like you stated? Maybe that’s a part. But the real issue is and always will be fair compensation. Entry into the doctor and lawyer professions are difficult as well, but you don’t ever hear of a shortage because the compensation is lucrative. People are willing to go through the hoops when they know there’s a financial reward at the end of the tunnel. But you’re right, as long as fees remain subpar and AMCs keep gouging appraiser fees, there will indeed be a shortage of newcomers. But you increase the compensation (like the Dodd Frank Act was supposed to do) and you’ll have no shortage of interested new appraisers. This is simple economics, and I can’t really believe this is a discussion except for the fact that big banks and AMCs don’t want anyone to think that fees is an issue, they want everyone to think that the ‘difficult entry into the field’ is to blame. Personally, I like all the requirements to enter the field including the 4-year degree requirement and everything else.

  13. Avatar

    At the present time I am declining about 15 to 20 orders a week. I simply respond with a canned comment the fee being offered in not reasonable or customary. The R & C fee is $xxx. The problem is not a shortage of appraisers but fees to low to attract trainers and trainees. If I had the additional demand of 15 to 20 appraisals a week at a profitable fee I most definitely would not let this income stream go to some other firm. I would hire trainees and I would not have any problem finding very qualified collage graduates that would gladly jump thru the hoops for $30 per hour.

  14. Avatar

    I heard the too big to fails are currently collecting the aging appraisers DNA (some AMC’s are now requiring DNA samples) to clone us. This way, they can mass produce live appraisers while they strong arm the Appraisal Foundation and AQB into removing restrictions to enter the industry. Eventually, one will be able to get an appraiser designation at any Too Big to fail Kiosk or by applying to any of the bank owned AMC’s by answering a few simple questions: (1) Big banks are your friend True/false (2) Who is your friend? Big bank or small bank? (3) Without Big Bank, the world would literally stop spinning. True/False.
    Write an article about that!

  15. Avatar

    What about letting the appraisers that are blacklisted back on to the lenders lists (unless the appraiser has committed something bad; most have been put on a list without even knowing and for no reason!). It would open up a lot of appraisers to more work.

  16. Avatar

    I think this article hits one important point: “We are currently working on an answer of how many appraisers are actually completing appraisal assignments nationwide for mortgage
    lending assignments.” To that I answer, I can no longer recall the last time any AMC contacted me and hired me to do an assignment for anywhere near what C&R fees. To whom it may concern, please be careful not to look at the list of just approved appraisers (I think I’m on many of those lists although I rarely get the assignment). Even the pretend requests with $175 to $200 that are snapped up in minutes have been waning. All this discussion is simply smoke and mirrors.

    I dare any AMC to contact me with a legitimate assignment and pay C&R upon delivery of the report and not 15, 30, 60 or 90 days later. I’m like any other business, pay me when you get the product. I’m not a bank or lender. And if I need to use a company like Treasure Valley Factors, my fee needs to reflect that additional cost, too. And regarding trainees, I did my share of training, but found it to be unprofitable then and even more so now. So when the greed lessens enough at the top to trickle down to pay the workers, then maybe the cries of the sky is falling will disappear.

  17. Avatar

    Good answer by Wally – let the laws of supply and demand take over. Also, right now there is a shortage of appraisers because there is a lot of demand for reports (at low wages) – but I have been in this business for 19 years, there is a boom and bust aspect, in 2 or so years we will all be scrounging for work , – all of us will be back to getting 3 to 4 orders a week , not the 7- 10 we are getting now. Enjoy it while it lasts! I don’t think there will be any mention of an appraiser shortage when this rush ends.

  18. Avatar

    Once you finally obtain all the data regarding the number of active
    appraisers and actively practicing appraisers, you need to add another factor to
    any of your 2006 to 2016 time comparisons. That other factor is appraiser
    capacity.

    Due to vastly increased appraisal scope and regulation, appraisers are
    either completing approximately one-half of the appraisals per week now than
    they did in 2006 OR are working approximately twice as many hours per week as in
    2006 to complete the same number of appraisal assignments. My sense is the
    typical appraiser has done some of both (reduced completions per week to some
    degree and increased hours worked per week to some degree). For example, if an
    appraiser increased hours worked per week by 50% from 2006 to 2016, that would
    entail a reduction of weekly completions by 25% in that time span (This example
    assumes appraisal assignment completion requires approx. twice as much time per
    assignment in 2016 than in 2006.) Thus, using this example, even with
    all other variables remaining constant, we would need 33% more appraisers
    to complete the same number of appraisals in 2016 as in 2006 due to this reduced
    assignment capacity per appraiser.

    Of course, the best and quickest way to attract more appraisers to the
    appraisal industry (yes, it is an industry now, not a profession) would be
    to substantially increase appraisal fees. Paying fees commensurate with
    the current vastly increased workload per assignment would both substantially
    increase the number of new appraisers and slow the exit of current appraisers
    from the industry. In fact, until fees paid start to come close to being
    commensurate with the workload performed, it will both be difficult to attract
    new appraisers and many many existing appraisers will continue to keep one hand
    on the handle of the industry’s exit door. Additionally, if the economy finally
    improves significantly in the future (no guarantees here), competition for the
    type of worker with the skills possessed by today’s appraisers will only
    increase. Consequently, it may be more cost-effective to substantially raise
    appraiser fees now (to increase the number of practicing appraisers) than to
    wait until a more healthy economy arrives when fees will have to increase much
    more (than needed currently) to provide the same number of practicing appraisers
    in a more competitive labor market. This is because the price elasticity of the
    supply of labor with increase markedly in a (more) healthy economy.

    • Avatar

      Excellent points Road Warrior, but let me add one more. What were the qualifications to get into the profession in 2006 versus today 2016, and what is the current financial impact of such standards? If you add the expense of college ($100,000) along with the reduced ability to earn as an appraiser for those 4 years ($75,000 X 4 years) than the cost to the appraiser today is $400,000 more as compared to 2006. If an appraiser works 20 years and competes 250 assignments a year the appraiser of today would need to collect $80 more per appraisal just to be even with the 2006 appraiser who had no such requirements. The truth is out there if you seek it.

  19. Avatar

    There is no shortage of appraisers – just a shortage of desperate appraisers willing to donate half their customary & reasonable fee to superfluous AMC middlemen in order to stay alive. I’ve recently been seeing a new AMC business model that is once again destined to fail. Instead of broadcasting the traditional lowball order the AMC broadcasts a “bid request”. For the appraiser it’s lose-lose: either lose the time spent composing a reasonable bid (immediately rejected of course) or lose by becoming the lowest bidder in a race to the bottom. For the client it’s also lose-lose: lose by paying the AMC top dollar for an appraisal and then lose by receiving the product of a desperate & harried lowest-bidder. For the AMC middleman though it’s win all the way.

  20. Avatar

    To those who haven’t done so, please check out the previous article “Let me tell you about Valuation Expo” to see the back and forth between myself and Joan Trice. Interesting reading.

  21. Avatar
    Mary Ann Momber Wright

    So…you want to support the LAZY appraisers that had over 5 years notice to take the test and upgrade to the Cert Res but we’re to lazy to do so, and completely disregard all of the hardworking appraisers that followed the rules and have the education and training licenses in place at the right times? Oh hell no……how about supporting the appraisers who did what they were supposed to and tell the others they should have done what they were supposed to…..

    • Avatar

      What? Most of the certified appraisers were grandfathered first of all. It is also possible that there are as many good licensed appraisers with no degree than the few licensed appraisers that wasn’t grandfathered, already had a degree and upgraded but not enough incentive to take 6 figure debt for $250 an appraisal. Anyway, the licensed appraisers in good standing for at least 5 years should be grandfathered as they have proven that they are competent. How many professions do you know of that tell active practicing professionals that they have to go back to school for 4 years to do what they have been doing for the last 10 years?

  22. Avatar

    The HVCC (and later Dodd-Frank) attempted to create appraiser independence; however, an unintended side-effect was to create appraiser more dependence – on AMC’s. Prior to these laws, many experienced appraisers (including myself) had the ability to market their services to clients who could supply them with enough appraisals to be able to hire trainees. Today we see an entirely different business model wherein appraisers are given assignments in a piecemeal fashion as if on an assembly line or wait at their computer for a broadcast email to be the first to accept an assignment. It not only reduces the professionalism of the appraiser, it makes it much more difficult to build a true business that allows for the hiring of trainees. Newly licensed appraisers can open up shop and are immediately equal to veteran appraisers in the assignment rotation. In one way that is a good thing, in another, it ends the learning process that results from collaboration with their more experienced mentors. In my opinion, the appraisal profession is the worse for it. Oh, and what Mike Turner’s comment said also.

  23. Avatar

    “In conversations with chief appraisers and senior management at various lenders and appraisal management companies, many are reporting increasing challenges outsourcing appraisal assignments in a growing number of markets around the country.”
    The real problem is that banks can’t find appraisers to work at slave wages. If the fee is commensurate with the travel, research, and analysis involved then you will find an appraiser that will accept the assignment. The banks want low fees and quick turnarounds. Idiotic AMCs and incompetent appraisers perpetuate this system. When geographic competency and property specific expertise become the criteria for hiring an appraiser then you will see growth in the profession because that means higher fees for professionals that know what they are doing. Until then we can expect more of the same for the foreseeable future. Especially when underfunded state appraisal agencies do little to police the profession. Lowering standards is NOT the answer. The real answer is effective representation in Washington DC. Banks will continue to demand an increase in the de minimis so that more appraisal assignments become evaluations. Those evaluations will be done by clerical workers located 500-miles from the subject property providing a value opinion from a database with no consequences to a licensing body. Regulators don’t understand the appraisal business and are captured by the financial industry they purport to regulate. When we have sufficient representation in Washington maybe we can make a case for real appraisal reform and avert the next financial crisis. Until then I expect the Appraisal Foundation to eventually become the Evaluation Foundation.

  24. Avatar

    The real problem is that banks can’t find appraisers to work at slave wages. If the fee is commensurate with the travel, research, and analysis involved then you will find an appraiser that will accept the assignment. The banks want low fees and quick turnarounds. Idiotic AMCs and incompetent appraisers perpetuate this system. When geographic competency and property specific expertise become the criteria for hiring an appraiser then you will see growth in the profession because that means higher fees for professionals that know what they are doing. Until then we can expect more of the same for the foreseeable future. Especially when underfunded state appraisal agencies do little to police the profession.

  25. Avatar

    The author should take into account that with reduced appraisal fees over the past 10 years and increased expenses, ultimately little to no money has been available for retirement. There is no retirement age for an appraiser as every appraiser will work until this profession kills us all. In our death however, we will still be required to respond to those coming value reconsiderations within 4 hours.

  26. Avatar

    The STATE of the industry is that the federal government is doing little to nothing to enforce the protections to the appraiser as outlined in the Dodd Frank Bill (C&R). The STATES themselves are passing, enforcing, and protecting the appraisers.

  27. Avatar

    Great article . Whether your license or a trainee there really is no difference . If your already in the field and have experience as an existing appraiser why should the new criteria appt to existing appraisers . In 2008 existing appraiser were told they were grandfathered in when the ABQ first put out new requirements. So how can they take that back . Maybe the AQB should go read the grandfather clause definition.
    Most people who go to college and graduate with a bachelors degrees or masters are looking for a secure career with benefits pension and retirement . The average cost in New York for a 4 year degree is $65000 . So on top of 4 years you need to take 200 hours appraisal courses completely separate from degree which is another $5,000. Half the people I graduated with from high school are still paying student loans. The way this industry is going I don’t see how anyone would want to get into this field after 4 years of college.
    Just like anything in life you have to practice at it hands on and love what you do with understanding. Just because someone has a college degree doesn’t make them a great appraiser especially when they were in college for courses that had nothing to do with appraisals

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