AI Current Path is a Serious Issue for ALL Appraisers
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Time for the AI to cooperate with real estate appraisal state coalitions…?
Is it finally time for the AI to cooperate with other respected professional peer organizations and state coalitions? Please read the following article by Jonathan Miller, titled “Sadly, The Appraisal Institute is now working against its local chapters“, to see what AI insiders views are about the relevance of the AI’s current path.
While my intent is not to take cheap potshots at the AI, I do find it odd that the same organization that repeatedly testifies in public that it represents the interests of all appraisers in America even above its own interests is seen by its own members as not representing them or even keeping them informed.
This is a serious issue for ALL appraisers. Why should the Financial Services Sub Committee give any credence to the Appraisal Institute’s paid lobbyist when its own members are complaining that they are not consulted with on critically important decisions? Who exactly DOES the AI represent when they appear before public bodies?
The SRA members (appear to) have been all but abandoned. They needed help when Home Valuation Code of Conduct (HVCC) first reared its ugly head but got nothing aside from lip service. Since that time, all AI efforts that I have seen at several TAF /AQB / APB meetings have been geared toward lobbying for alternative standards to benefit a very small segment of their MAI membership (CA AB624 & TAF Meeting Redondo Beach, 2015). Typically those MAI’s that own or manage large national AMCs. Their intent based on public testimony is clearly to be able to provide abbreviated low cost – high volume desk top appraisals for portfolio investor transactions.
There has been a drive toward international appraisal standards and developing international AI membership. On the surface, both commendable goals, but it is the specific motivation and intent that is problematic.
Real Estate Appraisal has been conflated with Business Valuation (BV) as if some kind of equivalence exists, or should exist. This is why we saw the term valuator being promoted over ‘appraiser’.
Although both disciplines have approaches called by the same names (Income, Market and Cost) the application of the techniques within those approaches is so disparate as to be no more similar than daytime and nighttime. Both are portions of “a day” but that’s where the similarity stops. Any real estate appraiser that used the same routine practices that are acceptable in BV would lose their license. What is acceptable for BV by tradition and practice among certified public accountants and business valuators simply does not apply to individual real estate appraisals.
Recently news media reported that the total value of real estate in America was around 17 to 19 trillion dollars, and that Wall Street’s total investment value was a similar amount. Not every single piece of real estate in America is valued each year so it doesn’t take much imagination to see the desirability of being able to appraise assets that ARE appraised each year! Particularly if those assets could be appraised while the ‘valuator’ is sitting on their own “asset” at their desk inside their office.
Price Waterhouse & Merger Stats subscriptions will no doubt jump .
I truly hope those MAIs that still practice traditional real estate appraisal in accordance with the high standards the Institute used to be famous for will rise up and direct their leadership to reconsider their apparent direction. Similarly I hope the SRA and Associate Members in the residential side of the profession start demanding fair treatment and attention to the issues important to them.
Lobbying for C&R fees would be a nice start.