College Degree Requirement is Flawed

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Appraisers 4 year college degree

Why the 4-year college degree requirement is flawed and how to make the requirement work?

Many, many years ago, my local college offered appraisal classes. You could take a couple classes, go take the state test and start knocking on doors. New people didn’t need a mentor. And new people learned by trial and error. It probably wasn’t the best way to do things. But it did allow for new people to freely get into the profession without a bunch of hurdles to overcome. Times have changed.

Today, new people have to have a 4-year college degree in anything first, to get moving toward being an appraiser. To make things even harder, even with a degree, new people can’t find mentors. Mentors who are willing to shadow them every step of the way for an insane amount of hours. Mentors who are willing to do it all for very little money, to assume any additional risk, and are willing to train their own future competition. Suddenly, but not surprisingly, current statistics show that nobody is getting into the profession any more.

The new requirements have created a ridiculous scenario today. A sculptor with a BFA degree, or a chef with a degree from a culinary school, is now more qualified to be appraiser, than an actual appraiser with 20 years of experience who doesn’t have a 4-year degree.

If someone wanted to pursue a degree in culinary school to be a chef, what would they have to do? Well, they would have to take all the usual basic classes, and then all the classes specific to cooking as he/she got closer to graduation. This is the typical path for any college degree profession that I am aware of. The way degree programs are set up, they give new students good basic skills to enter a profession of their choice. The finer details are learned over the years after the new student finds a job and a mentor.

The problem with the new 4-year degree requirement to be an appraiser is, a degree in anything doesn’t give someone any skills at all to be an appraiser. The new requirement is absurd. It has no relevancy on being an appraiser. Anybody coming into the appraisal profession right out of college in any degree, knows NOTHING about appraising. And that is why the requirement is so flawed.

If the profession is now stuck with the new 4-year requirement, how can the requirement be made to work? How does the profession attract new people into the business?

It’s simple. Real estate appraising needs to become a college degree. And it needs to be found in any college catalog, along with degrees in engineering, culinary arts, and journalism for instance.

The first two years would consist of the basics like in any other degree – math, English, history, etc. The final years would include courses on USCRAP, basic construction, software, regulatory, FHA, regression, and any of the other courses active appraisers are offered by their education providers. Other course could discuss appraising things other than real estate such as golf courses, cars or antiques. The final year would consist of real world activities and filling out numerous URARs. The final graduation project could consist of appraising a commercial building.

The interesting thing about a 4-year degree in real estate appraising is, all that education and training could eliminate the need for a new person to find a mentor. And it could fully satisfy an hourly requirement threshold. A thorough, 4-year college education in real estate appraising, could allow someone to go straight to the state test exam, skip a mentor, and allow them to start knocking on doors again right after their test was passed. Show a bank or an AMC a degree, and boom, get hired.

In my opinion, industry leaders and coalitions need to spend the time drafting up a full college curriculum. They then need to approach colleges throughout the country with the outline. This needs to get implemented right away if the desire is to save the profession and real estate/mortgage appraisers specifically. Retired or current appraisers would make great instructors.

Something to ponder and consider.

Until something like this happens, the bleeding will continue…

By Bubba Jay more recently known as Bubba Jay / Retired Appraiser II

Image credit flickr - Jason Bache
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51 Responses

  1. Retired Appraiser Retired Appraiser says:

    Sure there are handful of college courses that would help a residential appraiser such as English 101 and a basic speaking course; but a four year degree?  Let’s be honest here folks…the 4 year degree thing was nothing more than a trick old schoolers have been trying to pull off for years.  Why?  Duh…to shut down oncoming competition.  Notice the time frame of when they were able to pull it off (at the tail end of an appraisal boom).  The good news is that the old schoolers behind it now find it impossible to hire a trainee…just like the rest of you.

    A four year degree?  LMAO  I know people with four year degrees that couldn’t find their way out of a paper bag with a compass, map, & GPS unit.  I know guys who work as day laborers and high school kids with more common sense or street smarts than attorneys.   It is what it is and there’s nothing you can do to reverse the “infinite wisdom” of the old timers.  The laughable part is that the timing of the whole thing played right into the hand of banks and AMCs.  They are still laughing about the timing of it.

    The only winning party that came from this is the unsuspecting appraiser wannabes who would have blown thousands of dollars to get into this dead end JOB.  Without a degree, they were spared from throwing away what could have been their life savings.

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  2. Diana N says:

    Wow, a college degree just to fill out a form that is going to be read by a machine, heaven help us all. Sorry, I’ll match my 40+ years experience with any newbee appraiser with a college degree. Some of the dumbest people I know have college degrees.

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    • Tim says:

      Diana, I think you’re missing the point. This would provide some experience along with the degree, kind of like a college internship. Unless you are one of altruistic intrepid folks who enjoy the philanthropy of training a newbie, this is the way. No way they will repeal the degree requirement. That would be like eliminating a tax!

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  3. Jane Moylan says:

    This is the most intelligent, practical answer I have ever heard of.

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  4. Koma says:

    Why do I need to be Certified? Million dollar+ homes are nowhere to be found in my areas (there are some but you get my drift). Ooh they say your missing out on the added knowledge…lol After 13 yrs in this business I get all the knowledge needed from my peers with 20-40 yrs experience and all it costs me is a good lunch and maybe a couple of beers..lol That plus my cont ed is doing me just fine. I’m not going to spend a couple thousand dollars in college costs, cont ed and licensing fees just to make the same money I’m making now. Wow I learned all of that without a degree, go figure.

    Mind you I’m not against college. I have one child attending and one who just graduated. The oldest, BA in Computer Science, just received an offer at $$$. Yes it was substantially more than training to be an appraiser.      I enjoy what I do, but guess what my kids are going where the money is.

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  5. Bill Johsnon says:

    The thought of a degree in real estate appraising is interesting, but I again think most are looking at the issue from the wrong direction. There is NO shortage of people with bachelors degrees, but rather a shortage of people who WANT to become appraisers. If we focus on residential lending and the lenders who hire the appraiser, are they interested in fixing the problem? What is the problem? Are appraisal fees in there mind to high in some areas? Do they think these areas are high because the large city appraisers fees are often so low? Do they think 3 weeks is to long to inspect and submit a report because again some areas may be 3 days? Who has the power to fix the problem? With significantly higher pay, reduced liability, reduced scope of work, a more transparent system (CU, blacklists), etc., etc., etc., then maybe the problem will self correct.

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  6. Danny says:

    Most college degrees don’t truly prepare you for being on the job, regardless of the profession. It does prove though that you as a person is dedicated, teachable, willing to learn and committed to being more. Once on the job, any job majority of what you learned went out the window. I do have a college degree, 4 year bachelor in business. It did teach me a lot, but probably more so than anything just gave me a well rounded educational background, which serves me in daily conversations. Someone wants to talk about the biology of how a person is made I can comment, someone wants to talk about history of the world I can comment and join in. I am a more well rounded individual because of it. I am good at my job though because of my experience and what I learned through on the job training. However, I also wouldn’t have gotten in the door for the interview without my degree… oh and i’m not an appraiser. Just working in the appraisal industry, sales & marketing director.

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  7. Diana N says:

    Tim, over the years I have trained several appraisers, all without college degrees. Some went on their own and did quite well, others realized it wasn’t for them and that there was an easier way to earn a living. Probably a smart move considering the fees being offered today.  Just today I turned down three requests for full appraisals including 1004MC that the AMC was willing to pay me a huge $250.00 for. Honestly, a college degree for that.  🙁

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  8. Bubbas observations are reasonable enough but I tend to fall with RA on this one.

    Before we talk about whether a college degree course in real estate appraising is a good idea, how about some specific discussion about whether what we do requires a degree at all? Just because something is a recognized commendable pursuit or achievement generally, does NOT mean it is a necessary component of everything else.

    Certainly I would benefit from a college writing course and refresher in basic English, but are they critical or even important to what I do?

    The Federal Government is required to write publications and policies so that they can be read and understood by readers with only an eighth grade education. Some claim it is only a 6th grade education requirement.

    Strunk & White’s Elements of Style was originally published in 1918, and as updated is still used to train new federal employees in the preferred writing style today. One interesting observation is that S&W now discourages the use of technical or trade jargon. In fact “plain English” is preferred in all instances now. Gone is the verbiage designed to impress, confuse, baffle and bewilder “our inferiors” with our wisdom and fancy degrees (OK, except for unionized teachers and educators-but that’s another issue completely).

    So, if plain writing is preferred why do I need that degree in Geography again where the Major and the Minor can be the same thing? Is it critical to appraising in my home state or county?

    How about a degree in art? I’ve appraised one house in thirty years that was Rococo; and only a few that were truly baroque. Perhaps if Id had the art degree I would have known the term instead of having to ask my mentor how to describe the specific properties twenty years ago! Gosh what WOULD I have done if he were not available? Is it possible my library has no books on architectural styles and designs? Fortunately MOST of the really fancy houses I do are pseudo-something else that permits me to conceal this particular shortcoming of mine.

    No doubt (college) math and geometry are useful, but necessary? You can figure out how to calculate the area of a chord by reviewing your kids 8th grade geometry book. Modern calculators eliminate the need to calculate complex formulas myself. Inwood and Hoskold can be found in tables or books (when needed at all). Admittedly if I am ever required to calculate the interior volume of a Russian Onion Dome structure I could be in trouble (absent a library). Don’t EVEN get me started on Suprematism and Stalin Baroque!

    Perhaps economics? Accounting? Logically yes; though the Treasury Department considered my semester accounting class that was presented and passed in two weeks to be “adequate”. I suspect there are other ways to learn about supply and demand than in college. Why not study how to shop for a used car instead? Same principles.

    No hard feelings folks but there is NOTHING in what we do that demands a college degree. Don’t despair though. College is NOT a requirement of a profession; EDUCATION is.

    Want to attract new talent? Stop being so pompous as a profession. Want to keep old talent and experience? Stop harassing the practitioners and subjecting us to constant second guessing; regulatory abuse and using us as pawns in political arguments.

    A last thought. As the AI and other special (non R.E. appraisal) interests move toward universal international appraisal standards for “valuators” advanced education may indeed become critical. It takes highly educated people to fool the nation & world into thinking the “Blue smoke and tossed chicken bones method” of valuation associated with international “valuation” is scientific.

    Maybe the best book to guide us would be “The Emperor’s New Clothes.”

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  9. Want PROVE how necessary advanced degrees in economics are?

    Note comments about the potential for “negative interest rates” being necessitated here (US) and comments about the short term Three month T-bills falling to “Negative 0.5%”

    Seriously? I am “investing” in a negative yield instrument offered by my government? Folks, THIS is why there is a blue smoke and chicken bones basis to international accounting. THEORETICAL or assumptive risk premiums can create conditions where it is believed NEGATIVE interest will stimulate anything! By golly, the bean counters are all so educated that the methodology MUST be right! Right?

    COME ON! COMMON SENSE PEOPLE!!!!

    Has anyone even considered the practical logistics of a negative interest T-Bill? Normally we invest to receive a small positive profit, right? In this I would invest so that at the end of the holding period, I can knowingly owe MORE than I invested?

    If this weren’t such an educated and genteel crowd, I’d have to call “BULLSHIT!” on this one. Oops. Pardon me, I’m uneducated and don’t know any better.

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    • Pierce Blitch III says:

      i was not sure any other appraisers saw this as I did. We are going to have a lot of foreclosure work in the future. I believe it will be worse than 2009-2012 this time.

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      • Mike Ford Mike Ford says:

        Pierce, it is certainly possible. At a minimum we have to have another recession (I think). I think it really depends on how much they ‘loosen’ the credit taps for borrowers and whether those specific borrowers are able to stay employed.

        Real estate values were never allowed to find their ‘normal equilibrium.’ To facilitate the appearance of recovery, interest rates have been kept artificially low compared to historic norms. That alone pushes prices upward. What happens when they return to traditional norms of 7%+-? A definite real estate slowdown unless somehow income levels surge upward too. I’m just not seeing it.

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  10. Tish says:

    ” if the desire is to save the profession and real estate/mortgage appraisers specifically” is quite an assumption.   Who said anyone other than appraisers want to save the profession? I think the real point of the 4 year requirement is to phase out the appraisers so that AMV’s, drone’s or any other Godforsaken automated form filling software can do the work that we do. And sometimes I wonder why we even care to save it ourselves.  As it stands now, since apparently we are the reason the entire economy collapsed, all of us are subject to being sued for the rest of our lives for any appraisal we have ever completed as long as the lender suing “found the errors” within a few years (4 years in FL) of filing suit.  It makes me sick that we end up being the fall guys.  All I can say is THANK GOD I became a VA appraiser in 2013!  The fees are fair, the turn time is more than fair, and I am actually treated with respect! That is the ONLY reason that I am still an appraiser.

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    • chris says:

      I too was put on the VA list. Greatest thing EVER to happen. I have NEVER been more respected. Fees are fair and so is the attitude of the VA personal.

      THEY should have followed the VA process. Simple !!!

      But hey, the government gave these banks 100 billion a year off of our backs. Can you say it was for national security as the Gov. want our banks to be stronger the China.

      The other thinging was how do you clean up a profession that 50% of the appraisers out there, and still out there do not have a clue how to actually appraise.

      Fraud is still going on, appraisers are still be banged for being dopes, over appraising, comps to far etc…extreme lying about actual condition, no mention of busy roads…etc….the lsit goes on and on and one.

      They want more computer values……why….cause they still do not trust us appraisers to do our jobs. Protect the public trust. End of story we are here to protect EVERYONE, so the houses can be resold if the owners die in a car crash a week after settlement.

      SAD….I see some of my peers black listed…..why….cause they caved into lender/AMC pressure to survive….whats changed in over 20 years…..NOTHING!

      Only the best will survive…that’s their plan, those that do survive will get the money to train again…..that;s what THEY planned years ago going back to 2005.

      5 year I did reviews……So bad a monkey could see the errors and fraud…..We got what are peers did to us….none of us turned any appraiser in the STATE for what they did. we just rewrote the reports and the lenders still used those appraisers for the deals that would pass with piss poor appraisals. No one turned anyone in….NO ONE. The Funders did not even black list cause, as I was told, They liked their clients and didn’t want to lose them cause only a few reports were bad….

      They got what they deserved as well ! Out of business.

      Stick to your guns, do the job, pull your hair out writing bastard deals for $250.00, it will get better sooner or later in your area…..They don’t want dummies who barely passed high school, taught by their parents or friends, becoming appraisers.

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  11. bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

    dont get me wrong Mike, or anyone else for that matter. i too, dont think appraisers need a 4-year degree to do the job. i think a high school diploma isnt enough, and i think a two-year degree should be enough.

    the point of the article was to ask, if appraisers are stuck with this 4-year requirement, and for now they are, how can it be made to work? i think one way to make the requirement work, is for colleges to offer a degree in appraising. at least this way, students could get some education in appraising. right now there is none. if the goal is to get all appraisers to do everything the same, a standardized and approved curriculum throughout the country could accomplish that.

    again, the other bonus would be that every hour spent in a college appraisal program could be applied to each states requirement of hours. if there was a path to accumulate enough hours, the problem of reaching those huge hourly thresholds and finding a mentor could be totally eliminated.

    we all know the profession has A LOT of problems, and i agree with that 101%. this article was an attempt to address just one piece of that huge puzzle. by itself, this idea is worthless unless many of the other problems got fixed too.

    have a great day everyone.

    the bleeding continues . . . . .

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  12. Fair enough…

    At the Nevada meeting of TAF/APB, the Board discussed the possibility of grandfathering existing long term appraisers. Recognition that experience can often equal formal education. WE ALL NEED TO WRITE  TO THEM AND SUPPORT THAT  IDEA. Additionally, they have considered developing online  curriculum for appraisers. Its interesting.

    I disagree re 2 year or 4 year. The only course needed other than the professional courses we take on our own is: a basic economics course. I have only my own experience to go by. No college degree but considered qualified at federal level for equivalent positions with attorneys and engineers. Actually hired at a grade above.

    IF our national tests mean ANYTHING, then the ability to pass those tests should be the metric. If the tests do NOT adequately test knowledge then eliminate them and replace them with the college degree requirement (which would make no sense either).

    My challenge to those promoting 2 OR 4 year degrees. Specifically what course and number of units or hours would you require for an appraiser degree? (By the way R.E. degrees are already offered up to the PHd level).

    I would even support requiring specific NEW courses for CE rather than repetition of the same old courses, so that appraisers actually advance their knowledge.

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    • bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

      i understand what you are saying mike, but you are mostly talking about current people. i doubt any current appraisers care at all if they are grandfathered in or not.

      first, the problem that needs to be addressed FAST is, attracting new people into the profession, and active appraisers who are not willing to train any of them. current conditions have forced active appraisers into not willing to train anyone, therefore i dont blame appraisers at all. a big road block has been built here. therefore, a path needs to be built around that road block for anyone interested in being an appraiser, and goes around that mentorship problem.

      second, i think at minimum, there should be a two-year college requirement. if appraisers are suppose to be held to an attorney/engineer standard, then a high school diploma isnt enough. the only thing that is consistent right now concerning education is, too many appraisers are being paid as if they are only high school graduates working at a fast food restaurant somewhere.

      third, i still dislike your “Gx” federal pay grade levels because appraisers are not federal employees. “Gx” pay levels as you propose imply that they are federal employees. appraisers are not. appraisers are in business for themselves. if you want appraisers to be paid like federal employees, then they deserve federal benefits as well. appraisers are either self-employed or they arent. if they are, then each appraiser and free enterprise should decide fees and nothing else. you cant have it both ways.

      the bleeding continues . . . . .

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  13. Bubba, Disagree re old timers not caring. I personally know MANY appraisers in SoCal that would like to upgrade and who wont be able to. New York State has several that have contacted AGA complaining that a prior promise of grandfathering has not been honored by the state . THAT claim is still unverified. The best we have been able to find out is that information sent by the state MAY have been contradictory or unclear.

    The ability to upgrade goes to retention of existing people. I’m 65. I plan to keep at this at least until 75 if health permits. Perhaps longer.

    The ability to ‘fix’ the dearth of new appraisers is so incredibly easy that I believe those that have not already promoted it, deliberately want a shortage to be created. ALL that is needed is the willingness of lenders; GSEs and other institutional users to say “We will accept appraisals inspected only by trainees, provided that the co signing appraiser has assured the trainee is capable of performing proper inspections; and that there is an actual review of the appraisal with the trainee prior to its being finalized.” PROBLEM SOLVED! Give me that and I will take three trainees TODAY (ok as soon as I complete the supervisory appraisers course now required).

    I’ve never said appraisers should be held to an attorney OR engineers standard. I HAVE said that it is demonstratively possible for self educating individuals to achieve those levels of direct education; or comparable education. There is a difference.

    Bubba, I appreciate the concerns re federal civil service comparisons however you have clearly MISSED the part of the proposal that very specifically addresses the differences between government employees who have no overhead; AND that have benefits that we do not have. To a large extent those differences form the basis for he final conclusions. I seriously doubt informed business owners would dispute that TOTAL overhead costs for a sole proprietorship appraisal company are less than 25% of gross; or that those for a ‘staff’ based firm can approach or exceed 50% depending on the model.

    In any case the college degree is not our most pressing problem. Its an unintended red herring. Its an idea that had unanticipated negative impact and now “the powers that be” are trying to fix it without correcting the most basic aspect of it. It is not now, and never was NEEDED!

    There are many alternative educational paths that would serve the profession BETTER by encouraging REAL ESTATE appraisal related courses for real estate appraisers. I’d much rather hire a licensed or certified appraiser that has completed credible income courses, than a degreed individual that has a degree in political science or philosophy.

    Bubba, I don’t think you are ‘wrong’ per se, I think the underlying concern for you is a belief that SOME level of advanced education beyond HS is required to be a good appraiser. You see college as the vehicle. I see some type of internship supplemented by relevant coursework as the solution. I suspect the real solution will be a hybrid of both ideas OR inclusion of both concepts as alternative paths. I’d be fine with that.

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  14. Dfloyd says:

    I like the idea of the reader, but I would inject some apprenticeship training in there somewhere…  Maybe at the end, rather than appraising a commercial building.  You just can’t do this in the real world, without real world experience…

    I came out of banking, but I’ve been appraising real estate for 30 years…  I have lots of education on the wall, and I really think higher education is needed for this business.  There are a different set of skillsets for many professions, and all are admirable.  But this isn’t the same thing as those industries built off of tech or trade schools..  Car salesmen, realtors, insurance agents, sawmills, carpenters, etc. are great careers but there are rare cases they could be in legal hot water if they say or write something that is inaccurate..

    I have trainees right now. My biggest problem is the inability to use them by the clients for inspections, and they are allowed to do inspections under TN law after the initial 500 hours.

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    • Hi Dfloyd; All good ideas despite my disagreement re 4 year degrees. Along those lines, the people we SHOULD be writing to with all of our opinions and views are AQB.

      https://appraisalfoundation.sharefile.com/share?cmd=d&id=s7cb15ac769e4cf4b#/view/s7cb15ac769e4cf4b?_k=k8c2su One of the observations at the last TAF / APB meeting in Nevada was that they are NOT receiving enough suggestions directly from appraisers. Admittedly a different board, but Dave Bunton of TAF reiterated it is applicable to all the boards too. They want and need our input.

      The totality of their (AQB) suggestions make sense.

      Re trainees, that ONE SINGLE thing (ability to have them inspect) would solve the shortage problem almost overnight. I would take three trainees immediately and turn on the tap to residential work I’ve been declining.

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  15. Wayne says:

    A wise person once pointed out that, “thermometers have degrees, and you know where they stick them”.

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    • Lol! Seriously though, nothing wrong with a degree, but it should never be used as the metric to determine qualifications for fields not directly related to that degree. Think about it. We have what are described as very difficult tests for appraiser licenses, certification and general certification.

      IF those tests do not adequately determine our qualifications, then they should be eliminated. If they DO test our abilities adequately, then everything ELSE should be eliminated as a requirement!

      In most states, IF an individual can pass the state bar exam without a degree or a specific JD, then can become licensed as an attorney and open up for business the next day. Now, I’m not suggesting we LOWER our qualifications to those of attorneys; but I AM suggesting we start injecting some common sense into the process.

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  16. Wayne says:

    Mike, probable a discussion for another day; why do Appraisers have so many licenses? If it were one license, like Lawyers, accountants, Etc., after we received our license to practice we could specialize in what ever field of endeavor under USCRAP provided we were competent to complete the assignment. Seems to me that this was flawed from the start, but what else can you expect when government tries to make anything better.

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  17. Wayne as good a question as any. Answer is pretty simple I think. We have different levels of skill required. If all one is going to do is to appraise non complex sfrs for loan purposes (ostensibly, the majority of work), then why would that person have to learn income capitalization; or about complex commercial / industrial leases; discounted cash flow, etc.?

    Within the residential discipline the same also holds true regarding very complex properties. The average appraiser does not need more than 3+- years experience to be a ‘good’ seasoned appraiser, but to do highly complex properties far more experience is likely required. Perhaps as much as five or even ten years ‘equivalent’. Again, should a basic licensed appraiser be required to pass advanced residential or small income property courses to do an owner occupied tract house, conforming loan limit assignment with no apparent “advance skill required” issues?

    I actually liked our licensing system right up until lenders arbitrarily decided to over ride FIRREA/USPAP with their own knee jerk requirements. NOTHING wrong with a competent trainee signing a report for a property I have not personally inspected as long as I am signing behind them accepting FULL responsibility. That means I  HAVE TO ASSURE my trainee is competent or it is MY license on the line. Similarly as originally set up there was no requirement for a four year degree, nor was there a need for one.

    Typical bureaucratic progression…add layers of unnecessary requirements to ‘fix’ issues that were never problems to begin with.

    The people that promoted 4 year degree requirements are the very same people that asked if the tests were too hard and should be made easier because enough people were not passing them! You see they wanted the trappings of enhanced respectability for the ‘profession’ that a degree was believed to create, but they weren’t happy that most degrees failed miserably in preparing someone to pass any level appraisal licensing course.

    NOW they want to “fix” the professions traditional experience requirements (which date back to Level I; II, III and IV experience ratings) so that those with NO APPRAISAL qualifications or skills can be induced to enter the profession with their basket weaving degrees!

    Insanity! …and they cannot figure out why there is a shortage of qualified appraisers!

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    • Wayne says:

      Hi Mike,

      I disagree with the licensing with the exception of the Trainee. In my opinion there should be one license for Appraisers. Then follow uspap, that is what its for. As to degrees, there are three. A bull shit, a more shit, and a piled high and deep. Also, I do not believe there is a shortage of appraisers, only a shortage of appraisers willing to work for 1990 fees.

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  18. Chris Yaecker says:

    Before the real estate world collapsed in 2008, the mortgage industry including the appraisal “profession” was woefully unregulated.  As a reviewer I was appalled at kind of people who called themselves appraisers and the trash they submitted as professional appraisals. Anyone could call themselves an appraiser and many did with disastrous results.  However, not enough people in the industry or the government cared too much – times were good and values only went up – and billions in bad loans were written many with horrible appraisal reports.  There were some very good lending institutions out there like Charter One Bank in Cleveland where I worked.  They only hired college graduates with a variety of backgrounds and we were known as a top notch professional organization, and Charter One never had any significant default issues.  Thank you John and Bud Koch.  Until something better is devised like a degree or certificate program in which every new appraiser is required to attain then I think a four year degree is a must to maintain and expand professionalism in this industry.  Changes are needed but going backwards is unacceptable.

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    • That’s naïve and simplistic. It is also inaccurate. We have had meaningful regulation since 1989…though it took to 1991 to actually implement it. If as a “reviewer” (may we assume you meant review APPRAISER, or are you an unlicensed ‘reviewer’?), if all you saw were bad appraisals, then your firm wasn’t as good as you think it was.

      Back before the crash when Chase, WAMU and Greenpoint were so prolific MOST of the appraisals they processed (as acceptable) WERE good; at least up through ’05-’06. Once volume peeked they started getting sloppy with standards.

      I agree the QC tanked by ’07 and ’08; especially with respect to Countrywide and LandSafe; though WAMU and Chase started showing diminished quality as well. I’ve been a general certified appraiser since licensing was first made available in my state. I have no degree yet I have been hired for positions that require EQUIVALENT education (including that gained by experience). Education is half of the answer. Meaningful oversight is the other half.

      NOT just requiring a degree and then being amazed that it did NOTHING to enhance work quality.

      Require a field review of 10% by volume, by COMPETENT field reviewers paid enough to do a thorough job and there would be no significant quality issues within three years.

      “Going backwards” is unacceptable? To who? BTW in 1989 when FIRREA was passed NO degree was required because we weren’t trying to substitute novices with degrees for experienced appraisers!

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      • Koma says:

        Mike, Good comment.

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      • Chris Yaecker says:

        If we had such meaningful regulation since 1991 why was the appraisal industry so full of very bad appraisers who allowed so many bad loans to happen?  The appraisal industry was a major villain in the collapse of the mortgage industry.  And as I stated until something better is proposed then a college degree is a symbol of professionalism and hard work.

        Charter One created a mortgage company and started to buy large quantities of mortgages from around the country. We reviewed rooms full of terrible appraisals and if they did not pass our review the bank did not buy the mortgages.

        Bad Countrywide mortgages kept we swamped with hundreds of REO appraisals in 2009, 2010 and 2011.

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      • Koma says:

        Sorry Chris but how do you know that the majority of bad appraisals you reviewed were not done by a college graduate?

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      • Chris, having regulations is not the same as enforcing those regulations. THAT has been a problem since FIRREA was created in 1989. If you want a perfect example, look at Dodd Frank. It is the LAW that lenders and amcs MUST PAY C&R fees. Its even spelled out HOW those fees are to be determined. It is also a fact that industry activists / lobbyists or MBA, and AMCs such as REVAA are out there deliberately circumventing C&R.

        LACK OF ENFORCEMENT is and always has been the weak link in the chain. I’ve posted where Chase and WAMU USED to be great companies to do work for…before they abandoned their QC requirements. I had WAMU try to push me into an outright falsehood regarding site description and size for over a month before they accepted that I was right and their title data was wrong. I had Chase try to push me into saying a 100% gutted kitchen didn’t disqualify a house from being “habitable”. Chris, we have a lot of problems in our profession. Dealing with them effectively is more important that the ‘window dressing’ of “professionalism” that a degree is supposed to convey. IF a degree is such a guarantee of professionalism, then why do we have so many dishonest attorneys? Accountants?…and of course, Bankers?

        Morality & professional integrity is not taught at most colleges. In fact, just the opposite seems to be the lesson. That morality is somehow optional.

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  19. Why does Ohio only show licenses as active for one calendar year? You guys have to renew annually? What a pain!

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  20. Pierce Blitch, III IFAS says:

    Chris,

    How do you go backwards in Licensure? You are currently a “Licensed” appraiser in Ohio but were formally a “Certified Residential” appraiser? This does not make sense to me.

    It was not the lack of a college degree, it was a lack of oversight by the lenders when choosing their appraisers. Prior to 2005, most lenders in Georgia were having between 5-10% of the appraisals reviewed by competent Review Appraisers and paying a decent fee for the service. We did not have many problems at that time. When they got away from the review process, that is when novices with little training and supervision got their reports accepted as gospel and hence the problems of 2007-2011.

    While I don’t agree with the college degree requirement, there has to be a better way.

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    • Koma says:

      Pierce good comment and it’s happening again with the AMC’s taking a cut of our fees and handing out work to the lowest bid.

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    • Mike Ford Mike Ford says:

      Pierce, I wondered about the license level too, BUT he also had a big time gap and maybe he got caught up in state changes related to how recent his experience was. Anyway no hint of disciplinary actions or suspensions reported, so lets assume he’s a “good guy” OK?

      Absolutely concur regarding lack of reviews. Primarily field reviews; AND secondarily decent ‘informal visual’ “reviews” by lender staff appraisers that used to generate inquisitive calls about “why”; and also formal desk reviews.

      It’s now ‘left up to the AMCs’ who take their walking orders for the lenders and GSEs. IF the “client bank” wont pay for a field review, no AMC is going to do one as a matter of routine. I periodically do QC reviews for a “friendly appraiser owned AMC.” It KILLS me to let some of the stuff ‘pass’ but as they keep reminding me, further review or even educational suggestions to the appraisers is NOT within the QC scope. You’d be AMAZED how cursory it is. I’d sure as heck never do it if it required a signature!

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    • Chris Yaecker says:

      Many bad appraisals were occurring years before 2005.  I reviewed thousands of appraisals over many years and I find it to be one of the most ungratifying jobs ever.  I will never review another report in my life.

      I was certified many years ago and I thought the process was too easy at the time and by 2009 the feds agreed. There were about 150 appraisers in Ohio who had their certified status taken away because Ohio failed to properly administer it.  Most of these appraisers have either retired or upgraded again. Frankly, I have been too busy ever since to file my experience log and take the test – but I will soon follow through since my nephew wants to become an appraiser under my management.

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      • Chris, thank you for the volunteered explanation which helps the rest of us to put your views re education into context. If I felt my state’s testing and oversight procedures were flawed, I might feel the  same way.

        My state’s tests have been tough from day one and have remained so. I have friends and associates that have had to take upgrade tests up to three times before they passed (oddly enough, everyone of them a college grad).

        Some people simply don’t test well. They ‘choke’ during three to four hour morning and then similar time afternoon testing sessions. I DO feel bad for those that fell victims to the state’s own failure to oversee proper testing.

        Good luck to you and your nephew.

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  21. Mike Ford Mike Ford says:

    Sorry, apparently I forgot how to spell my name; my blazing speed is too much for my 10 year old keyboard…doubtful a college degree would help.

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    • LOL! No worries we corrected the typo in your name.

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    • James says:

      When I took the test for certification here in CA, there were 4 other licensed appraisers there to take the same test. All 4 of these other appraisers held a 4 year degree, and were on their 2nd attempt(atleast) to pass the certification test. I don’t know how they did this time around, however, I passed on the first try with flying colors. Sadly, I do not hold a 4 year degree.

      Mike, I’ve been reading through your blog and commentary, and I have to admit that I find you very impressive and inspiring.  Take good care of yourself, we need people like you around forever!

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      • James that is one of the nicest compliments any appraiser could ever have from one of his or her  peers. Thank you.

        …Now about that membership in the appraisers guild *g*. Seriously, If I could get HALF the people that post here officially involved in developing specific strategies for our regulators, we could already have effected changes!

        I’ve spoken before TAF twice in the past year (the only time before that was something like 15 years ago). On one of those occasions we DID actually effect a change (killed AB624). I’ll try to get before TAF in Arizona in April as well but since we don’t use ANY Guild dues for this it will depend on my personal finances and time availability.

        In the most recent meeting, one of the residential members of the APB reached out to ALL of us and has asked for our input in the area of whether or not APB should be offering guidance on supporting sales comparison adjustments; and if so-what that guidance should entail.

        Her name is Lisa Desmarais and her email is lappraisal@comcast.net . While the other individual that gave me their email and promise to address our concerns or at least see that they get to where they are supposed to has NOT responded once to my emails; Ms Desmarais has replied to evere single one. I urge all who read this to think about what they are asking, and to respond through her direct.

        Now, for those that woke up this morning and realized you really DO need to join the American Guild of Appraisers ( http://www.appraisersguild.org ) you can still do so through Jan Bellas at (301) 220-4100 or http://www.appraisersguild.org .

        Officially our dues discount ended December 31. New dues are supposed to be $325.00 HOWEVER I am told several people citing my prior blog posts for the $225 rate have had that rate honored. I suspect THAT wont last forever.

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    • Baggins Baggins says:

      Perhaps you should outsource that duty?  HA!  This industry has become a joke, with all this outsourcing, automated underwriting, and so on and so forth.  I might just move to underwriting.  The pay is twice that of appraisers on average, and they don’t even have to think.  They just run reports through XML review, and click and go to long list of stips, without ever cracking open the pdf report for actual report review.  XML based underwriting has turned into the biggest ailment for appraisers, as if we thought it could not get worse than amc’s.

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  22. Baggins Baggins says:

    I can see it now;  The college professor sitting down with the chief automaton underwriter, and them arguing about the merits of appraisal development.  Professor;  But we want the properly equip the future appraisers with the proper analytical skills.  Automaton underwriter;  We don’t find value in appraisers with unique skills.  We need generic appraisals so our staff can process 40 or more of them a day, per underwriter.  Professor;  How can we successfully educate appraisers, if the goal of mortgage lending is to eliminate the appraisers influence and force them to operate all the same?  Automaton underwriter;  We only want you to educate them how to form fill in compliance with XML review software.  Unique report content will be met with resistance and stipulations.  We control the appraisers, and appraisers should stop performing unique and independent appraisals.  All we care about is the automated warning points generated from XML review.  Professor;  We won’t be able to engage in this sort of educational criteria.

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    • bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

      no need to worry about any of that Baggs. the appraisal degree will never happen, at least in our life times it wont.

      first, the idea would have to be over-analyzed to death by all the egghead leaders. this alone would take many years, and probably a decade or two just to come to a decision.

      then, the whole thing would have to be implemented. can you imagine this happening? it would take a decade or two just to agree on the idea. ironing out the details of an appraisal degree would take another entire generation of appraisers for people to agree to and figure out all those fine details.

      now we all know why they just say “get a degree in something”. its so much easier isnt it?

      the bleeding continues . . . . .

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  23. Evan says:

     I’m looking to get my appraiser license in California after working 5 years in residential acquisitions.  Most of the feedback and online articles I read carry a negative tone.  Do you no longer recommend this route for young professionals?  Why are there no supervisors willing to take on new trainees?  What is you long term outlook?

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    • Retired Appraiser Retired Appraiser says:

      If you are thinking about obtaining a residential appraisal license you are in need of SERIOUS COUNSELING. I doubt that the strongest advocate for this “profession” would advise you to follow through with your current dream. As for me…not only do I say RUN…but “RUN LIKE L” as fast and as far as your legs will carry you. This has not been a career since 2009 but rather a JOB… and a subminimum wage paying JOB for the majority after everything is taken into account.. At this point I don’t even recommend it for part time gravy money because of the perpetual liability that you obtain along with your license.

      I encourage disgruntled appraisers and wannabes to consider web based businesses. As I mentioned to the owner of this blog yesterday, the commercially viable web that we know today is a mere 20 years old. People don’t realize that opportunity still lies everywhere with regard to the internet.

      Example: http://www.ThisIsWhyImBroke.com a simple concept but also voted one of the most addictive websites on the web. A similar site can be built using WordPress (free) and a $75 theme. The owner now makes around $250,000 per year from affiliate marketing because he doesn’t like advertising. Worthofweb.com puts a $2,480,000 valuation on the domain (a horrendous domain choice) because of the web traffic generated. In short, Adam Freedman (the founder) is throwing away a ton of money by ignoring advertising dollars. Google Adam Freedman or check out YouTube and you can see how he did something that any of us could have done and could still do.

      When comparing the world wide web to the telephone business the web is now the equivalent of the phone companies in 1897. When comparing it to the Wild West the web we’re up to the year 1869 (establishment of the transcontinental railroad). Would you have invested in the telephone business in 1897 or the railroad in 1869? To be blunt, what you are considering would be the equivalent of starting a buggy whip company in the year 1920.

      Why waste you time chasing after a profession with an ugly and predetermined ending (a brick wall) when you can do something remarkable with your life? If you are going to enter a business…plan on owning a business. If you are going to build a business build one that can be sold. Anything else is a foolish waste of your time and money.

      Bottom Line: At least 90% of the appraisers that I’ve spoken with over the last 7 years want out badly. The remaining 10% are so diversified or set for life through other means that they’re fine with it. Residential appraising accounts for about 10% of the income for those who are willing to hold tight.

      Check out the chart below if you want to know just how far the internet has advanced in comparison to a 20 year old telephone industry (see 1897).

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    • Evan, RA and I are not usually completely on the same page, but he just gave you good advice. The influence of self serving, underhanded interests controlling our profession is leading to its INTENTIONAL eventual demise. There is a constant battle against ever creeping intrusion by Mortgage Bankers; Bankers; Investment Bankers, Federal  Regulators and even some professional appraiser peer groups that are in bed with FNMA and other GSEs.

      Even the software designers are setting us up for eventual elimination. The ONE exception I would offer is Business Valuation. Look into ASA BV training and designation as well as NACVA. You could earn a VERY good living but the entry fees are steep. THEN in between if you want to dabble in Residential or commercial appraisal you could do so and be quite marketable.

      The reason none of us that like t think of ourselves as ethical appraisers take on trainees is because the clients do not accept reports co signed by supervisors if the supervisors have not also inspected the interior of the property you inspect. we don’t mind that until WE feel you are trained, but the business model does not work if we have to do that for 90 days or so.

      We’d have to pay you FAR LESS than you need to survive in order for US to continue to survive. I don’t believe in paying a trainee less than $25 an hour for the first month (time actually worked; NOT x 40 hours). The economic model is closer to around $10 and hour x 40 and that just does not make for a great professional peer relationship.

      You also need a degree. Four year.

      Long term outlook? As a few respected friends remind me, 125 yeas ago buggy whip makers had a thriving specialty business. By the 1920’s though they were pretty much washed up.

      Many would say our outlook is not quite that positive. By the way, WHILE you are being paid peanuts and asked to eat manure, you are required to uphold the highest standards of integrity, even when you know there are people out there cheating AND the regulators are indirectly encouraging it.

      If all that does not dissuade you the jump right on in! IF you are close to L.A. you WILL be able to find trainers but it wont be easy and they may not be quite the ‘best’ (appraisal sweatshops). You will need a part time job to help you survive.

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    • Retired Appraiser Retired Appraiser says:

      Here are 20 more reasons for considering an internet business over appraising Evan:

      You can generate income 24 hours a day every day of the year.

      Rather than having a market of a few counties you have a market of 3.17 billion people

      You can run most internet companies from anywhere.  Need a 4 week vacation?  No problem

      The cost of entry is 20 times less than appraising

      Your yearly overhead is about 15 times cheaper than appaising

      No license required

      No MLS required

      No continuing education courses

      No E & O Insurance

      No college degree required (Lynda.com, YouTube.com & CodeAcademy.com are cheap cheap)

      No working 2,500 to 3,000 hours under another appraiser for beans.

      Depending your creativity your potential income is:  Google: Mark Zuckerberg & Jeff Bezos.

      Your liability is nearly zilch compared to appraising and it certainly doesn’t carry over until you die.

      Your ability to earn won’t be tied to the interest rate roller coaster like appraising.

      You won’t be forced to abide by 12 new regulations every year.

      Nobody is going to force you to turn over 1/2 of your income in exchange for work each month.

      The government will never force you to give up every client overnight like they did with HVCC.

      You can market your services to anyone on damn well please (including mortgage companies).

      It’s a scalable business

      You can work it in retirement or sell it

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  24. Any that know me also know I oppose degree requirements for appraisers for reasons I’ve cited over and over. Having said that, The National Association of Realtors (r) has recently achieved accreditation for their Realtors(s) University Masters Program.

    At least the courses have SOMETHING to do with Real Estate!

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College Degree Requirement is Flawed

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