Number of Applications Tell a Story

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Illinois Appraisal Newsletters at IDFPR
Provided as a service to licensed and registered Illinois appraisal professionals as well as Illinois course providers and users of appraisals. Illinois Appraiser Newsletters promote a greater understanding of USPAP, the Act, and the Administrative Rules of the State of Illinois.promote a greater understanding of USPAP, the Act, and the Administrative Rules of the State of Illinois.
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Number of Appraiser Trainees Applications Tell a Story

Applications plummeted another 74%

Recently the AQB held a public hearing in Washington DC regarding Alternative Experience Requirements and what to do about the anemic number of appraisers nationwide.

I read their concept paper when it came out and I’ve read the testimony of those who submitted ideas. I didn’t attend and I didn’t offer up any written solutions.

Back in 2005, I remember when everyone was so fired up about finally raising the bar, insomuch as formal education was concerned. They were going to make appraisers in the image of CPAs and lawyers. Four year degrees would be the new benchmark.

The first seismic shift started in 2008. Remember?

New Criteria. New national exams. In 2015 they pressed on with nothing short of a Bachelor’s degree in…something.

The chart below is a snapshot of what has become of “trainees” in Illinois.

Chart of what has become of appraiser trainees in Illinois

That’s right. In the halcyon days of 2005 we had 1,231 new applications. In 2007 it dropped 48% to 637 applications. When the Criteria changed in 2008, applications in Illinois plummeted another 74% to 165. This year, with only one month left, we’re at 55. If we hit 60 by year’s end I’ll be amazed.

New applications do NOT automatically translate into licensees. These are just the people interested enough to fill out an application and pay a fee. Half can’t seem to pass the trainee exam.

Look at the dotted trend line. It’s startling.

From now on, five applications per month, on average, is the new normal.

Is this what the AQB had in mind a decade ago? Probably not. But this is what we have.

I offered no suggestions or ideas. It goes back to that old Johnny Mathis song, Too Much, Too Little, Too Late.

By Brian Weaver, Coordinator Editor of IllinoisAppraiser, Appraisal Management Company Coordinator for the Illinois Department of Financial and Professional Regulation (IDFPR)Illinois Appraiser Newsletters – Volume 8, Issue 5 – December 2015

Image credit flickr - Amar Dhari
IDFPR Board

IDFPR Board

Provided as a service to licensed and registered Illinois appraisal professionals as well as Illinois course providers and users of appraisals. Illinois Appraiser Newsletters promote a greater understanding of USPAP, the Act, and the Administrative Rules of the State of Illinois. promote a greater understanding of USPAP, the Act, and the Administrative Rules of the State of Illinois.

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35 Responses

  1. Eric says:

    The college degree has very little to do with this. Most appraisers I know have college degrees, and started appraising after trying other fields.

    If fees for a 1004UAD started at $450, and the AMC’s didn’t nit-pick you to death for stupidity, many more people would be entering the appraisal field.

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    • Bill Johnson says:

      The numbers I’ve come across Eric indicate that only 50% of all current licensed appraisers have a 4 year degree, so I would say it is a big deal. As a profession, I also find that a high number of family members (sons/daughters) follow their parents into the field. Will that family member take the same career path knowing it takes 4 years and tens of thousands of dollars just to start the 2.5 year training period?

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  2. Koma says:

    All they keep saying is when the housing market booms again it will take care of itself. More people will just start jumping at the chance to be a trainee. Guess what it’s not that simple anymore and the liability is so much greater.

    I am licensed and my chief appraiser says my work is really good why not become certified. I tell them why should I dole out all the money for a degree when I’m not going to get it back in turn. Million + homes are very few in my areas. Wouldn’t do FHA anymore anyway. We have clients now that say CR only on everything, but when we tell them we don’t have a CR in the area they say never mind. Then a day later they send it back and say a licensed appraiser is OK.

    Keep making harder is good for my bottom line, but not for our profession!

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  3. S Maher says:

    Go Shopping for the value??? Why don’t you just make it yourself so the appraiser doesn’t take the responsibility of the law suit that will come at a later date.
    Remember: Figures can lie and liers can figure.

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    • Bill Johnson says:

      I agree with your points on some level Deborah, however I think your missing out on the real world running a business experience that your trainer will be providing you. I have become a much better appraiser in time, however without the years of business knowledge I gained through my trainee experience, I may not have survived to become that better appraiser.

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  4. Bill Johnson says:

    If the question is, why have the number of appraisers been declining in recent years, then why do these regulators not understand basic business principles? After 2009 and HVCC, the appraiser business owner lost control of his clients and lost the ability to assign appraisals via inter-office transfers. The great American entrepreneur business experience/opportunity was crushed overnight. The old business model did not put a cap on income and gave the owner the ability to scale. Fast forward to today, and with very strict regulations, the industry forces the signing appraiser to firsthand do all of the work. Why is the original appraiser required to certify that they personally took the photos of a carbon monoxide detector, or hot water heater? Why for 2.5 years must the training appraiser accompany the trainee for all inspections. Does the medical field have a dedicated single doctor attached shoulder to shoulder to every single medical student for 2.5 years? After the medical student has stitched up cuts for 2 years, is the single doctor still required to stand over the shoulder to supervise?  I’m fine with 2 to 3 years of training in the field, however its the education requirement that should be reduced.

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  5. Ray says:

    hmmm…..all good comments but I believe Donna Corrado has it pretty much right. The AMC business model is no friend of the appraisers doing lending appraisal work. AMCs have depressed the appraiser’s income to the extend that only appraisers with 20+ years of experience can handle the decreased income or those that have other client options.  Since government regulators are in bed with the major lenders, the option to do away or revise the AMC model will not be considered, even though the deletion of the AMC model would result in HIGHER income for appraisers. But this will result in HIGHER costs for lenders and of course that can’t happen.  Its not the required experience nor the educational level, it all about the $s. Minimal $s will attract minimal new entries to the profession. pretty simple concept to understand.

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  6. Mike Ford Mike Ford says:

    The requirement for a college degree to be an appraiser never raised the bar to begin with. It did NOTHING to improve appraisal quality. It was an easy fix for something that was not related to any known problems.

    NOW the White Paper proposes to do exactly that which four year degrees were supposed to prevent!

    LOWERING of standards. One HUGE standard in my opinion is adequate relevant experience. When I started appraising I worked in a fee shop initially under an MAI that was retiring; and then under an SRPA who was also the Society’s area ethics chairman. He was TOUGH! By the way, I also had six years prior real estate sales experience in two states; and had been the Budgetary Counselor for the nations largest FCU for several years.

    BOTH my predecessors went on to become Chief Appraisers at an S&L (at different times) and I went on to become Chief Appraiser at a title company…all within five years. Our mentor was GOOD. Back then working in a full service fee shop for one year was the equivalent in experience terms of working at a bank for two years. Even so, ALL of us that went on to become Chief Appraisers at recognized institutions would concur that at two to three years we had not only “not seen it all; we hadn’t even seen ‘enough’.”

    NO ONE imho should become certified with less than three years experience in real estate appraisal. No matter WHAT their background is. Frankly I think five years is more appropriate, but coupled with strong testing; three years is MINIMALLY ADEQUATE experience.

    All of the disciplines cited provide useful foundations for an appraiser, but they do not provide the one single most critical item…experience.

    They’d be better off taking the opposite tack. A plan where two years experience equals one year college AND we get equivalent credit  for ALL appraisal classes too (CE). Worse case an AL would become an AR in 6 to 7 years. In many cases combined with other education they’d do it in four.

    Most ALs around today have more experience than that already! THAT would bring new people into the fold. ALL people need is HOPE or a visible path to advancement. What we are really saying now, is that college grads are unwilling to pa their dues and become adequately experienced, therefore as an accommodation to their impatience, we are going to lower the REAL bar!

    It would NOT diminish quality to substitute experience for education. I have no degree. When I worked at Treasury (IRS/LB&I) one of the requirements I had was to pass a semester course in college level accounting…in two weeks. I did so. I also passed over 40 other courses integral to Treasury/IRS  Employment.

    Yesterday I took my first of two Regression classes on how to build our own models using Excel. It was no great mystery. What USED to sound mystical and beyond my acumen was cleared up in about five minutes! I urge ALL who do not use their own regression modules to take Dustin Harris’s and Mr. Wallitt’s course ($59). I digress.

    The point is that NOTHING in residential appraisal requires a college degree. It MAY require some specific coursework, but hardly a degree. I’d contend the same thing with most commercial appraisal though I’ll concede the requisite job related education IS college equivalent.

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  7. Deb G says:

    Its great that guys like Mike Ford have had such outstanding mentors but not every mentor is in that class. So even if a trainee somehow manages to connect with one of those 5 percent of appraisers who will train him or her, there is still a chance you will end up with inconsistent or even substandard training. My strong advocation for professional teaching is based on my short but unhappy experience with one of the bad guys who had a top designation but no morals whatsoever. I don’t even put that time on my resume because it will reflect badly on me but plenty of others have done so because gaining certified experience is so damn hard to do that each hour becomes really precious.

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

    whats hard, is trying to figure out where to begin to describe why this business is so gooned up right now.  the banks, regulators, feds, FHA, each individual state, have all created a huge mess, and we are starting to see the consequences.

    low/frozen fees. high expenses. insane liability. ridiculous education requirements. ridiculous report requirements. ridiculous revision requests. give me time and i will think of much more. . . . .

    lets face it, it just isnt worth being in this business anymore. appraisers have finally had enough of all the BS, and new people are running away. (VERY smart on their part).

    the scary part is, the idiots that run this show and have totally ruined this show, will look at that chart and STILL NOT SEE A PROBLEM! how many appraisers didnt renew their licenses in IL recently? i will bet anyone, anything, that all the other states are seeing the same statistics.

    the main excuse used by the folks in charge has always been that the number of appraisers is in decline because they are getting older. i would love to now hear someone explain to me how the connection works, with the aging appraiser excuse and the massive decline of trainees in that chart! i can hear it now – “we are seeing a massive decline and exodus of trainees because appraisers are getting older”.

    makes sense. right?

    we are only beginning to see the beginning of this shipwreck, i GUARANTEE IT. and we are in for an even bigger shipwreck, when there are no longer checks-and-balances, (appraisers), in mortgage transactions. (assuming all this has been the plan by banks all along).

    the bleeding continues . . . . .

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  9. Retired Appraiser Retired Appraiser says:

    It looks like those jobless 2014 & 2015 college grads have figured out that McDonald’s has far more to offer than the appraisal “profession”.  One can only hope that future college grads continue to figure it out early on before they blow good money to enter this liability ridden, leech infested, dead end J-O-B.

    Kudos to the 74%!  You appear to be far more wise than appraisers who continue to toil away in the septic tank.

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  10. Chris says:

    The day of reckoning is almost upon them. The survivors are going to reap rewards beyond the dreams of avarice !

    Hurry up and retire my fellow appraisers. The more appraisers that leave the business the faster and better we will be in a position to rectify our profession.

     

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  11. Chris says:

    It is already happening in the rural and far suburban areas. The last email I received read…” Mr. Chris, we will accommodate ANY fee you request and ANY due date you desire.”

    Like I said, hurry up and retire my fellow appraisers. Only when the system is completely broken, does anyone care to fix anything.

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

      i was starting to see that too. as the appraiser population continues to dwindle, appraisers will soon be able to pick and choose all their assignments more. rural customers will only be able to get an appraisal in the winter months when work is very slow and appraisers take what they can get. when things are busy, appraisers will decide to work only urban areas, easy assignments, or areas nearest them.

      appraisers will be able to choose to work for $275 or $500. given a choice – would anyone want to work for $10/hr, or would anyone rather work for $20/hr? its not a hard choice. greedy banks and AMC’s who dont increase their fees will have a hard time finding appraisers to do their assignments.

      appraising rural properties takes a lot of time. most everything else is about the same, but add in the additional time it takes to get there, and the additional time it takes to drive by all the rural comps, and suddenly it isnt worth appraising rural properties or long distance properties anymore. again, $10/hr, or $20/hr? DUH.

      we are just starting to see the results of all the bad decision that have been made in the last 5-10 years by the states, the feds, AMC’s, banks, whoever, and its starting to bite those people in the asp. the bad things is, things or so badly gooned up, i dont see any way to fix it all. there is going to be an UGLY train wreck, and its going to happen very soon.

      the implosion and bleeding continues . . . . .

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  12. Chris says:

    Bubba,

    I appraised urban and suburban, it takes time wise, just as long to get to a property as it does for me to drive 45 -55 miles to a property for rural.

    The difference is, I am no longer sitting in traffic for 45-60 minutes being stressed out…like I was for 18 years before moving to Gods county.

    As to rural, you Urban guys would be amazed how “rural” has been “built” up since the housing boom.

    The larger MC’s are having a hard time now. I am paid $400 for what you Urban guys are being offered for $200-$275. Simple….supply and demand. Just don’t accept them for anything lower than $350-400. In a few months, things will be back to normal again if appraisers just stuck to their guns. Call each other, talk to each other. The banks broke up the big mom and pop appraisal offices for a reason. Divide and conquer.

    Like I said, hurry up guys and retire and thing will be righted again. Our profession has been cleaned up over the past 10 years from all those appraisers that Mommy and Daddy tried to teach.

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  13. Koma says:

    I just saw an article today that some states are waiving some requirements for new doctors because there is a shortage in those areas of their states…..mmmm

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    • Retired Appraiser Retired Appraiser says:

      Do you remember what they did when the FHA needed thousands of more appraisers around 2009?  They dropped the test requirements…not only opening the door but blowing out two walls so incompetent appraisers could start doing FHA work.

      The great thing about our government is they have no problem rewriting the rules every time they screw up something.  The bad news is that they’ve managed to screw the appraisal profession up so badly over the past six years that flipping burgers and collecting trash have become far more profitable (and respectable).

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  14. Should have been a postman. Should have been a postman. says:

    It’s all backwards.  Increase the trainee requirement to a solid 4 years apprenticeship, minimum of cumulative 1k a year hours, and absolutely drop the college degree requirement.  Have any of these older fellows who think college is worthwhile, bothered looking into the contentious issues with higher education today?  The primary focus of many students is how to cheat, and cheat good.  They’ve got everything to cheat from micro print answers on water bottles, to group text capability for answer sharing.  Degrees are bought by and large, and not earned.  Colleges have reduced criteria and lowered the bar, because they cannot maintain those graduate stats, when children are woefully under equipped in the first place.  This absurd Common Core deal was written by a person not even qualified to be an educational worker in the first place, so just wait for that next round of applicants 10 years from now.  I’m relieved to have fewer new applicants, since when there was a more open door, I found myself as literally the 1 in 10 appraiser apprentice whom actually followed the ethical rules.  Either you’re qualified to be on a lenders approved panel, and can expect a fair amount of work, or you should not be on that panel in the first place.  The problem with the industry is that amc workers and distributors are not licensed, that is the problem.  Stop worrying about appraiser licensing, and get these process clerks in charge of distribution appropriately individually licensed, and watch accountability return to this industry.  Corporations are not people, and subsequently; amc licensing to a company instead of individual worker licensing, is a primary problem that must eventually be faced.  These guys are just process clerks, and it’s getting pretty ridiculous how appraisers continue to complain they can’t best a process clerk in negotiations…  All distributors of appraisal orders should be licensed, regardless of amc status. As far as lateral experience, that’s an outright fail of an idea.  The key point being that ethics is the cornerstone of the valuation professions credibility, and under no circumstances should a biased sales position pro advocate experience set be associated with the necessary experience to understand ethical engagement for an unbiased valuator in real estate.  A realty agent and an appraiser handle separate tasks, and rightfully so. If realty experience translates to appraisal licensing, I’ll expect immediate recognition as well, and demand a sales license immediately, with nothing more to bring to the table than my 15 years of appraisal experience. The tools to enforce ethics are present, but the industry heads choose to overlook them.  Again,…..  What’s new?

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    • Deb G says:

      Your comment about ethics being the supposed cornerstone of the appraisal industry is true, yet if it were possible to legislate good behavior, the entire military and law enforcement fields would have no reason to exist. Stiil it sure is lovely to imagine a world where everyone understands what the right thing to do is, and acts accordingly.

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  15. should have been a postman should have been a postman says:

    Actually, I changed my mind on this issue.  It would be nice to jump straight to managing broker.  I demand that if realty agents get lateral jump to appraisers licensing, that appraisers be given the same credit.  It would be really great to jump straight to managing broker, without having to work under anyone.  Isn’t that the point of this article, that realty sales agents and appraisers are equivalent?  So hell yes, I want out of appraising, and would rather be a managing broker.

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

      . . . and if that lateral move from real estate appraiser to managing broker doesnt work out for you, you could also try moving laterally from appraiser to garbage collector, used car sales or Amway.

      they are all regarded about the same, arent they?

      LOL

      the bleeding continues . . . . .

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    • Retired Appraiser Retired Appraiser says:

      If you are looking to use your experience as an appraiser working as a home inspector makes far more sense.  I was a broker and appraiser for 20 years before getting out of both “professions”.  From my experience there are few similarities between the two job descriptions; namely because few appraisers make good Realtors.  Appraisers enter into their profession because they are detail oriented while Realtors (who become brokers) are people oriented.

      If you aren’t opposed to getting out of the real estate industry I recommend using periscope with a 360 degree field of vision.  There are far greater opportunities out there but you will never see them until you open your mind to the possibility of getting away from real estate.  Convince yourself that you’re not a one trick pony.  If you can visualize it you can achieve it.

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