Real Estate Appraisers…Who Are We?
Appraisers…Who are we?
With the current requirements to enter the profession of real estate appraisal, it is likely that who we are will conceivably change in the coming years. Perhaps for the better? Or, it could be to the detriment of the professions.
Appraisers today, and for many years prior to today, have come from a variety of prior jobs and professions. Many of us are former military, teachers, nurses, contractors, builders, home inspectors, real estate agents, lenders, accountants, environmental consultants and engineers, and minimum wage folks aspiring to better themselves. Some of us have dual roles as real estate agents & brokers, certified public accountants, and a rare few are practicing lawyers. Our specialties, developed in the appraisal profession are as diverse as our backgrounds. Each of us has brought to the profession, hopefully, the best of any prior profession. What is rare, are those who started out as real estate appraisers, usually as a result of being the sons or daughters of appraisers.
Many, if not most, and I believe it is most, have limited formal education beyond a high school diploma or an associate’s degree.
One would ask, why have so many of us come from a prior occupation or profession? The answer is quite simple. Most of us could not afford to start any other way given the fact that we have families to raise, children to educate, and bills to pay. It is very difficult for anyone aspiring to be a real estate appraiser, to have the financial resources to have a 4 year degree, do a 2 year or more apprenticeship on less than minimum wages, and do all the above without having an income or incomes from service in another employment or profession. And, therein lies the current problem with the requirements for entry into real estate appraisal.
The numbers of appraisers are shrinking as the pool of appraisers either retire, or die off. That attrition is not likely to diminish anytime soon. In fact, it is likely to get much worse. It would not be too far-fetched of a notion that there may be a shortage of 25-35% or more of active licensed or certified appraisers in the next 10 years.
Some would say, and may honestly believe that we will not need the amount of appraisers in the future that we do now, given the advances in technology and likely future advances in technology. Whether or not that is or will be true is a rather large gamble at this point. Perhaps, given the law of averages, and risk factors, lenders in the future will simply base their lending models on the gamble that a certain percentage of loans they make will not be paid off, and the eyes and ears of an appraiser actually inspecting a property may not be necessary. Of course that would require massive changes in secondary market requirements, and FHA, that has recently increased actual inspection criteria will have to rewrite their requirements, as will the VA and commercial lenders.
It certainly does not seem that the financial world is ready for our demise, or limitations on what they will expect us to do.
It would seem reasonable to me, as a longtime observer of and participant in the profession of real estate appraisal, to have a more modest approach to becoming an appraiser.
For example, a person with a high school diploma, in most states, can take a course, pass a test, and without any training or apprenticeship, be able to list and sell both residential and commercial properties without any concern as to their value, their complexity, or any other concern of protection of the public. Obviously, the better real estate agents, those that will survive for the long term, and those who will likely make the most money, will be those who are better trained and have more experience, but all of that comes after licensure, not before. And, specialties in residential and commercial are developed in the process of training, or just plain luck and opportunity.
It would seem that in real estate appraisal, we could have a more workable solution by requiring a minimum level of the equivalent of an associate’s degree in specific courses in real estate, appraisal, law and finance and an apprentice or trainee license, similar to the trainee licensure in Virginia, under the watchful eye of a certified supervisory appraiser, and acceptance by the secondary market, as well as a minimum wage requirement. It would also possibly be useful to reconsider the type of licensure for appraisers with one level of licensure, a Certified Real Estate Appraiser, and let the market and the scope of work, and USPAP requirements determine who is qualified to do an appraisal of a specific property.
Or, we can just gamble on having enough appraisers to do the work of the future under the current requirements.