“Hiring of Trainees to Remain Slow” Shocking News?
“Hiring of Trainees to Remain Slow” This is ‘Shocking News?’
According to a recent survey conducted by the Appraisal Institute, “trainee hiring will remain relatively weak for the next one- to two-years.” Um, I hate to disagree with the results of what I am sure is a credible survey, but this is just a gross underestimation. One-to two-years? How about FOREVER unless something drastically changes in our industry?
Most know me as a fairly optimistic voice in the appraisal world. I am not usually one of those on the sidelines calling “foul” at every supposed indiscretion and ‘unfair’ practice that is thrust upon us. Instead, my attitude is generally to roll up my sleeves and work to either fix the problem or find a way to prosper despite the disadvantage. However, there is a growing issue that cannot be hidden under a bushel any longer without some very dire consequences for real estate appraisers across this nation, and eventually the industry as a whole. The industry in general is increasingly making entry into the profession more difficult and closed to growth.
…outlook for hiring trainees will be grim for more than just the next few yearsThe problem at hand is two-fold: First, there is no financial incentive for new trainees to enter the field. Second, there is no financial incentive for current appraisers to bring others into the field.
Barriers for a trainee to enter the real estate appraising profession are growing insurmountable. I have heard many explanations for why this is, but frankly, they are all secondary. If you ask me, the big reason is a combination of an overreaction to the ‘housing crisis’ and current appraisers (some sit in powerful positions) trying to protect their own jobs. In the end, it is doing the profession a disfavor. Some appraisers look at this as a positive thing (a shortage of appraisers means higher fees, right?), but my view is much different. Artificial hurdles stifle free-enterprise and economic principles are thwarted when that happens.
The bigger problem here is the self-interest of the appraisal business owner. In the ‘good ‘ol days,’ I could hire, train, and send employees out in various directions doing inspections. If they were well-trained and watched over closely, this meant more volume and the ability to serve my clients on a higher level. This is no longer the case. While USPAP, the AQB, and Fannie/Freddie still allow trainee inspections, lenders and AMCs don’t. What financial incentive do I have to hire, train, deal with all that comes with having an employee, and pay an individual if they are not even allowed to work in a way that provides the best support and value to me—the business owner?
In the end, the future for trainees (and for current appraisers for that matter) is grim. Until we stop shooting ourselves in the foot by limiting the ability for new appraisers to enter the profession and removing the financial incentive to train, the outlook for hiring trainees will be grim for more than just the next few years.
Guest blogger: Dustin Harris is a multi-business owner and residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker & consultant. He owns and operates The Appraiser Coach where he personally advises & mentors other appraisers. His principles and methodologies are also taught in an online, Mastermind group. He and his wife reside in Idaho with their four children.
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Bigger than the appraisal industry shooting themselves in the foot, is the possibility that all this is to eventually eliminate appraisers from the loop. AVM are slowly getting better and are already used for many types of loans. I believe that the squeezing out of trainees is an attempt to say… ” well there are not enough appraisers, will have to start relying on AVMs” just a long term thought.
And fees going up? Starting too, but… I saved a borrower $5k on a purchase as the property was over priced and was renegotiated. $375 for an appraisal that saved them $5k up front and thousands over the life of the loan. So is the appraisal too costly? Just say’n
Congrats! You are one of the handful that has the master plan for the appraisal profession figured out.
*Decrease fees (while enriching banks through AMCs)
*Increase workload by up to 50%
*Increase educational requirements so that nobody in their right mind will enter the business.
Stir until it comes to a rolling boil
*No new blood coming in
*Appraisers nearing retirement age (the majority) will speed up their exit.
*Boom. Severe appraiser shortage now in place.
What to do? Try our new AVM out guys. It’s quick…reliable…and it uses the same data collected from those idiot appraisers on the sly.
Behold. The future of residential appraising. No worries though mate. They may throw you a few $50 inspection fee orders if your nice so they can verify the house does indeed exist.
There isn’t a shortage of Qualified appraisers in the industry, just not enough retarded appraisers accepting $275-300 appraisals when it takes a 1.5days to complete a Appraisal. The AMCs want to make up a crisis because they want as many Appraisers in the Pot as possible. They don’t want education requirements increasing or a Needed mentorship. I see a conflict of interest from the AMCs saying there is a Crisis….the author is the same guy who said its possible to complete 2-3 appraisals in a day.
I started appraising 2 years before they started the Licensing. I was one of the first to go through the fiasco of taking the same classes over and over and over again. I drove to Boston with a big box of 50 sample appraisals and had to appear in front of the Board. That’s the way they did it in the beginning.
I passed with flying colors as I was new to the industry and had the classes under my belt. Not many others were that fortunate.
To this day, people ask me how to get started and if I will train them. 100% of the time, I tell them it’s a lost cause. Government has basically made a make shift monopoly. It’s pretty obvious where the industry is going. They don’t want a professional appraisal any longer. They are creating a huge database from each and every appraisal we complete (UAD). Their technology is increasing to the point where they may “average” (bad word) the results of many appraisals in a certain area or try to create an algorithm to justify loans. That’s sad. Why don’t they just use Zillow and get it over with? Plus or minus $75,000 – who cares, right?
The only trainees could be children of the appraiser. But what appraiser would want their child to get into this business? So forget about it.
Just obtained my license this month and after reading this, it’s looking like I made a mistake. Geeez