Leaving the Appraisal Profession
It’s a Great Time to Leave the Appraisal Profession.
I can hear the chorus of my fellow appraisers rising up in disagreement with me. I envision many of them screaming, “But I love being an appraiser”! Yeah, I hear you. I loved being an appraiser too. Let’s not consider what we were but what they want us to become.
First, ask yourself if you are still making a livable wage. I’m not and instead of blaming myself, I started running the numbers. In, my high value market, 18% of the solds were cash sales. No appraisal required on those! Values are so high that buyers are putting a lot of money down to lower the monthly payment as much as they can. So, based upon what industry insiders tell me, Fannie and Freddie are probably waiving the appraisal on another 17% of the solds. Add it up and I estimate that 35% of the sales in my market did not require an appraisal.
I ran the number of solds in my market and divided that by the number of Certified Residential and Certified General appraisers in my market and it came out to 1.4 appraisals, per appraiser, per month. Pretty bleak!
Now let’s consider the business from AMC’s. This business has dropped significantly In my market but I still get some offers emailed to me requesting a bid and turn time. I dutifully make a tolerable bid and quick turn time but I lose about more than 90% of these opportunities. Obviously, I’m losing business to an appraiser who is submitting a very low bid. My business cannot survive by being the low bidder. I’m hamstrung by not knowing what an acceptable fee is anymore. Where is Customary and Reasonable?
Next, let’s consider this racial bias issue. I am sick and tired of being accused of racial bias when I have never considered people, and/or their color, in any of my appraisals over the last 24 years. I appraise property, not people and I’ve not seen any examples of appraisal bias. I don’t understand how a biased appraisal could survive the gauntlet of eyes and machines that scrutinize every report before it is accepted. I have seen a fair amount of racial bias among lenders. I’d suggest the Feds look at them and stop pointing the finger at me!
One of the things I really enjoy about being an appraiser is getting out in the fresh air, inspecting homes, and meeting nice people. It’s really the field work that I love, not the “grind” of crunching numbers in the office. I find it hard to imagine how I am going to be able to produce credible, accurate appraisal reports without the benefit of personally doing the field work myself. AMC work is faceless and impersonal until I leave the office for an inspection.
The GSE’s, FHA, and VA will take all the field work away from us, shutter us in our offices and ask us to crunch the numbers all day at reduced fees. And, we’ll be held legally responsible for the errors and omissions of property data collectors. The chance for error increases when you take appraisers out of the field.
New forms will present yet another challenge and a steep learning curve to climb. I understand there will be more data and more analysis required. It will be hard for an old dude like me to become enthused about this major change.
Looking back 24 years ago, my business was dependent upon the relationships I cultivated with mortgage brokers and the work I performed. All those relationships and the business I grew were trashed in one fell swoop by the HVCC and replace by parasitic AMCs.
Tomorrow, I’m supposed to become a data scientist and try to decipher the value of a property I’ve never seen, bought and sold by buyers and sellers I’ve never met. I will be expected to make sense of the collective mindsets of thousands of people and describe all this in chart and word using a limited vocabulary so as not to offend anyone. I’ll need to spit two or three of these out every day to make a living. It really doesn’t sound like much fun to me.
Fannie and Freddie didn’t like what I was 20+ years ago and I don’t like what they want me to become.
It’s a great time to leave the appraisal profession.