Luxury Real Estate Appraiser Designation?
Back in the late 1970s, when comedian Steve Martin was at his standup peak, he appeared on Saturday Night Live in a routine whose theme was “How to have A Million Dollars And Never Pay Taxes.”
Steve got right to the heart of the matter:
“First, get a million dollars…”
Appraisalbuzz provided a press release type piece on luxury real estate appraising, and I did a double-take wondering whether this was a parody. McKissock, a well respected online education company, now offers a designation for luxury real estate appraising, which I find quite silly. Here are the steps they shared to get into this niche so appraisers can make more money and work fewer hours per this piece:
- Become a certified residential or certified general appraiser (licensed appraisers are a tiny segment already)
- Make sure you’re well-suited to specialize in luxury appraisal (don’t wear the same shirt you used to change the oil in your car)
- Familiarize yourself with the luxury home market (develop local market knowledge which takes years)
- Earn a professional designation (get the CLHA designation today!)
- Get started as a luxury real estate appraiser (find wealthy attorneys to give you business)
In other words, this new designation conveys the appraiser’s luxury expertise to the world. But it can’t!
In reality, many appraisers don’t understand that the organization creating the designation has to spend a lot of money to market the designation’s brand, or the consumer will place no value in it. And appraisal organizations have never demonstrated adeptness at doing so, largely because it is too freaking expensive. Early on, appraisal designations did mean something, but with the advent of appraiser licensing/certification and the proliferation of new designations as largely revenue opportunities, their effectiveness for generating new business is severely limited, except perhaps within the old guard of the profession itself.
- Valuation Connect Demands Licenses, Denies Fair Pay - April 9, 2024
- Appraisal Reviews for $3 – The Devaluation of Appraisers - January 16, 2024
- FNMA Continued Effort to Get Rid of Appraisers - September 29, 2023
You can have all of the designations you want real or fake, but until the industry (our clients) truly understand what it takes to complete such assignments (knowledge, experience, time, liability, etc.), then a title is meaningless.
Seek the truth.
and are lenders/clients REALLY going to pay the fees that are commensurate with this type of work? I HIGHLY doubt it!
Tony, how about what I stated on Dec 5th (on this site).
“When Class Valuation is locally (San Diego) offering 1004’s for $340 when the property has a Redfin estimate of $9,067,216…..
This has nothing to do with appraisers, and or so called educators identifying the issue, but its all about the lenders having no care in the world.
Seek the truth.
Or just assign yourself some fancy title. That’s what people whom manage the appraisal process do. Luxury appraising is an entirely different ball game. One should have a thorough knowledge of material identification, material sourcing challenges, cost of materials, associated labor challenges. How to convey specialty service capability in mortgage lending to the high turn over managers whom have a financial motivation to drive down the appraisal fee, the other side of the story.
When your favorite amc pundits promoting industry wide organizational restructure efforts, recommend success through private attorney practice work instead…
Reminds me of all of the Realtors who got “Certified Distressed Property Expert/REO” merit badges 10 years ago.
Where are all of those IDIOTS today?
There are no “Brownie Points” in Appraising.
I think its funny when realtors put themselves into categories based on how much they have sold (10 million, 20 million club, etc.). On the rare occasion when it becomes a pissing contest (have you worked this area before, where did you come from, do you have any experience, etc.), I like to play their game and speak their language by raising them a business card (backup) that shows I have appraised over 10 billion dollars worth of property.
Past experience does not mean anyone is immune to ignorance and or errors (including me), but in speaking their language (as novel as it is), I get a kick out of seeing their reaction, and sometimes the respect we all deserve but rarely get.
Seek the truth.
Does the 1004 form have a standard addenda? It seems REALTORS are better organized than appraisers, and spell their title with capital letters.
Yes there’s a standard addenda (Supplemental Addendum / more like a blank word document), however rumor has it most lenders never get past page two or three as those are often the first pages that reflect an appraisers opinion of market value (appraised value), thus the addendum is rarely spotted in the wild. And please explain how it seems realtors are better organized, are you referring to their NAR lobbying presence?
Seek the truth.
Yes Bill, among other things. The Realtors were recently threatened for fixing commissions, and several years ago I remember commissions at 7%, few realtors are complaining about 4%. and all real estate people are frightened about liability. Appraisers shrug off liability to E&O coverage.
My last form report fees were $600, I started when FHA was $20 & VA $25
Considering on a national average it only takes 70 hours to become a realtor, what are they risking when they skirt the rules? Rex Reality (very low commission) is becoming very popular in San Diego where in my primary area agent commissions run on average run about $45,000 per single transaction.
Seek the truth.
http://brea.ca.gov/pdf/BREALicFeeIncArticle111319.pdf
more great news!!
No problem SB, I will simply tack on an extra licensing fee of $1 for every appraisal order that comes my way. The sad truth is, if you try to add a single dollar to any order in my area (decline, but my proposal fee is $1 more), then as quick as you can say “Dustin Harris is against the No. 2 pencil”, the order will be reassigned.
Seek the truth.
Appraisers can do (?) a day, should we all become realtors? and retire early
BREA is essentially broke. That’s why fees were doubled yet again. Part of the reason is a lack of common sense and outright sophistry at senior management. It’s also why BREA needs more fines.
1. January 2019 BREA got the law changed and now Sr Real Estate Appraiser/investigators are forbidden by law to do ANY review appraisals or any other kind of appraisal. Let that sink in for a minute. In answer to recent subpoenas they claimed they did not have to comply with production demands for their USPAP compliant review of the respondent’s work because they no longer do reviews. (although in the period in question they DID do reviews).
2. BREA has licensed appraisers; res cert appraisers and cert gen appraisers. They plan to replace all lower license and res cert appraisers with AGs (generals) ASAp – however they claim that they cant get certified generals to work for the salary they pay. They all want raises.
3. If they can’t get good general certs for $125k to $150k compensation packages then why are none of the current Sr appraisers quitting?
4. In trial testimony, John Schmidt of BRE (Sr. RE Appraiser/Investigator) claimed in his 18-year career with BREA that he had completed ‘about 500’ review appraisals. That’s 216 months. 500/216 = 2.3 reviews per month.
Is there a fee appraiser in the country that will not take a salaried state job with health and incredible retirement benefits for $125k to $150k compensation package? How about if all you have to do is desk review 2.3 jobs a month AND NO LONGER HAVE TO COMPLY WITH USPAP in the process? (Despite other state laws to the contrary).
5. I have a much simpler and far more cost effective suggestion for BREA. Fire every incompetent on staff currently. Start with the certified general appraisers since they are the ones that should know better than to have accepted the change in law or process promoted by BREA. BTW all your MAIs working there are STILL REQUIRED BY YOUR AI Ethics obligations to conform to the standards of the Institute-which cant be done if they abandon USPAP completely and lie about what the actions they take actually are (hint-they are still review appraisals-albeit incompetent ones).
6. Replace the prolific 2.3 per month top producers with contract appraisers. If each review cost $1000 (average) that’s still only $2,300 per month or $27,600 per year. Double it. Say $2000 for reviews its only $55,200 annually. Treble it? quadruple it even and it is still less than the current compensation packages paid for staff appraisers there. BONUS – no retirement or healthcare costs; no sick leave, no vacation pay. BEST bonus of all you could FINALLY HAVE USPAP compliant work being performed at BREA!
7. Dissolve the Bureau. Keep 1 or 2 lower to mid-level managers or administrators to assess statutory fines for work that is found deficient by field reviewers. Field reviewers whose own work could be challenged and who could, in turn, be turned in for deficient work.
But none of the above will happen. BREA needs more and more $5k to $10k fines to fund the bureau due to mismanagement and incompetence. That’s really why they abandoned even a pretense of honesty about whether they do reviews or review appraisals any more. IF they no longer do appraisals or review appraisals why on earth would they need MORE certified general appraiser/investigators? It does NOT take an expert to mismark and misinterpret USPAP compliance from a checklist.
Unless of course, they are still lying about not doing “review appraisals” as they are currently defined in USPAP.
I’m amazed ASC is allowing them to get away with this. Preservation of public trust does not result from deception and outright lying by state officials.
I guess that the good beginnings California had with their first commissioner predicted these issues? MAYBE NOT? Our first commissioner borrowed Help from the DMV, or the CHP and others in Sacramento. That relates to the position the BREA has today within the jurisdiction.
Mike do you remember our first Commissar was an MAI who shorted the payroll, trying to make the budget work, and got caught while in office
I never did know the particulars of what caused Robert West to be canned and give up his license. At least one of his peers is now at TAF though. Purportedly asked to leave old OREA around same time for purported involvement in the RW fiasco. (I am NOT referring to GH whom I have very high respect for).
Interesting aside, the current head of BREA used to work at OREA during period when a state audit found MANY instances of wrongdoing. Names not mentioned in the auditor report. The current head went on to work for other state agencies for the next 20+ years until returning back to head BREA. Now BREA is broke again and has to reorganize all over.
I’ve been an appraiser since 1989 and I totally refuse to achieve any designations, especially from the Appraisal Institute. Mainly because they charge about twice as much for their courses as anyone else AND designations don’t mean squat! And I love the line by Groucho Marx; “I wouldn’t be a member of any organization that would have me as a member!”
I’ve been appraising high value properties here in Charleston, SC for over 25 years. I originally started doing them because most everyone else was afraid of them. Truth be told, I actually find them easier to do (they just take a little more time to do). I now have a reputation of being an ‘expert’ for custom property assignments so they usually pay me what I request. Yes, lenders advertise some of these orders for a fee of $275 or so. I simply tell them it is a special property and my fee is $…., take it or leave it (typically 3x the requested fee). Most of the time they give me the orders. I even told them a fee of $2,000 last year on a request I would normally charge around $900 for because I did NOT want the order (I was busy & I knew it would be tough finding comps). They sent it over 30 mins later with the $2K fee, thank you very much!!! Titles don’t mean anything! Experience and professionalism does!
Feel free to send us $495 for your luxury real estate designation (B.O.Z.O) and you can get started earning the big bucks ($400) before the end of the year.
Designations are a thing of the past with shotgun blast AMC’s. I cover a very rural market in Ohio. I could get my rural appraiser’s designation, MAI, SRA, RM, or whatever. Being appraising since 1986 and not once did anyone ask me if I have one f those designations. I did ask a few AMC’S, who chief appraiser is an SRA, would they pay me more If I further educated myself so I could better meet their needs. They just laughed at me. We appraiser’s are in a cut throat business where it pays to be cheap and fast. I was asked to appraise a lake front circular shaped home in a rural lake community where it was selling way above any comps to work with. I asked for a modest price increase from the standard rate the amc paid and they immediately reassigned to another appraiser willy to prostitute themselves. I would love to hang up my clip board after 33 years, but I’m am 55, the median age of a appraiser and still have a few years of this crap to deal with.
Designations mean no more than the enforcement of the ethics and skills they purport to convey by the associations conferring them. A recognized designation where the association behind it no longer effectively self polices means nothing. Two L.A. area hired gun EWs routinely lie and deceive and deliberately mislead courts and report readers making up new processes on the fly and misrepresenting existing ones. Both have phenomenal resumes and respected designations. Regrettably, they use them as shields to discourage others from challenging their outright lies and deception.
Having said that, federal agencies place a lot of weight on them. Perhaps it is because they really have no other meaningful metrics. I recall when I worked at IRS my Manager told me to ‘get some alphabet behind my name because The Service (as its referred to internally) can not send someone to court or for public speaking without them.’ Admittedly her interpretation only, but in my world then her opinions were all that really mattered.
The truth is that most of our clients no longer know the difference between an MAI (often honestly misstated as MIA); or an ASA, SRA, AVA, IFA, AGA, RICS, FRICS and the AI review designation that I haven’t bothered to memorize (AI-RR?) and so forth. While few other serious appraisers are impressed by my own “AGA™, GAA, RAA, SCREA, Realtor®” & other titles, the truth is that MANY clients are. These include attorneys, judges and other court officials. It also includes state and federal officials who are not allowed to discriminate for one over another. It is my knowledge (such as it may be) that makes me effective. So it is conceivable that a luxury housing designation MAY benefit an appraiser.
I’d be more concerned over course content and cost than ‘designation’.
Much of what Jonathan said is true. Among our peers, a designation does not take the place of actual skill and experience. It MAY, however, be indicative of additional special studies. Such as an AI Green Registry listing.
I won’t take a course purely for a ‘bought’ designation. On the other hand, if taking that course or courses makes me a better high-end property appraiser, then I would be foolish NOT to take it. In my market, a million dollars is not a lot of property. $200,000,000 however, is. The old Beverly Hillbillies mansion purportedly just sold for that amount (unverified by me). Regionally in my market there are break points where quality recognition takes huge upticks. Roughly 1-3 million; 5-10 million, 20-40 million and “more.”
Each range has its own buyer expectations and descriptive language. These go far beyond simple quality differences like custom or ‘luxury’ to baroque to rococo. A helipad is not expected at 3-5 million. At 15 million it may be. Sound studios can be found in any range from 3 to 30 million. Compounds can focus on myriad custom entertainment features or amenities. Celebrity trophy houses also factor in. In a recent review, I had to look up “groin” arch styles. I’m not an architect.
I know an SRA in my market that is one of the best for the high end and ultra-high-end property in the area (JF – that means you). He sought out that niche and made himself an expert in it. Honestly, I doubt his SRA is a deciding factor for his clients. The quality of his work and respect of his peers, on the other hand, IS a deciding factor. Though the ever-increasing alphabet soup that follows his name can’t hurt.
So, my point is – take any course for the knowledge it exposes you to. If it leads to some form of designation-wonderful. Those designations may earn strong peer respect five or ten years from now. If practitioners abuse public trust and dishonor the designations, then they will become meaningless.
[At AGA we intend our Designated Member-AGA (AGA™) to stand for integrity above all else. We respect the federal testing standards all licensees and certified appraisers passed. No member is more highly regarded than another, as long as they are always honest in their appraisals]
Next time you meet a Mortgage Broker, Realtor or any Homeowner for that matter ask them what SRA or MAI stands for….
You can probably guess what percentage of those folks will know the answer…….
Or the next time you meet the new buyer SB, ask them why they chose this C3, Q4, .1 bathrrom, neutral home.
Seek the truth.