PAREA Program & Its Negative Impact on Diversity
The study also found that the PAREA program is not as effective in providing a more accessible pathway to licensure as the traditional apprenticeship model.
Practical Applications of Real Estate Appraisal (PAREA) is a program that aims to revolutionize the real estate industry by increasing the number of appraisers. However, after listening to the Appraisal Institute speaker at yesterdays board meeting it quickly became evident that this initiative is a complete failure.
- You cannot start PAREA until you have received all your real estate appraisal education. 94 hours = $1,700 per McKissock
- Appraisal Institute speaker said that most AMC’s/banks won’t accept licensed appraisers work so he suggests going the CR route. Cost to become a CR appraiser through PAREA – $10,000
- PAREA is a complete online course. Zero mentorship in the real world. No physical measuring. No driving. No real time experience. No true mentorship.
- No discussion with the PAREA student about the pay to play. Multiple MLS services, E&O insurance, business expenses, accounting, appraisal software, computers, reliable transportation, and other miscellaneous expenses. Total costs can exceed $6,000 per year.
- The Appraisal Institute said that this would increase diversity into the appraisal field yet could not tell us the breakdown of how many applicants were minorities.
- PAREA graduates will be scooped up by AMCS to sign off on Hybrid reports performed by third party data collectors.
- PAREA graduates have no geographic competence.
- Total cost for PAREA at the end of the day = $17,700 and potentially more.
The Average Joes argued several points in the board meeting.
- A graduate of the PAREA course would be paid and treated like a trainee as they have no real-world experience.
- We could have more appraisers back into the industry if banks/amcs would allow appraisers to use their trainees.
- Reinstate Licensed appraisers to be able to mentor new trainees. This would introduce the next generation of appraisers into the business.
- Petition FHA to reinstate any licensed appraiser who took the FHA course and had to pass the test.
- More appraisers would hire trainees if the AMC model wasn’t taking so much money out of the pockets of working appraisers. Work is slow. Most have the mentality that my bills come before your bills.
In closing PAREA launched in 2019. And the program has not been successful in diversifying the appraisal profession. In fact, a study by the Appraiser Qualifications Board found that the PAREA program has had a negative impact on diversity in the appraisal profession. The study found that the PAREA program is disproportionately used by white appraisers. In fact, white appraisers are more than twice as likely to use the PAREA program than minority appraisers. The study also found that the PAREA program is not as effective in providing a more accessible pathway to licensure as the traditional apprenticeship model.
Can you provide a link to the study
Agree, The article has some inaccuracies. PAREA didn’t take effect until Jan 2021. Also Mckissock’s site says there are virtual mentors. Too early to tell if the diversity goal works because this administration is just getting started with targeting diversity.
this program is really expensive, one of the biggest obstacle for any new appraiser is working for next to nothing while you get your hours and gain experience. With PAREA not only are you making nothing, you are paying for the program, and in the end you may come out with some appraisal acumen and limited experience, but I highly doubt you’d be ready to start your business – this whole thing is going to crash and burn. Meanwhile, lots of potential trainees die on the vine as us old Cert Res folks retire. Appraisers and Appraising is/got screwed. Who can we thank? I don’t have that many fingers.
Images coming from the crystal ball indicate going through this class will be a company write off, and many an amc manager and upper level employee will assign themselves licenses, taking the PAREA class during normal working hours.
I was a glutton for punishment, having a few million extra brain cells to shed this morning and was reading reddit appraisal threads. Amrock amc just laid off two hundred and fifty employees they said. A genuine good feeling came to me, for a moment. Then I read more posts, nearly lost consciousness while dealing with a measurable intelligence quota reduction before self preservation kicked in and I clicked the page away. Appraisers here really are hands down better experienced and smarter. Pepsi challenge to join that group and redirect some of them here instead so they can actually learn something.
https://www.reddit.com/r/appraisal/
More government: means greater loss of Appraisers contracting ability. Our ability to choose our clients, rather than the People to assume who our clients is wrong.
We wont be able to protect ourselves in what ever kind of R.E. we agree too. We automatically are wrong when we project a down market, we are wrong when we do an estimate of H.&;B. use, if it differs from zoning, no mater what the evidence. Our only protection is to ability to defend ourselves in the present with the present rules and laws with the system which has existed since 1780*.
We must choose our CLIENT or continue as a politicians bait.
*wasn’t Ben Franklin a real estate lawyer among other things.
A lot of us worked for little for a long time Many are still complaining about prices and collections, ain’t that life!
PAREA is the equivalent of the Florida Nursing scandal, where people passed the NCLEX without credible training/experience and the industry was flooded 7,600 incompetent nurses. The only difference is that the State Board decertified these licenses given the false and fraudulent means of “education,” while AI is the author of this false and fraudulent path.
That’s quite interesting. What do you suppose the states application on file retention period is, when an appraiser submits their papers to gain initial approval? Because over time, as these licenses are doled out, there would be no way to distinguish parea appraisers vs those coming via mentor. They really should have created a different licensing designation for parea, but then again, the entire program was meant as a silver spoon to the appraisal management industry.
Not that it really matters, the systemic failure of mentorship has long since claimed a lasting presence in this valuation services industry, as amc appraisers churn out more amc appraisers, whom churn out more… While the most qualified skilled appraisers usually do not train. I recall the certified appraiser class and used to remember their names, roughly a fifth or less of them are still involved in this industry. From my very first initial class so long ago, I think only me and one other guy out of about sixty people made it all the way.
I’ve met several people whom count not pass the psi exam and just gave it up. I passed all three first time around but still lament the lack of testing on quite relevant topics such as legal frameworks, regulatory authority, appropriate limitations to practice and other competency related items. There are all too many appraisers out there whom have confused alamode’s how to automate your business type tools with actual competency building education. They slap a class label on anything and most appraisers bite.
I’m quite certain at some point in time, poorly developed appraisals have caused human beings to suddenly clutch their chests and fall over backwards dead on the spot. The appraisal likely floated away in the breeze directly into the trash bin, and nobody was the wiser as to the true cause of death. People are like I worked my entire life to make this happen, and some appraiser with his outsource crew just ruined everything in two minutes. Unlike the nurse scandal you mentioned, I think we’re well past the point of accountability being firmly tied to competency. Boy those were the days though, back when respectable society actually mattered. Now it’s all just dog eat dog, lie after lie, power struggles and policy for sale, whomever can get ahead fastest with propagandized messaging.
#3 & 4 are the best reasons why this will be a complete failure. You cannot just throw a trainee out there after class and have them successfully start their own business with all that entails. So yes, the AMC’s will scoop these newbies up and pay them crap to sign off on alternative valuation processess. Then Appraisers will be sued when the cradle falls. My what a tangled web they weave. Good luck out there newbies. You better have good E & O insurance and be ready for the downfall of your chosen profession before you even get it started!
Unfortunately, they will grab on us and we will fall with them. The profession will loose its credibility and all will yell for a solution: replace appraisers with AI?
Mary, in previous threads I was on about a call to action for the valuation industry EO insurers, to create brand new policies and coverage for subscribers whom attained their licenses through PAREA. Because this is simply not fair for people brought in with inadequate experience to effect everyone else covered under these umbrella policies. Previously I also advocated for the EO insurers to create new policy coverage groups for appraisers whom complete hybrid and desktops, because clearly they add exponentially more risk factors to the total pool of covered persons than appraisers whom only complete full service appraisals. That’s like a ten to one ratio of not far more risk factor, for the same coverage cost. One could only speculate what the comparative ratio for increased risk of PAREA graduates might be.
Guess who’s going to make a fortune off of PAREA education… McKissock. And guess whom assisted in this effort and volunteered to create the virtual classes… I took a deep dive on McKissock owners, investors, and associated persons, as they related to the amc industry and other GSE connections. Not looking good for independent appraisers. Why would they kill their own golden goose? Short sighted at best. They’re too busy counting potential subscribers in a projected future subscribers model rather than actually caring about previous long term subscriber participation. Greed without regard for students well being or future prospects. We want some federal relief and refund for our excess educational expenditures too! Selling rainbows to the plebs, mandatory subscriptions are required.
Agree! Short sighted corporations only thinking of immediate cash gains while shooting themselves in the foot! Gee what a surprise!
Cost is irrelevant. That’s what the money from the government is for if you are the certain type of diversity they want.
Still waiting for someone in the upper echelons of this industry to have that eureka moment where something parea is on their desk, while they simultaneously read some news piece regarding the SCOTUS decision striking down affirmative action in higher education. Circling the water hole, they want what you have.
From what I’ve heard, PAREA is presently being ‘tested’ in only one state in the US, which decided to support the PAREA program 100%. Was any mention made of which state that is?
Not sure Dave. I gave that some research for you this morning, about a half hour, could not find anything. If one researches state by state there are stories, that’s a lot of work to go through every last one. TAF has a contact person specifically focusing on these matters though, you could try emailing her I suppose. (very bottom of the TAF parea page by the map.) The information the article writer poses in this article appears to contain new information on expenses. Those are rather high costs. My crystal ball lit up and although I don’t exactly understand this message, this is what appeared; Grant money forthcoming.
https://www.appraisalfoundation.org/imis/TAF/Resources/Educators/PAREA/TAF/PAREA.aspx?
What are some active PAREA programs? I’d like to research but cannot find specific course offerings.