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.
- Market Action and Reaction - June 27, 2016
- Real Estate Appraisers…Who Are We? - January 28, 2016
- Appraisal Standards Should Age Like Fine Wine - January 19, 2016
THIS IS COPIED FROM ANOTHER ARTICLE I READ AND REPLIED TO.
I lack the formal education required to become “certified”.
I would like to see something that allows me, at my age, to continue to grow in this profession.
I only have, in my planning, about 10 more years or so before I retire.
Cost benefit of college and time away from my young grandchildren disallow the returning to school.
My problem, not yours, I am fully aware of.
Why could a Licensed not sit for a Certified Residential exam if say, the license has been held for 5 (or 10-pick a number) years and never a disciplinary action was taken against the Licensee. You could implement a similar approach for a Certified Residential to upgrade to a CG.
I’ve been an appraiser for 30 years and have no real defined education beyond high school and some college courses. I have trained several people, and the conclusion that I’ve come to is a college degree doesn’t make a good appraiser! Understanding your job, understanding that honesty, ethics and experience work hand in hand for good appraisers. There is a science to appraising, but there is also the art of persuasion. Paired sales and the right verbiage go together… College doesn’t teach that. Knowing how to measure a complex house. College doesn’t teach that. Experience teaches that!
I recently went to an appraisal seminar of sixty or more appraisers and I would bet the average age was 55+. There are some newer appraisers coming in but that would be people who have other jobs and can work in cracks of time. The author is right who is going to go into appraising as a profession with little or no pay for 2 plus years. I’m training my last appraiser, who as we speak is taking his Certification test, he could only do it because he is retired from another profession and gets retirement. (he will probably be an appraiser for 5 to 10 years at best). So I guess we who intend on appraising until we die… will be in good demand!
It doesn’t matter where we came from or where we started as the pile of gold at the end of the rainbow is not big enough anymore. Stop trying to reduce the entry standards and address it from the opposite end. Although we do not operate in a free market, based on the increased entry standards, liability, inflation, scope of work, appraiser independence, business expenses, etc., our fees should be double from what was standard 8 years ago. If the fees were to double tomorrow, would we have an increase in trainees? As far as “Who are we” you left out the biggest reason why many become appraisers to begin with (our moms, dads, brothers, sisters) or in general, we follow in our families footsteps. With the current state of the industry, there will be no 3rd generation appraisers in my family.
I do not have the required educational degree, but have been appraising for 20 years, and pardon me, but I’m GOOD! There are numerous reasons smart people don’t have a four year degree – with me it was Mononucleosis in first year Nursing Science – but had straight A’s in spite of the illness that claimed three months that year. For most people, it’s the cost, not the IQ.
In fact, Appraiser’s require a certain level of “EQ” along with that IQ = appraisals are a mathematical essay, or a well written, well thought out scientific document. And don’t forget, the best appraisers have people skills. Nope, college can’t teach you that.
I agree that there were many bad appraisers in the past, but the new level of testing ensures that only the “smart” people pass. And college can’t teach a sense of ethics, even though it’s a prime rule in USPAP.
incompetence in leadership continues to take the entire profession in horrible directions. creating huge messes without thoroughly thinking about the consequences first has always been the norm. throwing more messes at the huge mess, trying to solve the first mess, without thoroughly thinking about the next consequences, has always been the norm. unwilling to accept that a huge mistake was made, and unwilling to throw all the messes away and start over has also always been the norm.
for many years, appraisers have been saying that the profession is going down the wrong path. current statistics show that the profession IS going down the wrong path, and it is no longer just someones opinion any more. like a lot of things appraisers have always been saying, the appraisers were right again.
the current education requirements are a huge problem, and the four-year degree requirement created even bigger problems for the whole industry when it went into effect here recently. the four-year degree requirement was suppose to make the profession better, but IMO, it only hurt the profession even more.
i will be covering why i think this way, and i will go into greater detail in an article i just wrote yesterday. look for it to come out sometime next week.
until then,
the bleeding continues . . . . .
how many log ins do you need? Now that you are back to appraisal work should your log in be something else now? Like “reincarnated” lol
This pretty much sums up the appraisal profession today.
Did I cry spinach when I stood a duck on Plymouth Rock?
Did I and Washington give up with Valley Forge in hock?
Did Daniel Boone and me cry quits when injuns shaved our scalp?
Did John Paul Duck give up the ship or ever holler help?
Hey Daffy Americans don’t give up !!!!
No Daffy Americans don’t give up!!!!