In recent years, there’s been a lot of talk about the importance of appraisers and all that they do for the housing industry. Despite this, the number of appraisers continues to dwindle and the turnover time between when appraisers enter and exit the field has slimmed. These trends beg the question – why are we seeing less of them and is this a concern? To address this, The Mission of the National Association of REALTORS® Research Division surveyed 2,000 respondents to learn all about the current appraisal trends.
“The work of an appraiser is indispensable to our industry,” says NAR President William E Brown. “Appraisers provide the credible, outside opinion on a property value that agents, lenders, and ultimately the consumer depend on to guide them through a transaction. If the regulatory burdens holding appraisers back go unaddressed, the challenge of providing that timely appraisal will only get worse. We have to work together as an industry to clear the way for appraisers to continue doing their good work while building an environment that encourages talented newcomers to get in the game.”
Some of the main takeaways from the survey are below:
- Training is a real issue. Few seasoned appraisers are doing it and those who do often do so for no pay. One challenge highlighted is the unwillingness of lenders to accept appraisals performed in part by a trainee, as well as concerns with liability. Fewer than 20 percent of appraisers train others.
- Appraisers are working to address turnaround time, but there’s less willingness to perform FHA/VA loans. Appraisers also complained of lower compensation from bank-owned asset management companies, or AMCs, as opposed to work done for law firms, lenders, and independent AMCs.
- Dissatisfaction with the profession is high: The average tenure of an appraisal hovered around 22 years, but roughly 10 percent of respondents said they may leave the field within 5 years. Frustrations with regulatory burdens and insufficient compensation are the top two reasons cited for a desire to leave. NAR has worked with FHA closely to address some of these concerns, and those conversations are ongoing.
For more information about current appraisal trends, visit https://www.nar.realtor/research-and-statistics
I retired from doing fee appraisal work about five years ago. Even then, I was only doing them for lawyers, a large University client, and a few individual lenders. At that time, in my state, the average age of appraisers was already 55, and increasing by one year, every year. It was no wonder. The business is genuinely boom or bust – cyclical in the extreme. In my view, the forms and requirements had become unnecessarily burdensome as well as confusing and even deceptive to clients. Furthermore, AMC’s, like mobsters, were sucking off half the fees for most appraisals, basically for doing nothing – that disaster brought on mainly by a grandstanding politician from New York. I, like many other appraisers, stopped doing FHA’s back in the late 1990’s when HUD decided to make appraisers (who are not home inspectors) responsible for just about anything that might go wrong with a house or loan during the duration of the mortgage. I guess we were easy scapegoats, or perhaps someone wasn’t happy with how their home had been appraised. Who knows? At any rate, I’m glad to be out of the business.
In 2002 I enrolled in a school that taught all he classes for R.E. appraisal and became certified. I then approached over a dozen appraisers to intern with. It was in the big re-fi boom and of the few Appraisers that would talk to me, none would take me on as hey were just o busy to train anyone at that time. In 2008, nobody was doing anything Real Estate wise and no was was interested in joining the field. I asked a Guy then if he would take me on as a trainee and I think that it was because the field was so slow that he was afraid I’d later become his competitor! So, here we are, 2017 and there’s a shortage of appraisers. Go figure! Nobody would train for the last 15 years and you wonder how we got here. Really!?!
I am appraiser now for twenty years. I agree that we are a dying breed. A big reason which is unaddressed is that they are now requiring college degrees to become an appraiser. No one is willing to get their degree in Real Estate Appraising. Then, once they have the degree there’s a 2500 hour apprenticeship. In actuality, they may not see money in their pocket for like six years assuming they can get hired as a trainee.
It is really simple economics that are keeping people from entering the field. Fees have increased very little over the past 20 years and the scope of work has increased significantly. It takes approximately twice as long to completed a fannie mae 1004 as it did when I entered the profession and the fees have not increased accordingly. Simple supply and demand. If the fees and earnings or an appraiser increase, more people will want to enter the field. AMC’s have not helped matters. Increased scope of work, etc. But the bottom line is fees need to increase to reflect both inflation and the additional scope/work that is required by lenders.
I left the business two years ago (after 30 years)when I lost a long time , and my last client of over 20 years. I almost never did AMC work. The new manager stated my work was not detailed enough and my termination had nothing to do with some reports coming in under what was needed. Funny how my reports become lacking when they were fine for 20 years. The good loan officers who were good company people were disappointed in me being “fired” but they were waiting out their few months to retire.
Anyway, I refused to go back to them upon their request when the new manager was later demoted. I made enough money, invested in rental property and retirement that I now own my primary home and my second home in Florida. We live very well, I sleep so much better at nights and it feels good to not be “under the gun appraising”. I’m sorry for the young appraisers as I really see no future in the business to enjoy a deserved income .