Upcoming Changes To Real Property Appraiser Qualifications

[Delta85]

What has happened post-1997/98 is that appraisers have never had to put in the effort to develop relationship. Getting business meant filling out forms and having work dumped on them because there was too much work and too few appraisers. We are now back to a competitive environment where things like experience, qualifications, etc. matter.

Do the business people, attorneys, judges, accountants, chief appraisers, bank officers, assessors, top real estate agents, other experienced appraisers in your market area know you by name? If not, you haven't even begun the rudimentary steps to establishing an appraisal business. A great many appraisers never bothered to do this. Yes, this takes time and effort.

That's way too broad a brush you are using. And it disgards all the anecdotal evidence displayed on this forum that these so called opportunities are little to none. Certainly not enough to make a living off of.

Speaking for myself I am a 4 year college graduate with sales and marketing experience both hands on and classroom. I can tell you there is little to no non lending work in my area. I've spent 10 years marketing my county and there are simply too many appraisers chasing too few work opportunities. Most lawyers and accountants and others who might need an appraisal commonly tell me they have a guy they have been using for 20 years and have no reason to change. Don't get me wrong I've had success, just not enough to base a business around and based on the posts I read here and conversations I have with appraisers around town that is more or less the story to be told.

 

[AnonApprsr]

Good for me I guess. Except the background check thing, that really bothers me.

 

[The Warrior Monk]

That's way too broad a brush you are using. And it disgards all the anecdotal evidence displayed on this forum that these so called opportunities are little to none. Certainly not enough to make a living off of.

That anecdotal evidence obviously excludes most CGs on this forum and elsewhere, because they are telling a very different story. With regard to work, you don't need anywhere near the volume. If you're average fee is, say, $1,500, it's a lot easy to make a living and manage compared to an average fee of $250.

Speaking for myself I am a 4 year college graduate with sales and marketing experience both hands on and classroom. I can tell you there is little to no non lending work in my area.

I used to think the same until I got established in the nonlending arena. I used to wonder who appraised all those farms, landlocked properties, underwater land, easements, etc. After all, they eventually do have to get appraised if the properties are gifted, owners pass away, if they are involved in lawsuits, etc. Not only are the fees good, but I also discovered there are incredibly few appraisers to appraise these properties.

I've spent 10 years marketing my county and there are simply too many appraisers chasing too few work opportunities.

I'm seeing a very serious issue with CGs, as there are more people retiring than entering the business. This is repeated over and over by CGs on this forum, and has been noted for years.

Most lawyers and accountants and others who might need an appraisal commonly tell me they have a guy they have been using for 20 years and have no reason to change.

Now you know what time and effort means.

As another real world example, the county appraisal division in the county I live only opens their appraiser list up every five years or so. And you also have to be a CG.

Don't get me wrong I've had success, just not enough to base a business around and based on the posts I read here and conversations I have with appraisers around town that is more or less the story to be told.

There are two stories being told.

 

[Delta85]

That anecdotal evidence obviously excludes most CGs on this forum and elsewhere, because they are telling a very different story. With regard to work, you don't need anywhere near the volume. If you're average fee is, say, $1,500, it's a lot easy to make a living and manage compared to an average fee of $250.

Well ofcourse it excludes CG. I'm talking the life of the average boots on the ground CR.

 

[Delta85]

I used to think the same until I got established in the nonlending arena. I used to wonder who appraised all those farms, landlocked properties, underwater land, easements, etc. After all, they eventually do have to get appraised if the properties are gifted, owners pass away, if they are involved in lawsuits, etc. Not only are the fees good, but I also discovered there are incredibly few appraisers to appraise these properties.

All I can do is repeat my experience in my area......most of these non lending contacts have a go to person they've used for years. For all others there are too many appraisers chasing their business. This does not mean I have given up. It's just a decade of feedback.

Trust me, I'm not afraid to make a cold call either by phone or in person and I have 20+ years experience in sales and marketing not counting the college marketing courses I've taken.

 

[Roy Courtney]

For the CR credential, I agree it is too much. For all I know it could be a backdoor way of solving the AMC issue, since incoming college grads won't be working with them.

But keep in mind in these discussions that this degree is going to dramatically slow down the number of people coming into this business, not increase, on both the CR and CG credentials. What will increase is the number of CGs relative to CRs.

I agree! Many of our clients (LOL) do not seem to understand that the appraiser shortage is already underway. Last week one of my best clients sent over an order for a "RUSH". I responded with a nice "no can rush". The order was cancelled within a few minutes. Today, a whole week later I receive the same silly assignment except now it is not a rush!:Emoticon_hug: Some are beginning to learn!

 

[Michigan CG]

Delta, once there becomes a shortage of CR appraisers the work won't all to CG. Remember in college that supply and demand theory? Right now supply is just too high therefore idiot AMCs will abuse appraisers. Once supply goes down and there is too much demand the AMC model will either have to adapt or die. Fees will rise and the 24 hour TAT will go out the window.

A couple weeks ago a non lending client needed an appraisal on a complex residential property. I quoted them a month and $900. Another non lender called me last week and I told them two weeks. Today an AMC called me about a property that no one would take and they wanted it in four days. Two appraisers had actually been to the property and decided no go. I told them 10 days and there was no hesitation.

The free market and supply and demand is a concept that works. The CR profession will be fine once the supply and demand evens out. Raising the level to a college degree might be the best thing for the CR appraiser in combating the AMC.

Do you remember the "white paper" Joan Trice and her TAVMA friends put out a couple months ago? They were panicking because of the raised bar and want to change things to sustain their absurd profits. There is not way the American public will let appraisal standards be lowered considering the mess we are in now.

The sky is not falling.

 

[Delta85]

Delta, once there becomes a shortage of CR appraisers the work won't all to CG. Remember in college that supply and demand theory? Right now supply is just too high therefore idiot AMCs will abuse appraisers. Once supply goes down and there is too much demand the AMC model will either have to adapt or die. Fees will rise and the 24 hour TAT will go out the window.

I understand supply and demand. Once the 4 year degree goes into effect new entries into the CR world will dry up even more so than now. Over time current CR will die, retire, or simply get out of the biz and find other work. Once the economy improves larger numbers of CR will leave for other work. Flash forward a few years and I can easily imagine a severe lack of CR to complete appraisals. Who will complete these reports? A 1004 could pay $800 with a 3 week TAT but if there is nobody to accept and complete it what does it matter?

 

[Roy Courtney]

I understand supply and demand. Once the 4 year degree goes into effect new entries into the CR world will dry up even more so than now. Over time current CR will die, retire, or simply get out of the biz and find other work. Once the economy improves larger numbers of CR will leave for other work. Flash forward a few years and I can easily imagine a severe lack of CR to complete appraisals. Who will complete these reports? A 1004 could pay $800 with a 3 week TAT but if there is nobody to accept and complete it what does it matter?

There will be appraisers to complete work for good clients. I received a call from Clear Capital today wanting to order a report. The nice guy started describing the assignment and what it was that they needed. I said I am sorry to break in but our company does not work with AMCs. These AMCs are beginning to have a problem! The AMCs in some areas will just not be able to place an order because the appraisers will not accept them. Do you think that may cut into their profit margin? DUH?

 

[Michigan CG]

I understand supply and demand. Once the 4 year degree goes into effect new entries into the CR world will dry up even more so than now. Over time current CR will die, retire, or simply get out of the biz and find other work. Once the economy improves larger numbers of CR will leave for other work. Flash forward a few years and I can easily imagine a severe lack of CR to complete appraisals. Who will complete these reports? A 1004 could pay $800 with a 3 week TAT but if there is nobody to accept and complete it what does it matter?

This tells me you don't understand supply and demand. When the economy gets better appraisers make more once the supply and demand is in equilibrium. When fees get back to where they are good there will be trainees.

The median household income in the U.S. is $51,000. One report a day at $400 is $100,000/year gross. The typical entry level college graduate will make ~$40,000/year and would have to work a long time to get to $100,000. And the typical college graduate can't sit in his home office in his bathrobe and make money.

The future of appraising is bright.......in a few years.