AQB Update On Proposed Changes To Appraiser Qualifications

[TRESinc]

Hey, Tres-

I agree with Timd's response. Also, a more important (IMO) factor of fees is supply and demand.
In the COW states, fees have gone up regardless of a college degree. In other states, not so much.
As the supply of appraisers dwindle, and assuming no significant shifts in demand, fees would be expected to go up.
A college degree requirement is an entry-barrier to the profession (and, as I said, I generally don't like unnecessary entry barriers). So, the degree-requirement should reduce the potential pool of entrants; that will reduce the potential supply and as the supply dwindles, fees will go up and (in theory) reach a point where the college degree requirement is financially feasible for an entrant to obtain. It will still be an entry-barrier but it won't be financially unfeasible to obtain when measured against the income potential of the appraiser.

But, like I said, that isn't my argument (i.e., have the degree requirement to raise fees); it is just a consequence of my argument (keep the degree requirement because its merits on our profession as a whole outweigh the counter-argument of the necessity of the degree for a specific individual).

I definitely like Rex's idea of having an alternative path for existing appraisers that would be weighted on experience; the alternative path would be in lieu of the degree. There may be some course requirements (and not necessarily college) but the emphasis is on experience and a demonstration of competence.
This alternative would benefit a single class of existing appraisers: Licensed residential appraisers who want to move up to Certified residential appraiser. I think a practicing, licensed appraiser who demonstrates sufficient competence and has the experience shouldn't need a college degree to move up to certified residential. I'm sure I'm not alone in that opinion.

i see your point.

i guess i am the exception. i'm licensed and no desire to move up. i can count on one hand the number of $1,000,000+ developments in my coverage area and have lots of fingers left. i stopped doing FHA work before they made the change. i've had my same 4 main clients for ~10-20 years and i am working my way out of the residential lending side of our profession as fast as i can.

 

[J Grant]

"The effect of the college-degree requirement will take years to realize. It was implemented in a very oversupplied market. Previously, people would work for peanuts or pay to train. Anyone coming into the market now expects the compensation level to be at least an average wage for a four-year college grad. That's one of the reasons AMCs are making noise. People coming into the business aren't willing to work for a split fee of a split fee. The effect will be magnified over time as people retire"

There is truth to this but I would like to expand. It is NOT just the idea of training for peanuts keeping degree people from entering. It is the fact that AFTER they do the training for peanuts, the fees are still low on AMC side, who control a large volume share, AND the work is unrewarding and flat out awful with most AMC's.

Some fields requiring college degrees do not pay that well, BUT they attract dedicated, talented people because they offer other things- a sense of mission or purpose, or steady pay/tenure, SOMETHING. On the other hand, some professions which can pay well later have low pay or grueling apprenticeship years- the underpaid residency for doctors or law entry level. These fields draw people because of possibility of higher pay later as well as rewards from the work itself.

Plenty of college degree people took a cut in pay to train, but they did so knowing there would be higher fees down the road, and the appraisal work itself was intriguing. Both the potential for higher fees and intrinsic reward from the work is gone when AMC's get involved

Even if the degree is dropped and training shorten AMC dominated, appraisal would still have trouble attracting and retaining people- more might enter, but it would be revolving door of burn out/quitting. A field combining high pressure, low fees, terrible working conditions, uncertain and fluctuating income, no perks, no loyalty from clients, who the heck would stay in it, degree or no degree? The AMCs have a large pool of appraisers now because most appraisers entered and trained in the years prior to AMC dominance and are stuck or biding time till retirement.

Unless and until the low fee and intrusion into working conditions of AMC's improve dramatically, the appraisal field ( and appraisal work) will suffer, with or without a degree requirement. A degree requirement would put pressure on lenders and AMC's and lenders to fix the situation sooner rather than later, as well as act as a means to improve the profession over time.

 

[Eli]

Anybody can be a real estate agent, but not everybody is good at it. Entry is extremely easy. A week of courses and a test.

Anybody can be an insurance agent, but not everybody is good at it. Entry is extremely easy. A week or two of courses and a test.

Anybody can be a car salesman, but not everybody is honest at it. Entry is extremely easy. A tie and a smile.

Even though we have a bad apple or two, I don't think the entry level into this profession should be too easy.

Whether we all agree with college or not, it really does weed out those who aren't analytical in most cases, don't you think? My son will soon
be sitting for his exam, and has followed this current path in getting there. The level of education and perseverance he has endured
really shows up sometimes. Just saying.

I say again - Take entry level licensing back to where it was originally, with specific education and apprenticeship. If the licensed appraiser
wants to climb the ladder into certification without college, then make a sensible path. For others who want to enter as a certified appraiser,
then perhaps college would be one of the links along with the apprenticeship. Encourage FHA to allow licensed appraisers to complete their
requests, within their licensing limitations, and I believe we've solved more than one of the problems.

I think about your son if they roll it back and I am sure he would like to say a few cuss words if they do. But, like Wimpelberg posted. He still has that degree that is marketable in other professions or occupations.

My kids wouldn't even go here and could have. Your son wanted to and was willing to go the extra mile. Don't tell me what he says if they go back.

There is no shortage of appraisers. There is a shortage of appraisers willing to work for beenie weenies.

 

[hastalavista]

i see your point.

i guess i am the exception. i'm licensed and no desire to move up. i can count on one hand the number of $1,000,000+ developments in my coverage area and have lots of fingers left. i stopped doing FHA work before they made the change. i've had my same 4 main clients for ~10-20 years and i am working my way out of the residential lending side of our profession as fast as i can.

I think you are more of an example than the exception (which, in some ways, is exceptional).

- From a residential mortgage perspective, you have no need to change your licensing level. With the alternative path, you could, but you don't need to.
- You've been migrating away from residential mortgage work in general, and migrating toward non-residential work. Non-mortgage work has significant advantages over mortgage work that if, one had the ability to set their volume at whatever level they decided, and choose a mix between the mortgage bucket and non-mortgage bucket, nearly everyone would be dipping from the non-mortgage bucket exclusively (ok, a smart business person might keep the best mortgage client they have as a diversification play)
- As you migrate away from mortgage work, that provides those who do specialize in that space the opportunity to take your place.
- The one advantage you (and others like you, which I include myself) have is that not everyone wants or can migrate away from mortgage work. Some are very successful specializing at it. Others may weigh the risk of trying to develop non-mortgage clients greater than the benefit of taking mortgage work. Some may not have the competency to complete enough non-mortgage work assignments to make the break.

Your decision is market-based. The benefits of non-mortgage work outweigh the risks, and the benefits of mortgage-work are not enough to overcome whatever risks are involved in getting out of that space.

What I like about Rex's idea is that in your case, there may be additional, non-mortgage work opportunities that are available with the Certification-level. The existing opportunities may be plenty as they are, but if there were an experienced-based competency path to get a certification-level license in lieu of a college degree, then those opportunities could be pursued if one wants to.

In the big picture, while the total size of the pie may not change, the number of appraisers who eat the specific slices (mortgage or none mortgage) do change.
I've turned down a total of 6 residential assignments this week, for non-mortgage lending purposes, because my pipeline is full for the next 6-8 weeks. Those assignments need to be done by someone.

 

[George Hatch]

We have appraisers participating *in this thread* who didn't have a college education when they started appraising but whose competency and professionalism past or present has never been questioned. That everyone here can acknowledge that fact in one breath and then turn around and say that it was a mistake to let them in is actually very annoying to me. As in, unacceptable.

We don't necessarily need to completely scrap all post secondary educational requirements but it seems downright ignorant to object to the idea of alternate pathways *such as* the 2008 "specific courses" requirements. If you're worried that someone doesn't know how to write then address it directly with a writing course requirement; and then TEST for that in the license testing or work sample reviews. Saying that the only way we can be sure that all applicants will know how to write is if they have a liberal arts degree that has no technical bearing on what we do everyday is just stupid. And vain.

 

[The Warrior Monk]

We don't necessarily need to completely scrap all post secondary educational requirements but it seems downright ignorant to object to the idea of alternate pathways *such as* the 2008 "specific courses" requirements. If you're worried that someone doesn't know how to write then address it directly with a writing course requirement; and then TEST for that in the license testing or work sample reviews. Saying that the only way we can be sure that all applicants will know how to write is if they have a liberal arts degree that has no technical bearing on what we do everyday is just stupid. And vain.

I advocate for keeping the degree requirement right were it is simply because it creates a notably barrier to entry, creates significant upward pressure on fees, and helps solve the AMC issue, all at once.

As far as the college-degree requirement goes, I always thought the 4-year degree for CR was excessive; however, I'm not complaining about the effects it is having. It one advocates something similar to what AI did with regard to getting an SRA for non-degreed individuals, that is a reasonable alternative.

 

[Eli]

All the appraisers I know don't like the Ramon Noodle diet. Lol

Many have left for greener pastures as the numbers show. The degree gives professionals that option which makes competing jobs and professions compete with appraising. Pick several occupations or professions and you or I can see clearly how different jobs and professions compete for skilled labor and participants.

I am a comparison freak. I see how it is raising the competition level to at least a plumber or electrician or accountant. There are several other professions or occupations we could look at.

Like some have posted, it takes time though. People already in have nothing to worry about. They already have the certification.

Remember the govt serves the people and appraisers serve the public. We are a little different from most professions. We are more like law enforcement or accountants in many ways in my mind and trust me many law enforcement and accountants at entry level make way more than an entry level appraiser when you add the total compensation package.

Let me throw an extraordinary assumption in for mortgage work. The opposing appraiser on a witness stand might be different.

 

[J Grant]

We have appraisers participating *in this thread* who didn't have a college education when they started appraising but whose competency and professionalism past or present has never been questioned. That everyone here can acknowledge that fact in one breath and then turn around and say that it was a mistake to let them in is actually very annoying to me. As in, unacceptable.

We don't necessarily need to completely scrap all post secondary educational requirements but it seems downright ignorant to object to the idea of alternate pathways *such as* the 2008 "specific courses" requirements. If you're worried that someone doesn't know how to write then address it directly with a writing course requirement; and then TEST for that in the license testing or work sample reviews. Saying that the only way we can be sure that all applicants will know how to write is if they have a liberal arts degree that has no technical bearing on what we do everyday is just stupid. And vain.

Yes there are appraisers who didn't have a college education when they started appraising but whose competency and professionalism past or present has never been questioned- would those same non degree quality/bright people be attracted to the field today with the vast change to low fee, crappy AMC domination on the res side? I doubt it. Most quality minded, ambitious non degree folk would realize it is a dead end on res side and apprentice or train for something else

While well intentioned, the alternate path just prolongs the problem and will keep the field mired in a low pay, AMC leverage situation- which will turn away the very bright, ambitions non degree people the alternate path is supposed to attract. Appraising on res side today is a sea change from pre HVCC, why would anybody with smarts knowingly enter it today regardless of education- unless they see it as as stepping stone to commercial license, or take a cynical view to just pump out volume with minimal effort..

At some point, appraising has to break away from its trade roots, which served it well before but no longer serves it well. To that it needs to become a profession with a similar degree standard entry to other professions,. Otherwise the res lending side will keep eroding and attract the worst non degree people, not the better ones.

 

[George Hatch]

You know who else could analyze the performance of college vs non-college appraisers over time? The Appraisal Institute. They have had "dues payers" who did and didn't have college, and they know who they've disciplined in the past and for what. Given the overlap in the exact QE courses those people have taken that's another variable that is accounted for at the outset.

The AI could compile that *rates* of complaints for their SFR appraisers by education level and then we'd be able to see what correlation - if any - there was between the haves vs the have-nots.

 

[George Hatch]

Yes there are appraisers who didn't have a college education when they started appraising but whose competency and professionalism past or present has never been questioned- would those same non degree quality/bright people be attracted to the field today with the vast change to low fee, crappy AMC domination on the res side? I doubt it. Most quality minded, ambitious non degree folk would realize it is a dead end on res side and apprentice or train for something else

While well intentioned, the alternate path just prolongs the problem and will keep the field mired in a low pay, AMC leverage situation- which will turn away the very bright, ambitions non degree people the alternate path is supposed to attract. Appraising on res side today is a sea change from pre HVCC, why would anybody with any smarts knowingly enter it today, regardless of education- unless they see it as as stepping stone to commercial license or management, or are cynical bottom line who will exploit the situation to pump out volume-.

At some point, appraising has to break away from its part trade roots, which served it well before but no longer serves it well, and become a profession with a similar degree standard entry to other professions, or keep eroding and losing good people both degree and non degree. ch.

You're making an economic argument in defense of our personal economic interests. I'm as selfish as the next person, but I don't think that the use of the State to protect me from competition on the fact-free basis is a virtuous argument.