AQB Update On Proposed Changes To Appraiser Qualifications

[Joe Flacco]

Perhaps it is because they are not as bad as you think.

For the most part, what we have today are not market value appraisals. They are fannie mae guideline appraisals.

It is not supposed to be like that. You do the appraisal first and then anything outside of the fannie mae guidelines should be discussed or explained. But what most are doing today is appraising to the guidelines.

 

[George Hatch]

As it turns out technology was always going to set appraisers free from the farm system that existed prior to licensing, which was as dependent on the combination of capital equipment and office space as it was the principal's connections with prospective clients. There were two reasons more appraisers weren't solo:

It takes time and exposure to build an approval list that it took to generate a stable book of work, and
It required a office, a typist/receptionist to field calls, the data plant of microfiche, fiche viewers and printers and copy machines to physically produce a report. And the start up costs were prohibitive.

When the PC, the laser printer CD-ROM (for public records and plat maps), fax machine and answering machine (replaced the receptionist) came along that combination of inexpensive equipment freed up a lot of appraisers to go solo because now you could run your own office out of your kitchen instead of having the acquire and maintain all the infrastucture.

That happened right in the same year licensing came online; and the combination was lethal to all the big fee shops that had previously prevailed. so what a lot of appraisers tend to blame solely on licensing was actually a combination of licensing and the technology enabling the solo operator like never before.

Long story short - fee shop plantations were going to break down anyway due to the tech; and licensing is the only thing that prevented experienced appraisers from having to compete with raw amateurs who would otherwise have faced no barrier to entry at all.

Whether you have a designation or not, if you think it's bad now it's truly hard to imagine how much worse it would have been for you without licensing.

 

[Joe Flacco]

So if I am understanding this correctly, pre-licensing, we had the most competent appraisers heading firms. Licensing allowed anybody that obtains a license to build a firm. That is a step down from designated appraisers heading firms. Then DF did away with most firms and now we don't have many local firms at all. Instead, we now have national entities that know nothing about local markets. What a mess.

 

[Evincere]

That pre-licensing structure is a far superior structure than what we have today.

Not necessarily.

What you are saying is that pre-licensing we had some of the most competent appraisers leading large firms and responsible for the staff.

Not necessarily. Mentor competency does not require or equate to leading a large firm. The structure today would require even closer supervision of what is now a trainee by limiting the number of trainees - hence superior as it increases the responsibility of the mentor. I knew of 2 SRAs who paid someone else to do their demonstration report. Some of the best education and mentor-ship I received was from non designated Appraisers who had more knowledge, common sense and experience than the designated ones they worked for.

Our MAI was a knowledgeable albeit ...very busy man engrossed in his love of commercial work. Matter of fact, I once had a blowout with an SRA I worked under for a very short while. It was over fixed security bars on every window and door that had no release latches. Rather than being a potential safety hazard issue his training mandated that they be adjusted for positively merely because they existed as fixtures and the comparables adjusted for not being death traps.

That's the way it should be. Today, we have thousands of appraisers doing things a thousand different ways. Things are very fragmented and there is nobody to take charge and get things straightened out.

Take classes and learn critical thinking skills. Be your own education advocate.

With larger firms and in house staff, you at least get some sort of consistency in thought.
I keep talking about very large firms with 100+ appraisers. If what you describe is really the way it was pre-licensing, it is possible that if licensing did not happen, then today we would have these very large local firms built through acquisitions and mergers over time.

Since when does quantity equate to quality?

 

[Joe Flacco]

As it turns out technology was always going to set appraisers free from the farm system that existed prior to licensing, which was as dependent on the combination of capital equipment and office space as it was the principal's connections with prospective clients. There were two reasons more appraisers weren't solo:

It takes time and exposure to build an approval list that it took to generate a stable book of work, and
It required a office, a typist/receptionist to field calls, the data plant of microfiche, fiche viewers and printers and copy machines to physically produce a report. And the start up costs were prohibitive.

When the PC, the laser printer CD-ROM (for public records and plat maps), fax machine and answering machine (replaced the receptionist) came along that combination of inexpensive equipment freed up a lot of appraisers to go solo because now you could run your own office out of your kitchen instead of having the acquire and maintain all the infrastucture.

That happened right in the same year licensing came online; and the combination was lethal to all the big fee shops that had previously prevailed. so what a lot of appraisers tend to blame solely on licensing was actually a combination of licensing and the technology enabling the solo operator like never before.

Long story short - fee shop plantations were going to break down anyway due to the tech; and licensing is the only thing that prevented experienced appraisers from having to compete with raw amateurs who would otherwise have faced no barrier to entry at all.

Whether you have a designation or not, if you think it's bad now it's truly hard to imagine how much worse it would have been for you without licensing.

It could have turned out that way. Or maybe not. We will never know.

 

[Meandering]

This is the first time I am hearing about the structure of the profession pre-licensing. I heard people say that licensing was bad for the profession but I don't think I ever understood what they were talking about until I read this post. That pre-licensing structure is a far superior structure than what we have today. What you are saying is that pre-licensing we had some of the most competent appraisers leading large firms and responsible for the staff. That's the way it should be. Today, we have thousands of appraisers doing things a thousand different ways. Things are very fragmented and there is nobody to take charge and get things straightened out. With larger firms and in house staff, you at least get some sort of consistency in thought.

I keep talking about very large firms with 100+ appraisers. If what you describe is really the way it was pre-licensing, it is possible that if licensing did not happen, then today we would have these very large local firms built through acquisitions and mergers over time.

It was the good old boy network and system.
Read through these lawsuits and see what you missed.



United States Court of Appeals,Ninth Circuit.
James C. McDANIEL, Plaintiff-Appellant, v. APPRAISAL INSTITUTE, a Corporation Organized Under the Laws of the State of Illinois, fka American Institute of Real Estate Appraisers of the National Association of Realtors;  Dan W. Mahoney, Husband;  Susan Mahoney, Wife;  Sanders Solot, Husband;  Ruth-Jean Solot, Wife, et al., Defendants-Appellees. Decided: June 30, 1997

APPRAISERS COALITION v. APPRAISAL INSTITUTE
845 F.Supp. 592 (1994)

 

[Joe Flacco]

Not necessarily.



Not necessarily. Mentor competency does not require or equate to leading a large firm. The structure today would require even closer supervision of what is now a trainee by limiting the number of trainees - hence superior as it increases the responsibility of the mentor. I knew of 2 SRAs who paid someone else to do their demonstration report. Some of the best education and mentor-ship I received was from non designated Appraisers who had more knowledge, common sense and experience than the designated ones they worked for.

Our MAI was a knowledgeable albeit ...very busy man engrossed in his love of commercial work. Matter of fact, I once had a blowout with an SRA I worked under for a very short while. It was over fixed security bars on every window and door that had no release latches. Rather than being a potential safety hazard issue his training mandated that they be adjusted for positively merely because they existed as fixtures and the comparables adjusted for not being death traps.



Take classes and learn critical thinking skills. Be your own education advocate.



Since when does quantity equate to quality?

What I am saying is that for a while now we have had incompetent appraisers training more incompetent appraisers. Now we are in a mess. I am understanding now that it all started with licensing. I am not saying all designated appraiser are great. I am not saying non-designated appraisers are incompetent. I am saying we need very competent appraisers that are in charge and have some authority at the local level. The closest thing we had to that was probably pre-licensing.

 

[The Warrior Monk]

I have been hearing "licensing system has been a complete failure" for at least 25+ years. I note you qualify your statement by saying "almost".

By "almost" I means that it did raise the bottom. Or more properly it created a bottom, where one didn't exist pre-licensing. You could literately write call yourself an appraiser and write a number on a napkin with no support.

And I didn't realize you were even old enough to be considered one of the mustache petes.

I keep myself young by conditioning. In fact, I'm in the process of ramping it up. Isolated islands trips and jungle trekking are on the agenda, before I get to old.

Regarding the rest of what you posted: I am amused the licensing became the substitute for designation, and licensing has evolved to the point where its requirements are becoming very similar to being designed, sans the demo requirement.

 

[The Warrior Monk]

Really? Then why are they not sanctioned by the state?

Simple. A lot of people think that the states just randomly goes after people. That is not the case. The division of licensing services investigates when there is a complaint. No complaint; no investigation.

 

[Evincere]

What I am saying is that for a while now we have had incompetent appraisers training more incompetent appraisers. Now we are in a mess. I am understanding now that it all started with licensing. I am not saying all designated appraiser are great. I am not saying non-designated appraisers are incompetent. I am saying we need very competent appraisers that are in charge and have some authority at the local level. The closest thing we had to that was probably pre-licensing.

Regarding the rest of what you posted: I am amused the licensing became the substitute for designation, and licensing has evolved to the point where its requirements are becoming very similar to being designed, sans the demo requirement.

And I am amused constantly by the realization that most things in life have a tendency to go full circle.