AQB Update On Proposed Changes To Appraiser Qualifications

[J Grant]

There doesn't seem to be a lot of interest in addressing my observation of the disparate effect on aspiring appraisers who are economically disadvantaged. How many quality people are we excluding there, and are our own economic interests really worth that cost?

I think our own economic interests are worth that cost, because if it becomes a low paid crappy field, what favor are we doing an economical disadvantaged person by making it easy for them to get in?

The field can offer scholarships to college for the disadvantaged- you can be in charge of fund raising!

I personally have not known nor met a poor or economically disadvantaged person who became an appraiser- whatever the level of education. It attracts mainly working class or middle class - and not all college grads by any means are from wealthy or advantaged backgrounds. My own dad struggled all his life to make a living ( I wish he could have gone to college but his parents were very poor and it was a different time ). My mom was the one who wanted us to go and she saved like crazy denying herself stuff so we could go. I worked part time jobs most of the time I went to college.

 

[Joe Flacco]

Stop talking about economic interests or supply and demand. The only person making that stupid argument is JGrant.

Advocating for rolling back the degree requirement is basically arguing that we should continue what we have been doing since the beginning of licensing. I disagree strongly with that.

 

[gregb]

https://theappraisercoach.com/why-do-appraisers-need-a-college-degree/

A post from 2014 on this topic-

1. THERE AREN’T TO FEW APPRAISERS, THERE ARE STILL TO MANY! There are to many appraisers because of the low standards initially set for licensing, this is what the ABA and NAR wanted, remember the argument that there would not be enough appraisers when licensing first began. That argument is now being heard again.
   
   The AMC’s are crying because they are just starting to having trouble finding an adequate supply of morons to exploit, not to mention finding actual competent appraisers, which is what their clients say they want. They are also looking into the future and do not like their business model of exploitation to be upset.
   
   Please remember that the low fees of today are a direct result of EXCESS COMPETITION (to many appraisers). In 1991-92 there were 60,000-70,000 appraisers nationally, that is all that is needed now, if that. Today the count stands at 101,600. There is still a substantial way to go for equilibrium.
   
   Most “appraisers” today, who never heard of appraising before licensing, were sanctioned by the government (got some form of license) when the standards only required they have a pulse and be able to lie (experience claims were not verified). These people never heard of appraising until licensing. Licensing opened the door to the unqualified, uneducated, unethical, get-rich-quick, uncaring, unethical and unpatriotic (most loans have government backing in one form or another). Many realized the bar was set so low they could immediately qualify by lying without getting caught. This was, some say, the unintended ( I say it was intended) consequence of to low of a bar.
   
   It seems only right that when dealing with the largest purchase most people will make in their lifetimes that the individual appraiser be educated. The core education requirements in 2015 are a start. A college degree shows they were capable of learning.
   
   Prior to applying to be declared an appraiser by the government most of these “appraisers” had not appraised a day in their life. The test they took was a joke – people took it five or more times before “passing”. Most “sanctioned” appraisers today, they are a legacy of the low standards, consider this industry an avocation, not even a vocation, let alone a profession. In their chimp-like poop-flinging frenzy to bid for the lowest fee they cause all sorts of problems.
   
   In 1991-1992 the fee for a standard SFR was $325-350, it is the same or less today. The fees to appraiser’s should be at least double what they are. Fees have not increased in over 20-25 years. However, the liability of an appraiser, cost of licensing, cost of doing business (fuel, insurance, maintenance, etc.) and reporting requirements (more time per assignment) have dramatically increased. Some efficiencies have helped, e.g. electronic delivery and electronic photographs, but not anywhere nearly enough to offset expenses and additional time requirement. And let us not forget inflation in general over the last 20-25 years. Appraisal fees have gone backwards. Fees offered today by AMC’s are what they were 25-30 years ago. The AMC’s, banks and mortgage brokers consider an appraiser to be a speed bump and they believe the appraiser deserves as little money as possible because the appraiser makes their life more difficult.
   
   Trainees!…I don’t want no stinking trainees! I’ll never “train” someone again, unless I’m paid, in cash, $250+/day to do so. A “TRAINEE” must be an EMPLOYEE (because by Federal law they require supervision and are not professionally licensed) and therefor must be paid your state’s minimum wage, plus all the expenses (workman’s comp. insurance, additional bookkeeping, fed. and state contributions by employer, overtime for 40+ hours, additional E&O, etc.) thus raising your cost to a minimum $15-20+/hr, and depriving you of your production time. Not to mention the liability issues and trust me, they are real. Treat the trainee as an IC and you will most likely be sued by your state and then the Feds. for misclassification when the trainee files for unemployment or work related injury or some other grievance. You will then loose anything you own to pay the back taxes, wages, penalties, interest and professional fees of the CPA and attorney you hire to defend you. Happy bankruptcy! Oh yea, I forgot, you can’t bankrupt out of owing taxes!
   
   Most “appraisers” who are sanctioned by the government today are nothing but puking, evil-flying, work out of my garage, data sources?… I don’t need no stinking data sources! – I get my data from the broker, low fee chasing, get-it-done-quick, what the hell are ethics, I’ll over look problems with the property, tell-me-the-value-you-want, cannot write, uneducated, take the cheapest class I can find (they get what they pay for), form filling, brain damaged monkeys.
   
   I propose that all government sanctioned “appraisers” be required to meet the 2015 educational standards by 2018 or loose their license.
   
   My comment addresses the profession in general. But since someone reading this may say there weren’t any qualifications for you to become an appraiser, you old **** (I’m 63), consider these facts: while I was finishing my two year college degree (in my early 20’s) in business/real estate, I earned my RE Salesman license and then my brokers license, all while working. I took advanced fortnight classes from the AIREA (now the AI) towards eventually earning two professional designations, one at 30 (RM) and the other at the age 33 (MAI). I choose this profession rather than came to it after multiple failed jobs (like being a teacher with to may mouths to feed) like so many. When the Institute in the early 1990’s required a four year degree for new members I went back to college in my 40’s and earned my four year degree.
   
   On second thought maybe the ones who want “more” appraisers and think that the standards are now “to high” are right…perhaps the world does want/need more uneducated, non-credentialed, poorly trained, “accommodating” individuals who will work for peanuts like the monkeys they are. I guess we’ll just have to wait and see how it unfolds.
   

 

[George Hatch]

At this point I advocate including an alternate path for demonstrating the requisite skills - even though the AQB has yet to quantify exactly how much of those skills are necessary to be a competent SFR appraiser.

I liked the 2008 criteria because they went beyond HS but were still readily doable during the same time frame as it takes to earn your experience credits. If those specific requirements are deemed insufficient then increase them by including relevant coursework.

Unlike others, I have always opposed any dilution of the experience requirements.

 

[hastalavista]

There doesn't seem to be a lot of interest in addressing my observation of the disparate effect on aspiring appraisers who are economically disadvantaged. How many quality people are we excluding there, and are our own economic interests really worth that cost?

Just as I don't agree with raising the qualifications standards (college degree) as a means to protect our own turf and increase our income, I don't agree with lowering it because by having it might crowd-out those who cannot afford college (and I've already addressed that specific question when raised by Ken earlier in this thread).

IMO, this isn't about economics. It is about determining if a college degree (4-years... but I don't have an issue if it is a 2-year degree... or perhaps a less-than-2-year certification which is the way many colleges are going for specialized training; but I'd advocate for a recognized certificate rather than a hodge-podge of classes; and that certification include college level math, writing, finance courses) is a legitimate requisite for being a licensed appraiser.
The question I ask myself is, in addition to the required appraisal-courses we take for qualified education, is some level of "formal" education (college-level) a legitimate requisite for new entrants? I think it is. I think a degree is a legitimate requisite. Whether a 2- or 4-year degree, or a formalized certification program granted by a college, I'm not as decided.

 

[J Grant]

[

At this point I advocate including an alternate path for demonstrating the requisite skills - even though the AQB has yet to quantify exactly how much of those skills are necessary to be a competent SFR appraiser. .

Perhaps you believe in this sincerely, but you must realize on some level it will mean a far larger supply of appraisers going forward. Which is ironic , since you always push the blame back on appraisers regarding low fees that the reason is they hired too many trainees back in the day and created excess competition. You've also consistently defended AMC's ordering at low fees on posts and corporate presence on boards is fine too. So I find the context behind your position a bit odd.

 

[J Grant]

There doesn't seem to be a lot of interest in addressing my observation of the disparate effect on aspiring appraisers who are economically disadvantaged. How many quality people are we excluding there, and are our own economic interests really worth that cost?

And how many quality people is the field losing now, by making those who are in it economically disadvantaged and poor from low fees?

 

[George Hatch]

Why, because I place the responsibility for the results of the puppy mills on the individuals who ran them? Because I place the responsibility for the results of the oversupply on the people who created it? Because I place the responsibility for the appraisers underbidding each other on the individuals doing it?

AFAICT the difference between your worldview and mine is that I don't think of my peers as children who need to be protected by a person or persons with superior knowledge and virtue; but rather as adults who can and should make better decisions WRT their long term interests.

 

[Non Sequitur]

Advocating for rolling back the degree requirement is basically arguing that we should continue what we have been doing since the beginning of licensing. I disagree strongly with that.

The training system for residential appraisers has been broken since the beginning. At this point the users of our services (mainly mortgage lenders) have had enough. On the back of the bachelor's degree requirement the big players are pushing "education in place of experience" and residential appraisers have offered no viable alternatives to fix what's obviously broken. Offering an alternative track doesn't mean anyone hates education, it's an effort to keep field experience for trainees in the mix. In the absence of offering an alternative track, weighting education in place of experience is a viable answer to those who truly value education as opposed to those who believe an advanced degree is worth nothing more than a "Yes" checkbox on an application.

 

[George Hatch]

And how many quality people is the field losing now, by making those who are in it economically disadvantaged and poor from low fees?

I knew this question would come up, and all I can say is that I think there's a distinction to be made between a market that will not economically support more capacity vs cynically using the State to meddle in that market by imposing new and unnecessary constraints that will have a disparate impact on otherwise qualified candidates.

Me choosing not to buy an orange isn't the same as the state telling the grower they can't grow that orange.