Integra’s Chairman On Current Appeal Of National Appraisal Firms As Acquisition Targets

[djd09]

The states should regulate national firms or whatever they call them. There is a fine line between independence and a pay check.

 

[Joe Flacco]

Appraisal should be (and once was) at least as lucrative and respected as accountancy, but that is no longer the case. And that is unfortunate.

In your opinion, what caused this?

 

[PL1957]

In your opinion, what caused this?

Licensing

 

[timd354]

My first years (before moving to Michigan) were working for an MAI who was honest and ethical. I later learned that his cost approach methods were not exactly correct but that is another story.

I was exposed to many MAI reports and don't remember seeing anything that I would call close to bad. In my nine years in Michigan I am exposed to a lot fewer MAI reports as I am not MAI and my work is mixed (commercial, residential and ag). I still get to see some reports, a couple a year at most, and the majority are very good. I did get to look over some tax appeal work that went through Michigan a few years ago that were horrible and obviously advocating for the client. A few of them had the "DRAFT" background on every page and they reserved the right to change anything in the report; those reports were meant to intimidate the townships IMO.

The worst commercial reports I have seen are mostly from old-time CG appraisers who are not designated and whose work is primarily residential from what I can tell.

I have seen one residential appraisal report from a MAI that was absolutely horrific, but most residential appraisal reports that I have seen from MAI's have been very good.

 

[gregb]

Licensing

Yes, the curse of licensing. Regular dissing from CR's and AR's about the CG license, why is a CG allowed to appraise residential. Never ends.

 

[Eli]

Yes, the curse of licensing. Regular dissing from CR's and AR's about the CG license, why is a CG allowed to appraise residential. Never ends.

It's shallow and pathetic. Now, we are where the rubber meets the road. Lol

Not, but getting closer to where the rubber meets the road.

 

[djd09]

In your opinion, what caused this?

Fannie

 

[Joe Flacco]

Licensing

Is it licensing itself? Or is that requirements for licensing were too low? I am thinking that licensing is okay but the requirements for licensing were too low.

 

[Deleted member 126639]

In your opinion, what caused this?

That is a big question. There are many explanations going back to FIRREA and the S&L crisis.

In the recent past, I would say the Appraisal Institute, and appraisers generally, have failed to elevate the profession to a level similar to the legal and accountancy professions.

We should have licensure requirements that are just as strict as those professions. Something similar to the MAI comprehensive exam should be the minimum standard of test for a license in every state. As it stands, the CPA and Bar exams are orders of magnitude more difficult. This simply should not be.

I would argue that separate licenses for residential appraisers should be eliminated. All licensed appraisers should have the ability to appraise any asset class. The simplicity and repetitive nature of residential appraisal work is not dissimilar to a lot of low end legal work. The business model should be similar. Just as licensed attorneys doing say, divorces, have virtually all of the work done by paralegals, residential appraisers should fall into a similar category. This would eliminate many highest and best use errors that residential appraisers don't understand, and it would better position the industry as a whole to adapt to the use of data mining and statistical analysis for residential appraisal.

The Appraisal Institute, or perhaps another body, should do a much better job of lobbying on our behalf with respect to how essential we are to the overall stability of the banking system. Using law as a simile should be an easy sell to Congress when the overwhelming majority of legislatures and even their lackeys are lawyers. Why has this not happened?

I would say that appraisers themselves are to blame in many instances. Our internet presence is pathetic compared to other professions, but the number of ridiculous posts I see complaining about, for example, college degree requirements is just sad. Many appraisers simply do not conduct themselves as professionals, and it should therefore not be surprising the market does not consider us as such. Someone actually responded to this thread claiming state licenses reduced our professional standing. Could you imagine anyone making such a claim about lawyers or accountants?

Lastly, it is imperative that large appraisal firms have the same risk as accountancy firms. The SEC does not accept filings prepared by convicted felons, whether those are individuals or corporate entities. Federal regulations should be amended such that banks cannot accept appraisal reports prepared by convicted felons, including whole organizations.

As it stands, this industry increasingly seems to be in free fall. There are far too many appraisers, far too many unqualified appraisers, and we have a public relations disaster on our hands. Desperate times require desperate measures.

 

[Joe Flacco]

This is the first time I ever heard anyone make a case for a single appraiser license with the requirement for that license being similar to the MAI exam. It makes a lot of sense. Thank you.