First of all, these are thoughtful answers to difficult questions.
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.
100% agree. When licensing came into play, the big concern was whether there would be enough appraisers. As a result, the initial tests were comically simple. Licensing/certification gave legitimacy to a bunch of marginally competent appraisers who immediately began marketing themselves based on fee to clients whose only concern was regulatory compliance. This started the downward spiral.
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.
I can hear the howls already ... likening residential appraisers to paralegals. I don't disagree that there are differences in complexity in appraisal work, but I don't think the split comes in residential vs commercial. Much commercial work is mind-numbingly simple as well. I can see the benefits to a single license in that it would reduce confusion among the public.
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?
I think you are talking about me
. My one word answer is consistent with your thoughts that licensing/certification is too easy and the plethora of licensing levels simply serves to cheapen all of them. That being said, I agree that we are our own worst enemy.
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.
In concept, that's a great idea. In practice, apart from Arthur Andersen, I don't really recall any professional firm being held to this standard. It may be more useful as a death-penalty hammer than anything else.
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.
"May you live in interesting times" is a supposed Chinese curse. Well, we as appraisers are now certainly living in interesting times.
community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.
