Poll for Commercial Appraisers

[Zoe]

At the risk of being obtuse OP, you are a deleted member. Are you designated and what line of work do you perform appraisals in? I am not shy.

 

[Fernando]

While all three approaches are generally included in a commercial appraisal, in many cases the income approach is the main determinant of value, especially when investors are involved. With the work from home/remote work environment there is less demand for office space and in the larger cities I have heard office vacancies are increasing.

I am not worried about anyone claiming I over valued a property for two primary reasons. First appraisal values are as of a specific date in time. Second if things like rent, occupancy, interest rates, business climate, construction costs, etc, fluctuate so will the appraised value.

When home prices dropped to the bottom during Great Recession, you can argue that appraisers valued at a specific date when prices were high. Once loan defaults, lenders will look closely at prior appraisal reports to se if their a flaw to blame on appraisers. Back then, politicians went after lenders for over lending to "unqualified" borrowers. I never understood that. Borrowers knew what they were getting - a chance to buy a house and putting 90%+ risk on lenders.

Some long term rents for commercials are not at market. Appraisers need to know the lower market rent for current commercials in changing economy.
Some banks are deferring some commercial loans in how next year FED will drop interest rates to 0%.

 

[sputnam]

Who are you? Why do you want my opinion on this topic? What are you going to do with the data? And, what's in it for me?

 

[Vernon Martin]

The only designation I ever get asked for is the MAI designation, and that is rare. When I do an AI directory search I find 242 MAIs located within 50 miles from me. A few years ago it was 450. I also have had a couple of friends with CRE designations tell me that they were dropping the designation because of the lack of payback. You are also not looking at those who have master's degrees in real estate.

 

[WestMichiganCG]

Hard stats? Don't have any. However, I do have more than 47 years' experience dealing with lending and appraisals in my section of the world. Since licensing went in effect more than 30 years ago, none of the area lenders have ever called for a particular designation. I do know of several occasions where a designated member was awarded an assignment, but that was based on their expertise relating to the particular assignment and not their designation. The nearest AI chapter is a 4+ hour drive, and they will occasionally run a class around two hours away. The nearest designated appraisers are about 60 miles north, 90 miles south, 100 miles or more east and Lake Michigan is to the west.

In a five County area there are currently two active Certified General Appraisers, and if you expand out to seven Counties there are two more. Now you go further north there are a ton, but rarely are they willing to come into this area due to travel time and being unfamiliar with the area. Their bid prices also have an impact on the number of assignments they receive. While I don't charge anywhere near as much as many of the designated appraisers, I hardly ever accept an assignment in their general service area, primarily due to travel time and my limited knowledge of the market when it comes to commercial real estate values.

Which county are you in?

 

[bsilver]

Show me the data that it does. BRCJR is a banker - appraiser. And he said it. They don't pay extra to get the MAI with rare exception. Before licensing the MAI or some designation PLUS your broker's license was the only way you could get appraisal work. And in the 90s and 2000s look at the groups that came and went. NAMA? I was a designated EAC. Did it ever generate a single lead? NOPE. Then the group dissolved after the family that basically owned the organization (yet was a member of TAF) died in quick succession.

Pushing people to blow a bunch of money for a useless designation (and everything but MAI and SAR are probably worthless outside of specialty like ASA or ARA) and that has only a limited appeal in their specialty. I don't know if even Farm Credit bankers could tell you what the ARA stands for in most states.

That's like saying anyone who doesn't use Narrative One for writing non-FNMA form appraisals is cheating themselves out of a great selling point. Look at your own polls - Looks like you checked off every box and no one else even responded. No one cares. Period. Give it a rest and I will.

I'm designated in a couple of these organizations. I've had dozens of clients find me through the organizations. The expense is more than paid for over and over. I've always worked in a family shop with multiple designated appraisers. My father held MAI, SRA, ASA, ARA, SR/WA, and MRICS designations before he retired. Those designations, and the rest of ours, pulled in and continue to pull in complex, challenging and unusual assignments that are simply not cheap. The additional work for economic studies, litigation support, and testimony would not be available to us without these designations. Higher fees and having expertise in the valuation of dozens of complex property types will not likely be available to undesignated appraisers. More importantly, these designations are not simple letters after a name. They are evidence of a dedication to the profession. They don't give these designations away. They require considerable effort to attain, and that effort creates more informed appraisers who not only generally, not always, but generally prepare more thorough work product with a higher degree of understanding. I'm not sure why you have such a negative opinion; though I can understand the cost issue. I guess I've just read a lot about how appraisal education, USPAP, the organization, the lenders, how they're all just useless, hinder more than help, or are unaware of x y or z problem. I don't know exactly, but I am certain that far too large a percentage of appraisals by others that land on my desk, for review or whatever purpose, would quite simply never have gotten delivered out of my office under my supervision. I'm not saying there's laziness or intentional monkey business going on. But there are a large number of practitioners that have less than a complete understanding of the proper methodologies. SI'm way more convinced more education, more standards, and more designated members are needed, not less.

 

[Terrel L. Shields]

The additional work for economic studies, litigation support, and testimony would not be available to us without these designations.

Really???? Geez, I guess I just thought I was testifying.

 

[Vernon Martin]

Same here. The only times I get hired as an expert witness is when I'm an expert witness on the topic, whether cannabis, or environmental damages, or Costa Rica or assessment-to-sales ratios. No one asked for a designation.

 

[Greg Graybadger]

My highest-paying clients require designations. If you don't have one (or more) you would be unaware of their needs and these opportunities. I have very broad experience including appraisal and review for residential and commercial lending, eminent domain, taxation, litigation, minerals, forestry, business valuation, and portfolio, both rural and urban nationwide. For litigation work, we typically start with reciting our credentials and experience. The more well-recognized and prestigious credentials are best. A Masters degree is great, deep experience with the property type is great, and relevant designations are great. I have also hired appraisers for many, many assignments and often relied upon the presence of designations as an initial indicator of professionalism. Obviously this is not always reliable, but it serves as a starting point in the absence of a known reputation.

 

[Vernon Martin]

My highest-paying clients require designations.

I'd like to know more. Your LinkedIn profile describes you as a government appraiser?