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Rural Appraiser Shortage And Statistics

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SD Capital Investment

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Dec 28, 2016
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State
South Dakota
I am a state registered trainee in SD and apart of an organization called PASAAD. http://paasd.com/ This group released a letter from the American Bankers Association stating there is shortage of qualified appraisers, particularly in rural areas. This is contrary to what I see on this site, where most say fees are too low because the profession is saturated. Also the appraisal institute released a study showing a 20% decline in active appraisers in the last 8 years. Furthermore, their study shows that based on age trends there should be a large decline (40%) in the next ten years when appraisers age 51-65 move into the 66 & older category if trends stay about the same. Can anyone shed light on this subject based on their own personal experience and connections within the industry. If this information is true then shouldn't fees should increase at the same pace? Thanks in advance.
 

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Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
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Arkansas
The ABA is simply trying to set the stage for eliminating the requirements for appraisals and the NAR and Mortgage Bankers are more than happy to sing that narrative in harmony so as to move the politicians in that direction. There is no shortage of rural appraisers. FHA & Fannie basically redline rural properties by allowing lenders to impose additional guidelines to those published by F/F. Therefore the rural property takes longer to inspect, research and adjust comps. And additional post-report stips apply. But lenders are unwilling to pay more than a cookie cutter price. Most secondary market rural properties take over 8 hours, and deserves a four figure fee.
 

Eli

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May 12, 2007
Professional Status
Certified General Appraiser
State
Tennessee
The ABA is simply trying to set the stage for eliminating the requirements for appraisals and the NAR and Mortgage Bankers are more than happy to sing that narrative in harmony so as to move the politicians in that direction. There is no shortage of rural appraisers. FHA & Fannie basically redline rural properties by allowing lenders to impose additional guidelines to those published by F/F. Therefore the rural property takes longer to inspect, research and adjust comps. And additional post-report stips apply. But lenders are unwilling to pay more than a cookie cutter price. Most secondary market rural properties take over 8 hours, and deserves a four figure fee.

You scratched it. There are some high end appraisers in the monopoly/monopsony competition realm that are selling ****.

8 hours won't touch many in urban and suburban areas. Appraisers used to absorb some losses when it was more of a free market.

AMCs are their own worst enemies considering fastest and cheapest and public trust.

I understand there are some very very homogeneous markets, but they are the exception instead of the rule.
 

graindart

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Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
Groups always complain about a lack of qualified workforce when something climbs above the groups desired parameters. If the turn times are too long, it must be due to a lack of qualified people. If the fees are too high, it must be due to a lack of qualified people.

One of the problems with rural areas is that clients don't want to pay what it would cost to keep professionals in the rural areas. A typical lender who doesn't specialize in rural lending will have 99% of their applications from urban / suburban areas. They will have a set of rules that they expect appraisal reports to conform to and they will have a fee that they expect to pay on average. That works to some degree for urban / suburban areas, but often is a joke when it comes to rural areas. Often times when I'm appraising a rural property, I end up spending way too much time in the report explaining why there aren't 3 comparable sales within 1 mile in the past 90 days (often less than 3 total sales within 10 miles within past year). Rural appraisals for SFR lending often take 4 or 5 times the amount of effort / time expended as compared to urban / suburban, but the lender will rarely ever offer to double their regular fee.

In general I don't see there being a lack of qualified appraisers in rural areas around here. Rather, the pay & required turn times required by many potential clients just don't match the reality of what a qualified professional appraiser will accept. What they're really complaining about is a lack of "hungry" appraisers that will turn a rural report in 24 hours for $300.
 

LANoble

Sophomore Member
Joined
Jun 5, 2015
Professional Status
Certified Residential Appraiser
State
West Virginia
I'm in a rural state and the number of residential appraisers actually increased YoY. That said, there has always been a shortage in some areas; I once served those areas and enjoyed my job much. There came a point though where bad ethics pushed good ethics out of the marketplace. So, the shortage of appraisers is complete false narrative. We are here but not partaking in the folly.
 

SD Capital Investment

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Joined
Dec 28, 2016
Professional Status
Appraiser Trainee
State
South Dakota
This is very helpful so far thanks for all of your input. Does anyone care to comment on whether or not the annual pay information given by AI sounds reasonable? I'm making $20/hr + benefits as an assessor so making 100k on my own schedule makes me a little anxious.
 
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graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
There are too many variables to figure out a guesstimate on pay. Assuming the states of SD and MT are pretty similar in populations / density, my experience might be similar to what you can expect.

If you're hoping to net $60k - $100k per year right after getting licensed in SD, I'd say your chances are rather slim. Not to say you can't do it, just that you'd probably be in the small minority of newly licensed appraisers that started making decent money right away.

Copied from a previous post:

Way too many variables. Some start making money earlier. Some go through all of the hassles of getting licensed and end up leaving the profession due to lack of business. I thought I'd start making some decent money right after getting licensed, but then found out that most clients wouldn't hire me without 3 - 5 years of licensing. It was a slow 3 - 5 years and then I started making ok money around year 5.
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
Forgot to mention, some of the assessors locally also do residential appraising on the side. So even though they are licensed, they still keep their "day job". I don't have a clue what they get paid, but it does include health insurance, retirement, and other benefits. Going out on your own as an appraiser can be feast or famine and doesn't come with any safety net.
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
This is contrary to what I see on this site, where most say fees are too low because the profession is saturated
I think you see this on this site more b/c many on here saying that (myself included at times) are in urban/suburban areas. My market definitely doesn't have a shortage, let alone a shortage of appraisers taking lower fees ($2XX)
 
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