The Appraiser Shortage Myth Part 43

[Michigan CG]

Last year we were told about the shortage of appraisers in the COW states and how there WOULD be changes to requirements to become a residential appraiser. None are coming any time soon.

Recently William Fall, MAI wrote an article that was completely misleading about the shortage of appraisers.

AMCs have been advocating for more trainees as the impending shortage is nigh and the current appraisers are mostly older than dirt. When I started I was told the average age of an appraiser was over 50. My mentor said they were saying the same thing in 1970 when he started.

If there is such a shortage in the COW states (there was in 2016) are those folks hiring trainees? They should if they want to maximize profits. Do they see this as a problem they need to address or do they see the 2016 business as a temporary thing that will correct itself?

The best way to gauge that is to find out how many appraisers in the COW states are advising their children to become residential appraisers. That is the true test of the market as many appraisers, back in "the day" were recruited by family members Appraising used to be a family business and used to be passed on from generations. Are the COW state appraisers hiring trainees and are some of those trainees their children?

There are multiple threads this year about how the AMC model is changing to blast e-mails asking for fee and turn time. There are threads about $285 FHA assignments and lower in many states.

How are those appraisers in the COW states being treated now? The AMC will always tell the appraiser they are "partners" and go on to tell the appraiser they need to turn the report in ASAP, by the way what is the best fee you have? Are those "partners" in the COW states being treated differently than the folks in Florida, Atlanta, southern California and other areas where fees are STILL depressed? I doubt it.

The AMC model might have (most likely) created the shortage of appraisers in COW states and is actually encouraging a shortage in more states and as long as they offer $285 FHA fees via blast e-mail. No one is going to recruit their family members to the business as long as AMCs continue their current business model.

When there are more states with "shortages" people like William Fall will cry "Appraiser shortage" and tell us how many appraisers are over the age of 80. Someone please ask William Fall and others crying shortage if they would encourage their grandchildren to become a residential appraiser.

 

[bnmappraisal]

There are multiple threads this year about how the AMC model is changing to blast e-mails asking for fee and turn time. There are threads about $285 FHA assignments and lower in many states.

How are those appraisers in the COW states being treated now?

(my bold)
I'd be willing to bet they're still being cussed out under the AMCs breath for daring to charge such "higher/exorbitant fees" just like they were in 2016.

 

[Ariba]

The number of appraisers at the state and national level is declining at what stage does it become a shortage?

 

[J Grant]

The number of appraisers at the state and national level is declining at what stage does it become a shortage?

There is a difference between a real shortage , and a media /public relations spin about a shortage created for the purpose of influencing regulations/ policy to favor AMC /affiliated lender interests.

A genuine shortage would be not enough appraisers available to fill orders in a timely manner nationwide. The reverse is true; an ample supply of appraisers available, with only 3 COW states having an issue with fulfillment,..As far as declining numbers entering, the AMC's deny it is their own low fees and poor treatment of appraisers causing it.

Regarding the COW states, one might expect the higher fees to draw cert appraisers in from other areas, and/or for existing appraisers there to take on trainees-the fact that is not happening points to two problems :

1) appraisal work on res lending end is cyclical, an uptick in interest rates can see volume plunge and income drop, for extended periods. That would wipe out any gain for an appraiser who moves there. and an appraiser who took on a trainee either has to let them go, or just created more competition for a low supply of work.
In addition they realize as soon as the COW states gains more appraisers, the AMC's will pick up the same tactics they use elsewhere to pit appraisers against each other and drive fees down.

 

[TRESinc]

If there is such a shortage in the COW states (there was in 2016) are those folks hiring trainees? They should if they want to maximize profits.

i don't believe it is as easy as 1 + 1 = 2. simply hiring an apprentice/trainee does not equate to an increase in profit, and in all likelihood has the opposite effect for the first few months to a year.

i have never had a trainee/apprentice personally but if i ever do i will spend considerable time interviewing them first to see if they are actually worth my time. once they are hired you can bet they will not be doing anything on their own for a considerable amount of time, most likely 6 months to 1 year. during that time period they will be costing me money, not increasing my profits. yes eventually it will lead to that but it won't happen overnight.

all that being said if i was in the COW states i would definitely hire an office assistant. i don't live in the COW states and i have an assistant now. someone to perform all the non-appraiser needed functions like scheduling, pulling public records data, handling phone and emails, etc. i save a ton of time, and money, having a pseudo-office manager person handling all the day to day stuff.

 

[Evincere]

This entire national shortage campaign being touted by those cited in the many published articles (i.e Fall group, HW) reminds me of the hoarder syndrome or those who stockpile when there's a sale, or the coupon fanatics buying non perishable items just because they have a coupon for a just in case situation.

I've seen people like this - 30 bottles of shampoo, 50 cans of corn; etc. etc. They often claim they have large families to feed but that's often not the case. And even though the items are stockpiled to satisfy the psychological security needs of the purchaser the items just sit there on the shelf unused until they expire.

At it relates to our world and AMCs - hey become our partner, sign up but don't ever expect to get an order because we are coupon shoppers.

 

[Terrel L. Shields]

The number of appraisers at the state and national level is declining at what stage does it become a shortage?

How many fewer mortgages are taken now than in 2007?

 

[CindyR]

OK. I give up. I missed the memo. What is a COW state?

 

[bnmappraisal]

What is a COW state?

Colorado
Oregon
Washington

C
O
W

(Edit to add: It took me a minute too Cindy to first realize when I first read it on here, so don't feel bad)

 

[Ariba]

Colorado
Oregon
Washington

C
O
W

(Edit to add: It took me a minute too Cindy to first realize when I first read it on here, so don't feel bad)

What do they have in common?

Also, concerning appraisal shortage an other indicator could be this forum. What was the peak membership on this forum? My guess it is down substantially from that peak? Anyone have a guess?