The Appraiser Shortage Myth Part 43

[hastalavista]

Do commingled fees exist? Let's start there. Time to complete an appraisal and how the professional can do better with more time or whether they are competent are different problems.


That has nothing to do with an oligopsony or antitrust law or state law regarding appraisal practice.

I thought the original poster (as others) have reminded us that the thread is about appraiser shortage and appraiser trainees?
So it is no surprise that my post (which addresses that) has nothing to do with your questions (which don't address the topic).

You might be better off waiting for the responses to your new thread about what constitutes Appraisal Practice to address your questions? (don't wait for mine, however. )

 

[Eli]

I thought the original poster (as others) have reminded us that the thread is about appraiser shortage and appraiser trainees?
So it is no surprise that my post (which addresses that) has nothing to do with your questions (which don't address the topic).

You might be better off waiting for the responses to your new thread about what constitutes Appraisal Practice to address your questions? (don't wait for mine, however. )

There are laws in place. Duh?

You just worry about CA. Lol

 

[Deleted member 130081]

I'm not ignoring anything. I thought the data was self-evident but I'm happy to spell it out.
In the COW states, where there the demand for mortgage work exceeds the supply of appraisers, fees have gone up significantly. I don't know about you, but I think there is enough margin in a $600 to $1,000 appraisal fee to support the training of appraisers.
In CA and FL, where the supply of appraisers exceeds the demand such that appraisers are doing work for $300 or less, the margin isn't there. But there is an over-supply as things exist, no?

Earlier I asked if you (I should have made that a general statement) had attended any regulator presentations.
Now, I'll ask in general, has anyone really put together an appraiser trainee program? Well, guess what.. I have.
I had an employee manual and handbook.
Trainees were hired as employees and worked the first 30+ days in the office to understand the ordering process and basic property research process. They were also exposed to finished reports; what they looked like and what the content expectation was.
I took them out to train them on how to measure a house. Interestingly enough, this was usually where the first drop-out cut occurred. Some people could not get comfortable with how to measure and inspect a property (or, I wasn't a good trainer).
From there, they would work with me (or another assigned appraiser) on reports.
At a point, they were sufficiently trained to inspect on their own (basic house; I work in an urban/suburban market so basic homes are a plenty). After a couple of years, they were able to get their own license; most, at that point, opted to become an Independent Contractor.
Training appraisers was personally and professionally satisfying. And, after the initial investment of time and money, my firm grew because of it. With rare exceptions, most of the appraisers continued to take work from my firm even when they had their own clients (which I encouraged them to get). I never was worried and never had (to the best of my knowledge) a trainee "steal" a client of mine. And, my attitude was, "Well, if a newly licensed appraiser can steal a client of mine, I have bigger problems than that!"
But a good training program is a lot of work. I could have generated more money in the short term by just doing the work myself. The break-even point came (for me) just about when they were able to upgrade. If I did my job correctly as an employer (made it attractive to continue to work with me at my firm) then I would reap the reward. It worked for me and I'm glad to have done it. I wouldn't want to take it on again because I'm getting too old to work those kind of hours (I'm working more than I want to right now! LOL!). But there are plenty of other competent appraisers, with the ability to put together a good training program who can do it as well if not better than I did.

Now I'm not sure how long the COW states have been getting the higher fees? At least a year, but I don't know if it has been 2-years. But taking on a trainee is not something most should consider to do on a whim.
Not everyone is set-up in their business model to take on a trainee.
Some don't want to do it, period.
For the rest who are interested and want to do it, I'm sure they are trying to gauge how long this imbalance will last. I wouldn't blame anyone for taking a wait-and-see attitude while reaping the higher fees now (and I don't consider that higher fee to be a windfall; they are being paid for the work they are doing based on the demand for their work. As should we all). Lastly, even if 50 appraisers today decided to take on trainees tomorrow, we probably wouldn't see that impact for at least 12-months (the point where a trainee can do the inspection on their own and put together the basic components of the report); and that impact wouldn't be significant but incremental over the next 12-24 months.
By the way, as I understand it, many lenders will not take on an appraiser on their list (either direct or via their agent, an AMC) until they have 3-5 years licensed or certified experience. So as it stands, taking on a trainee now is a 5-7 year commitment (at least from the trainee's perspective if they want to get residential mortgage work).

Again, I don't think I ignored anything.
Where the competition is fierce and it affects fees, there isn't going to be a lot of training going on. Where demand is high and fees are higher, the margin necessary to pay for training exist.

But if you see it differently, I'd like to hear it.

LOL. Nope. Don't see it any (much) different. And I started to laugh at your first sentence, not because I think you are laughable, but quite the opposite.

No, you did not need to spell it out and I see and agree with the points above. However, your points cover 3 of 50 states during a very short period of time. Your points also illustrate what will happen if a shortage actually ever comes and when it does, and fees go up to the levels they are in the COW, then trainees will be feasible. That is not the case in the other 47 states. Trainees cost time and money as you pointed out. Where will the money come from? How were they paid for when they used to be around? Is there a direct correlation between the margins absorbed by the AMCs and the lack of trainees? These are the issues/points/questions I believe you over-shadow with your (previous) arguments about how the real problem is bad appraisers and once they get weeded out, all will be ok.

Had to edit cause I just said it way too complicated-like. There are no trainees today because the margins that used to pay for them are gone.

 

[TRESinc]

I guess no one wants to discuss if these people in COW states are hiring trainees including their kids.

because people like jg are blaming the lack of apprentices on low fees, so they can't give you an answer as to why there are not loads of trainees in the COW states when the fees are so high.

it's simple human nature. fees are higher, appraisers are cashing in and making more money. they don't want to spend their newfound fortunes on someone else who will "eventually become their competition" and potentially lower the amount of money they can make. that point is painfully obvious based on the posts people have made on this forum in the college degree thread - they need someone to limit the competition for them.

 

[Deleted member 130081]

Succinct considering the topic. The seemingly only answer to the alleged shortage problem is.....LOWER THE STANDARDS via alternative experience requirements which in and of itself will never address or provide a solution to the lack of new trainees. Basically, seasoned appraisers are being asked to subsidize a trainees apprenticeship - or else.

I agree. The problem is economic, plain and simple. I would train someone if I had incentive to do so. In fact, I had a guy work for free last year and I still couldn't get that to pan out, because it took longer to do an appraisal with a tag along than it did on my own, and again, there just aint no margins left. Now, Denis might charge the problem is with me and my time/labor management skills and I guess I would have to give that some weight (just guessing D, sorry if I over-step). However, if trainees are to come back in numbers, it will need to be easy enough for many of us to do it, not just the top couple percent.

 

[Eli]

GH would understand. I have a child who is a sheriff deputy. He Is suited for it and would have been a great lawyer.

Appraisal is along that line but he makes some jack ! Especiallly when you count benefits . He may get killed tomorrow but that is beside the point. Right?

 

[Deleted member 130081]

because people like jg are blaming the lack of apprentices on low fees, so they can't give you an answer as to why there are not loads of trainees in the COW states when the fees are so high.

it's simple human nature. fees are higher, appraisers are cashing in and making more money. they don't want to spend their newfound fortunes on someone else who will "eventually become their competition" and potentially lower the amount of money they can make. that point is painfully obvious based on the posts people have made on this forum in the college degree thread - they need someone to limit the competition for them.

Uhm...JG stated/opined the exact reason you just did in a prior post, so....

 

[Evincere]

it's simple human nature. fees are higher, appraisers are cashing in and making more money. they don't want to spend their newfound fortunes on someone else who will "eventually become their competition" and potentially lower the amount of money they can make. that point is painfully obvious based on the posts people have made on this forum in the college degree thread - they need someone to limit the competition for them.

Where do you get this Fees are higher crap from. Perhaps, with the exception of the COW states Fees have been stagnated at the same amount for years now and in some places, dropping. It's business that has picked up, not fees. We elsewhere are eeking out a living because of current market stability. We are NOT making a killing.

 

[TRESinc]

Uhm...JG stated/opined the exact reason you just did in a prior post, so....

i guess i missed that. she possibly did in one post but there are several, hell probably hundreds by now for the continuous top poster of the month, blaming the lack of trainees on low fees, which kinda goes against what is happening in COW states (the question i responded to).

 

[Michigan CG]

it's simple human nature. fees are higher, appraisers are cashing in and making more money. they don't want to spend their newfound fortunes on someone else who will "eventually become their competition"

It is my thought that these folks are making money now and don't see it lasting. I also think that the AMC model is not acceptable and therefore they are not recruiting their kids to carry on the family business but I could be wrong.