The Decline of the Appraisal Industry: An Unsustainable Future

[J Grant]

More tinkering from the DC crowd (see below) without addressing the real problems appraisers face: THE PAY SUCKS!

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The spin words are vomit worthy, we are thrilled - big vision for 2025 and beyond that enact projects that advance appraisers into the future-

There is no viable future for appraisal as a career for res lending with the AMC present system and lousy pay. They can make additional ed programs all they want; few, if any, will sign or complete it or stay in the field afterward.

 

[Terrel L. Shields]

More tinkering from the DC crowd (see below) without addressing the real problems appraisers face: THE PAY SUCKS!

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Farm Services problem is that their requirements for appraiser are a PITA and they rarely pay all that much. They have their own in-house appraisers. Great, no problem. But after seeing the requirements to do a direct Farm Services appraisal, I nixed that, and after doing Farm Credit work, decided it was too big a PITA too. Farm Credit is a GSE just like Fannie Mae. They just didn't go under like Freddy and Fannie.

 

[Non Sequitur]

Because there is always "that guy" out there who won't do it, and use it as an opportunity to obtain clients. I know a guy who does work for a large AMC who consistently does work 30+ miles from his house in an urban area, because he does them for $300. This company will tout quality and superiority to other AMCs but they are bottom of the barrel, sacrificing any sort of integrity for an additional $50.

I'm sure every market has a firm, or several, that would be happy to do exactly that. But it's more complicated. We all have different earning needs, full time or part time, a working spouse with health insurance, etc. IMO that's why AMCs are able to blast bids and take advantage of their position in the market.

 

[Fritz in NY]

Lender/Investor to AMC, " How quick can we get it back? " &, "How much $ ?", "As long as the appraiser is licensed go for it". A great feeling of competence and experience flows through my veins with this normal, daily conversation.

 

[Non Sequitur]

And the decline continues. An appraiser on FB posted appraiser numbers for his state (CA).

California appraisers, as of:
9,388 - Jan. 1, 2022
8,717 - Jan. 2, 2024
7,996 - Jan. 1, 2025
- Down 14.8% in three years
- Down 8.3% in the past year alone
- For the first time since licensing began in 1992 we are below 8,000

And not a single thing is being done to stop the bleeding. Not a peep from any org, TAF, ASC, state board, etc. but TAF's newsletter today announced another practicum initiative to train new appraisers. Wow, just wow.

 

[Fernando]

And the decline continues. An appraiser on FB posted appraiser numbers for his state (CA).

California appraisers, as of:
9,388 - Jan. 1, 2022
8,717 - Jan. 2, 2024
7,996 - Jan. 1, 2025
- Down 14.8% in three years
- Down 8.3% in the past year alone
- For the first time since licensing began in 1992 we are below 8,000

And not a single thing is being done to stop the bleeding. Not a peep from any org, TAF, ASC, state board, etc. but TAF's newsletter today announced another practicum initiative to train new appraisers. Wow, just wow.

That's a good thing. Less competition for me. Fees gonna go up this year.

 

[Surf Cat]

That's a good thing. Less competition for me. Fees gonna go up this year.

Maybe.....but in the long term, no, it's not a good thing. The lack of leadership that Non Sequitur pointed out creates a toxic environment that pushes talent out the door (as evident with the supplied decline in numbers). Limited opportunity for seasoned, highly educated appraisers, fostering a lack of trust in the aforementioned associations.

So yes, you might get more work for a few pennies more......but you're still an AMC rubber stamper, hired not for your expertise and knowledge in the profession (as evident in your recent thread starts asking trainee questions), not because they trust you, but for raising your hand to the assignment where all their staff appraisers "passed" on. They'll just stip you to death to get where they want their number to be......and you'll do it.

 

[Fernando]

Maybe.....but in the long term, no, it's not a good thing. The lack of leadership that Non Sequitur pointed out creates a toxic environment that pushes talent out the door (as evident with the supplied decline in numbers). Limited opportunity for seasoned, highly educated appraisers, fostering a lack of trust in the aforementioned associations.

So yes, you might get more work for a few pennies more......but you're still an AMC rubber stamper, hired not for your expertise and knowledge in the profession (as evident in your recent thread starts asking trainee questions), not because they trust you, but for raising your hand to the assignment where all their staff appraisers "passed" on. They'll just stip you to death to get where they want their number to be......and you'll do it.

It goes through cycles. During busy times, many want to be appraisers and enter the field. During famine times, many drop out. Those who remain will benefit when the next boom comes and appraisers can dictate their terms. It's been like that all the time. However, lenders don't like to be at mercy of appraisers when there's a shortage, thus they try to "skip" appraisals if possible to retain control.

 

[J Grant]

It goes through cycles. During busy times, many want to be appraisers and enter the field. During famine times, many drop out. Those who remain will benefit when the next boom comes and appraisers can dictate their terms. It's been like that all the time. However, lenders don't like to be at mercy of appraisers when there's a shortage, thus they try to "skip" appraisals if possible to retain control.

There may be mini booms but imo no more booms -(unless rates drop to 2% which will never happen)

They have spent years developing alternatives so that if it ever gets busy, appraisers are not going to make bank - WAIVER use will increase, they'll pump out hybrids at the AMC with PDR collectors for the properties that need appraisals and the fee appraisers will get the scraps - just a larger volume of scraps when it is busy. And it never stays busy long enough for the lean times when fees are low. I am at full fee with many clients, and it is still too low for the amount of detail that FF keeps expecting, and I can't imagine doing it for half or a third of that fee for an AMC.

Why do you think so many are giving up their licenses - or not training for PAREA or practicums - the course work itself may be fine, but since they are preparing people for a dead end low pay field and since they do not disclose it , the programs are built on a lie.

 

[Mark K]

A- the ABA has 20x more members and can outspend you. B - the NAR has more than 20x members and can outspend you. We have no lobby power and never will. And the banks never wanted us anyway.

The crux of the issue ^^^. Its basically The Golden Rule. "Those with the gold make the rules. "

Back in the late '80's early '90's when I was principal broker of a small brokerage (15 agents) every lender required:

1. Termite inspection, no exceptions.
2. Unstaked survey, basically the surveyor went to the property to see that the improvements were located within the property lines.
3. Flood Certification from independent vendor.
4. Well/septic inspection from licensed plumber if the house was on well and/or septic.

Eventually, they dropped the requirements for all of these. Buyers/sellers, agents, LO's were all happy because those inspection requirements were expensive and often delayed the closing, especially in busy times. Nobody cared about the inspectors and surveyors losing business...except the inspectors and surveyors.
These guys all sounded like appraisers that believe they are indispensable. "What if the house has termites, what if the garage is located over the property line, what if part of the property is in a flood zone, what if the well or septic doesn't work right...the bank could lose money when/if the owner walks?"

Sound familiar?