The End of *most* Full Time Appraiser's ?

[ZZGAMAZZ]

====== Part I
Most homes start off as rather conforming subdivisions, where there are plateaus of models with about the same features and quality. Homes in such plateaus have about the same price, perhaps varying a bit on location. But as time passes, some homes are taken better care of than others, some get upgrades or remodeling every so many years, some don't, and then they start to diverge from specific models into an almost endless variety. Appraisal keeps getting more complex - and that is where we are at today - as no time in the past. To get away from subjective, fly by the seat of pants estimations of market values on specific features you do need to get into non-parametric regression such as MARS. But it produces complex models that are difficult to communicate to laymen or even real estate attorneys and judges. That kind of communication, to be effective, requires a tool set founded in R or Python graphics. You shouldn't be surprised to find MAIs and SRAs very good at generating graphics with R.

- But now you are getting into the very high end of appraisers - and even they have their limits. Many can do the graphics but tend to stick to parametric and simple statistical methods such as cluster analysis and at best multi-linear regression.

A good appraiser capable of being an Expert Witness should know:

1. Data-mining, e.g. non-parametric statistics.
2. Skill at communicating relationships and patterns through graphics.
3. Skill at communicating with professionals such as real estate attorneys and judges, - and possibly, heaven forbid, juries.
4. Plus many other things - such as simply being able to explain the reason appraisers are needed over real estate brokers.
....

So, there is that. And another big problem is that good appraisal requires more time and money than a CMA or BPO.

Part of the reason we have Appraisal Organizations such as the AI is to explain these things to the public and market Appraisal so that appraisers get paid reasonable fees for their time.

And it seems all these organizations do is try to find less qualified individuals to work at lower fees.

So, why should appraisers pay into these organizations? It should be the mortgage brokers and lenders paying their fees and they should rename their organizations to something else, I had better not

===== Part II: "Financial Engineering". (or more specifically for appraisers "Valuation Engineering")
1. Financial Engineering (of which the newer field of Valuation Engineering is a specialty of) will become more dominant in the future. Anybody who wants to become an advanced appraiser or "Valuation Engineer" should think about getting a degree in Financial Engineering (MFE - Master of Financial Engineering) is a highly sought after degree:

https://quantnet.com/''

2. The equivalent certification is 'CFA' which I am sure you have heard of.

3. Besides Python, most Financial Engineers also know C++ because they write complex programs in fast C++. Rust is also used. R is still good as well - and R uses a lot of C++ libraries as well. Some would be surprised to know that R is often faster than Python, primarily because of a plethora of C++ packages written for R.

4. There are Financial Engineers that do high level valuation that uses very advanced statistics, who are not licensed appraisers. What they do is often way beyond what any appraiser would understand. Their end product is typically high quality, and they likely consider USPAP superfluous and unimportant.

5. That's the way things are going. You can certainly find differences of opinion. But, some organizations are more concerned about "the real thing" - rather than some, for them, meaningless stamp of approval, that in the end guarantees very little of what they need.

Long time ago before I was licensed an an appraiser, I completed a MBA Finance course in Mergers n Acquisitions. The terms "appraisal" or "appraiser" were never even once mentioned although it seems to me that the real property assets of an orgazation would need to be apppraised eh?????

 

[Joe Flacco]

You guys are not busy?

 

[Fernando]

Yeah, I know rents are high in San Jose and it’s only $120k. But you need to factor 30% or so for benefits, no business expenses, fewer work days (25 days/year vacation/holidays), and you only pay half your social security. You would need to gross in excess of $200k year, every year, on your own to compare to that $120k Assessor job. Just sayin’. On the plus side, Fernando, the self proclaimed nice guy, might give you a break on rent for being an appraiser.

I would give a break for a salaried appraiser with stable income. If single and no kids, even better knowing less expense for the renter.

 

[RCA]

Long time ago before I was licensed an an appraiser, I completed a MBA Finance course in Mergers n Acquisitions. The terms "appraisal" or "appraiser" were never even once mentioned although it seems to me that the real property assets of an orgazation would need to be apppraised eh?????

There are too many crooks in the industry - afraid of the truth. --- All around the world. -- Very afraid of being exposed.

If some countries passed regulations that ensured reasonable appraisals, that would create an upheaval across the financial world.

Right now appraisals are essentially mostly BS, sometimes sufficiently accurate, sometimes not. That "nots" lay the ground work for making nearly all appraisals fraudulent over the long haul, by creating fraudulent comps. This goes on year after year - accelerating the impact of the fraud.

Although, to be correct, the vast majority of appraisers are just dumb guppies, pawns, puppets, - who just do what they're told. It is powerful crooks, higher up, that do know what to avoid. You don't advance in the industry unless you "play along" - and that has it implications.

... I could go on.

 

[Airstream]

You can last another few years if ready to geezer out... or get a RE license and sell... unfortunately a lot of appraisers are introverts.

I was pretty successful selling real estate. And in fact I made the most money when I did both. I just didn’t like the weekend stuff as a real estate agent. My last few years of selling all I did was pretty much list property. And I did both sides on the majority of my listings. But you are right it takes the right kind of personality. I am kind of an introvert (but not completely), but for some reason have a knack for selling stuff. Most of it is about customer service, being honest with people, and seeking their best. You don’t have to come across as an extrovert to do that. And I actually made looking at houses with buyers a lot of fun. But I do think making it as just an appraiser may be long gone. One will have to look at a real estate career in a more broad sense.

 

[RCA]

I was pretty successful selling real estate. And in fact I made the most money when I did both. I just didn’t like the weekend stuff as a real estate agent. My last few years of selling all I did was pretty much list property. And I did both sides on the majority of my listings. But you are right it takes the right kind of personality. I am kind of an introvert (but not completely), but for some reason have a knack for selling stuff. Most of it is about customer service, being honest with people, and seeking their best. You don’t have to come across as an extrovert to do that. And I actually made looking at houses with buyers a lot of fun. But I do think making it as just an appraiser may be long gone. One will have to look at a real estate career in a more broad sense.

Selling real estate in California, you need to establish an efficient routine in filling out forms, check listing do's and don'ts and being fairly strict in everything you do. I think that takes time. But, if you have experience doing appraisal - that can only help. That being said, you need a different point of view and have to be willing to deal with endless phone calls and boring issues. Many real estate agents don't succeed, because they make mistakes, are not sure of themselves and don't respond to customer questions - or simply are not good at communication. I say this not from personal experience, but from talking with various real estate agents. Real estate agents can always get sued and do get sued in California. And, that can be an unpleasant experience. Imagine you have to testify in court. Now, that is where personality, looks and being smarter than everyone else in the room can help.

 

[Airstream]

Selling real estate in California, you need to establish an efficient routine in filling out forms, check listing do's and don'ts and being fairly strict in everything you do. I think that takes time. But, if you have experience doing appraisal - that can only help. That being said, you need a different point of view and have to be willing to deal with endless phone calls and boring issues. Many real estate agents don't succeed, because they make mistakes, are not sure of themselves and don't respond to customer questions - or simply are not good at communication. I say this not from personal experience, but from talking with various real estate agents. Real estate agents can always get sued and do get sued in California. And, that can be an unpleasant experience. Imagine you have to testify in court. Now, that is where personality, looks and being smarter than everyone else in the room can help.

Wisconsin is much different. I wouldn’t live in CA. Taxes, regulations, etc Just too much. I found selling real estate kind of fun (other than the weekend nonsense which is why I went completely appraisal business).

 

[Non Sequitur]

This is where our industry is headed:

 

[RCA]

The AI software I use. keeps getting better. Now, I would say, at least at times, I can get what might have been 4 days of work done in several hours. Grok, ChatGPT, and Claude are all getting very good at generating excellent code. They are tireless, I can keep asking them to modify this or that, and they don't complain. I can put in very lengthy descriptions of what I want ( and yes, that takes field experience) - and it can generate code to fit the bill, - as long as I can describe exactly what I need.

What I see, and this is verified elsewhere, is that those people who already have the experience, can get so much more done, that they are really better off with these AI programs than hiring additional assistance. And this is probably across all professions. --- And we see that Facebook, Google and other companies are laying off younger workers and keeping the experienced ones, who I assume are using AI.

Oh, college graduates will still be able to get work. Only, they will probably need a couple or several years to get a decent salary in many areas - and whether they can even get work depends on whether it is there to begin with. Hard to say at this time, unless you are very optimistic.

 

[Essexfenwick]

To make it you will need an MAI or SRA and completely dedicate your career. Some lending, some legal. There will be less work but more complex. You will need credentials, skill and marketing. My average residential fee right now is $650. I have 2 part timers who take my overflow and a full time assistant to process, market, correspond emails and phone calls. It’s all about commitment going forward. I think is easier to commit than multitask different real estate jobs part time. Pick a job and attack. If you pick appraising and you’re youngish .. get designated. if there is another pickup in business hire an assistant and find some part-timers