This Industry's Out Of Control!

[David Mullen]

Mike

I could not remember any questions about high school or college on the application that I filed many years ago so I checked the OREA web site and they did not address minimum educational requirements other than appraisal specific courses.

Could not stand not knowing so I just called the OREA and was told that in California, you do not have the have a high school diploma or GED.

This does not surprise me when I read some of the reports that are turned in , and see some of the "Appraisers" out here in the field.

I hope that all other states have better requirements because I think that this is inexcusable. We can never be called a true profession until there are some serious educational requirements.

I can only think of one other "profession" that does not have tough, or maybe any educational requirements and some in our business share some of their other qualities or moral standards too.

It would be interesting to know how many other states are so lax.

 

[Ghost Rider]

Here's the BEST idea any state can come up with to fix the problem for the future. Right now, at least here in Connecticut, anyone who holds the Certified (general or residential) Appraiser designation is able to take on trainees under a "provisional" license. To get the provisional license, there is 75 hours of course work, and no exam. I have no problem with not testing the provisionals/trainees, but how about we actually check up on the appraisers who are bringing them into the business. If an appraiser is willing and able to bring on new appraisers, and mentor them through the first 2 years of their life in the business, how about we make sure that the appraisers who are teaching them are qualified.

My original mentor got into the business BEFORE there was license law. When the license law started, he took the test that they had at the time, passed it, and was a Certified Residential Appraiser. Since then, he has taken all the continuing education as required, but no more than that. He's a very good appraiser, and has been VERY successful, but as I look back at my training, I know how lacking it was. I was one of those appraisers who got to the end of the diving board, and was pushed into the deep end of the pool, and I doggie paddled my way to the shallow end, and then started swimming laps......Here is the bigger problem. While I was watched, and he made sure I didn't do anything too stupid in the beginning through reviewing my reports, I was "nudged" to lender pressure BY him. He is NOT a number hitter; there were a lot of times that appraisals came in under the "estimated" value, but if using a comp that was very good missed the value, and one that wasn't as good made the value happen, guess what......My original comp was pulled, and the new one was put in. Now, as a provisional appraiser, in a lot of ways, I didn't know better, and he had a LOT more liability than I did, so I didn't worry about it much, but as soon as my license level changed, so did those disputes, and there were MANY times he and I had VERY heated debates on those issues. When it came down to it, I won, since I refused to sign the reports.......and in the big eventuality, I left. But what happens to those appraisers who DON'T learn that what they are doing is wrong, who are pressured by their mentors??

What we need to do is better police the appraisers that are, in effect, "breeding" new appraisers, and new number hitters. I don't know how to do it, perhaps by establishing a new license level, a "certified mentor" or some such qualification, where they are better audited by state services. Will it cost more?? In the short term, yes, but in the long term, by lowering default rates incurred from inflated appraisals, the amount of money saved will dwaft those state budgets.

 

[Pamela Crowley (Florida)]

I have thought and said that a separate 'mentor' or 'supervisors' license might be a good idea. Additional classes, review of about 10 recent appraisals that are picked by an investigator during a surprise office visit, and maybe additional testing (even though some can pass any test).

Even surveyors have to get a degree and do a training period. The appraisal 'profession' is too overloaded now with those that never had the appitude for it and were never trained properly. And those are now training the newbies! :twisted:

 

[Terrel L. Shields]

review of about 10 recent appraisals that are picked by an investigator during a surprise office visit, and maybe additional testing (even though some can pass any test).

Which guarentees this industry will sunset within 5 years. Investigators are going to find flaws. That's their job. Send me a copy of one of your appraisals. I can rip it apart...especially if that is my job. No surveyor has to submit to scrutiny by "surprise" investigators either. In my state that is illegal...falls under the administrative law of the state. Actions taken by the board just because they want to, without a complaint are generally viewed as "arbitrary" decisions and will not stand. My other lic. group (the geologists) found out the hard way when they made case law on the subject.

 

[Pamela Crowley (Florida)]

Investigators are going to find flaws. That's their job. Send me a copy of one of your appraisals. I can rip it apart...especially if that is my job.

Good point.

 

[Mike Simpson]

I've a friend who earns their living via the Review Appraisal.

They once taught at the University of WA, they're quite intelligent, and they say they can, "tear any appraisal apart...even a good one."

Comforting--huh?

-Mike

 

[Terrel L. Shields]

I was one of those appraisers who got to the end of the diving board, and was pushed into the deep end of the pool, and I doggie paddled my way to the shallow end, and then started swimming laps......

Lots of us got our training the same way, but so did the "old timers". With classes few and far between, a lot of them were real estate sales people in a down market looking for something to supplement their income. They learned by doing, maybe joining a society. The most motivated spent the additional time and money for certifications that were serious like the AIREA, and others got easy designations by diploma mills.

Pre-licensing, any designation could get you some work. In the transitional phase, my first work was for a lesbian...gave new meaning to the word b-i-t-x-x. I saw that was not working..she was totaling unable to teach, only to tongue lash (no pun intended.) MAI wannabe. 1st appraiser i knew who thought everyone else (except her MAI mentor) was scum appraisers. Banks were willing to give me work anyway. Found a sweet gal to help-CG...no recriminations or calling me stupid. But she did not help me inspect, assuming I could do it. I could. I did. I probably made some mistakes I don't today. Would take a full week to finish a residential appraisal. Found another mentor in OK as I was working both states. Super nice. Looked over my first appraisal, inspected it with me, - an 8,000 SF custom built summer home in E. OK. that had went on the auction block...dirt cheap, about $200,000 if I recall, with 40 acres, 2 lakes, horse barns, etc. He made a lot of thoughtful suggestions, helped with finding comps (by knowing WHERE to look), and made few changes after the fact. Lots of my certification and text disclaimers are from him.
I begin doing farms, mostly poultry farms. At the time, most sold for less than $250,000. I used my own methods, reinventing them several times. My butch 1st mentor's mentor (did you follow that) did a farm nearby me and I got a copy of the report. I was shocked. Missed several good closer sales to take on a sale 30 mi. away. To avoid calculating direct cap rates, he used yield cap methods regardless no "investor" buys a chicken farm, they are owner operated in most all cases except the $2 million factory farms. Adjustments were simply cost related straight across the board adjustments. There was at least 25% difference in Cost and Income method. Not credible. If this was what my "peers" were doing, then how could I go wrong? Fact is, today I could never have made it. Mentor or not. I cannot recommend this profession to any newcomer.
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