You may have read the article by Lance Coyle, President of the Appraisal Institute, in yesterday’s Working RE news edition email addressing the future of the appraisal industry entitled The Future of Valuation.
Mr. Coyle addresses a major problem in the appraisal industry that several different organizations, appraisal firms and appraisal management companies have taken steps to try and bring to light as well as help solve the problem. But it’s still not getting the due attention that it deserves. When turn times on appraisals become 4 + weeks due to the challenges of having too few appraisers, the industry will certainly take notice—but I’m afraid it may not be soon enough.
The real problem is there are a number of barriers to entry to become an appraiser. Now those interested in an appraisal career are required to have a 4 year college degree. Recently the number of experience hours for certification rose to 2500. In reality you are looking at over 6 years of education and experience to start your career as a residential appraiser. Individuals coming out of college, who are looking for a career don’t often have the luxury of additional training for 2 or more years. This is one area I believe should be reconsidered to help give new appeal to the industry.
Perceptions about requirements have also made it difficult for appraisers willing to take on trainees. Some believe that the GSEs don’t accept trainees for assignments. Licensed trainees are accepted by the GSE provided a licensed supervisory appraiser also signs the report. But even though the GSEs accept trainees, lender overlays may exclude trainees for orders. On a positive note this perception is getting better and more AMCs and Lenders are open to accepting orders from trainees than in the past.
Liability is also a concern for a lot of supervisory appraisers. What kind of liability could a supervising appraiser be exposed to if a trainee were to make a mistake? The potential risk could also result in appraisers not hiring and training new blood in the industry.
Other concerns include having enough volume to support a trainee, additional stress, additional time and expense requirements as well as a growing concern that an appraiser may be training his future competitor.
I believe that most of these concerns can be overcome and there are a lot of brilliant people working to help ensure a bright future for the industry, but without enticing the next generation, which would mean a loosening of the licensing requirements, it will be a very difficult proposition.