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What the Appraisal Foundation Thinks
By David Brauner, Publisher
Editor’s Note: Working RE recently interviewed John Brenan, Director of Appraisal Issues, and David Bunton, President at The Appraisal Foundation regarding the college degree requirement, the shortage of appraisers, the number of experience hours required for licensing and who can complete a property inspection.
The current Real Property Appraiser Qualification Criteria, made effective January 1, 2015, requires 30 semester hours of college-level education to become a “Licensed” appraiser and a Bachelor’s degree in order to become a Certified Residential or Certified General appraiser. When asked if TAF is considering modifying this requirement, TAF said there was no opposition to the requirement expressed at the recent Appraiser Qualifications Board’s (AQB) public hearing in Washington, D.C. in October; the inference being that the lack of comment means appraisers are not opposed to the requirement.
Shortage of Appraisers
TAF said they see no shortage in the number of appraisers nationwide currently but that there may be a shortage who are willing to work for low fees in some areas. It also said that there may be a shortage in certain rural communities.
College Degree Requirement for Certification
Given that FHA and many AMCs and lenders currently require appraisers to be Certified, at a minimum, in order to work for them, those stuck at the “Licensed” level face a limited future in appraising if they are not a college graduate or don’t have the time or resources to become one. TAF acknowledges the problem and said the AQB is considering some path for those who have contributed to the profession over the years to become “Certified” absent a degree. TAF said, “One of the concerns heard by the AQB was the inability for someone who has practiced ethically and competently as a Licensed Residential appraiser for a number of years not being able to upgrade to the Certified Residential credential because he or she does not have a Bachelor’s Degree. The Board agreed that this is an issue they should examine more closely, and will be performing additional research to try and ascertain whether such a scenario could be facilitated within the Real Property Appraiser Qualification Criteria (Criteria) while maintaining public trust. Nothing has been firmly established at this point, but this will be a major topic on the Board’s 2016 agenda and it wouldn’t be unreasonable to think one or more exposure drafts will be published to solicit comments and feedback from the public.”
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Trainee Experience Hours
TAF acknowledged that the experience hours piece of the licensing requirement can be onerous, particularly for recent college graduates who may need to begin earning quickly in order to pay off student loans. The AQB is therefore considering some alternative to satisfy some portion of the experience hours- perhaps a combination of coursework and testing.
Many appraisers make the case that allowing a trainee to do a property inspection on behalf of their mentor, when they are qualified, is a valuable incentive for appraisers to take on trainees, given the time and expense involved in bringing someone along. Currently, supervisory appraisers are required to visit the subject property by most lenders. Many appraisers would like to see this changed. TAF said requiring a supervisory appraiser to inspect the property is not an AQB requirement, and a competent trainee working under appropriate supervision should be able to sign an appraisal report, without the supervisor having to personally inspect the property.
Dates: November 10th and 17th
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David Brauner is Publisher of Working RE magazine and Senior Broker at OREP.org, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 49 states. He has covered the appraisal profession for over 20 years. He can be contacted at firstname.lastname@example.org or (888) 347-5273. Calif. Insurance Lic. #0C89873
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I think the new criteria is ridiculous when it comes to upgrading your license. If your already a trainee or license professional this should not apply. Not everyone in todays economy has time or money to go to college or even be accepted to one. I only got a notice in the mail a year prior from NY department of state introducing the new requirements. I called years ago in 2008 when changes where made for new appraisers needing 30 credits or associates and i was told iwas grandfathered in. This rule should still apply to people who again already in the business. Not everyone has made appraisals there full time job or even as an assistant get a job and experience to build 2000-2500 hours in order to take certified test. I had my test scheduled December 2015 with approval from appraisal institute and paid $25 and to find out Albany never got my log so even if i passed i will not become certified anyway. I asked to over night they so no its too late. I got completely screwed and at 32 trying to figure out where to go from here for my future. I should not have to worry about this at my age or for someone who has more then enough experience then some of the actual certified appraisers out there today. In realty just because a piece of paper states your qualified doesnt mean shit. Half the appraisers i know do not have any college backgrounds or are stuck at the license they are. This was plan was not thoroughly thought because yes in years coming there will be a shortage and then too late to make changes. I would reconsider at least for us already holding apprentice license to grandfather us in.-
I am one of “those” extremely affected by these new education requirements. I am so affected that I most likely will have leave this profession as they have made it almost impossible for me to continue in this field and make a living above the poverty level until I get my license. I have an Associates degree, active real estate license, GRI, and over 15 years experience in the real estate industry. I was laid off twice and didn’t want that to happen again so I decided to make a sacrifice, be more independent, take responsibility for myself, work for myself, and get my appraisers license in Florida. I was aware of the new requirements coming in 2015 and wanted to get in and started before this took affect. I decided to make this sacrifice based on the fact that it would only be for about 2-3 years max and I could deal with that to get my license. But now it is a much longer and more expensive road that doesn’t seem to pay off in the end? A month after I finished my trainee classes, Florida decided NOT to “Grandfather” anyone in?!?!? They did the last time there was a change, why not this time?!?!? By the time I got this notice, there was no time left for me to finish up my required hours let alone the required classes and exam. I am a grown up with bills and responsibilities. How am I to reduce my work load and pay, and take out loans to go to school to get an unnecessary bachelors degree AND finish up my report hours and other appraisal education requirements?!!? To make this even MORE ridiculous, I can get a bachelors degree in ANYTHING?!?! So I take out student loans to get a bachelors degree in childcare, photography, or liberal arts and THIS is going to increase public trust and make me a better appraiser?!?! If I wanted to go back to school to get a bachelors degree, it would be for something I could make more $ in less time. I think the public would be more impressed with years experience or specific appraisal related classes and/or degree than a useless degree in an unrelated field. The public is not even aware of the details of these requirements or changes or really even cares. The only people that are aware and care are people in the industry. How much do you or people you know, know about the requirements to become licensed/certified in anything else?-
Florida does not have a licensed appraiser status and the online classes are limited. The appraisal schools are not even offering many of the classes I need due to low/reduced need. Oh wait, this may be even MORE ridiculous; I made more money a few years ago reviewing appraisals for an AMC w/o any specific appraisal training, than I do now working as a trainee with USPAP, and my trainee appraisal classes. Oh yea, and I didn’t have all of the expenses that go with having an appraisal license; MLS and Realtor dues, etc.
One more item; how can a bank have an AMC?!?!? I think this is a bigger issue of trust!! The whole idea was to separate the bank and appraiser but the banks are now profiting more from this situation. Is the public aware of this change??
by Clarence (Larry) F. Schaub. Lic. App. & RE Broker
I realize nobody will read this as there has been many replies. I will keep it short as-
of right now I no longer will accept low 30 year old fees with too short of turn times
& still comply with all the new requirements including verifing adjustments by
using sales from outside my market area in Washington County Oregon. There are
never enough like kind & recent sales to prove most adjustments. It is time for less
regulations & back to the fact that appraisals are just an opinion of value.
Anyway I graduated with an Associates & Bachelor Degree in Business Administration
in 1964. An appraisal lic. was not available in Oregon & you had to do fee work under
a RE Broker who took 1/2 of the fee. After that around 1970 you were required to have
a Broker Appraisal Lic.. Now you lost all listings & sales being used to get a Brokers Lic. so you could complete a fee appraisal. So now we have a Broker’s Lic. of no value.
During the past 51 years as an appraiser & currently a State Lic. appraiser the demand for appraisers went up & down and for several years at various time frames
there were no appraisal assignments for most appraisers due to the high interest rates
or a down economy or a lack of lenders with available funds. I have had to survive
by working several other jobs.
The point is I am still not certified but have taken about 1/2 of the required classes
and believe that any appraiser that has completed 5 years of appraising without
getting violations of USPAP or black listed by lenders for not coming in at value deserves
to be qualified for the Certified Residential License. If they can compete in this market
and be violation free & prove completion of 500 appraisals +/- they have enough experience to offset the college degree requirement.
Clarence F. Schaub, RAA, State Lic. Appraiser, R.E. Principal Broker
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Hi Clarence. I read your post and agree generally. I would add having the ability to pass the state test at the certified level. Five years plus passing the test should be all that is required. If AQB has concerns that their tests are inadequate to weed out the unqualified, then it is the tests that need to be revised and made tougher-not the degree requirements.-
by Edd Gillespie
I just wanted to say good job to David and hooray for TAF for ignoring the naysayers and grappling head on with an issue that is basic to our becoming a respected and independent profession. We have each got to invest in our own education if we are ever to advance past our 80 year cottage infancy. And obviously if advanced formal education is not required to be an appraiser no one will get it.
Next, if we are to gain and maintain the public trust we must grapple with the issues of transparency (i.e. our notions of confidentiality) and accountability. I have no problem with experience, but so far it is meaningless to our industry when it comes to the depth of analysis and the integrity and clarity of communication that are the absolute requisites of our job.
When I took the USPAP instructor class a couple of years ago there was still far too much deference and control afforded the client and intended users. The standard for appraisal reports is credibility and in answer to my question regarding who decides credibility I was told, “the client.” So much for meaningful independence.
We’ve also got to grapple with this notion that we are not advocates for the client’s position. That is just not what people are used paying professionals for and we have done an absolutely crummy job of explaining it to anyone let alone living it, notwithstanding the reams of lip service it is given daily. If my wife did not work and if the kids hadn’t yet left the nest, I could not afford to do this job without being an advocate. Simply could not afford it. Some say it is the spun notion of customary and reasonable fees and AMCs that created the fee crises and they sure had an impact, but no more so than clients who expect us to make their deal. And no small part of the exacerbation is appraiser who compete by undercutting their fee. And then I heard about a guy who uses a certain software and completes an appraisal in 72 minutes from acceptance to delivery. If you insure that guy raise the premium. That is a wreck finding a place to happen by speeding down a one way street in the wrong direction. We need to be taking more time and charging more for it, this cheap and fast stuff is not sustainable and is not good if we are ever to be a profession.
Don’t feel you need to post this. I am just elated that TAF is insisting we all become educated. We are finally witnesses to our conception as a profession and it is apparently going to be a difficult birth.
Have a good day and keep up your good work! I know paid adds and selling insurance wind your clock, but you guys give a lot of time, thought and space to what is most important to me and to our profession yet to come. Thanks.-
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Edd, the is a huge difference between ‘becoming educated’ and putting in time to earn a degree in basket weaving (or liberal arts).
Your premise that if no education is required, then no one will become educated is fallacious and unsupported. I have no degree, yet I was hired by the Treasury Department at a grade level equal to attorneys & engineers (higher than some). It was no fluke because I was also rated from qualified to highly qualified by numerous other federal agencies at the same and even higher grade level.
Experience and RELEVANT specialized professional education is superior to a non related degree in nearly all instances. Relevant education is one thing no one can argue with. It is the automatic assumption that a degree bestows any special expertise or abilities on an appraiser that is erroneous.
The one area that I am hearing AQB contemplating change in is that of experience. They have it backward. There simply is no substitute for experience. None. Unless the new degreed trainees can also pass the certified appraisers license exam AND a basic real estate sales license in their state, then they lack the experience required to be a competent appraiser.
For those than COULD pass BOTH type exams, then six months direct experience for each property type being appraised may be a reasonable alternative.
Whether trainees have to be concerned about repaying student loans or not, is NOT my concern, nor should it be a concern in establishing requirements. Clearly their degrees were not sufficient to insure they could survive in their ‘chosen’ profession of appraising.-
by Christopher V.
You’ve hit on a fine point with regard to TAF education requirements. Let me ask, are you aware if they, TAF, are considering a provision for Licensed appraisers with a degree and years of service to the community, get Certified Residential Licensed? I’ve found that Certified Residential as well as General Certified appraisers are unwilling to take on established Licensed Appraisers that in some instances may in fact have more experience and knowledge of the industry than they. The threat of competition prevails which proves to be detrimental to progress in many instances!-
Is there a way to bring this “dilemma” to The Appraisal Foundations” attention?
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Christopher, respectfully if they knew more than I do about appraising then they would already BE general certified appraisers, and not merely claiming ‘equivalent or superior’ knowledge. It is not fear of competition from limited skill trainees that keeps us from hiring trainees. It is lender refusal to accept their reports unless we also co inspect on an interior basis. If I have to do 80% of the work anyway, then what do I need to pay a trainee for?-
by Michael S.
I hear a lot of “What other profession would……blah, blah, blah” I ask, what other profession where a degree is required is an exception made for not having one? Don’t expect to be treated like a professional while trying to water down the requirements. That said, it is disconcerting to hear that TAF acknowledges “low fees” while saying we should just accept it. How does that not contradict “fair & reasonable?”-
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Most states do NOT require a college degree to become an attorney. Look it up. (Admittedly, passing the bar exam without one may be extremely rare). “Watering down” the requirements? hardly. FIRREA had no requirement for a degree. What was required was testing designed to weed out the unqualified. If the “Pros from Dover” are now admitting that their tests are not up to the task they were intended for, then why should I accept any other criteria as being necessary or acceptable? California now requires a four year degree to become a Broker. Completely unnecessary as evidenced by over 80 years of non degreed brokers providing excellent service across the spectrum of all real estate.
Either the state tests are adequate or they are not. If it is the latter, then that is what should be addressed. Not some feel good regulation based on sophist arguments.-
I’m a Certified R.E. Appraiser since 9/99. I’ve trained five people during that time frame. Three are still in the profession. Due to the rules, regulations, schooling required, continued education, expenses, the possibility of being destroyed on each and every appraisal that one does. I tell everyone who expresses any interest in this field to FLEE!!!!!-
by Joseph Robbins
I have been appraising in Maine since 1979. Real Estate Broker since 1972.-
B. S. Univ of Maine. Real Estate Educator. I cannot upgrade to “certified” in the State of Maine. There is more going on than requiring a college degree here. My last application to become “certified” was a six month process. The result: application denied. The threat of sanctions and fines accompanied the denial. I am told that anyone with a residential appraisal license from New Hampshire who applies for
Maine certification is granted the license no questions asked. “Maine, the way life should be” except for the uncertified appraiser.
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Joseph, it’s still unclear why you cannot upgrade in Maine with a B.S.-
I feel that TAF and the Appraisal Institute do not really care about what is happening to our industry. They’re obviously people that are either isolated, no longer working in the appraisal practice, or feel the need to cater to the lenders and AMC’s. I say this because we are asked to do 10 times the work on the appraisal then we did 5 years ago. We have CU and Corelogic writing appraisal rules without giving the rules to the appraiser before submission of the report. I called Fannie Mae and asked to get the CU data in my office and I was told it was only a subscription sight for lenders. THAT IS THE APPRAISERS DATA THAT THEY ARE USING AGAINST US. If the foundation had any regard to the appraisers they would mandate that information be supplied to the appraiser at the time of the order not after its submitted. If the foundation had any regard to the appraisers they would mandate a fair baseline for appraisal fees. Instead we get counted down if we refuse an order due to fee, we get counted down if we do not meet their imposed time frames, we get counted down for our reports not being CU compliant on the first submission. They also comment that there is not a shortage of appraisers. I work in Missouri and Kansas and both states have sent letters to the appraisers as to how can we get more appraisers in the pipeline since so many are over 56 years old and no one is training new appraisers. My answer is who wants to go to college, work for basically free under someone for a minimum of 2 years to make, if you’re lucky, on the high side $100,000 a year. Who wants to walk around with a target on their back feeling that any appraisal could be their last. Who wants to be told on every order what to do and how to do our job by people that are not appraisers. We are sent in some cases 36 pages of requirements for a job and they we are held to the small type on page 26 that states we need a picture looking both ways down the street from the driveway. Its ridiculous what is happening to our profession and the only way is for the appraisers to take it back. I challenge the state boards and TAF to start looking at the appraiser FIRST instead of breaking their backs for compliance issues especially when the larger lenders and CU will not supply the appraisers with the tools to do the job right the first time. Mike-
by John Ely
I agree with Mike wholeheartedly. I’ve been out of production residential work for years and at every turn there is another requirement for documented support for adjustments. And under the AMCs, fees are low and pressure is high. If there is a shortage of appraisers that is why. – John E-
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Mike, The TAF is concerned and in my experience is reasonably open minded. I’ve met and spoken with both Mr. Bunton and Mr. Brennen. Both impressed me with their commitment.
The AI is another story. It is a private organization and is not required to be concerned with the issues affecting all (appraisers); even though they frequently represent to regulators and legislators that they represent ‘the interests’ of all appraisers.
The AI is undergoing its own struggles to remain relevant today. Some MAI’s and many SRA’s along with a host of non designated affiliates may well agree that the interests of all are not being given adequate attention. That is however only the AI’s business, and that of their members.
The following has been submitted to the FFIEC and CFPB as a proposed minimum default fee for states lacking C&R enforcement; or where studies are outdated or flawed. http://mfford.com/html/c___r_fees.htm You can get involved by contacting the American Guild of Appraisers if you are seriously interested in doing something. Email Janbellas@appraisersguild.org or call her at 1(301) 220-4100.-
I can’t tell you how pleased I am to at least here that the AQB is possibly going to discuss the College Degree Requirements for Licensed Appraisers. I have been Appraising Real Estate since 1997 as a trainee and became Licensed in 2002. I got feed up with the appraisal industry after the 2008 Bank Bail Out and considered doing something else. That is the reason I never became Certified. I have fulfilled all my hours under a General Certified Appraiser even after I became Licensed and owning my own appraisal company. I still continued working for a General Certified Appraiser, doing a few appraisal for him as well as working on my own. I was not concerned with becoming Certified as I was making a Great Living as a Licensed Appraiser and was doing FHA for years as well. After leaving the appraisal industry for a couple of years during the time I could have become certified, I missed my window of opportunity to do so. I realize now how that has affected my appraisal business and has limited me in this industry. I have owned my own appraisal company since 2002. During 2002 till 2006 Is when I continued working for a General Certified Appraiser, logged my hours and turned them in to the State. It worked out great for both of us. I do not have a college degree and don’t have the time to go back to school as I am trying to run a business and raise my kids. The majority of Certified Appraisers out their do not have a College Degree in the first place! I believe it is a ridiculous requirement and needs to be changed! Why should someone go to college, get a 4 year degree and then have to turn right around, take all the real estate appraisal courses, obtain 2500 to 3000 hours working under a Certified or a General Certified Appraiser to gain an Appraisers Certified License. This is what happens when Government Oversight, Over Reaches and puts in place regulations that handcuff small business owners. Yes, I know it is my own fault for not testing when the opportunity presented it self to become “Certified”, but who wasn’t feed up after the 2008 tsunami that hit the Real Estate Industry as a whole?
After working in the non-appraisal world it made me realize just how much I love Appraising Real Estate and working for myself.
This needs to be fixed! Not just for me and my own selfish reasons, but for the Industry as a whole! Make us take Appraisal Classes that pertain to the Appraisal Industry instead of getting a Degree in underwater basket weaving before becoming an Appraiser!
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
AGREE 100%! RELEVANT education!-
by Scott Loyer
In my opinion I would like to know as to why the board does not-
Follow the model of Louisiana appraisers that joined the realitors that lobbied the state legislatures to correct this fee monstrosity in every state ? It appears this is the answer to 1/2 fees not to mention we have not had a raise in over 30 years . The board should be working on this to unite the appraisers and all other issues would be solved. I have emailed 166 appraisers in New York and 100% of them are willing to join the realtors at any cost to fix this most important issue that faces the industry today ! They also added that the lack of effort of all the appraisal institutions is the main reason they will not support or join these institutions which is a travesty in itself due to they are a very important source of information and guidance to the industry . The Louisiana model is thier and it is suspicious as to why their is a lack of effort by these appraisal institutions ? A response by the board would be much appreciated and to say we don’t have to take work at lower fees would be wrong because the game is rigged Thank you.
by Mike Ford, CA AG; SCREA, AGA, GAA, RAA
Where have you 166 New York appraisers been? The American Guild of Appraisers and a host of other state coalitions HAVE been working on this very issue! In June through August 2015 our focus was in stopping California AB-624 (a dual standards proposal passed without input from any appraisers except the AI). We were successful despite it already having been passed in both state houses! The fee proposal linked above was submitted to FFIEC and CFPB in October of this year. Plans are underway for promoting the plan in selected states ASAP. Of 21 state coalitions, only a half dozen appear to ‘do’ anything beyond their own membership.
Mike Ford, Director of Operations; American Guild of Appraisers; Chairman, National Appraiser Peer Review Committee. AGA, OPEIU/AFL-CIO
Contact firstname.lastname@example.org or at 1(301) 221-4100. Or , call me direct at (714) 366 9404.
Why don’t you 166 New York appraisers join us in doing so? With 166 people, you can establish your own State Chapter of the American Guild of Appraisers (AGA) and have direct input into what is undertaken?-
by Julia Thayer
I think they should rightly consider years of experience in place of college education. I feel when that change was made, they were primarily thinking of new appraisers coming into the industry. Most appraisers are my age and not all of us have a college education nor can we afford one financially or time wise. If one has been appraising over ten years and still don’t have enough knowledge, they shouldn’t be appraising. We take hours of education and con-ed each year and this is always a good learning thing along with reading such things as this magazine. I feel this is sufficient. As with any job, experience is the best teacher…not something that is read from a book or taught by a college professor that has nothing to do with being in the field, knowing what to look for and be aware of, and the time it takes to learn and know how to do a proper appraisal report. College is NOT always to answer!-
by Bruce Flanagan
John Brenan is absolutely right, the only shortage of appraisers are those willing to work for the crazy low fees being paid by the AMC’s. They will find that the number of appraisers willing to work for those fees dwindling over time, because those appraiser’s will not be able to stay in business at those fees. It is simply not a sound business model-