I just returned home from a meeting with my church congregation. I sat next to a man whom I have known for just a short period of time. However, I know him to be a good man, honest, and hard working. “You mentioned you work in the appraisal field, right?” he asked. “Are you looking to hire anyone? I used to be a trainee many years ago, and I enjoyed that kind of work.” Upon further inquiry, I discovered he had been unemployed for over a month.
It is a question I actually get quite often. In fact, I have an entire folder full of resumes from appraiser trainee hopefuls. Unfortunately, I had to tell my friend and so many others that I have a lot of work for them to do, but I cannot hire them.
Appraiser publications across the nation are lamenting the fact that we have lost 20-30% of the professionals in the industry in just a few, short years. Furthermore, a large percentage of those still left are within only a short number of years from retirement. What’s more, these jobs are not being replaced. Why?
In the ‘old days,’ (I say that tongue-in-cheek as it has only been a few years), hiring a trainee and raising them up through the ranks could be a viable and profitable option—if it were done correctly. For those appraisal business owners who were actually turning down business, a trainee could be a valuable asset in just a short period of time. Anymore, the incentive has been erased.
I have trained many appraisers over the past ten years. I like trainees. They are innocent, moldable, and teachable. Within a relatively short period of time, they can go from knowing next to nothing about real estate appraisal to inspecting properties and being trusted with a large portion of the technical side of things. The motivation for a business owner was the extra volume they could take on and mutually benefit each other. However, that enticement only exists if an appraisal business owner could allow a trainee to do that work without a supervisor constantly looming over their shoulder. If a Certified Residential Appraiser could send a Trainee to inspect one property/comps while he/she inspected another property/comps and then they meet back at the office and work on the write-ups together, more work could be done in less time. The Trainee gets paid for his effort, and the Supervisor makes more money on that one appraisal than is being paid out for the help. Win-win!
Of course, there are the ‘little’ issues of trust and credibility. Was the inspection done in a professional and thorough manner? Was the appraisal and report completed accurately and by adhering to all laws and quality standards? Who determined that? Naturally, the fact that the Supervisor was required to co-sign the report (and also accept ultimate responsibility for its quality) should be a motivating factor in making sure the work was completed with integrity and excellence.
Well, that was then. Now, our clients (AMCs and Lenders) have made it next to impossible to take on a new recruit. Most of the engagement letters I receive have the following little statement attached, “The Certified Appraiser must physically inspect the property, all comparables, and complete the appraisal report. The use of Trainees for this assignment is not allowed.” So, let me get this straight: I can hire and train a new appraiser, but they cannot do anything to help my business grow until they are fully Certified. Gee, sign me up!
Where does this idea even come from? It is not USPAP. It is not the ASB. It is not State Appraisal Boards. As far as I know, it is not even Fannie or Freddy who are requiring these stricter guidelines. These are coming directly from the lender. Why? I wish I knew, but our clients are shooting themselves in the foot with these regulations. If there is no motivation to hire a new appraiser, there will be no new appraisers hired. With so many leaving our industry, our numbers will naturally drop. Now, as appraisers, we know a little something of supply and demand. Fees are naturally going to rise as the number of appraisers dwindles. If lenders and AMCs are all about saving money (which I assume they are if they are in business), they had better consider making some changes to these policies—and soon. It should not be hard to do as USPAP (as well as other regulations) still requires that the Supervisor be fully in control of the appraisal process—thus providing some indemnification for the lenders.
Just this week, I was contemplating opening a new area. I am near having the geographic competency to cover this new area. There is more than enough work and my clients desire my presence there. My biggest problem is that I am busy enough in my current areas already so as not to have the ability to make this happen. As of today, I have a perspective employee who could help me cover that area. In the end, I had to tell my friend to head back to the unemployment line as my clients won’t allow me the freedom to hire him.
I call on AMCs and Lenders everywhere to think this thing to the end of the row. Allow us to do our job. By doing so, you are also allowing us to be accountable for the job we are doing. In the end, you are only helping yourself by increasing the number of good appraisers entering the profession which can be called upon in the near future to serve you in your purposes.
Now, go create some value!
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Dustin Harris is a multi-business owner, but he has found most of his success as a self-employed, residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc., and is a popular author, speaker and consultant. He owns and operates The Appraiser Coach (www.theappraisercoach.com) where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth. He is also the Founder and President of Your Appraisal Office (www.yourappraisaloffice.com) which implements some of the systems he has developed to help lower costs and free up time for real estate business owners. He and his wife reside in Idaho with their four children.
For more information on this subject, please listen to The Appraiser Coach Podcast Episode:
