A New Generation of Appraisers

Evelyn Fred, a Realtor with Jameson Sotheby’s International Realty, had four properties appraised in 2014. While the reports are coming in closer to value, the time lag between completion of the appraisal has grown longer. So although Fred believes there have been improvements in the overall quality of the appraisal reports, as well as the caliber of the appraisers who complete them, she would love to see a faster turnaround.

“It would be great if we could simply order an appraisal today, have an appraiser at the property tomorrow and get the report the next day,” Fred says. “If inspectors can do that, why not appraisers? Sometimes, we have to wait a week to get the report in because they’re so bogged down with other work. I found that many appraisers treat this as their side job, and there is not a tight time frame for completion required.

“Recently,” Fred continues, “a client had an appraiser come out to their property, and it took almost two weeks to get the report. When we finally received it, it was riddled with errors.”

Fred contested the appraisal and had another one scheduled, but had to wait another week to get the report on the new appraisal.

“Although things are better, there is still much room for improvement. We still see the lack of timeliness,” she says. “All we really want is for appraisers to do their work. Do it right and in a timely fashion.”

When NAR conducted its 2013 Realty Confidence Index, the appraisal industry was reeling from the same shocks that upended many Realtors. Experienced appraisers left the field in droves as their work dried up and the reporting requirements changed. Some were unwilling or unable to accept the tighter deadlines and the fact that the AMCs would be cutting into their already thin fees. Others may have been daunted by the increased digitization of the appraisal process.

“We definitely saw some bloodletting,” Johnson says. “It also was partially because the new rules and regulations came out. A lot of appraisers not only had new licensing issues, but they also had delivery through specific technology. A lot of the appraisers who had been around forever just didn’t embrace the technology.”

A new generation of appraisers has since filled the gap. Brand new to the business and often just out of college, some made routine mistakes that generations of earlier appraisers did, but they didn’t have the experienced coworkers to help guide them as they took their first steps in the industry.

Some of the growing pains experienced by the new generation of appraisers have been alleviated. Much of the turmoil caused by the introduction of the HVCC regulations in 2009 has dissipated, Johnson says, with the AMC’s and the appraisers having a much firmer grasp of what the rules mean for them and how to follow them. The new appraisers who entered the profession after the crash, and the few who stayed with it through the hard times, have also gotten much better at the work.

There are also some positive signs for the appraisal industry, though they come with cautions. The Appraisal Institute, an organization of more than 21,000 appraisers in nearly 60 countries, reported last year that while the number of active real estate appraisers working in the U.S. continued to decrease, the rate of attrition had slowed. In the first half of 2014, the number of appraisers fell by 1 percent, compared to an average annual drop of 2.6 percent over the previous six years. As of June 30, 2014, there were 80,500 active real estate appraisers, a decrease from 81,050 at the end of 2013.

The Appraisal Institute also found it likely that the profession could shed another 10 percent of its workforce in the next five to 10 years through a combination of factors, including retirement, fewer people becoming real estate appraisers and the increased use of data analysis tools.