Most good things change, and most change is good!

Over the years, many things in the appraisal profession have come and gone. Things that were once all the rage – have since fallen into the ranks of the old and obsolete. 

I remember as a young appraiser when Polaroid film was the standard, then 35MM, and now digital cameras, or even a phone or tablet. Fax machines with shiny paper that would curl up with red streaks marking the end of the roll was replaced by email, instant messaging and online portals.  

We have seen new ways of creating the same product, new technologies, new consumer preferences – the demands of time and money have hastened these changes.  Like most of you my age, I’ll bet you were ecstatic when fax machines replaced snail mail, and even happier when email replaced fax machines! 

I have truly enjoyed being involved in the appraisal profession for many years. As an independent appraiser, staff appraiser, chief appraiser and appraisal board member, I have seen the industry change over the years, and most of the changes have been good.  

Most good things change, and most change is good!

Today we are seeing change that not every working appraiser sees as “good change.”  What am I talking about?  We all have seen the buzz phrases: appraisal modernization, bifurcation, data collectors, desktop and hybrid appraisals, and observation (rather than Inspection). Some of these have been around for many years. Heck, appraisal modernization was being discussed by FNMA and Freddie Mac in 2016!  

  

Moves to modernize

The most recent efforts to “modernize” the appraisal process was highlighted significantly due to the years of the pandemic when appraisal turn times and fees reached all-time highs. During this period, the demand for appraisals far exceeded the capacity of appraisers to complete them. As the fees went up and up, and the turnaround times grew exponentially, we knew it wouldn’t be long before change would occur. Remember: a light bulb shines its brightest just before it burns out!

Some mortgage lenders would say there is a shortage of appraisers and believe the shortage is impacting their ability to deliver credible appraisals to their clients in a timely manner. I agree this is true, but not because of the number of appraisers relative to the appraisal volumes, but because of the geographic distribution of appraisers. Others, like independent appraisers, blame AMCs and say there is only a shortage of appraisers willing to work for the fees AMCs pay.  

Next gen appraisers

Several white papers have been developed on the declining number of appraisers dating back to 2011. Many mention the cause of the decline in appraisers due to the revised criteria by the Appraisal Qualifications Board, which required a 4-year college degree (and they are now revisiting). There are also the economics of training new appraisers and the numerous and disparate state laws and lender prohibitions. All of these negatively impact the ability to train the next generation of appraisers.  

As the United State’s population increases, most occupations are graying. Appraisers aren’t the only “stale, pale and male” profession. However, unlike doctors, accountants, attorneys and engineers, the appraisal industry has no clear path to entry.  As a result, the number of new appraisers is not keeping pace with those leaving the business despite the excellent efforts of the Appraiser Diversity Initiative and other industry groups.  

No matter the reason, the bottom line is the number of appraisers is declining, and the consumer experience is suffering. The fear of repeating those long turn times and high fees, combined with the growing gaps in appraiser coverage, is driving change. And just like in other industries, such as taxi cabs, travel agents, and telephone operators, when new technology is available, or consumer experience suffers, America’s capitalistic and entrepreneurial spirit steps in to provide solutions.  

To avoid being placed in the graveyard of other professions that did not evolve to remain relevant, appraisers need to embrace this change and grow as a profession to meet the needs and demands of the people they serve.  

Physical inspections

Appraisers need to keep an open mind towards allowing someone else to do a physical inspection while they “observe” the inspection results, analyze the data and develop the final opinion of value. Think of it like a dental hygienist cleaning your teeth with the dentist checking and approving the work. Or the paralegal conducting research for the attorney, or a nurse that assists the doctor, and so on. 

Emerging technologies

Everyone needs to accept that technology can help us do our jobs better. We all use calculators, GPS, and digital photography equipment in our daily jobs. We should be diligent in discovering, understanding, accepting and implementing new technologies as they become available. Twenty years ago, I would have never imagined we could measure a house with a phone or identify features of a house through computer vision.  Today, these are a reality, and they allow us to be more efficient and accurate in our appraisals.   

USPAP

All appraisers must know and fully understand USPAP. We can no longer assume contrary positions such as, “I must personally see the inside of the home to do a credible report” or that “I need to drive by the property and the comparables.”  And God forbid “I need to smell the house”!  

All appraisers should professionally refresh themselves by re-reading Advisory Opinions 2, 18 and 37 of USPAP.  These incredibly good reference materials will allow appraisers to incorporate new concepts and technologies into their daily work confidently.   

This is the time in our careers when every appraiser needs to accept change and more so, embrace change as a good thing. We need to do this starting today to stay relevant and remain a viable option in the lending process!  

Most good things change, and most change is good – unless you’re not a part of the change.