Monday, 15 August 2022 | The Latest Buzz for the Appraisal Industry

National Appraiser Regulatory System

We often hear from our readers that the appraisal system needs to be changed. It is not very often that someone takes the time to layout the changes they would like to see. Below is an article from Don Clark on what changes he thinks we need to see in the profession and his response to the recent bulletins from  The Appraisal Foundation and The Appraisal Institute

The Memorandum and letter put into context, a situation that has been brewing for sometime now between the Appraisal Institute and The Appraisal Foundation. As a Professional Appraiser who is not a member of the Appraisal Institute (AI), nor any other National Appraisal Organization, but is an AQB Certified USPAP Instructor of The Appraisal Foundation (TAF), and a member of two state Appraisers Coalitions, I do have some thoughts on the issues that are addressed by both. However, I do believe that many of the issues can be resolved by both stepping up to the plate and doing what is best for all appraisers, not individual organizations.

As I see it, there are some real and urgent issues facing the appraisal profession, and my thoughts are how they might be resolved:

  1. Increasing and continuing loss of real estate appraisers nationwide. This has been a concern in many states for some time now. Both the AI and TAF have ideas about who and how an appraiser can enter the profession, that to me at least, are idealistic and unrealistic. The primary consideration is the educational requirements for entry. In my opinion they are too stringent, and have resulted in less and less individuals entering the profession. A solution would be to roll back the educational requirements to those prior to 2008. I doubt that there are very many people with a 4 year degree or higher that are enthusiastic about entering the profession. The hours, compensation, and recognition are just not there.
  1. The licensure level is unrealistic. There should be one type of licensure: Certified Real Estate Appraiser. The 3 levels we have now are unrealistic, too arbitrary, and keep many good and well-qualified appraisers from doing what they have the competence to do based on demand of the market place. It is the market place and individual clients and appraisers who should be deciding what type of properties an appraiser can appraise, based on their knowledge of the real estate, it’s complexity, and geographical location. Just as many states have gone to only one form of licensure for real estate agents based on similar criteria, so should such criteria be applied to a real estate appraiser.
  1. Licensure, educational requirements, and the qualifications of an individual should be determined by the states, not a Professional Appraisal Organization or any other National entity.
  1. Continuing education needs to be totally revamped. Appraisers year after year are forced to take the same subject courses over and over again for little justifiable reason. It is my opinion that, with the exception of changes to The Uniform Standards of Professional Appraisal Practice (USPAP), there is no need to take any course more than once every 5 years.
  1. The Uniform Standards of Professional Appraisal Practice (USPAP) should be for a period of 5 years, with appropriate changes made at the time and date they are necessary. This is done very well for example, by the Federal Government. Any agency and the Military have manuals that are subject to continuing change, with the item/subject that is changed being replaced with a newer and more up to date version. In my 20 years in the U. S. Navy I made hundreds of changes to such manuals on a continuing basis. To rewrite a manual every two years seems literally to be a waste of time, effort, and money. The manuals could be the subject of an audit by state regulatory boards.

That is my “Five Point Plan” that I believe would resolve many of the issues of contention between the AI and TAF.

In my opinion it is far better for the parties to work this out than to have the Federal Government do so. It would also put the real estate appraisal profession under the regulatory process of the states more solidly than it is now, and that is where it belongs.

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  1. Amen to your comment on those G D NEVER ENDING ALTERATIONS TO USPAP!!! Thank God the same team wasn’t involved with writing the Declaration Of Independence…they would still be tinkering with the document. Enough is enough already. If you can’t come up with a USPAP document that works by now can the d*#@ed thing already. It should be obvious to all by now that whomever was given the contract to write USPAP managed to obtain a contract in perpetuity (until Hell freezes over) while getting paid by the word for each revision.

  2. Overworked, underpaid, unrealistic turn times, call within 4 hours set appointments, we want the appraisal back in 24 hours (read the very next morning) as a turn time. PERFECTION DEMANDED, multiple background checks at your cost, fees for software, fees for “technology, delivery systems” Fees for licensing as an appraiser then as a business, lets not talk about gas, E&O insurance, car insurance, continued education, The FEDS, States and AMC’S breathing down your neck with the USPAP anvil ready forever hovering and ready to drop on you because your human; and then there are the AMC’s. Who wants this work? Research the property, provide me with a fee quote/turn time and we’ll decide if we send this one to you, but only IF you are the fastest and cheapest for this work (bhwa haw haw). Then on top of that you have the AMC’S ROBBING you of 40% of the appraisal fee and still charge the lender for their services. When people indicate to me that they would like to be an appraiser; I tell them to FLEE!!!!

  3. The State Boards should be the only ones in charge of discipline. No other entity should be allow to blacklist, demand further education or testing (Looking at you FHA). Only the appraisal board. Homeowners, Real Estate Agents, Sellers, Lawyers, etc should not be allowed to file complaints for frivolous reasons. They should not be allowed to threaten appraisers by turning them into the state board because they do not like the value. SOW’s should be eliminated. The APPRAISER should be the one to determine how many comps, listings to use. Only the appraiser should be allowed to select the comp parameters, and determine which photos, maps and aerials to supply. Put USPAP to some actual practical use. Let USPAP determine the requirements for an interior inspection appraisal, drive-by appraisal, condo appraisal, desktop appraisal, etc. NO ONE ELSE!! Excessive SOW assignment conditions decreases the quality of a report.

  4. Most of this article I agree with, with some exceptions.

    1. I think that a national regulatory body works best to maintain integrity and uniformity of the system. Leaving it to the individual states is, in my opinion, a recipe for disaster. In fact, I would like to take it a step further and have national licenses. As long as we comply with the USPAP requirement of geographical competence, why not?

    2. There should be 2 types of licenses: Residential and Commercial. And those two should not cross paths. 3. Education is a pet subject of mine. There is a huge disconnect between the requirements of knowledge and the quality education available. As appraisers we are having more and more demands put on us and increased requirements for competence. The AQB is approving class materials that is shallow (for lack of a better word that is not impolite) and, frequently, riddled with errors. Anybody with a pulse and a certain number of years of experience in appraising can teach and, based on some recent classes I have taken, I became painfully aware of that. We simply cannot allow substandard education to count towards an appraiser’s knowledge base yet expect much, much more from us.

    3. I fully agree that changes to USPAP every two years is excessive. As Don suggested, make changes every 5 years and require the full 15 hour USPAP class to be taken by every appraiser once every license cycle. It is a great refresher of knowledge.

  5. Agree 100% with USPAP changes every 5 years. Tired of having to take that course every 2 years. Better education is a must. Currently based upon all the expectations, requirements and liability that the Appraiser faces a Doctorate Degree should be required. NOT! But when you think about what an appraisers is expected to do and be an EXPERT in, aside from valuation… other degree I can think of would cover it. I think we need professionals in the Appraiser profession with a good education, how much is up for debate. I really believe that FANNIE MAE, HUD, lenders, etc are gunning for appraisers so that by pure attrition they will go away and they can use AVM estimates (which comes from all of our work over the years) and be done with Appraisers. If this is NOT their objective then they are shooting themselves in the foot as way too many good and long term appraisers are saying the hell with this profession, I am reworking my business plan. That is exactly what I am doing after 22 years in the business, I have been working very hard to get ALL personal referral, pre-listing, pre-sale business from our local Realtor base…..and it is working. I am at over 50% personal business and working very hard to make it 100% over the next few years. I am DONE with lenders, HUD and Fannie MAE calling the shots and holding the big club over our heads warning we could lose our licenses. I am also seriously considering no longer doing FHA Appraisals. They cannot pay me enough for all the liability attached!

  6. No offense to the perfectly well thought out list of grievances, and practical fixes, BUT.

    If appraisers had any power at all, we wouldn’t even be in this mess to begin with.

    Appraisers have lots of awesome ideas on how to “fix” things, but it won’t matter how many good ideas we throw out there. The demise of DOD/Frank showed us not even the government will back us.

  7. You know if the banks took responsibility for the Appraisers they hire, Licensing and E&O Insurance become un necessary


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