Wednesday, February 28, 2024 | The Latest Buzz for the Appraisal Industry

Thirty Years in and the Future is Still Bright

This article was originally published in the latest edition of the Fall 2022 Appraisal Buzz Magazine!

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As I sit here and reflect on my career, which reaches its 30th anniversary this year, it strikes me just how little has changed in the appraisal industry in the past three decades. Although it has been many years since I “slung” a tape, I am a real estate appraiser and am proud to tell people so.

Our industry has always been the proverbial black sheep in the mortgage process. The appraisal is often portrayed as a necessary evil and viewed as time consuming and expensive. We are the independent, objective, impartial, and too often misunderstood voice in a process stacked with highly motivated, emotional, and often misinformed participants. It is this very independence that drew me, and presumably so many others, to the profession to begin with. This was an environment where I could provide my professional, impartial opinion that would be relied on for lending and buying decisions. Sounds simple enough, right? Well, not so much. I suppose whenever a process is based on a person’s opinion, it’s going to generate several alternative opinions and a degree of conflict.

I read a lot of industry blogs and meet appraisers from across the country at various industry events. What strikes me more than anything is the level of negativity that permeates from so many appraisers. While I realize that those complaining on blog posts are typically the noisy minority, I think it is fair to say that appraisers are a generally negative bunch. The question is, why? For as far back as I can remember, the sky always seems to have been falling on appraisers. However, the reality is that the past decade has been a fantastic time to be in the industry. The volume of assignment opportunities has increased year after year, and along with volume has come some additional requests. Some might complain about fees, but in comparing the average hourly rate of an appraiser to other industries, you might reconsider your dissatisfaction. Organized and diligent appraisers have been making a great living for a long time and will continue to do so.

I am an advocate for appraisers. I genuinely believe that the vast majority of appraisers are professional, hard-working people who want to do the right thing and take pride in their work. Despite the negative few in the bunch, it should be acknowledged that appraisers are an amazingly resilient group. There is no more intrusive a process than a stranger walking through your home and taking photos. Yet, day in and day out, appraisers turn up on people’s doorsteps not knowing what they might encounter, inevitably dealing with any number of unexpected issues. Hundreds of thousands of appraisals are completed annually and the vast majority go smoothly, which is a testament to the majority of professional appraisers in the field today. The pandemic clearly showcased the appraisal industry as one that was willing and able to adapt to extraordinary conditions. Without missing a beat, production continued. Adjustments were made to prioritize health and safety, but homeowners were still able to receive financial assistance during a time when they needed it most. I was directly involved in this process and was blown away at the flexibility, empathy, and professionalism displayed during the darkest periods of the pandemic. This type of extraordinary service is not given the attention it warrants.

For the appraisal profession to continue to evolve and grow, we as an industry need to constructively address a number of key issues facing us today. One major issue is the complete lack of diversity in our profession. We must have a workforce that mirrors the consumer base we interact with. In my opinion, this is the primary root cause of the bias issue we now face. This is a legitimate problem that must be confronted. We all must collectively do more to encourage more diverse entrants to join our ranks. Additionally, appraisers need to be not only encouraged, but empowered and incentivized by all industry participants to utilize trainees. Lenders should review their existing policies and experience requirements to allow for broader use of trainees. We need creative solutions for the current supervisor shortage. Too often, new appraisers go to great lengths to comply with all education and experience requirements, only to be told they cannot be utilized because they don’t have sufficient experience. Barriers to entry must continue to be removed, and it needs to be less of a challenge for appraisers to get started once the initial requirements are complete. Appropriate risk controls around assignment can be easily created to allow appraisers to receive work as soon as they become licensed. There is plenty of opportunity for everyone.

So, why do I say the future is bright? Well, because it is. As I previously stated, so little has changed over the past few decades. Yet now, so much is changing. In the past few years alone, appraisers have been impacted by waivers, bifurcation, hybrid appraisals, desktop appraisals, gadgets that create floorplans, gadgets that enhance inspections, new forms that look just like the old forms, new measuring standards, claims of bias – the list goes on. There is clearly an abundance of distractions, but not all of them are negative. The future of the appraisal industry is going to be different, but that is not necessarily a bad thing. The updating of our industry is long overdue. We demonstrated during the pandemic that we are adaptable – something many were surprised to see. If we continue to adapt and be open to the inevitable changes that come our way and leverage technology constructively, appraisers will succeed and continue to add considerable value to the mortgage process.

Embrace the change. Think about your business as a revenue-generating enterprise. Apply that to the services you offer with an hourly rate that is commensurate to the professional services you provide. Exceed expectations – this is a service industry irrespective of who your client is – and you will win. Welcome the new technology developments and learn how to use them to drive efficiency and improve your quality. Even better, hire a trainee to help you utilize it! Join any number of the current appraiser forums out there to positively interact with your appraiser colleagues. It has never been easier to communicate and develop a network and learn.

Expand your knowledge of the countless specialty services that will absolutely continue to require the services of an appraiser such as complex high-end properties, new construction, review assignments, etc. These are all areas where there is a lack of experienced talent. Appraisers are no longer one-trick ponies filling out the same form for cookie-cutter assignments. We have a considerable amount to offer the mortgage industry; we are the critical objective voice of reason in a chaotic process. I am proud to be an appraiser, and I’m fortunate to be in a position that creates employment opportunities for hundreds of newly licensed appraisers and trainees. My first three decades in this industry have been extremely fulfilling. Looking ahead, I hope to have a positive impact on the next generation of appraisers because I believe the future is bright.

Tom Armstrong, MAI

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