Shrinking pool of appraisers
Where’d all the appraisers go?
Banks are struggling to find appraisers. Residential and commercial appraisers are extremely busy, charging more and taking a lot longer.
There’s a huge opportunity right now, leading to consolidation, small firms rolling up into national firms. Others are being hired by banks taking them out of the fee world. Some are selective on who and what they work on but aren’t “retired.” I use quotes because many appraisers can’t fully retire. They have a strong work ethic and enjoy the valuation journey to determine market value.
This is a real email:
“We’ve had a terrible time trying to assign this one, and we’re hoping you could assist us. We’ve sent this bid a couple of times and haven’t gotten any responses.” Exasperated AMC
Problem: New appraisers can’t find supervisors to get experience.
One Answer: The Appraisal Foundation’s on-line and virtual reality education (effective Jan, 2021).
PAREA, not to be confused with any medical condition, is AF’s alternative to the traditional supervisor/trainee model. The acronym = Practical Applications of Real Estate Appraisal.
I have questions.
- Will PAREA’s first modules be available by mid-year 2022?
- Will it bring appraisers up to speed faster?
- Will it be a decent real-world equivalent?
- Will it be a good onboarding tool for new appraisers?
- Will appraisers use PAREA?
By the numbers
The Appraisal Foundation Appraisal Subcommittee as of December 1, 2021 says there are 39,045 certified general, 46,857 certified residential and 7,228 licensed residential. The 15-year trend for active appraiser credentials reflects a collective drop of 18,304 appraisers.
Here’s an old appraisal, figure it out
What Got You Here Won’t Get You There by Marshall Goldsmith tells us that our past extreme one-mindedness helped us reach a certain level of success. Once we get there, our one-mindedness turns against us.
Our memorized old educational and leadership knowledge alienates those around us. “This is the way I entered the appraisal profession, so it must be the right way to do it now” attitude. The entrenched Sinatra (My Way) management style has impeded attracting new appraisers. Be a teacher not a drill sergeant, or worse, an unavailable manager.
Share your art
If you hire a new appraiser, what’s the next step? Give them old appraisals and hope they magically figure out how to do things? What software tools are you providing to get them up to speed?
Do you have appraiser playbooks specifying how to do basic things?
How do they inspect a property, research zoning, look up property appraiser records, research Costar, write up a comp, a neighborhood description, market overview, complete an adjustment grid, understand a pro forma and cap rates, yada yada? There’s lots to learn.
Collective mindset change
The book suggests that our past techniques we learned entering the field that made us successful often turn into impediments to higher levels of success. In Goldsmith’s executive coaching, he uses 360-degree feedback from supervisors, peers and subordinates to help him coach his clients. As a firm owner or appraisal manager, would you be open to feedback from your employees?
Don’t be a caveman, provide tools
New folks looking at our valuation industry from the outside see a lot of educational requirements. If they find an employer and supervisor, they’re often met with the absence (or half-hazard implementation) of appraisal specific software such as a comp database, report writing and appraisal workflow. Invest in tools like DataComp Suite.
Appraisers in banks sometimes experience the fatiguing manual process of running an entire department with Outlook and Excel. If you’re new to the field, would you want to work for a bank that lacks an enterprise level appraisal and environmental workflow platform with custom reporting like YouConnect?
We can attract real talent if we provide technology for the buckets of business: leadership, marketing, sales, management, finance, technology and client success.
Smartest people in the room
I don’t know if PAREA is the answer, but our model is broken and alternatives are a good thing. A collective mindset change will benefit everyone. The fear of training a new appraiser that leaves to compete with you is a potential, but so what? Share your art. You know a lot of real estate stuff.
Appraisers are the smartest people in the room when it comes to real estate. You can create substantial opportunities and the give-back feels good. Is 2022 the year we change? Let’s put some water back in the pool.