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Our Take: Fixing the Appraiser Shortage

A healthy mortgage industry is made up of many components, but few are as critical as the appraisal.

A healthy mortgage industry is made up of many components, but few are as critical as the appraisal. We don’t have to look too far back in time to see what happens when appraisal quality isn’t there.

 

That’s why many of us are very concerned about the very real probability of an appraiser shortage in our near future—and everyone is wise to try to figure out how this shortage will impact his or her business.

 

With the average certified appraiser nearing 60 years old, attrition is a real concern. Meanwhile, an estimated 20 million new households are projected over the next decade – and you can bet many will be new homeowners, all needing appraisals.

 

First, the industry is trying to get young talent into the profession. The Appraiser Qualifications Board, which doesn’t take policy changes lightly, has proposed changes to the requirements for becoming a licensed appraiser.

 

But was this a good thing – or will it erode the appraisal quality our industry has worked so hard to build?  

The AQB voted allow a different approach for appraiser candidates to obtain relevant experience and academic background needed in order to earn an appraiser’s license. While this may sound like a bad omen for appraisal quality, I think they are on the right track.

For example, the board plans to have alternatives for the 2015 requirement for appraisers to have bachelor’s degrees or a certain set of college coursework before getting licensed. For many appraiser candidates, this was too much of a financial hardship to add on top of the burden of getting real-world training.

 

Under the AQB's new proposal, candidates can achieve educational requirements by passing a college level equivalency program equivalent to 21 semester hours of college level coursework. A second option exists for licensed residential appraisers to take 21 hours of specified college coursework. And a third method is suggested that combines both college level courses with the CLEP program tests.

 

The AQB has also created modules that may be utilized to gain important experience prior to becoming credentialed. The previous standard ignored basic objectives of the profession – creation of competent, well-rounded appraisers, not just those that potentially went through repetitive basic activities for two or more years.

 

The new approach underscores that most certified appraisers work alone and lack the time or the resources to train an apprentice—especially when handling an increasingly busy workload. Working appraisers are also not highly motivated to train someone who may someday become a competitor. As a result, many people trying to break into the industry are having trouble finding someone to mentor them. The AQB’s proposal would lessen some of this burden.

 

The AQB’s changes are going to take a few years to take hold, but I’m very optimistic of the direction being set forth. However, we need to do more.

 

While coursework and the amount of time a person spends learning how to appraise property are important, our industry could also benefit from “simulative” and “experiential” forms of training, such as virtual reality. Physicians and commercial pilots are already using this technology, which I believe is going to have an enormous impact on how we learn and interact as a society. These sorts of tools can be an excellent supplement to the appraiser’s education.

 

While our industry needs to carefully weigh any changes in training requirements with appraisal quality, a wider on-ramp to the profession will help attract a new generation of appraisers we so urgently need.

 

I’m very glad to see the AQB look outside the box for solutions. I remain open to other ideas to make our industry more attractive to young professionals, too. If you have ideas of your own, I’d love to hear them!