Property appraisers no longer need a college degree in order to receive their certification, and they do not have to put in nearly as many hours as they used to in order to obtain and maintain that certification, either. According to a recent announcement from the Appraisal Foundation’s Appraiser Qualifications Board, the move to reduce requirements for appraiser certification is intended to ease labor shortages in the industry. At present, most appraisers are in their late 50’s and many have opted to either allow their certification to lapse or are opting out of mentoring new trainees due to lack of compensation and lender restrictions.
In the wake of the housing crash in the mid-2000s, many appraisers left the industry entirely. Although the national housing market has, for the most part, recovered, many industry professionals have not returned. This shortage is probably most evident in construction-related fields, but the need for appraisers is a growing concern. Earlier this year, the National Association of Realtors (NAR) proposed changing the requirements for appraisers, stating, “Appraisals are an integral part of the homebuying process, and ensuring there are well-trained, qualified appraisers to supply demand is key to a safe and healthy housing market.”
The NAR’s concerns over having living human appraisers in the field are certainly founded. In early 2017, a number of lenders moved to automated valuation models for eligible situations, citing the long timelines (as long as seven weeks in some hot markets) for getting appraisals and reaching closings. Furthermore, when local appraisers are not available, an automated solution may be more accurate than an appraisal from an appraiser unfamiliar with the local market. However, data cannot fully replace a personal review of a property, although there are options available to real estate investors depending on the type of deal you are doing. For example, you might opt to get a broker price opinion (BPO) from a licensed broker instead of a formal appraisal if you have a good sense of a potential purchase already.
Investor Insight: While your certified appraiser will still have to complete training, do not assume that a newly certified professional will have the same background as a more seasoned appraiser. Work with your appraiser to make sure they understand what you need to know about any property.
Do you worry about a future shortage of appraisers? Is there a better way to get a property value? Tell us about your strategies and learn from others here.
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