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Changes proposed for the SRA Designation
This page was written in March 2016, when the Appraisal Institute was considering significant requirements for obtaining the designation. For more information search this website for SRA Designation (search box near the top of this page on the right side.)
By Ann O’Rourke, MAI, SRA
10/20 Update. Changes proposed for the SRA Designation for Appraisers (Appraisal Institute) were not adopted and membership has continued to decline.
There are many new appraisers now. SRAs should be role models for new appraisers. But the number of SRAs keeps declining. The demise of the SRA is another nail in the coffin for the residential appraisal profession, as contrasted with form filler business persons.
I’m an AI member. I am open to any changes that will stop the decline in SRA members (about 50% since 1990). But I don’t think this proposal will help. There may be a backlash from current SRAs who drop their membership. The difference between requirements for state certified residential and the SRA will be minimal. However, one plus for the SRA is peer review. Some states review appraisals and some don’t before issuing licenses and certifications. As of 1/1/05 the Appraisal Subcommittee will require audits of a sample of the applicants.
One designation – MAI – the best solution
In my opinion, the best option is one appraisal designation, similar to ASA. MAI, General and MAI, Residential. This is easy to do. Lots of appraisers would join and the AI would become the premiere appraisal association.
The AI could save residential appraising
Residential appraising is going downhill fast. The vast majority of the work is for lenders who just want to make the deal. They have always seen appraisers as deal killers, but the pressure is much stronger now than in the past.
When I started my appraisal business in 1986, I joined the SREA. SRAs were the role models for new appraisers. There were lots of residential appraisers at the meetings, but I could rely on the SRAs overall to have expertise and training. The SRAs were mentors you could call. They didn’t have to take on trainees to do this.
Now, when attending a meeting of a local appraisal group, I can’t really tell who knows what they are doing and who are just form fillers. To find out I have to speak with them. But does a trainee have the expertise for this?
I see whole generations of residential appraisers without any role models.
Many appraisers have always wanted to learn and meet with other appraisers. In the past, most candidates didn’t get designated. Why not have a member classification similar to the former affiliate designation – for those who don’t want to get a designation. Of course, with little difference between the SRA and certified residential in 2008, so maybe more of these people would get designated.
Here are two possible solutions:
- One appraisal designation, similar to ASA. MAI, General and MAI, Residential. This is easy to do. Lots of appraisers would join and the AI would become the premiere appraisal association.
- Two parallel organizations within the overall AI umbrella – one for residential and one for commercial. Much, much easier than a merger with another organization. The model for the organization is the former SREA which was residential focused and candidates were not considered inferior.
What’s in it for the AI? More members and more money. A chance to keep the residential form fillers from dragging down all appraisers, including MAIs.
Residential vs. commercial
When I started in appraising in the 1970s as a staff appraiser, you began with residential appraisals. The “more promising” appraisers were promoted to commercial appraising. In other words, commercial was superior to residential. I don’t know when this started, maybe in the 1930s when appraisal associations started. Now appraisers are typically “tracked” and start in residential or in commercial appraising, but this attitude still persists.
This was obvious in the former AIREA where there were few residential appraisers. The former SREA was an organization started by lender appraisers and the focus was on residential appraising.
In my opinion, the AI appears to be returning the old AIREA days. SRAs are being encouraged to become proficient in small commercial and apartment appraisals although I am not sure who will be their mentors so the appraiser can get state experience. MAIs? However, those types of appraisals are lower fees than other commercial work. Why not just get an MAI?
What’s the difference between certified general and the MAI?
What’s the difference between certified residential and the SRA?
There needs to be a big difference for both, not for just the MAI.
Why are the SRA requirements changing?
The AI had to make SRA requirements match certified residential. To keep the singly designated SRA from dying off, something needs to be done. There are about 3,100 SRAs now, about half of what there were at merger in 1990.
Fewer SRAs mean less dues income for the AI and less residential influence in the AI.
The future of the SRA
I really hope the SRA changes work, but this is very unlikely in my opinion. The big problems are the lack of market recognition for the SRA and high dues. The “worst case” scenario is an SRA backlash with even more designated members dropping out, and few new SRAs coming in.
I see the future as most SRAs as being dually designated, like me, with both the MAI and the SRA. There is no extra charge for the SRA. The AI recently changed their SRA requirements for MAIs, not requiring a demo for the SRA and expanding the type of experience allowed. However, I doubt if very many do residential lending form appraisals themselves, now or in the recent past. They may have residential staff appraisers however.
Demonstration appraisal report requirement
I have always thought narrative demos for the SRA and the MAI were too big a hurdle to getting designated. The only complete appraisal in a self contained format I have ever done on a home is for my SRA. As a commercial appraiser, I already do narrative reports. Sure, I learned a lot from my two demos. But there are other ways to learn.
Cut the dues by 50%
I don’t have any problem with dropping the demo or the other changes making the SRA very similar to state certified, although I would prefer the SRA has higher requirements than certified residential. The MAI requirements are much higher than the certified general requirements.
For some time, in my area anyway, SRAs have been giving up their designations. Those who kept their SRAs were asked why. Dues of around $900 per year (depending on local chapter dues), just under the MAI dues of $1,000, was the primary reason. Also, of course, the shift away from local chapter meetings with good networking and shift from appraisal department to mortgage broker ordering of appraisals. SRAs were well respected in the past by clients.
My answer for some time has been to cut the SRA dues in half.
I have a newsletter business. I make my money from renewals. New subscribers are great, but my source of future income is renewals. I started my newsletter in 1992. Twice a year I mail to my expired subscribers, which always has the best response of any other marketing activity. With about new 10 new SRAs per year over the past 5 years, membership will continue to decline.