The First Rule of Real Estate is location, location, location. But, do lenders care?

Not every property fits well on residential forms. Today, many don’t fit due to the incredible scope creep.

Savvy appraisers are screening appraisal requests and turning down any assignment that will cause “problems” when submitted. Many appraisers are very busy. Every minute spend on a tough appraisal is time that could be spent on appraisal that takes much less time, not counting all the stips. The time to take the “tough ones” is when business is slow. If an AMC doesn’t like it when you turn down assignments, drop them and get a new AMC to work for. There are plenty of them desperate for appraisers.

Lender appraisal commoditization, and the UAD, have significantly decreased the focus on the importance of what appraisers provide – expertise in a local market. Every market, and submarket, is different and unique. In many areas, the markets are changing on almost a daily basis.

More and more frequently, appraisers are not trusted and local experts. The incessant requests to “consider” comps from public records, change the “wording” of a phrase, appraiser vs. public records sq.ft., cats in photos, etc. Do they even care about local knowledge? Is it just fitting everything into a form that can be easily “reviewed” by software and unlicensed persons that focus too often on what is irrelevant to the value opinion? Is this information what clients (lenders and investors) really want?

More important, the wide use of non-local reviewers with no local knowledge really makes it hard to explain what is happening so it fits into their rigid criteria.

For example, in some markets location on a busy street is not a factor that affects market value and in others it has a significant affect on value. Or, location on the first floor in a condo project is a plus, and in others it is a minus, for various reasons.

Don’t let lender restrictions affect your value or what you put into your report!!

Appraisal Today newsletter

Number of certified appraisers way up!

Certified Appraisers at All-time High, Opportunities Coming:
Appraisal Institute study

My comments: Licensed appraisers are dwindling as FHA and many lenders will not accept their appraisals. The AQB only determined certified appraiser qualifications. When licensing started, many states set up a licensed category because there were fears of an appraisal shortage as no one knew how many appraisers existed pre-licensing. Unfortunately, state licensing requirements varied widely, with some states (i.e., IL and OK) having very minimal requirements.

Appraisers are aging. That is true of many types of work, primarily due to the aging of the baby boomers. When I started my business in 1986, the AIREA (merged into the AI) survey said the average appraiser age of their members was in the early 50s (most were commercial appraisers). Few appraisers started appraising as their first career, so appraiser age has always been higher.

The positive spin is that there will be a shortage of appraisers in the future. This is nothing new as residential lender appraising has always been boom and bust. 70% of appraisers are residential. Another positive factor is that the post-licensing qualifications of  appraisers has gone up with more certified appraisers.


Text of AI press release:

The percentage of appraisers with a state certification is at an all-time high, the nation’s largest professional association of real estate appraisers announced today. With more than half of U.S. appraisers aged 51 to 65, the Appraisal Institute anticipates opportunities for new appraisers.

The Appraisal Institute has analyzed the Appraisal Subcommittee National Registry data since 2006 using a consistent methodology, and the long-term trend is clear:

· The number of appraisers continues to decrease at a rate of about 3 percent per year;
· The appraiser population could decrease 25 to 35 percent over the next 10 years due to age attrition and fewer new entrants.

“In spite of a higher level of appraiser qualification overall, the lack of career prospects for trainees and few new people entering the profession are legitimate and serious issues, yet opportunities do exist to reach the next generation and employment options will, in fact, likely be enhanced in the coming years,” said Appraisal Institute President Richard L. Borges II, MAI, SRA.

Broader analysis suggests this is primarily due to:
· A sharp and long-term decline in the number of new people entering the field;
· A high rate of future retirements due to the high mean age of appraisers;
· Individuals leaving the profession due to challenging business conditions;
· Increasing government regulation;
· Wider use of alternative valuation technologies displacing some appraisers (especially in the residential sector); and
· A potential oversupply of residential appraisers. (Nearly 70 percent of all appraisers focus primarily on residential appraisals.)

While the overall number of appraisers is decreasing, the number of certified general and residential appraisers is on the upswing.

The analysis shows there were nearly 6,000 more certified general and residential appraisers on Dec. 31, 2012 than there were at year-end 2006. For the same period, there was a decline of nearly 16,000 licensed appraisers. About a third of the decline is because appraisers achieved certified status. A large majority of appraisers who left the profession in the past three years were licensed-only appraisers who were either relatively new to the profession or did not pursue certification.

The proportion of certified appraisers to total appraisers was 72 percent at year-end 2006. As of year-end 2012, the proportion was 87 percent; therefore, the proportion of appraisers with a certification is higher than it has ever been. While the total number of appraisers has decreased 15 percent since 2007, the data indicates that the appraiser population is more qualified overall.

Commercial, non-traditional (non-point-in-time) valuations appear to be a growth opportunity for individuals with advanced analytical, financial and mathematical skills, Borges said. He said that key growth markets might be working with accountants, financial analysts, investors and others on real estate portfolio management/analysis, purchase, lease and investment packaging. He also noted that additional areas of real estate valuation – right of way, conservation easement, taxation issues and litigation support (expert witness testimony) – could provide opportunities for professionals looking to enter the valuation profession.

Link to 2 page Fact Sheet of stats and graphs:

Appraisal Today newsletter

75% of appraisers work solo

Real Estate Appraisal in the US: Market Research Report
Thanks to for this Most Interesting info!!

My comment: Unfortunately, the report costs $825. I’m not sure who would buy it, but below are some interesting excerpts. It does confirm that 75% of appraisers do not have any employees.

I did a surveys in 1992, just as licensing was beginning. At that time, relatively few appraisers worked solo (22%). 25% had 2-3 appraisers, 25% had 4-6 appraisers, and 27% had 7+ appraisers. The average was 5.4 appraisers per company. Number of years of experience of The business owners had 5-10 years of experience. I had three appraisers.

Around 1995 came a big crash, and many of us downsized to one appraiser. Few of us went back up to the old days. Newer appraisers in the mid-2000s hired lots of trainees to increase firm size. Most of them have gone back to one appraiser. Same Old Cycle. Nothing New.

Excerpts from report:

The top five firms in the Real  Estate Appraisal industry account for less than 15.0% of industry revenue  with the largest having a market share of just 6.2%. The larger participants in  the industry are generally subdivisions of large multinational property,  brokerage, and global real estate service firms. The vast majority of companies  operating in the industry are small, independent firms with few employees or  single-owner operators.

According to the US Census and IBISWorld estimates, 75.3% of establishments are nonemployers. From 2008 to 2010, the total number of  establishments in the industry was decreasing. The number of nonemployer  establishments was decreasing at a faster rate than employer firms. This trend, however, has reversed recently.

Click here to read more and post your comments at .


Excerpt from press release
Over the past two years, however, IBISWorld expects that industry revenue has recovered substantially, and estimates it will grow 6.7% in 2013 as the volume of real estate transactions increases and property values continue to recover from recessionary lows

Link to press release with more info:

Appraisal Today newsletter

Appraiser education levels

Question: What is your highest level of education (non-appraisal related)? poll results

Didn’t finish High School. 93 votes     1.5%teacher and class
High School or GED 300 votes             5%
Some College classes 1,475 votes         25%
Community College Graduate (AA) 555 votes 9%
Tech school graduate 139 votes          2%
University Graduate (BA, BS, etc.) 2,947 votes 49%
Graduate Degree (MA, PhD, etc.) 506 votes 9%

Total Votes: 6,015

My comment: Down from the Stone Age, pre-licensing, when it was hard to get an appraisal job without a bachelor’s degree, but still 58% with at least a bachelor’s degree and only 6.5% with no college.

What level of education, training, and experience should a review appraiser have relative to the appraiser originating the report? poll results
More   2,772 votes   48%
About the same   1,993 votes    35%
Less   25 votes    0.4%
It doesn’t seem to matter these days   980 votes    17%

Total Votes: 5,770

Dear Clipboard and Measuring Wheel – A Walk Down Memory Lane

By Dustin Harris, The Appraiser Coach

Hey!  How have you been?  Sorry I have not written in a while.  Wow, I cannot believe it has been over 15 years since I broke up with you.  How time flies.  My purpose in writing is not to make you feel bad, but I am not disappointed that we parted ways, and I honestly do not miss you two… at all.  I know that seems harsh, but you said I would be sorry, and I just wanted you to know that you were wrong… again.

Oh, in the beginning, I thought I had made a huge mistake.  My new flings were not as easy to get used to as you were. There was that one night, early on, where I had a little cry, ate an entire carton of Ben and Jerry’s, and almost broke up and came running back to you.  How glad I am that I did not.  That would have been a huge mistake.  Why?  Despite your warnings, your replacements have loved me without condition, been nearly completely faithful, and have allowed me to be more efficient and more accurate than I ever was with you.  Though they may have cost more in the beginning, they have paid for themselves over and over and over.

measuring wheel Measuring Wheel, I am sorry for the jealousy I caused you when I left you for Disto.  I still remember the harsh words you spewed at me as I laid you in the trunk of the car as a ‘backup.’  You said, “You will regret this!  Her smaller frame and fancy red laser can never replace me.  You will, I repeat, WILL be back.”  In all honesty, I thought at the time that you might have been correct.  That is why I carried you around for so many years even after turning my attention to Disto.  Please accept my apology that I never did pick you up again, even for a short fling.  I just cannot tell you how happy I am now with Disto by my side.  Is she accurate?  So much so that I have to ‘dumb her down’ a bit in order to meet ANSII standards of measuring to the nearest half foot.  “But, what about those really sunny days or walls that do not have anything to bounce off of” you ask?  Let me just say that everyone had a period of ‘getting used to.”  She had hers as well (and honestly, it was longer than it took to get used to you), but once I understood what makes her tick and how to really ‘push her buttons,’ I have never met a wall I could not measure with her since.  She and I are quite a team now.  Granted, she will never protect me like you did (remember that time I used you to beat that vicious dog over the head?), but thankfully I have never had an incident like that one again.

Clipboard, I know you were angry when I put you in the backseat and started holding a pocket PC instead.  Though Jornada™ seems a little antiquated now, she was light years ahead of you at the time.  Maybe it will make you feel a little better if I told you she did not last either.  Yes, I have now replaced her as well.  Before you start accusing me of being a ‘player,’ you should know I stuck with her for many more years than I ever was with you, and her replacement was a huge step forward.  Yep, I am now hanging with the iPad.  clipboardInterestingly, you will remember that I ditched you for the more petite replacement, but my steady now is almost the same size as you (though she is a tad more heavy—so you at least have that).  Remember when we were together how I would sometimes get clear back to my office before I realized that I had forgotten to take a picture or the two sides of my sketch did not match?  Then, you and I would have to get back in the car for another ‘date’ to the subject property?  Well, those days are so 1997.  iPad never allows me to leave the property without knowing that I have everything I need and that everything matches as it should.  How cool is that?

I know what you are saying, Clipboard.  You think that I am spending more time at the subject than I ever did with you.  OK.  I admit it.  This time you are right (I bet you never thought you would hear those words from me).  I am spending an average of 5 additional minutes at the inspection, but that is not where the time savings comes in.  The efficiency factor comes into play when I get back to the office.  Remember how I used to have to come back to my desk and stare at you for dozens of minutes while I transferred my chicken scratches into the appraisal software?  I know you liked all the attention, but I do not do that anymore.  All that data transfers into the report on its own.  You heard me correctly, all the data, the sketch, and pictures are all there when I get back to my office.  You could never do that for me, Clipboard.

As I reread this letter, I guess I have been hard on you two.  Maybe I shouldn’t send it, but my purpose is not to tear you down, and I am certainly not trying to pour salt in old wounds.  I only think it is fair, since so many appraisers are still spending so much time with you, that you know where you stand.  Just because you are popular does not mean you are better.  There, I said it.  I am sorry if that hurts, but there are other fish in the proverbial sea, as they say.  It is time that other appraisers follow my lead and ditch you guys.  Breaking up is hard to do, but it was a great decision for me, and I know it will be for others as well.  Sometimes we gotta put you relics on the shelves and move on.  Please do not feel bad.  Perhaps it is time for a makeover.  Clipboard, maybe you could round yourself off a bit and get rid of that hideous, metal growth and start a new life as a Frisbee.  And Measuring Wheel; you still make a pretty good billy club.

Wishing you All the Best,

Dustin Harris

The Appraiser Coach

Dustin Harris is a multi-business owner and residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc. He owns and operates The Appraiser Coach where he personally advises and mentors other appraisers. He is also the Founder and President of The Appraisal Coach which implements some of the systems he has developed to help lower costs and free up time. His principles and methodologies are also taught in an online, Mastermind group. He and his wife reside in Idaho with their four children.

AT final rev newslet

Working on Xmas = USPAP violation

stress-relax signs

AppraisalPort Poll Results 12/10/12

During this holiday season, I plan to:


Take some time off to relax at home with family and friends. 1,720 votes  37%
Take some time off to travel and see family and friends. 457 votes           10%
Take some time off to catch-up on all those home improvement projects. 195 votes   4%
Take some time off to go somewhere for a real vacation. 162 votes           3%
Work straight through the Holidays – way too busy to stop. 2,109 votes  45%

Total Votes: 4,643

My comment: Bad, Bad, Bad for 45% who will be working! And this does not even count just not working on Xmas!!

Appraisal Today newsletter

AQB issues 2nd Exposure Draft of Proposed Supervisors/Trainees Courses

2 appraisers“One of the changes adopted by the AQB requires that individuals who become Supervisory Appraisers or Trainee Appraisers after January 1, 2015, complete a course that, at a minimum, complies with the specifications for course content established by the AQB. The course must be completed by the Trainee Appraiser prior to obtaining a Trainee Appraiser credential, and completed by the Supervisory Appraiser prior to supervising a Trainee

Written comments requested by January 11, 2013.

If this is an issue for you, be sure to speak out!! The AQB reads all comments.

Issued on November 29, 2012.