Not only does the appraisal industry have problems, but there is also a lot of disagreement around what exactly those problems are.
One of the biggest problems, and yet still highly debated, is the industry’s lack of future workforce and the lack of effort to fix it.
HousingWire’s most recent webinar brought together four experts in the appraisal industry to try and address what the future looks like for appraisers. But the webinar is a great example of the diverging opinions in the appraisal industry, with more than 100 questions coming in during the Q&A.
This new survey of appraisers from the National Association of Realtors should help give more insight on the feelings of the industry.
NAR conducted the study to determine whether a shortage of appraisers exists and to what extent, as well as to further explore the other issues facing the appraisal profession, interviewing more than 2,000 appraisers.
In its summary, the association pinpointed the following three results, which will be highlighted further in charts below.
1. Training is a real issue.
Few seasoned appraisers are doing it, and those who do often do so for no pay. One challenge highlighted is the unwillingness of lenders to accept appraisals performed in part by a trainee, as well as concerns with liability. Fewer than 20% of appraisers train others.
2. Appraisers are working to address turnaround time:
But there’s less willingness to perform FHA/VA loans. Appraisers also complained of lower compensation from bank-owned asset management companies, or AMCs, as opposed to work done for law firms, lenders, and independent AMCs.
3. Dissatisfaction with the profession is high as challenges with FHA, others persist:
The average tenure of an appraisal hovered around 22 years, but roughly 10% of respondents said they may leave the field within 5 years. Frustrations with regulatory burdens and insufficient compensation are the top two reasons cited for a desire to leave. NAR has worked with FHA closely to address some of these concerns, and those conversations are ongoing.
National Association of Realtors President William Brown commented on the results saying: “The work of an appraiser is indispensable to our industry. Appraisers provide the credible, outside opinion on a property value that agents, lenders, and ultimately the consumer depend on to guide them through a transaction.”
“If the regulatory burdens holding appraisers back go unaddressed, the challenge of providing that timely appraisal will only get worse,” he added. “We have to work together as an industry to clear the way for appraisers to continue doing their good work while building an environment that encourages talented newcomers to get in the game.”
This first chart shows the average age of the industry is older since 22 years is the average time most of the appraisers interviewed have been in the industry.
Click to enlarge
(Source: NAR)
This next chart breaks down the reasons to leave the appraisal industry, with the two top answers being excessive regulation and insufficient compensation.
Click to enlarge
(Source: NAR)
In addition to this, few appraisers are training future appraisers, as the chart bellow depicts.
Click to enlarge
(Source: NAR)
This final chart explains why there is reluctance to accept trainees. Notice that the No. 1 reason is lack of compensation.
Click to enlarge
(Source: NAR)
