According to a recent survey conducted by the Appraisal Institute, "trainee hiring will remain relatively weak for the next one- to two-years." Um, I hate to disagree with the results of what I am sure is a credible survey, but this is just a gross underestimation. One-to two-years? How about FOREVER unless something drastically changes in our industry?
Most know me as a fairly optimistic voice in the appraisal world. I am not usually one of those on the sidelines calling "foul" at every supposed indiscretion and 'unfair' practice that is thrust upon us. Instead, my attitude is generally to roll up my sleeves and work to either fix the problem or find a way to prosper despite the disadvantage. However, there is a growing issue that cannot be hidden under a bushel any longer without some very dire consequences for real estate appraisers across this nation, and eventually the industry as a whole. The industry in general is increasingly making entry into the profession more difficult and closed to growth. The problem at hand is two-fold: First, there is no financial incentive for new trainees to enter the field. Second, there is no financial incentive for current appraisers to bring others into the field.
Barriers for a trainee to enter the real estate appraising profession are growing insurmountable. I have heard many explanations for why this is, but frankly, they are all secondary. If you ask me, the big reason is a combination of an overreaction to the 'housing crisis' and current appraisers (some sit in powerful positions) trying to protect their own jobs. In the end, it is doing the profession a disfavor. Some appraisers look at this as a positive thing (a shortage of appraisers means higher fees, right?), but my view is much different. Artificial hurdles stifle free-enterprise and economic principles are thwarted when that happens.
The bigger problem here is the self-interest of the appraisal business owner. In the 'good 'ol days,' I could hire, train, and send employees out in various directions doing inspections. If they were well-trained and watched over closely, this meant more volume and the ability to serve my clients on a higher level. This is no longer the case. While USPAP, the AQB, and Fannie/Freddie still allow trainee inspections, lenders and AMCs don’t. What financial incentive do I have to hire, train, deal with all that comes with having an employee, and pay an individual if they are not even allowed to work in a way that provides the best support and value to me—the business owner?
In the end, the future for trainees (and for current appraisers for that matter) is grim. Until we stop shooting ourselves in the foot by limiting the ability for new appraisers to enter the profession and removing the financial incentive to train, the outlook for hiring trainees will be grim for more than just the next few years.
Now, go create some value!
Dustin Harris is a multi-business owner, but he has found most of his success as a self-employed, 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., and is a popular author, speaker and consultant. He owns and operates The Appraiser Coach (www.theappraisercoach.com) where he personally advises and mentors other appraisers helping them to also run successful appraisal companies and increase their net worth. His two-day workshop will be held on Oct. 7-8, 2013 in Salt Lake City. He and his wife reside in Idaho with their four children.