To Whom it May Concern (and I hope there are many who are):
There are a great number of appraisers who do, but I personally do not... hate you that is. I find it very interesting that I work in a profession where most of my peers loathe the very hand which feeds them. Oh, I understand their reasonings, I just do not choose to subscribe to them myself. If you will please allow me a few minutes of your time, I will strive to accomplish three things. First, I would like to explain to you in understandable terms why it is that the appraisers who work for you curse your very name. Second, you should know why you should care. And third, I would like to make some suggestions as to what can be done about it.
First, a little background. What gives me, Dustin Harris, the authority to speak on such a subject? You should first know what I am NOT. I am not a banker, and I do not claim to understand the incredibly complicated world of national (or international) lending. As you can tell by my writing style, I am not a journalist or an intellectual. Finally, I have no personal vendetta or selfish goal in writing such a letter as this beyond what you read here. My desire goes no further than to educate, which brings me to what I AM. I am an appraiser and have been for nearly two decades. More than 80% of my work comes from companies like yours - AMCs. I am a teacher. As The Appraiser Coach, I spend a great deal of my time mentoring and consulting with other appraisal business owners across the country. I speak at appraisal conferences and I write to (and receive feedback from) hundreds of appraisers each week. As the Founder and Owner of Your Appraisal Office, LLC., I have appraiser clients in many different states and are intimately involved in their day-to-day business dealings. In other words, I not only work for AMCs myself, but I may be as well-connected to other appraisers as you are likely to find. I have a unique perspective on what appraisers are going through and what their personal feelings are about it.
Why Appraisers Hate You
Fee appraisers are tired. They are tired of working long hours for little pay. These are good women and good men who have put in a lot of effort to become educated, experienced and experts at what they do. Like anyone else, they simply want a chance to be successful. Frankly, most just want to be able to pay their mortgage, car payments, and have some food on their tables.
Due to recent changes, some have not been able to make it, and others do not want to even try anymore. Reliable statistics are hard to come by, but it appears that there were more than 100,000 real estate appraisers in the United States 3.5 years ago (before the 'housing market crash of '08'). Now, there are less than 70,000 of us left. Think about that; we have lost 30% (or 10% per year) of our profession! That is staggering. Furthermore, the majority of appraisers still around are 50 years of age or more and will be retiring soon. What is more alarming is that we are not reproducing ourselves. The number of new appraisers now entering the field is almost too minute to even calculate.
Why is this happening? Appraisers are being asked to do more and more while being paid less and less (per hour). It used to be that a quality appraisal report would take an appraiser 3-4 hours to complete from start to finish. Now, with the amount of scope creep, it may take twice that. Are we being paid twice as much for that work? Would I be writing this letter if we were?
Scope creep means that Engagement Letters are looking less and less like appraisal orders and more and more like a doctoral thesis. We are being asked to take pictures of just about everything. I received a request just this week to "make sure the toilet, tub and sink are all showing in the pictures of the bathrooms." For Pete's sake! Furthermore, requiring six comparable sales on a standard tract-home just might be a bit much, don't you think?
Though overall fees have crept up a bit over the past several months (thank you for that), we are being paid far less per hour than we were just a few years ago (most of my 'Your Appraisal Office' clients report more than 50% less). Furthermore, the borrowers are paying much more for their appraisal services, and due to lacking reporting requirements, they think that fee is all going to the guy standing on their doorstep with a digital camera, measuring tape and clipboard.
Granted, much of this is not your fault. We all know that much of this creeping scope stuff has been heaped on by politicians who seem to think that it is their job to save us all from the housing crises (that they played a major role in creating - by the way). Excessive regulations (from both the lawmakers and the big lenders) have caused you, the AMC, to require more of us. We get it. We are not blaming you for the entire problem. This letter should be pushed up the chain to the bureaucrats in Washington and the regulators in New York as well. In fact, the majority of the burden may lay on their shoulders. But, there are some things that you can do, and I aim to show you why it is in your own self-interest to do so.
Why You Should Care
Let's face it, at the end of the day you, like us, are in this profession to make a buck. AMC does not stand for "Appraisal Management Charity." You need to make a living as much as the appraiser needs to make a living. And that, of course, is why you should care about this problem. If we continue losing appraisers at the rate we have seen them leave over the past three years, it will take less than seven years to see them all become extinct. Of course, if all the appraisers are gone, your company is ancient history as well.
Naturally, no one expects that appraisers are all going to be gone in less than a decade. But, that is why something must be done now. Having a large pool of appraisers to work with is an asset to you. The larger the appraiser population, the better your ability to choose the very best from among them to work for your company.
Some Suggestions to Reverse the Trend
Again, I am not an expert in the financial arena, but I am a capitalist, and I am a multiple business owner. I understand the laws of prosperity and they apply, I believe, equally to both small companies (like the fee appraiser) and medium to large structures (like some AMCs and lenders). So with that, allow me to make several suggestions on how we can work together to change the status quo.
Read the conclusion to this article HERE