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Professional appraisal organizations are not delivering what we need.
I have a lot of professional designations. MAI, SRA, CRE, CAE, ASA, FRICS. I ascribe that to being an overachiever. Maybe. Whatever the reason, it took a lot of work and money to get those designations. And it costs a lot of money each year to maintain those designations. Almost $8,000 every year.
Here’s my dilemma, at one time, I had a large appraisal company and the company paid those professional dues. No more. Today they are my personal responsibility. Nothing clarifies your perspective as much as having to pay for something out of your pocket.
So I started looking at the invoices that have been piling up over the last month, and I pulled out my checkbook.
Suddenly, clarity entered my world. Writing a check and spending your own money tends to provide focus very quickly.
As I looked at each invoice, I thought to myself-what have you guys done for me lately? After all, I am spending upwards of $8,000 per year for the various designations and some other memberships. Every designation has to prove its worth in today’s uncertain market.
Is it enough to get an occasional email? What about courses? Advocacy? Professional standards? Magazines?
What am I getting for $8,000? Sadly, very little and definitely not as much as I need.
It used to be that professional appraisal organizations offered their members a lot. Some still do. But increasingly, the value is diminishing, and today I think appraisers need more. This is a volatile and difficult market. Appraisers need help, guidance, advice. Do we get that from our professional organizations? I remember hearing from someone at the Appraisal Foundation that the majority of appraisers in this country are not affiliated with ANY appraisal organization. Is that because they see no need? Is it because they cannot justify the cost? Perhaps a bit of both.
What I have seen over the last decade is that increasingly, it is vendors and appraisal companies/AMCs that are starting to fill the vacuum in our profession. Certain services are provided by the associations; certain services are provided by the vendors. Some of the larger and more reputable AMCs and appraisal companies take education seriously. No one has successfully figured out how to meet the needs of the majority of appraisers.
One big area of concern is technology and information. I get my information from a combination of blogs, conferences, forums, books, magazines, etc. I also talk to a lot of people who are smart. (I figure that is always a good idea!). But what about the appraisers in the trenches? Appraisers who are working very hard every day just to survive? Who speaks for them? Who watches out for them? How do they stay connected?
No one has come up with a good solution. I think one is out there. I think that there is a tremendous opportunity for those associations who figure out how to empower an appraiser; equip them with technology; provide them with services to help their business; keep them informed and provide the necessary leadership to create a strong, unified appraisal industry.
I haven’t written the checks yet. I’m still thinking about it. But I have decided that I’m not going to write a check to at least two, maybe three of those associations.
Which designations should I keep? Why should I continue being a member?
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I have been a Certified Residential Appraiser for 14 years. When I was an apprentice, I was handed a card by a MAI appraiser who asked me if I knew what his designation meant. Being pretty ‘green’ in the business, I wasn’t sure, but took a stab at it…I responded, thinking it was a “Masters degree in Appraisal?…I wasn’t sure what the ‘I’ stood for. He laughed and replied that it means value is “MADE AS INSTRUCTED” by the client. He made a comment that I should learn that if I wanted any longevity in this business. This gave me my first glimpse into the value of AI membership and/or designations.
Fortunately for me, I never took his advice and have made a good living by providing quality appraisals, with well thought out reasoning and sometimes long addendums to explain that reasoning. My clients knew that 1. they were getting an accurate report with a realistic value and 2. they wouldn’t be requesting a lot of corrections or additional comps. This was because I believed that it should be done right the first time! Long before lenders REQUIRED pending sales and/or active listings in addition to three comps, my reports included four, five or even six comps, because the first three didn’t provide enough credibility or the value range of the three comps was too wide. The additional comps provided clarity and the value conclusions now made more sense.
By the way, I never did persue a MAI or SRA designation, because the company I worked for at the time was getting requests for me to do assignments over the MAI and SRA’s. They gave them only three comps, “because that’s what is required”.
I have been on my own for approx eight years and have been fortunate to have had a good number of quality clients including a mix of Mortgage Bankers, AMC’s and Bank Mortgage Dept’s. I had no Mortgage Broker Clients after my first six months in business…I fired them due to requests for inflated values and the constant requests to revisit reports for “just another $500 or $1,000″.
Don’t get me wrong, there have been some bumps in the road. The biggest being the implementation of the HVCC, but not in the way most have lamented.
The impact of the HVCC on my business has not been the loss of “long time clients”(code for ‘brokers’) who have fed the ‘made as instructed” appraisers out there and made them wealthy. Instead, it has been the flood of these appraisers, now starving and lowballing their services for as little as $110 for a URAR just to get on the AMC’s list. They have turned quality AMC’s (who used to pay decent fees) into “low fee/low turn time” clients. Appraisers have now become their own worst enemies.
As for memberships, as stated above, I never wrote any checks because there is little or no value perceived by the lenders. Further, I did consider AI associate membership, so I took a look at the AI site. The Institute promotes benefits such as a listing in it’s appraiser database… I thought “the membership fee would be covered by a couple of extra assignments a year”…so I tried to look for appraisers in my area who I knew were Associate Members. WOW…JUST TRY TO FIND THEM!
You have to have the computer skills of a hacker to wade through the AI website to actually find an Associate member’s listing. Nobody needing an appraiser is going to take that kind of time to find an associate member appraiser, especially if they are busy at all. So, I concluded that the Associate membership was nothing more than a money-grab by the Institute.
In my opinion, the Institute spends more time promoting itself than it does the interests of the industry and the appraisers which should support it. If they did, more of us would be inclned to write that check. For now, I’ll use that money to market myself and to navigate this latest “bump in the road”.
I recently received my SRA designation and am now pursuing my MAI designation. I may be a little biased, but I have always thought that the Appraisal Institute offers the best education around, and I still believe this to be true! If I were to advise you, I would certainly keep the MAI and SRA designations, as these are the most widely recognized in the appraisal industry. This is not to discount those who have achieved other designations other than the ones previously mentioned. I believe that appraisers need to stick together to protect our industry for future generations to come, and being a designated member of a professional organization like the Appraisal Institute helps promote that. I know appraisers who are members of other professional organizations, and I encourage them to remain active in their respective organizations. The key to being a member of a professional organization like the Appraisal Institue is being involved. It is not enough to have the designation; you need to be active within the organization and support your local chapter. I encourage all appraisers to join a professional organization, pursue a designation, and remain active in the local chapter by serving on committees and the respective board. This is how you maximize the value of your membership!
Several years ago it struck me that these large appraisal organizations have presided over, and in some sense contributed to, the degradation of the entire profession. For my first 20 years in the residential business, I noticed that there were a large number of appraisers who were doing quite well by issuing fraudulent and/or inflated appraisals which made them very popular with many lenders. Many of these people had various initials after their names, including those of the most prestigious organization. Little was done to stop this practice and much was lost in terms of professional respect and public sentiment. Now, over the last couple of years, our business and incomes are being eroded by AMCs and other forces, the former frequently led by an appraiser with someone’s initials after their name. In the meantime, where are the professional organizations? As far as I am concerned the entire residential side of the profession has been diminished and reduced to mediocrity with wages to match. I’d get out of the business tomorrow if the right oppurtunity came along and would discourage anyone from entering the field. The rate of pay per hour is simply not worth it anymore.
When I started out 18 years ago I was gung-ho and thought a designation would really be something valuable and honored and maybe desired by lenders. Boy was I wrong. I got an IFA designation, and when the dues went to $400 a year and I was getting nothing (except a discounted class that was cancelled before I even got THAT), I decided no one probably would notice that I didn’t have a designation anymore if I dropped it. They didn’t. So I’m at least $400 richer every year. The professional organizations are probably as valuable for appraisers as the post office is now that e-mail exists. I know it probably sounds terrible to have a “What’s in it for me?” attitude, but, I mean, What’s in it for me?
Mark,
I often question renewing my SRA. However, the Institute is on Capital Hill working for us. Unfortunately, since there are relatively few appraisers and even fewer Institute members, the politicians pay little attention. When I was working as a Realtor with RPAC several years ago, I was greeted by politicians who said “if you do not represent at least 750,000 people, we do not want to talk to you.” Given this, the Institue does an pretty incredible job to be heard at all. Maybe if all appraisers joined we might have a little more power in the political process that seems to affect us all. It is pretty tiring to be one of the few who pays dues to help fund a presence in Washington, while the vast majority of appraisers ride for free on our coat tails.
Bill
I am very sorry to hear all the negative comments about designations being worthless, since I just shelled out $1,000 to take a bunch of Institute classes to get my SRA. But business is as slow as I have seen it in 20 years, and I just figured I have the time(not money) now to try and upgrade myself somehow. I thought I heard there was some push among the banking industry, during the darkest days of the meltdown, to put more weight behind appraisal designations, but I guess that went out the door after they got their books back in order.
I don’t think we can judge the whole future of appraising by the developments of the past year. The business and housing cycles are at the low point, and times change. I can’t remember too many people who predicted the situation we are in 4 or 5 years ago, so I think the next 4 or 5 years are probably just as unpredictable. One thing I hope is they aren’t any worse than now.
Mark, I have been an SRA for over 20 years. About 10 years ago I moved to a small community where people look at those 3 letters after my name and say “What’s that?” I am the only SRA in my county and everytime I write the big check I ask myself why. I have seen no benefit in the membership. Keep the MAI, the AI definitely does more for their MAI’s than the SRA’s. More than once I have felt betrayed by the AI and I still feel they could have done more to stop the HVCC. I know some appraisers were complaining about preditory lenders but the HVCC was not the solution. I am also sick of seeing the faces of people like Pelosi, Geithner and Barney Frank when I open my on line newsletter.
Hi, I am an SRA and CRP. (Worldwide Relocation) 2 designations is plenty for me. For the money, I get little in return and barely any recognition for the designations. Good luck to you and all of us.
Ken MacDnough SRA, CRP
A few years back, I joined the Appraisal Institute and considered getting designations. Since I was a member, the next time I took a class, I did it at the Institute, in Chicago, on Wacker Drive.
I had a view of the River, the Lake, learned nothing new, got bored to tears. I should have just read the book.
I like learning. I had signed up for the class because (based on the class description) I thought it would help me with appraising. All was done in class was rehash some non-real world situations.
I looked at what the Institute was offering me and proposing to offer. It was not much… a lot of the suff I got from them was the Institute beating its chest at its own glory and prowess.
A lot of what I get is information about how the Institute thinks it’s helping me but which to me seems the Institute helping itself. A lot of pay us, pay us emails. By the way, not once did they tell me how, practically, I would benefit from the designations.
When I started in 1999 I thought I could see the benefits. By 2003 things changed, I chose to not even be a member.
Having just read most of the responses to your article, it is obvious that more than the majority of respondents believe that designations provide no real value. I have been a licensed appraiser for only 8 years but realized in the begining that designations did not make a “good” appraiser, did not open any doors and did not provide a higher appraisal fee.
The appraisal profession (and I use that term loosely), is composed of independent individuals with no common voice or direction. None of the appraisal organizations provide sufficient, substantial benefits to the individual. Why bother becoming a member?
An appraisal organization that would lobby and fight for the individual appraiser would have a chance of bringing the independent appraiser into its fold. But none of the organizations currently offer an appraiser any meaningful benefits that assure a professional fee for services offered.
The real question is, does anyone really care? It is sad to read that so many experienced, professional appraisers are leaving the business. Perhaps there will come a time, when those that need our services realize that “you get what you pay for”.
Don’t look now but the appraisal groups that should be watching our backs may now be taking work away from us. The new Appraiser and Management Company Statement of Principles just released by the Appraisal Institute includes a statement that says an individuals affiliation with or designation by a professional appraisal association is preferred! Where does that leave the appraisers who don’t have anything but have worked competently and ethically their whole career??? Seems to me that’s just pushing an agenda for these groups. You can provide feedback until May 1st at http://www.appraisalinstitute.org/newsadvocacy/downloads/key_documents/AMC_StatementOfPrinciples.pdf
I’ve been appraising for 25 years and finally was presented my SRA in 2008. Achieving it was like a roller-coaster ride, lots of effort for a period of a few months then I’d back off for more than a few months, then a turn due to changes in family life, the market etc. I’d wonder if it would be worth it. Finally deciding that no, now is the time to pursue it even harder. So far it has paid off in my employment, visibility by being our chapter president and a having few speaking opportunities, etc. Most importantly I have been able to encourage others to pursue a designation – one who has put it off for a number of years as I did will soon be paying the higher dues; and another who is seeing the light of having an SRA to open more opportunities for his practice. This is the only one I have because when I started it was the one to have residentially and still is. I’ll renew until I leave this business, via retirement hopefully – but thats a number of years off. Nice blog Mark – hope to see you at CRN. Rob L.
Mark, I’m one of those “old guys” who has been appraising for more than 30 years. I started with an MBA in Real Estate and Finance and was taught as much as paying to get a designation would have added. I have worked steadily over the years and I have watched the “profession” continue to decline as the turmoil and troubles of the lending industry impacted us in many different, and usually, negative ways.
All these appraisers in all these organizations don’t have enough collective juice to push back against Cuomo and FNMA and Freddie Mac. We all had to eat their HVCC which, like most government solutions, is long on intentions and short on mechanics. All my marketing for the last 30 years went overboard in one fell swoop.
I work in the Washington, DC area and have had opportunities to meet and appraise homes for people in the government from legislative aides to Senators and Representatives. I have never met one that ever heard of the HVCC nor one that could understand how we became so overregulated without any legislative hearings. Only in America.
It’s going to be a real struggle to reinvent myself but I don’t see any way out. If I don’t get off this train, I’ll have no one to blame but myself when it goes over the cliff.
All good points which have led to several appraisers in several states forming their own coalition to begin advocacy for their profession. One of the newest is the California Coalition of Appraisal Professionals, http://www.CaCAP.org. AZ, NV, OH, IL and some others I’m unawre of have lobbied and succeeded in this new field of advocacy from a profession that has been rather introspective and stereotyped a loner. With few college educated people desiring to take up the profession in its current state, the decline in number of appraisers, and the graying out of appraisers, a vaccuum will present itself in 3-5 years. I doubt MAI’s will be wanting, much less accepting, residential work in the future for the cost of their initials. Even with a BA and an MBA, credibility within the profession is predicated on perception, not necessarily content.
Excellent comments Mark. Thanks for voicing the concerns, worries and desires that many of us working-stiff appraisers have struggled with over the past few years. I belong to the MBA. And as you can see from the above designation have spent several tours of duty in the mortgage business. I belong to the AI. Unfortunately now more than ever I feel like the AI is working for the AI rather than their members. I will never bother to obtain one of their “store-bought” designations. I belong to the IRWA and hope one day to obtain the SRWA designation from this group.
Good luck on your quest and keep us posted on your journey.
-Mike
I gave up the idea I or my company would make a difference in the marketplace. It will not happen, not when most users of real estate appraisals do not value a designation, they respond more to dollars spent, and “hitting a value.”
It is sad to recognize that the life I gave to learning about the market, and providing well supported value opinions means little to others. Oh, the MAI was a recognized value added, but not enough to offset the dollars spent to maintain the designation, nor the time and money spent post my degree from college.
Sour grapes? Yea I think that is part of it, but after listening/reading about other experiences I can sum it up by saying – no I will not be part of a dying profession. I use the term profession loosely because I thought I was getting into something I could talk to others and say, a profession. It isn’t, because so many; whether the folks at the local bank or the ones sitting in the halls of congress will not let the ones who matter actually value the trends in real estate. I started in 1976, and gave up the dream in 2008, because I finally realized I would never get paid for what I know, and I would never get the recognition due me. I “retired” the MAI dream, and so should you. Edward R Thatcher
I have been the SRA admissions chairperson for the Cardinal Ohio Chapter of The Appraisal Institute for the last 6+ years and have been in the appraisal profession for 30+ years. I have definitely seen a decrease in the number of designations earned (both MAI and SRA) in our state. In addition, one appraisal shop in Cincinnati with 3 designated appraisers did not renew their designations (all three of them!). With the decline of the profession all of us are looking for ways to cut expenses. They did not see any benefit for the money they were spending.
Mark,
Here is some of the rub and it relates to USPAP. We as appraisers leave “tons” of money on the table. USPAP should only apply to work that is done under an “appraisal” but not to say property tax assessment work done on a contingency basis outside USPAP. Supposedly USPAP allows this but there seems too many of us are deathly affraid of violating those standards. I for one am no longer going to leave the “low hanging fruit” on the vine for someone else to pick.
As far as designations go i recently became a MRICS through reciprocity to the MAI(thinking of upgrading to a FRICS) but am trying to figure out how that will benefit me in expanding my business. Maybe if one is doing an extensive litigation practise it might be of greater benefit than to one doing “trench” work; i’m still wondering. I am trying to take my business away from bank and straight “appraisal” work. If we as appraisers want to survive we need to find other sources of income outside of appraisals even if it means the possibility of circumventing USPAP. Keep thinking, reflecting and blogging on this whole issue
RE: Designations (are they worth it?):
i have been appraising in 4 ny counties (sullivan, orange, rockland & ulster) for nearly 20 years. i sold real estate for 10 years prior and have a bs bus admin.
i maintain an RAA which only costs $100 per year because i feel the various readers of my qual’s expect something along these lines but i would never spend what you spend on it.
the reason is because of the geometricly rising costs/unfunded mandates we appraiser’s must shoulder which i believe will drive many out of business.
Mark, great article! Keep the MAI designation and turn the rest in. The MAI alone in easily worth the $1,000 in annual dues.
In a lending environment I consistently see Cert. General appraisers bidding 30% to 50% less than MAI’s for the same work. (1) These guys have no idea how much money they consistently leave on the table. (2) $1,000 per year for AI dues seems like money well spent.
Mark,
I’ve been an appraiser for over 25 years. The only designation question I’ve ever gotten from a client over this entire time is “are you an MAI”? But, I’m sure you already know this.
I sat through the grind of becoming a … Put up with the pious teachers, listened to stories that I wasn’t sure if I was in an appraisal class of sitting at the local VFW having a beer with a vet. The last day of the class, I learned three things:
1) I would never hire, work for, or associate myself with these people outside of the this course.
2) I understood why they are on the road on not in the field.
3) If you get an MBA (which I have) do you still have to pay the college that you graduated from to KEEP your MBA? Just because I do not pay my dues for the year, (and not even get a copy of USPAP), does not equate to having my designation stripped from me.
We are in a “we will pay you $175 for a beachfront, 7,000 SF home, and will need six comps and three listings; and oh, we need it within 48 hrs after you view the email world. My greatest sign of achievement is that I get to do what I do for one more week. No “alphabet soup” letters after my name, no committees that I have chaired, no classes that I have taught is fine by me.. As long as the checks clear, these “Appraisal Groups” can keep on writing books.
Hello – My name is Robert Jones.
I’m located in the Dallas, Georgia area, a burb of Atlanta. I’m a Certified General appraiser and approximately 95% of my work is commercial. In my humble opinion organizations, degrees and designations do not make good appraiser’s. With all due respect to the MAI designation, people who have a Masters Degree in Real Estate, and the many other designations that are offered – just because people have degrees and designations does not constitute them being good appraiser’s. I have had many appraisals done by MAI’s come across my desk from bankers wanting me to review them. I could not believe what I was seeing. Values of $600,000 given to properties that should have been appraised for $300 to $400K. That’s crazy. These appraisals are in areas that I have been working in for a decade and I know the area better than anyone. Most of the appraisals from MAI’s that I have reviewed have no continuity and the order they have data makes zero sense.
With that being said, I’m sure there are MAI’s out there who do great work as well. My comment is not to down grade education or the MAI designation, but to focus on the fact that just because someone holds a designation or a degree does not mean that they are good appraiser’s.
So…designations, memberships, and more designations is not the answer. Yes of course, bankers love designations and degrees…why, because 99% of all bankers and people who order appraisals do not know the first thing about an appraisal.
People tend to fear what they do not understand, and bankers do not understand the appraisal process and appraisals in general, therefore, they fear when appraiser’s lack the MAI designation thinking that the MAI desingation guarantees them a good appraisal, when in actuality it does not.
C’mon people – coming up with a value is not rocket science. I can take a young man fresh out of High School that knows nothing about the appraisal process and appraisals in general and spend two hours with him explaining what we do and how we do it, and I guarantee you that he can come up with a credible value.
The market is what tells us what the value is going to be. I sincerely believe that most appraiser’s make way too much out of the Income Approach. Most of that stuff is not necessary to come up with a credible value. Yes we do it because of USPAP and the Client. We all need to simplify our appraisals instead of trying to impress the client with how much we know about math.
I know that you are not going to like what I have written but it’s the truth, and sometimes the truth hurts.
Thanks for your profound comments. As a California residential appraiser the past twenty-five years, I am finally getting out of the business and re-inventing myself. I have been assocaited with numerous appraisal groups, no more, if I am not getting anything from these groups why attend and pay dues. Good luck in your future. Ron
I have been appraising for 7 years now and have seen no need to join these groups or hold any formal designation. I have yet to have any client ask me what designation I hold or deny me work because not being a member. Instead I spend those dollars in advertising and being members of local BBB’s and business groups.
One thing that strikes me as being odd is that the Appraisal Institute is in bed with companies like Appraisal Port. But of course they aren’t mining and selling your data. Another is the reviews I see from numerous designated members are unreal. I mentor a registered appraiser that can write better work than some of these people. Not saying all are bad but after seeing some of the work it makes me chuckle.
We do need a voice though. Appraisers are a disbanded group and have no real voice still. Until there’s an organization with us as the main priority we will continue to be looked down on by people in the world of real estate. What’s out there isn’t it.
Where were our current organizations when they implemented the HVCC and terminated all of our relationships?
After all the hard work it took to get that MAI, I’ll bet you $20 that’s NOT the designation you’ll give up. Succinctly, it’s still the best out there.
Hi Mark,
It sounds like some people expect that a designation is supposed to create higher fews or new clients. I look at it this way. The designation doesn’t create the good appraiser, the good appraiser obtains the designation to show clients that the appraiser will do what it takes to get to the top and stay there. The appraiser makes the dewsignation meaningful – not the other way around. I would agree with you about dropping some of the designations but I would keep the MAI and SRA.
Mark, Awesome article. I am a licensed appraiser and with all that is going on even though I have completed everything just need to take the exam question every day why? Most of the AMC’s won’t pay you more for a higher designation, it had prestige at one time but not any more. My father-in-law has some of the same feelings that you stated. We have a professional appraisal coalition in South Carolina and it is difficult when you are a small group trying to get something done but we are working hard on it. I have never been more discouraged about this profession this past year. Soon I will leave it as many others have because when you can not support yourself anymore what is the payoff? I would not want to pick one or two for you not to write those checks to but one can’t help but wonder if more appraisers stopped writing those checks if things would change?
Mark,
You are right on. It became very clear in 1989 at the time of the last mortgage melt down that the appraiser was vulnerable. At that time, I had an SRA and was president of the local Intitute chapter. Because there were about 300,000 appraisers and nearly 70 appraisal organizations with no more than half of the appraisers belonging to any group, we were blamed for the excesses because of a lack of political representation. Licensing and certification came about that lowered the standards for appraisers to the lowest common demoninator. I sent my SRA back in 1996 whent the dues went to over $700 per month and the Institiute was fighting to keep other organizations out of the Foundation.
This time, the meltdown is partially blamed on us. I spent the last 10 years cultivating good clients that wanted a true appraisal. All of that is out the window now with HVCC. Again, we are down to the lowest common denominator.
Without adequate representation and without one organization stepping up to the plate and incorportaing all of us, we are doomed to failure. For the most part, appraisers are basement dwellers. Just leve me alone is the cry. At some point we have to say enough is enough.
I am a member of the IFA now, not sure if that organization is any better.
I agree with you fully. The memberships so many of us were proud to write a check to, fail to provide appraisers much of anything these days.
Our office has dropped all membership dues. The desire to attain designations seems to be gaining insignifigance also.
The AMC’s have had a large impact on all of this.
It has become a very different world for appraisers. Watch your backs, no one is watching out for you but you.
My earlier comments regarding appraisers getting squeezed out of the mix are further validated. Even the Feds don’t see any reason appraisers are necessary, let alone a designated one. Take a look at this recent NYT article: http://www.nytimes.com/2010/03/08/business/08short.html where a federal program will pay owners to sell short. Of particular concern is this paragraph: Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
In the 24 years I have been appraising I have worked for and with RM’s, SRA’s, MAI’s, SR/WA’s and undesignated appraisers. I was an RM candidate when I first started, but got fed up with the attitude of some of the old MAI’s – like the guy who told us at a meeting, “I’m glad to see you young fellas working on your MAI designation, and you, you RM’s, you need to get your real designation too.” For a few years I was an associate of the NAIFA and a candidate for IFA.
However, I never saw that any of the organizations did anything other than provide a networking opportunity at a lunch or dinner meeting and offer high priced courses. I have paid the ‘non-member’ price for a few AI courses on topics not offered by anyone else, but many classes are available from community colleges or proprietary private schools at much more reasonable prices. The NAIFA chapters in the Puget Sound region are focused on residential appraisal, so I often attend their meetings, but I am no longer a member.
Sometime in the early 80′s, during testimony at a legislative hearing, appraisers from two different organizations were testifying on opposite sides of an issue. One of the senior legislators told them, “Until you guys can agree on what you want, we aren’t going to listen to any of you, so stop wasting our time.”
A few cool heads in the AIREA, SREA and NAIFA got together and started working together. After FIRREA passed and the Appraisal Foundation was given a charter to write USPAP, here in Washington we incorporated the Appraisers’ Coalition of Washington (ACOW) as an “organization of organizations” representing the founding appraisal organizations of the Appraisal Foundation, with an additional memberhip category of the ‘unaffiliated’ appraisers in the state. ACOW has successfully coordinated legislation affecting Washington appraisers since 1992. Last fall we helped draft a bill for state licensing of AMC’s, we shepherded the bill through the legislature and it is now awaiting the governor’s signature.
One of my co-workers finally obtained his SRA designation last year, but his designation and 10 years of experience did not get him any higher fees than my 20+ years of experience gets me. And as a reviewer, I have seen as many poor quality appraisal reports from designated as undesignated appraisers.
I see no advantage to joining one of the professional appraisal organizations, other than ACOW. And as a board member of ACOW, I am seeing inquiries from appraisers in other states asking about the process of setting up statewide coalitions to effect change, primarily because the professional organizations are not effective. The joint office in D.C. (the “other Washington” as we say), representing the AI, ASA, ASFMRA and NAIFA for lobbying congress is a good step, but lately congress just passes mandates for state legislation. Effective action must be at the state level and it is not being done by the professional organizations.
I too debate the value of my designation. It seems to hold no sway except occasionally among other appraisers.
It seems to me that we need to reorder our profession. We need to stop thinking that we’re in the appraisal business but rather the real estate valuation business. We need to think about what services and products fit that business model. We desperately need day to day agressive advocacy.
As you said, most appraisers do not have any affiliation with an organization but I believe that many would if they thought that they were being defended from these constant assaults on our integrity and livelihoods.
So, show us what you’ve got.
Regards,
Mark Hastert, ASA
In my opinion, professional designations are meaningless and too costly on the residential side of the profession. The AMC’s now have full control of the Residential Appraisers and the residential appraisal profession since the start of HVCC. The only thing that matters to the AMC’s is how fast and cheap you can do the appraisal assignment. The AMC’s could care less about the quality of the appraisal because they shift all of their liability to the appraiser by requiring the appraiser to accept their Hold Harmless and Indemnification clauses. If the appraiser refuses their terms, they receive no appraisal assignments. Until all of the appraisers say “NO” to the current conditions, this profession will continue to self-destruct.
Bravo Mark,
I am a designated member of the Institute (SRA) and am working toward my MAI. I wonder why I do what I do sometimes. I’ve paid my bills for 2 decades. I am also working toward my ARA (ASFMRA) designation. I find that my work as an appraiser helps me with my brokerage business, as well as my own personal real estate investments. I think the institute does a poor job of teaching appraisers how to be better business owners. I’m not sure they know if that’s important…it is!! Smart business owners learn how to network which is not encouraged. Most appraisers I know are not very social. It’s more about who’s got the “right” number. I mainly worry about not getting on the “wrong” side of the valuation game.
Thanks Mark – I saw you in Las Vegas a few years ago & you made me think. Looks like you are doing it again. BTW – I’ve been in business over 20 years straight out of college & have been highly successful in a rural community. But it ain’t in appraising.
Mark,
Appraisers need an advocacy group more than anything right now. And, you are right, most of the appraisal associations are not helping in that regard. There are many new grass-roots groups starting up currently. Some are more educational and network oriented, some are actually doing, or planning on doing something for the appraiser. Caution should be warned here: appraisers should not become so worried about themselves that they forget why they are here. The bottom line is we are here to protect our clients’ bottom line. That is historically, for loan driven appraisals, the lender.
My experience goes something like this: In the mid- ’70′s, and for the next 10 years, lenders relied heavily on the appraisal. During the next 10 years or so, unfortunately, many of them did not care so much about the value of the property; they relied on the credit-worthiness of the borrower. Over the past few years, they primarily relied on the saleability of the loan, given certain parameters of the property (does it fit in the “box”?). Appraisers are getting squeezed out of the mix here, to the point that our professionalism is not valued nor required. Fee pressure places appraisers in a time-crunch to provide something at the expense of quality. Lenders, especially loan agents do not have a real vested interest in preserving the appraisal function and its quality. They merely want to get the deal done, get their fees, sell the loan and move on to the next deal! Hey, it’s not their money they are lending!
If we are to be the protector of our client, the consumer (borrower, in loan driven appraisals) needs to be aware of our role and capabilities in preserving the safety of their shelter investment. In other words, that consumer is really our ultimate client whom we protect.
We appraisers, through our advocacy groups, must make it known to the consumer that our function is not so much our income and livelihood we are protecting (which is important), but theirs.
I could go on, but time is of the essence.
Personally, I beg to differ with many of the opinions that I am seeing on this blog. As a member of the residential National Review Committee, I have seen a lot of good people become designated and know that they have paid the dues to achieve something beyond licensing. As a business owner, I have stressed to my staff that they join the Institute for the superior education quality, book discounts, and representation in Washington, D.C. I cannot see where our dues are wasted as we need, now more than ever, to work together to make our profession better. I have visited the national offices, in Chicago, and they are not as plush as the old Hancock Building address, and the staff were working for what we pay them for. Without organizations, such as the Appraisal Institute who do much more than just designate it’s members, we can expect our profession to be taken over by AMC’s or wind up becoming obsolete as we are replaced by AVM’s. On that note, I may not be recieving the volume of appraisal as non-designated appraisers, but I am getting a broader scope of assignments as my clients can expect a certain level of competency above and beyond what they can expect from licensed appraisers. And my fees show. Personally, the $90 or so that we pay for state licensing does not go far enough to enforce and regulate our industry. Though the HVCC has helped some, it has not repaired the problems. The loan officers were still able to provide a list of appraisers to their AMC’s and I see many of my peers still taking loan officers to lunch. Other problems with AMC’s is that they are price conscious and are sending out assignments to those who accept the lowest fees and not by sending assignments to those who are most qualified and competent to perform such assignments.
It is my own personal belief that the appraisal field is a dying field. When I first started in this business, I attended a few meetings. From what I saw the appraisal field is filled with a lot of ‘older’ generations, whether they be retired and in the filled, or in the ‘business’ for 20-30 yrs. I have met a number of appraisers in the business, but can yet find a substantial amount of actual appraisers who have been ‘appraising’ for that amount of time. The way I see it; you are absolutely right. A designation in the past was something, as was a high school diploma or even certain degrees. But as government involvement has tarnished many things, it continues to fail on aspects by involving itself.
In the past, when a bank or lending institution failed; it was allowed to fail. The people saw the bad practices and stayed away from banks with similar practices. Banks actually had to appease their customer base. Now we have grown to love a bank with ‘free checking,’ outside all other accumulated fees that we have come to despise. The current wave of information technology has sent a shockwave through the appraisal industry. First by computerizing it; then be graphically interfacing it so that everything is a bit easier. The law of economics would require that cost should go down as the ability to do the job, better and faster came to fruition. Digital cameras, signatures, email delivery; all should have lowered costs to appraisers. The only one who seems to think this is me; and those lowly appraisers embracing the change. Yes AMCs suck, HVCC is the devil; but you have to understand underlying problems. Designations in my opinion have gone by the wayside as their appeal has dwindled. Because banks were bailed out, and propped up, the need and requirement for them to obtain accurate valuations has declines; as they do not fear losing their assets. The younger generation of appraisers sees this. They see that banks now control the flow of work, so they go work for them. A number of them, including myself, got into the business with no high level of understanding, background or education in the subject, and were able to make decent money, at half of the pay, the trainers were getting. Now all of a sudden, we find we can work on our own at the same pace, the trainers were forcing us to, for, actually, a slight increase in pay. If an appraiser made 50% of a $350 fee, he took home $175 a file. He already had to pay for his own stuff, very few trainers provided this for them; basically setting them up TO do this. Now with an AMC paying $200-225 a file; that’s 15-30% increase in pay; PER FILE. Thats potentially a $7-10k increase in pay; without needing a designation, and without the bank caring if you had one or not. As the virus spreads, some appraisers find themselves trying out the court setting; since the courts are not asking, nor are they caring; the same message of NOT NEEDING a designation keeps spreading.
As we continue; demand for such designations, in my opinion has only declined; yet prices have not. Again, simple economics, when demand decreases, prices will tend to fall. AI membership, or cost of designation has not declined, even as the medium for learning coursework has gotten easier. A teacher is not required to have a live classroom, there is distance education. The overhead costs usually associated with such a live class are no longer there, yet prices have remained high. As a student of economics, this is mind boggling. I can almost guarantee if you look at the demand for online education, the cheaper classes are far outweighing the higher quality classes.
If organizations want to stand a chance, they are going to have to offer a higher quality product for a comparable if not cheaper price. A la mode is finally learning this; they are coming out with a new software, that appears superior to it’s highest competitor, for the same cost. I’d stake my money on that company right now. For them to beat competition up, they would have to lower the cost, just slightly, in my opinion; it may hurt at first; but i think we are looking long term.
As for designations; they should remain hard to obtain, but not because educational prices are so high, and maintenance costs remain high, but because they promote their meaning to banks. They need to again stand up, and shout out to them what their designations stand for and try to give them some promotion. As it stands; unless they carry some sentimental value; like a job well earned, and are not easy to recoup if lost; keep them. If financially, they are not producing enough work to warrant their costs; dump them.
As technology only gets better, it’s not going to be the experts of appraisal that have made their names, but the technologically advanced that can analyze and express data, not only descriptively, but visually, graphically – and in a way that does not always upset the client; understanding that the ‘appraiser-client’ relationship has fundamentally changed; it is more like an employer/employee relationship now.
Mark, I totally agree with you. I was a member of the AI, but could not afford to keep my membership up. I only needed to complete the Demo to get my SRA, but no assistance was given or offered from the AI. I need only to complete the Demo for the IFA, and the NAIFA did connect me with a mentor. However, scrambling to find assignments I have no time to work on it. The NAR wants their money for my RAA, I asked them what benefit is it. I got some bull crap about how they supply marketing data for appraiser members. Big deal with that as they do everything else they can do to put us out of business.
I only kept my NAIFA membership, as a residential appraiser I find they best represent my interest between the mentioned organizations. I am not aware of any other organizations and how they represent the residential appraiser.
I don’t believe anyone is our advocates anymore, that is why I don’t belong to any organization. I have been appraising for over 30 years and have fought the good fight on my on. Due to the new HVCC regulations and the so-called “Appraisal Managment” Companies, I believe we will be revisiting the 1980′s once again and once again receiving the blame for being the “corrupt” market destroying culprits.
Don’t give any more money out to them.
Hi. For the past year, every time I get an email from the Appraisal Institute or the IFA about classes, what they are doing with Chinese appraisers, etc. I sit down and reply. My response is “You should be doing NOTHING except working to rescind HVCC or at least restore full fees to appraisers or there will not be anyone left to pay your dues. I have belonged for 15 years and I am watching to see what you do to help me before I pay any more dues.
The lender is who should be paying the AMC’s not appraisers. They are the ones who don’t have to pay an employee in their office to track and order appraisals. Our industry is being decimated by this and there are no new appraisers behind our group.
Please join me in starting a revolt. Tell all the appraisers to stop doing ANY work for two weeks and bring them to their knees. We should have done this May 1st.
Thank you.
Margo Henson
206-784-6627
P.S. The only response I got during the past year were several email exchanges from the outgoing president of the institute a few weeks before he left office. It was nice to hear from him, but wish he had sent the info on to the new president.
I have been paying dues to AI (SREA) since 1979!! Up until the dumbing down of the appraisal business with licenses, I was a proud Member!! However, the AI of today has done nothing to advance my obtaining business due to my experience and background. Why hasn’t the AI in its pursuit of classes and publications started a referral program, or even a AMC which would go a long way in guaranting appraisal quality. I’ve had to face the fact that I can no longer “do lunch” etc. to obtain business due to HVCC which was concocted because of ignorant and/or fraudulent appraisers. And, I have 2 daughters I’ve led to this business, but have not recommended that they join AI. There is no longer any advantage.
Appraisal organizations are fighting to stay solvent because many members have decided not to write that membership renenwal check. With the advent of HVCC, many appraisers are leaving the business entirely, much less paying dues.
Sadly the appraisal organizations have been completely ineffective in fighting HVCC or in promoting change that would have alleviated the need for it. As an MAI, I can tell you that I get absolutely nothing from the Appraisal Institute with the exception of the annual invoice.
I am one of the lucky ones – my dues are paid by my employer, however, if I had to write the check I would struggle with that decision as much as you are.
Terrific article. I have 30 years experience and it has all been taken away by AMC’s. I quit the Institute years ago when aAll they were doing with the dues was renting high priced real estate in Chicago and Washington D.C.. I wote a letter to the President of the Institute in 1990 asking them to move the offices to a cheaper rent district and find ways to reduce dues. The response “you want to be considered a professional by the industry dont you” ? I guess the industry doesn’t recognize being frugile. Quit all the organizations…We are getting more assignments not being an S.R.A. or M.A.I.
Mark
I believe you are on point with the residential, I can’t speak to the commercial market.I was an SRA before I said enough is enough. I do mainly high end properties for banks, estates and court work.I found no one ask about the designation and even in court, the question was what have a done in the market. There is no doubt in my mind the “SRA” helprd years ago, but those were different times.
Best of Luck
Bob
Mark,
I have been a certified general appraiser for 15 years and during that time I have considered the costs in both time and money of obtaining a designation and I have always decided that it isn’t worth it.
On several occasions I have written to the Appraisal Institute suggesting they would be wise to offer a CGA designation. My theory behind the suggestion is that they would dramatically increase membership and therefore their influence over the appraisal profession. In addition, a larger professional organization would give appraisers a more effective lobbing presence.
Unfortunately I have never even gotten a response from the Institute, so I guess they didn’t like my idea. What do you think?
Al Calderaro
Mark, Nice blog! I agree with you about the designations but am reluctant not to renew. There is always the “fraternity” factor; others that go through the process to become designated understand the dedication it requires. If they are decision makers it can make a difference. Ernie