CNN just ran a story on incomes of appraisers. This survey stikes me as a bit overstated. Specialization is key, especially if the focus is on complex properties.

IMHO, I think the appraisers on the residential side that are generating a lot of income, own very large operations with a lot of trainees and are tied in tight with wholesale lending channels. Its going to be interesting to see how these firms do when or if refi or sales business drops off significantly. On the commercial side, its the firms tied in with conduits. With capital in abundance these days, demand for these appraisers is high.

A study on appraiser incomes [Note: Abstract], done in 1999 at Washington State University, was reported to be the first of its kind.

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3 Responses to “Apparently, We’re Flush”

  1. Jonathan Miller says:

    Why use an appraiser? …because the appraiser is not there for the buyer. We are there to assess the collateral for the lender, no matter how convoluted the system is. In a sale, the price of the apartment has been fleshed out by market exposure. If 2% of those sales in a market are not supported by the market and they are off a total of $3,000,000, then thats why appraisers are needed. The greater exposure for lenders concerns refinance mortgages, not sales. In a refinance is no value that has been fleshed out by market participants. This is were much of the self-dealing takes place.

    This being said, I have serious issues with the structure of the industry and your post touches on a portion of the problem.

  2. Ashish Shah says:

    It seems that the value of an apartment valued by most appraisers is generally close to the sell price. So the question arises “Why ever use appraisers?” How often is there a conflict between Apartment price (as quoted by seller) and the Appraised Value (as quoted by Appraiser). Answer: Very very seldom. The Appraiser selected by a bank issuing the mortgage would always quote a value at or close to the actual price of the Apartment so that there is no issue in the Mortgage closing, which is what the bank is really interested in – Closing the deal!!

  3. Jamie Pitts says:

    In the CNN article, they use the term “gross income”. If that means revenue before deductions for expenses, then the numbers seem a little more correct. Somewhere I read that the national average for appraiser expenses is about 40% of gross revenue. As a single appraiser office, my expenses run more to 50% of my gross revenue.