- Miller Samuel Real Estate Appraisers & Consultants - https://millersamuel.com -

[Appraisal Contemplations] Quality Over Quantity

A native Californian and a certified real estate appraiser, Aaron O. Thomas began appraising in Arizona and eventually ended up in San Diego where he owns and runs San Diego Appraisers [1]. His firm specializes in greater San Diego County area residential properties and his clients include mortgage brokers, CPAs, lawyers, businesses and homeowners. Aaron is very outspoken and passionate about real estate appraising. Colleagues on Appraisers Forum [2] have long known him as “Tucson Appraisals.” Good thing it’s too warm in San Diego to have the wool pulled over his eyes to the unethical business practice of the day: “comp checks [3].” Like me, he experienced a growing frustration in recent years with the form-filler mentality that many appraisers and users of appraisal services have embraced.

I am lucky to have Aaron contribute to the appraiser dialog on Soapbox.
– Jonathan Miller

Initially and some time after licensing was implemented there was talk of increasing the requirements of attaining a real estate Appraiser license. Regulators had some concern that if the requirements were too stringent, it would create a lack of real estate Appraisers. This of course would have made it a longer process to attain a mortgage. Needless to say, this extra criterion was never implemented until recently.

The real estate boom of 2004/2005 created a situation where there were more appraisal orders than there were Appraisers. This created an influx of Appraiser trainees that eventually outnumbered the amount of licensed Appraisers. They were depended upon to carry the weight of Appraisal orders that were flooding in from the higher rate of mortgage applicants. At the risk of making a generalization, these trainees were not given the amount of attention needed to properly train them because the licensed Appraisers were too busy trying to meet the demand of all the appraisal orders. This out of control situation created numerous appraisals that were inaccurate and in some cases downright fraudulent.

Now that mortgage applications have declined and more strict lending guidelines have been implemented from the collapse of banks across the nation, there are more licensed Appraisers than the market can support in appraisal orders. Appraisers are getting pushed out of the business and they are letting their licenses lapse.

Regulators (and others) have learned their lesson. Now that there is an overflow of Appraisers that can easily meet the demand for Mortgages, regulators are now implementing more stringent criteria on licensing without the worry of creating a lack of Appraisers. But, would they still have implemented these stringent qualifications criterion if there were a lack of licensed Appraisers? After all, we are tied to a larger system that still needs to flow smoothly. We are tied to it and governed by it more than people would like to admit.

Prediction: Licensing criteria will be loosened again when there is a lack of Real Estate Appraisers needed to supply the market.