Appraisal co. owner slams HVCC
Letter to the Editor
By Inman News, Thursday, November 19, 2009.Re: 'Appraisal rules draw more fire' (Nov. 18)
Dear Editor:
I have been a licensed appraiser for nearly 20 years. During all those years, I have formed great relationships with many lenders and loan officers. Now, I've lost that thanks to HVCC (the Home Valuation Code of Conduct).
In the past 10 years or so, many appraisers have never had a raise. Now we're being forced to take a pay cut of approximately 50 percent. This does not help my retirement fund, or trying to just make ends meet. Many of the "good" appraisers are now quitting because they can't make it anymore.
It's a shame when homeowners have to accept an appraisal that may be unacceptable, or from an appraiser who has never been in the subject county. There are many Realtors, loan officers and appraisers who are standing up against the HVCC. We hope to find some way that all parties can find a resolution.
Mike Edling
Owner
Edling Appraisal Inc.
Tacoma, Wash.
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Submitted by Douglas Quenzer on November 20, 2009 - 6:24pm.
Let's just think about this whole situation.
1) In the past year the education requirements for being a certified residential appraiser has doubled. You can't do FHA appraisals without being a certified residential appraiser. USBANK just came out with the requirement of being a certified residential appraiser.
It once was 120 hours of education and 2500 hours of experience. Now it is 200 hours of experience and 20 hours of college level education in certain subjects with 2500 hours of supervised experience. Let's add that cost up. It costs about $200 per 15 hours of appraisal education. So that means just to take the appraisal courses it will cost nearly $3000. That also means 12 weekends or 25 days of sitting in class. You can take them on-line, but for a newbie that's not advisable. The cost of getting 20 hours of college education is another $6000. That means just to get the opportunity to take the test requires an investment of $9,000. But that doesn't include the fact most appraisers also need a realtor or broker's license to be part of the local MLS. So let's say just to take all the courses it costs about $9,000.
2) Now if the general fee for an appraisal is $300. That means the trainee will get about $150 per appraisal if he works as an independent contractor. It takes about 8 hours per appraisal. So the trainee will make about $20 per hour gross. But out of that he/she has to pay for those nasty expenses; such as a car, MLS dues, cell phones, realtor dues (have to be a realtor to use MLS). Plus if you are an independent contractor you have to buy your own software, computer, camera, printers. So it is real easy for 25 to 30% of the net fee received to be expenses and that leaves about $15 per hour. The minimum number of hours is 2000 hours to get licensed. That means 250 appraisals to get the minimum license (or 250 days). So that means 50 weeks of work getting $15 per hour after you have invested all that time, energy, money to get a licensed. But to get certified it means another 500 hours of experience. And then there is no gaurantee there will be the work! Because unless it is very busy it could take 2 to 3 years to get that license. For example I average about 300 appraisals a year. I would have get another 200 orders per year to make it worthwhile to supervise someone. Not possible. If that were possible the trainee will make at most 30,000 gross. Doesn't count the expenses! That means working another job while you are trying to get the experience. It took me 2 years to get all the necessary experience. I had to sell real estate in the meantime. And if you do have another job it better be pretty flexible because you can't do appraisals at night!
Question: Who is going to spend all that time and energy and try and survive on 30,000 a year gross and maybe 22,000 a year net?
And this doesn't even get to the hassle of finding a certified residential appraiser willing to supervise someone. I don't know of any appraiser out there that is willing to do that for someone other than a family member. The fees aren't high enough, and the work is too inconsistent.
The end result: It will take about 10 years and there will be a huge shortage of appraisers. I am 54. When I go to CE classes the average age must be at least 50. And the best and brightest will not want to enter into a profession to starve. With the low fees there will be a day of reckoning. The best and brightest will not enter a profession to make maybe 22,000 a year.
Submitted by Bruno Skopinich on November 20, 2009 - 6:57pm.
As I told my colleagues...
Govt regulations will put us "out of business" FASTER than Market conditions.
There ought to be a prerequisite to being a politician. First, they must earn a living within the industry they regulate. SO that they better understand it.
There will always be a few bad apples in every industry. The problem is they punish every body.
Afterall... what would our politicians do with their time... if all problems where solved?
There are so many rules and laws governing us that no one seems to know what they all are. Politicians need an army of lawyers just to keep track of their workings.