When appraisers talk about changes in the appraisal industry, I think most of the real estate community only hears “blah, blah, blah” or rather the sound Charlie Brown’s teacher makes when speaking. But today I want to share about a specific change that is coming up in 2015 anyway because this is worth knowing about.
A College Degree? Beginning in 2015 an individual will need a Bachelor’s degree or higher from an accredited college or university to obtain a Certified Appraiser’s license. An entry-level appraisal license can still be earned though with only 30 semester college units or an AA degree, but the problem is that the “Certified” license level (which is a step above the entry-level license) has really become the standard for many lenders and private clients. This means the Certified license is inevitable for anyone serious about appraisal work.
The Big Idea: The idea with increased educational requirements seems to be to improve the quality of appraisers, which is probably a good move. Yet at the same time it is already an uphill battle to become an appraiser in California because of how difficult it is to find a mentor and work as an appraiser trainee. On top of this, it is an aging industry, which complicates things further. For reference, I attended an all-day class two weeks ago and only 1 out of 60+ appraisers in the room had a trainee (it used to be much more common). Moreover, the stat I keep hearing is that the pool of appraisers in California has shrunk from about 20,000 to 12,000 as a result of the carnage of the real estate bubble bursting and the mess of HVCC.
Why does this matter? The regulation and education pendulum for appraisers has swung far in recent years as a reaction to mortgage fraud and shoddy appraisal work. On one hand this is great and has potential to possibly increase the quality of appraisers over time. Yet on the other hand it could lead to a shortage of appraisers and end up stifling the industry. Only time will tell.
Question: Is this a good move or not? Should a 4-year degree also be required to obtain a real estate license or broker’s license? What do you think?