INDUSTRY U P DAT E S
PROPERTY APPRAISER SHORTAGE
A Problem in Rural Arkansas by George Jared
W
hen banks make loans for property typically an appraisal is needed. If the transac-
tion is $500,000 or less, the loaning institution can do it in-house. For transactions that exceed that amount, an independent appraiser has to be hired. In urban areas it’s not a significant issue, Arkansas Bankers Association Chairman Randy Scott, president and CEO of Farmers Bank & Trust in Blytheville, said. But in rural areas there are fewer licensed appraisers and it is leading to serious problems, he said. “Cities like Little Rock and Fayetteville have plenty of appraisers,” he said. “There’s no shortage of them in Northwest Arkansas. Where we are seeing a major problem is in rural areas.”
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A home or other property appraisal is a licensed or certified appraiser's opinion of a home's value, according to Nerdwallet. The appraisal is based on research of recent sales of comparable homes in the area, an analysis of the property and the appraiser's judgment. The mortgage lender requires an appraisal to help gauge risk of making a loan. The property serves as collateral in case the borrower defaults, so the lender wants to make sure the loan isn't too big compared with the property's value, Nerdwallet reported. Appraisal fees can vary from state to state based on several factors, including what type of loan is being sought. Most residential appraisals in Arkansas fall in the $300-$700 range, while commercial appraisals can be higher.
