By Charlie W. Elliott Jr., MAI, SRA, ASA
Appraisers Must Be Paid More
MAY 2011
TEXAS MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
14
considering the cost of managing the Lately, we have seen spectacles from variappraisal process, many appraisers ous groups of different professionals, comperform appraisals at rates that are plaining about not getting paid enough. much less than this. This seems to have been mostly government workers who are members of labor unions. There have been marches, Younger people are not entering the appraisal business. According to the demonstrations, civil disobedience; you Appraisal Institute, among its memname it … all in the name of either bership, the average age of a desigincreasing pay to various groups of worknated appraiser is 60, and the average ers or justifying existing pay levels and age of a non-designated benefits. These are usually appraiser is 53. The sanitation workers, policeappraisal schools are genmen, firemen and teacherally void of students takers. These people usually ing pre-licensing courses. get a number of weeks of The economic incentive is paid vacation, liberal just not there, especially healthcare benefits, lucrawith the current recession. tive retirement packages Obtaining a real estate and sick leave. I generally appraisal license requires, applaud the efforts of these on an average, three-topublic servants and supfour years for a residential port their well-deserved appraiser and four-to-five right to a comfortable stanyears for commercial dard of living, excluding “Unless material appraisers. During training, some who seem to position themselves to receive a dis- changes are made soon appraisers are typically proportionate share of the to compensate apprais- paid apprentice rates, taxpayers’ hard earned ers fairly and equitably which are significantly money. for their efforts, we will lower that those paid experienced valuation profesThere is another group find a shortage of of professionals who, in my qualified people to per- sionals. mind without question, form the tasks of propSome complain that deserve more compensaerty evaluation.” appraisal management tion than they receive. companies (AMCs) are the They typically get no reason that appraisers are paid so little. healthcare benefits, paid vacation, 401(k) programs or sick pay, and they have no As the owner of a non-bank-owned labor union to negotiate on their behalf. AMC, I disagree. I have experienced the These people are the real estate apprais- very competitive nature of the business ers who perform the service of evaluating firsthand, especially for residential homes, land, and the many different appraisals. The restricted rate that independent AMCs can charge, coupled with types of commercial property. While there is no source for which I the overhead associated with increased am aware that provides statistics on the regulations, leave them with even less amount of compensation these people as to pay their appraisers, not more. There individuals receive, there is much anti- is pressure from every angle, and those dotal evidence that supports my con- of us who want to pay appraisers more are not able to do so due to the low fees tention. Please consider the following: we must charge in order to remain My memory tells me that the going competitive. Unless material changes are made rate for a home appraisal 20 years soon to compensate appraisers fairly and ago in most areas was about $300. Today, in many areas, the going rate equitably for their efforts, we will find a is still at or close to this rate. After shortage of qualified people to perform
the tasks of property evaluation. It is not inconceivable that, when the market turns around, it could take four to six weeks to obtain a residential appraisal and six to eight weeks to obtain a commercial appraisal. What must happen to correct this problem? It is probably too late to avoid a shortage if the economy improves soon, as most of us would hope. It is not too late, however, to begin to correct the problem. This should be done immediately. Appraisal fees are controlled by the major banks. It has been estimated that 80 percent of all mortgages are originated by the four largest banks in the United States. The management of these banks control appraisal fees to the customer. We must encourage these institutions, along with all of the smaller banks, to raise appraisal fees if they are to insure the availability of appraisals in a timely manner to underwrite their loans. These professionals are the bank’s only hope for accessing collateral, which is
heard on the street
the foundation of their mortgage investment. Appraisal fees to the consumer must be increased soon to head off a critical shortage of professional appraisers. I suggest that, across the board, appraisal fees should increase by a minimum of 50 percent within the next year to avoid a critical shortage of qualified appraisers. This will not guarantee that a shortage will not occur, but it will be a step in the right direction. We must provide young people with an economic incentive to join our profession if we are to have a pool of qualified professionals to draw from. We deserve the best and brightest in our profession, and we will only get this if we pay our professionals fairly and competitively. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, email charlie@elliottco.com or visit his company’s Web site, www.appraisalsanywhere.com.
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tion of offering superior independent advice in these situations. In addition, as the securitization markets recover, we expect David, Florin and Tyler to significantly enhance the depth of Clayton’s offerings and advisory services.”
Mortgage Professionals to Watch
John Axt has joined ISGN as title products operations delivery executive.
John Axt
John Van Tassel has been named vice president of strategic growth for Hammerhouse LLC.
John Van Tassel
Mortgage Capital Trading (MCT) has named Rhonda Beck regional sales director for the firm’s Charlotte, N.C. office and will lead the company’s expansion into the southeastern United States. ICON Residential Lenders has named three new area sales man-
agers: Debbie Hood for the Pacific Northwest region; Rhett Hubbard for the Orange and San Diego County regions; and Justin Smith for the Los Angeles, Riverside, San Bernardino and Ventura County regions. Real Estate Mortgage Network Inc. (REMN) has named Tom Conklin western division sales manager overseeing wholesale operations on the West Coast. TMS Funding, the wholesale residential lending channel of Total Mortgage Services LLC, has named six new account executives: Alan Caldwell, Patrick Creighton, Ingrid Helfgott, Mark Karanovich, Samantha Hay and Kathleen McLaughlin. Coester Appraisal Group has announced the hiring of Harood Khalid as chief developer and Joseph Bryant as national sales director. Jerome T. Lienhard has been named president and chief executive officer of SunTrust Mortgage Inc. CoreLogic Valuation Services has promoted Wes McDaniel to the newlycreated position of chief appraiser. J.I. Kislak Mortgage LLC has announced the appointment of Felix Beck as senior advisor to the company. James Zeldin has been named executive vice president and chief sales officer of Default Resource. BrokerPriceOpinion.com has named Chris McLain as director of business development. Pamela S. Morris has joined Colonial National Mortgage as branch manager. continued on page 22