Mortgage

Another answer to the appraiser shortage? Eliminate 4-year degree requirement

Online training and less college hours would widen the field

[Update 1: Wording has been changed to reflect that the Appraisal Quality Board task force is part of the Appraisal Foundation, not the Appraisal Institute.]

Whether the housing industry will have enough real estate appraisers continues to be a topic of much debate. Although some assert that new competitive forces are to blame, the numbers seem to tell a different story.

Recent research from the Appraisal Institute shows that the number of active real estate appraisers in the U.S. dropped 4% between December 2015 and December 2016. What’s more, the number of appraisers has been declining at an annual rate of about 3% for the previous five years.

What’s causing this decrease? As veteran appraisers retire, they are simply not being replenished with new recruits.

Currently, the average age of an appraiser is around 60, according to the Appraisal Institute’s research. Meanwhile, only 10% of appraisers are under age 35. For that reason, the number of registered, licensed appraisers is expected to continue to drop for the next five to 10 years.

One of the major causes of this dilemma is the industry’s education and training requirements, which many potential recruits find too burdensome. Currently, to become a licensed residential appraiser, a recruit must complete a total of 150 hours of coursework and 2,000 hours of on-the-job work experience with a certified appraiser, in addition to holding a four-year college degree.

Fortunately, new education and training requirements proposed by the Appraisal Foundation's Appraisal Quality Board (AQB) task force will ease these burdens. Instead of requiring four-year college degrees, trainees could instead pass a college level equivalency program equivalent to 21 semester hours of coursework (basically, an associate’s degree). In addition, candidates will be able to complete their training online, via a Capstone-type training program.

One of the benefits of using e-learning is that it could pave the way for a more uniform and standardized approach to education and training. In addition — and this is an important point — online training could help improve the quality of the appraisers entering the industry.

For example, e-learning could also expose candidates to a much wider range of appraisal scenarios than they might normally encounter in the field. In addition, online programs will let trainees advance only after they’ve demonstrated their understanding of a particular lesson.

This competency-based approach is different than simply completing a certain number of hours in training. It’s also similar to how many other professionals learn their professions. Considering how important appraisals are to a healthy housing market, it only makes sense that appraisers should meet similar requirements.

The AQB’s proposal does not lower training standards, as some might claim. Rather, it will help attract more young people to the profession and it will improve appraisal quality and accuracy. I think we can all agree these are worthy goals.

 

 

 

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