Thanks to a small and little-known section of Arizona’s 2016 state budget, appraisers could soon be looking down the barrel of their own mortality, or at least the mortality of their chosen profession.
Included in that budget is a provision that eliminates the Arizona Board of Appraisal and folds its operations into the state’s Department of Financial Institutions, making Arizona one of just a few states that do not have an appraiser board or commission, Appraiser News Online writes.
From the Appraiser News Online:
According to the Executive Summary accompanying the Governor’s budget proposal, the action was necessary because the shrinking population of licensed appraisers was depleting ABOA revenues and that was “threatening the ability of the Board to fulfill its statutory obligations.”
Click here to see the relevant section of the state budget, pages 5-10.
The state’s budget and use of money has come under intense scrutiny recently, with the recent budget being called “historically lean” by the Arizona Republic.
From the Arizona Republic:
The governor has trumpeted the budget as a "fiscally responsible" plan that forces the state to live within its means. His opponents call it unnecessarily austere.
For now, the budget reworks the remainder of the current fiscal year as well as the one that begins July 1 and closes a $1.5 billion shortfall for that entire period. It does so chiefly through budget cuts, by sweeping unspent money across state government and by dipping into the rainy-day fund.
And the budget cut of eliminating the state’s Board of Appraisal will have significant impact on the state’s appraisers, even if there are less of them these days.
It seems that fewer appraisers begets fewer appraisers.
States appraisal boards long stood in the way of Appraisal Management Companies. The boards remain one final barrier to in-state AMC operations.
With the passage of the law, AMCs are emboldened to make a move towards pushing for more technology and fewer humans being involved in the appraisal process.
One AMC owner I spoke with discussed issues that arise with appraisers sitting on state appraiser boards.
Understandably, appraisers wish to stand in the way of the AMCs, as they often feel they are in competition. And they’re right to feel that way.
“We've experienced this when dealing with regulators as it's very much a kangaroo-type court and you have to basically drop a mini atomic bomb to get anything done,” the AMC owner told me.
What Gov. Ducey did was hand a victory to AMCs inadvertently. Admittedly, the dwindling number of appraisers in the state hastens their collapse in market share.
It may not be a death clock, but the times, they are a changin’.
“As far as the appraisers themselves… they're about 10 -15 years from being out of the main arena of lending, they'll never be completely gone but just less involved,” my source said.