Does the Shortage of Appraisers Affect Your Business?

9 Aug

There have been two recent articles (Reverse Mortgage Daily and Appraisal Buzz) that remarked on the current shortage of appraisers.  Both were accompanied by a graph from The Appraisal Institute showing a steady decline in the number of both licensed and active appraisers nationwide, with thousands dropping off the roster each year.

With the current increase in mortgage activity due to low rates, there is even more of a demand, so why should this be the case?

Part of the problem is the current protocol where lenders must order through an appraisal management company.  These AMCs collect a fee, which is deducted from the total cost of the appraisal.  A borrower pays a typical $450-$525 (in New York, anyway) for a single-family appraisal but the appraiser now earns only $300 or so for the job.

Friends in the appraisal business say that they cannot earn a living if their fee is so low.  And friends in the mortgage business report that it can take days for the AMC to find an appraiser willing to accept a particular job.  They also wonder at the quality of the appraisal work being done.

The cost of appraisals is bound to go up if the trend continues, in order to provide adequate compensation for appraisers to keep working.

We would love to see comments relating your experiences with appraisals and AMCs – please submit them below!

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