The Appraisal Foundation has recently issued a Practical Application of Real Estate Appraisal. You’ve heard of FIRREA, now there’s PAREA. I think the motivations are sound; the Appraiser Qualifications Board (AQB) created a first exposure draft highlighting the challenges of traditional supervisor/trainee model for gaining commercial appraisal experience. It’s an important topic for financial institutions’ fee panel that struggle to attract younger talent.
One obvious issue is the reluctance of trainees finding qualified supervisory appraisers willing to train them. The reasons for the lack of supervisors is varied, but I think concerns of veteran commercial appraisers include:
- Lack of confidence in commercial valuation business model
- Stereotypical 18-month job rotation of millennials
- Absence of entrepreneurial spirit
The exposure draft suggests “simulated and controlled environment”. In other words, online training to satisfy 100% of the experience requirement. The lack of a human mentor is an obvious and significant detriment to valuation critical thinking skills that can’t be gleaned through a virtual assistant. That said, it might make a lot of sense to make the online education very local, providing the rules of thumb many of us rely on in our particular market.
Per the AQB, the minimum requirements to become a certified general appraiser are 300 hours of qualifying education, 3,000 hours of field experience and in no fewer than 30 months. As a comparison, the FAA requires 1,500 hours to fly as an airline pilot, which can be earned in about two years.
As a veteran commercial appraiser myself, I get it. There are extensive commercial valuation nuances that take a lot of time to learn. For longevity and success of the industry, getting the conversation going to education alternatives is reasonable, especially in the absence of mentors. At the end of the day, if owners of appraisal firms recognize the opportunity that the next generation provides, let’s hope there’s somebody in the seats. Bueller? Bueller?