Appraisers have stopped calling. 

Appraisal managers and chief appraisers used to hate to get the call, “Can I get on your approved appraiser list?” That’s no longer the case. The phone stopped ringing. No one is calling asking to be added to your fee panel.  

How low can it go 

The obvious answer is declining number of appraisers. The Appraisal Foundation Appraisal Subcommittee says at the end of 2021, there was 39,045 certified general, 46,857 certified residential and 7,228 licensed residential. The 15-year trend for active appraiser credentials reflects a collective drop of 18,304 appraisers. 

Why it matters.  

There’s a feeling in appraisal departments that appraisal fees and turnaround times are becoming outrageous.  

Bank mergers and acquisitions can muddy the waters relative to a well-vetted approved appraiser list. In 2020, there were 4,377 FDIC-insured commercial banks in the US. Few new banks were being chartered and bank mergers reduced the number of charters. The following chart reflects the consistent decline of the number of banks between 1986 – 2020.  

Commercial banks in the us

It’s not you it’s me 

Many appraisers have fallen through the cracks by bank mergers, or being taken off the approved appraiser list. Often, there’s no explanation leaving the fee appraiser frustrated. The absence of a true client relationship and communication can breed resentment. This has led to a segment of the fee appraiser world saying, “I don’t like to do bank work.” AMC’s with poor platforms and low professionalism exacerbates appraiser’s annoyance. 

How accurate is your list? 

Most approved appraiser lists were created years ago. Often new appraisal managers and chief appraisers adopt their predecessors list. Many of these firms have been consolidated with national firm. Others have quietly slowed down selectively taking on work. 

Solution: check the most boxes 

So, what’s the solution to the shortage? I think it comes down to the appraisal department that checks the most boxes. Figure out what the fee appraisers want. More importantly, go back and re-vet (almost from scratch) your appraisers. Call them, ask for a Zoom meeting so you can actually see their face. If possible, grab a cup of coffee.  

5 ways to “find” good appraisers 

  1. Re-establishing the relationship. 
  1. Talk about the firm’s current geographical and property type expertise. 
  1. Talk about fee and delivery expectation ranges. 
  1. Ask questions about how they view their relationship with your bank. 
  1. Ask what’s it going to take to be the preferred bank. 

Appraisers might complain about various things, such as poorly formatted engagement letters which can result in reviewers kicking reports back for things like missing insurable value. Appraisal fees will be another topic. Inconsistent reviews are also a hot-button for some.  

Be a lighthouse not a tugboat

A typical commercial appraisal firm workload is 60% bank/40% everything else. Many appraisers are actively trying to flip those percentages, sometimes due to a negative AMC influence. This is a challenge for your appraisal department that you need to get ahead of. Just having a conversation will significantly improve their attitude and potentially increase their resources for your bank. If you don’t, the trend will continue. 

Maybe it’s a coincidence that the number of banks and appraisers are both declining. That said, the trend doesn’t appear to be changing course, at least in the short term. Finding appraisers may be as simple as revisiting your fee panel list and picking up the phone. Find the right people through re-establishing relationships. Get good appraisers on your panel. Find the right people. Find your people.