In this second part of a series on the challenges relocation appraisers face, experts examine the impact of current licensing and training requirements that set a high bar for entry into the field and changes that may help attract new talent. They also explore the need for fair housing training to reduce valuation bias and how property data collectors (PDCs) and hybrid appraisals could lead appraisers into an advisory or consultancy role.
Reducing Entry Barriers Without Sacrificing Quality Appraisals
According to Byron Miller, SRA, AI-RRS, ASA, RAA, MSSE, owner and principal appraiser at BM Appraisals and member of the Appraisal Qualifications Board (AQB) with the Appraisal Foundation, there is a re-evaluation of licensing requirements for appraisers. Appraisers must meet education and training requirements to become an appraiser, and he notes that part of that training is a supervisor-trainee model.
“Once an individual obtains the education they need and passes the national licensing exam in their state, they must receive anywhere from six months to 18 months of experience under a supervisor,” he explains. “This is the method that most appraisers use.”
Lisa Meinczinger-Gulden, SRA, AI-RRS, ASA, CRP, RAA, CDEI, GREEN, owner of Advance Appraiser Service and president of Relocation Appraisers and Consultants (RAC), says that the other method is through PAREA (Practical Applications of Real Estate Appraisal). This new program enables trainee appraisers to gain the practical experience they need through virtual simulations and online learning.
“Through virtual assignments, trainee appraisers gain their experience hours,” and as an instructor with the Appraisal Institute, she says, “About 29 people have graduated and passed the exam on the first try.”
This is one way to ensure that appraisers are appropriately trained and have practical hours without the hardship of finding a mentor in the field.
“When I first started, I was the only woman in the classroom, and now I’m teaching virtual classes to new appraisers,” Meinczinger-Gulden says. “I’m seeing more women of different backgrounds in my classes and different age groups.”
Miller adds that many of his continuing education students are older because they tell him they don’t want to start from scratch if they retire and later on decide to get back into appraising. “That’s why it’s important for us as an industry to review those barriers to entry and see if they still make sense,” he says.
Miller also points out, “The AQB is reviewing licensing requirements to determine which ones could be removed without sacrificing the quality of appraisals, as a way to reduce barriers to entry for the profession and improve its diversity.”
He adds that 97% of appraisers are white and about 70% are male, which places the appraisal professions near the bottom of the U.S. Department of Labor’s diverse industries. “We want more people coming into the profession, and to do that we need to remove unnecessary barriers to entry,” Miller says.
AQB is seeking input from appraisers and other stakeholders on a concept paper regarding appraiser qualifications, particularly the requirement for a college degree. “A person’s home is their largest and most important transaction, and you really want a qualified, knowledgeable appraiser at your side,” he says. “We need to find a way to raise awareness about our profession and attract college graduates.”
Impact of Valuation Bias
According to Miller, complaints about valuation bias in appraisals have tarnished the reputation of the industry to some extent. The issue raised a lot of questions in the field, and Meinczinger-Gulden says that the Uniform Standards of Professional Appraisal Practice (USPAP) is updated every two years, and the last update addressed valuation bias. The 2024 USPAP update made changes to the Ethics Rule to explicitly prohibit discriminatory factors from influencing appraisers’ conclusions, and it aligned USPAP closely with fair housing and antidiscrimination laws.
The AQB will mandate that all appraisers take courses on valuation bias and fair housing beginning 1 January 2026. Miller, who teaches a course, says it will be required for appraisers to maintain their licenses. “Appraisers know the 50-year-old fair housing laws already, and they can tell you about them, but many appraisers simply want to know what words to avoid using in their reports,” Miller says.
In some cases, Meinczinger-Gulden says that valuation bias can creep in if an appraiser is new to the field and less experienced. “It can also occur if the appraiser is working outside their normal market and doesn’t have the geographical knowledge they need when writing up the report,” she says. “Appraisers are supposed to be objective and impartial.”
According to Miller, it isn’t about which words to use and not use. “It’s about learning how to recognize your own biases,” he says. “I often ask my students, ‘What’s your favorite soda?’ And once I explain that their answer is a bias, they seem to understand.” AQB’s stance on valuation bias is that the more education and knowledge appraisers have about bias, the better they will be at recognizing it.
Even Miller has experienced bias in his own appraisal reporting. One house he appraised was fully renovated, the owners were in the medical field, and their home was in the mid-to-upper bracket of a suburb near Minneapolis. “I walked through the house and looked at my range of adjustments. I was initially going to make a significant reduction in the property’s value based on my preconceived cleanliness bias,” he recalls.
Bias can come in many forms, but unless an appraiser is trained to recognize the possible signs and question their own choices, they’re unlikely to correct themselves.
Meinczinger-Gulden adds, “Continuing education is mandatory for the life of an appraiser’s career. There’s no getting around that if you want to be good at what you do.” One key to reducing bias, she says, is cultural competency. “When you’re in someone’s home, you’re entering their space. If their culture requires shoes to be left at the door or outside, put on the slippers before you walk through the home.”
Other tips for cultural competency include:
- Dress professionally but appropriately for the tasks of appraising and home valuation.
- Build a rapport with the homeowner and greet them kindly.
- Do what the homeowner asks of you.
- Listen to what the homeowner says about the property.
Joseph Palumbo, SRA, ASA, CTA, chief operating officer at Worth Valuation Services, agrees that all appraisers, including those in the talent mobility industry, need to “be careful about what they say and how they act.” He does caution that the appraisal process is quantitative, but there is also a bit of subjectivity to an assessment.
“To my knowledge, valuation bias has not been an issue in relocation appraisals. It has primarily been raised in lending situations.” To be as objective as possible in the process, Palumbo advises, “choose comparables based on only the physical characteristics of the home being evaluated.”
Shifts in Appraiser Roles
Hybrid appraisals, in which PDCs can provide the data that appraisers use in drafting their valuations, is gaining traction in some parts of the appraisal field. Palumbo adds, “It’s primarily being used in lending to save time and money. Although that is debatable.” Hybrid appraisals could save appraisers time and clients money, but the accuracy of the data collected could become a concern as it relies on an unlicensed individual: the “data collector.”
“To date, Worth Valuation Services hasn’t been asked about hybrid relocation appraisals, but clients have asked about computer-generated valuations or automated valuation models (AVMs),” Palumbo says. Ultimately, he says, “It doesn’t matter where the data comes from as long as it is accurate because when an appraiser signs the report using that data, it is their license that is on the line.”
Miller and Meinczinger-Gulden are both concerned about the qualifications of PDCs and the use of the data they collect in appraisals. Companies that use PDCs say they are trained, but is the training consistent across the board like it is with appraisers? Miller says, “PDCs are not licensed, but they do undergo background checks, according to most companies using them.”
Miller, working with the local chapter of the Appraisal Institute in Minnesota, wants to see legislation that requires PDCs to be licensed. “I would argue that since appraisers and others in the real-estate stream are required to be licensed, so should PDCs.”
While PDCs can speed up the appraisal process and allow appraisers to focus on the analysis and critical thinking in the valuation process, things may get missed.
Miller recalls a laminate in a home that looked like grouted ceramic tile. If a PDC had simply provided photos for the appraisal process without the appraiser setting foot in the home, it would have been assessed as ceramic tile, not laminate. Miller says, “When I walked on that ‘ceramic tile,’ it sounded hollow. That’s something you’re not going to get from a PDC’s picture.”
“In the future, appraisers will act more like consultants,” Palumbo says. “Relocation management companies and clients would use their own technology to collect data on a property and then ask an appraiser to weigh in on the valuation.”
Relocation appraisers could be asked for their opinion on the value assigned to a property, they could be asked about data sets, or what their opinion is on an AVM.
Meinczinger-Gulden agrees that there will be more critical thinking and data analysis involved in the appraisal process, and she’s seeing some of those changes now with updated forms that are more focused on narratives and less focused on checking off boxes.
“Every appraisal I’ve done recently has been complex, and if appraisers want to survive in this field, they’re going to have to pivot with the industry,” she says. “For relocation appraisals, we’re all going to have to look at markets more closely.”