The relocation appraisal industry is a niche part of the overall appraisal sector, one that continues to face shifting tides in attracting new talent amid a graying workforce and a shrinking market. These professionals review the home of a relocating employee to determine its expected sale price based on design, overall appeal, comparable sales, and current market conditions, among other factors. New technologies are also changing the landscape, with some viewing them as opportunities for growth and others expressing concern about their reliability. Three experts weigh in on these challenges facing the relocation appraisal market.
A Shrinking Market
“With the cost of relocations nearing $80,000 in some cases, companies are pulling back on relocation offers, limiting them to middle to upper management personnel,” says Byron Miller, SRA, AI-RRS, ASA, RAA, MSSE, owner and principal appraiser at BM Appraisals. With interest rates on mortgages and home values high, the cost of talent relocations has increased, leading some employers to consider lump-sum allowances for employee relocation. “[This allowance could provide] a relocating employee with $50,000 to find and secure a new home in their new location, but the cost of the home and moving there could be much higher,” Miller says.
Home-sale programs, in which companies help employees sell their homes before relocating them, have shifted focus over time. Joseph Palumbo, SRA, ASA, CTA, chief operating officer at Worth Valuation Services, an appraisal management company that handles valuation in the United States and Canada for relocation management companies, says, “Few home-sale programs exist. Many companies have been transitioning to owner-direct or lump-sum assistance in the last decade. Some also are using the buyer value option (BVO).” BVO is a buyout program in which a relocation company purchases the home of a relocating employee, which is then sold to an independent buyer sourced by the employee’s real estate efforts.
Miller notes that some markets are more seasonal, but even in his robust Minneapolis, Minnesota, market, he’s seen consolidation from about eight major players to just three in the last 15 years. “In the past, many companies had their own staff that handled talent mobility. Now, many companies hire third parties to help with the relocation process.” According to Palumbo, “One of the key areas that relocation management companies outsource is the valuation piece, which includes finding WERC-trained, qualified appraisers that can deliver high-quality service and product so employees can be presented with a market-based offer on their homes.”
Palumbo sees a similar trend. “I think there’s a very high percentage that outsource the work and a low percentage that want to keep it in-house,” he says. Outsourcing the talent relocation work provides a turnkey service for companies. “Companies don’t have to spend time vetting the supplier and adopting quality control measures throughout the process because the third party handles all of that,” he explains. “The company can then focus on helping the relocated talent be effective in their jobs when they arrive at the new location.”
Attracting New Talent
Appraisers can be in their careers well into their 80s or 90s; statistics from the Appraisal Institute in 2023 found that more than 60% of U.S. appraisers are 50 years of age or older, with nearly 25% of those individuals being 65 years old and up.
In terms of the actual number of licensed appraisers in the United States, it’s smaller than expected. “Think about the current nursing shortage in the United States. There are still 5 million licensed nurses. Additionally, there are a million lawyers in this country, but there are approximately just 65,000 appraisers,” Palumbo notes, drawing on his experience as a board member of the New Jersey State Board of Real Estate Appraisers. “Of the 65,000 appraisers, roughly half of them are residential appraisers, and about 21% are licensed in more than one state. Just 10%-12% of residential appraisers work in the talent relocation market.”
With the recession, many people left the appraisal industry, and others have since retired. “Not a lot of young professionals are entering the industry,” Palumbo says. “Part of that is that there is less work to train people on. You need practical hours to become an appraiser, and you need a supervisor willing to sign off on the work that they do, which can be a challenge when there isn’t as much relocation work for already licensed appraisers.”
Lisa Meinczinger-Gulden, SRA, AI-RRS, ASA, CRP, RAA, CDEI, GREEN, owner of Advance Appraiser Service and president of Relocation Appraisers and Consultants (RAC), agrees that it can be hard to find an already licensed appraiser to take on a mentee. “There’s a high bar when it comes to becoming a licensed appraiser,” she says. “You must take a state exam and get a trainee’s license. Then, you must find a mentor for about two years. During this time, you achieve a certain amount of hours in the field, depending on whether you’ll be working in residential or commercial real estate.” Appraisers also undergo background checks and fingerprinting as part of the licensing process.
According to Miller, relocation appraisal is a niche field that requires a specialized skill set, and many clients only want to work with appraisers who have several years of relocation, forecasting adjustment, and market analysis experience. “Get educated,” Miller says. “Attend conferences with WERC and RAC.”
WERC also provides its Certified Relocation Professional (CRP) certification, which Meinczinger-Gulden earned. “It was one of the hardest programs and exams I’ve ever taken,” she says. “You learn about every aspect of the relocation process, from when the transferee is transferred, to the appraisal and beyond. It’s very comprehensive.”
Technology as a Tool for Growth or Concern
From Google Maps to artificial intelligence (AI), appraisers have more information about properties at their fingertips, enabling them to become more efficient. Light detection and ranging (or lidar), tablets, AI, and other technologies are making inroads in the relocation appraisal sector, with some tools more popular among appraisers than others. For example, appraisers use lidar to improve the accuracy and efficiency of their property valuations and documentation, replacing the need for a tape measure.
Others are using tablets in the field to speed up the documentation and reporting process, eliminating the need for paper and pencil. However, if you are working in more rural areas, Meinczinger-Gulden says that some technology may not be as useful because you can’t connect to the internet like you can in more urban and suburban areas. “In other cases, some appraisers may be less tech savvy and will have a harder time navigating new tools,” she adds.
More recently, AI-based tools like ChatGPT have been tested by appraisers to help with reports. Some are using it to draft their report narratives, while others are using it for data analysis and chart creation. According to Palumbo, like with any new technology, appraisers need to be very careful about how they use it and whether outputs are accurate and verifiable. “AI is not going to pay your errors and omissions insurance premium or any of your liabilities related to the appraisal work you’re doing,” he says.
Miller, who has worked in computer engineering, has a unique perspective. “AI can be transformative,” he says. “Appraisers already have lidar, tablets, and software analytics tools. AI can be another tool to enhance productivity as long as you understand that it is wired to provide an answer—even if it is the wrong answer.”
According to Miller, even when asking AI to provide citations, users should be careful that they verify the information provided. “Under the Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, appraisers should be validating the output of the algorithm even if they don’t understand how the automated valuation tools work. The same holds true for ChatGPT and other large language models,” he explains.
Meinczinger-Gulden cautions that AI’s output is only as good as its input—garbage in, garbage out, as the adage goes. “These tools are also learning from us. Everything that we input … is helping them learn. We have to be very careful. If something is input and it is wrong, AI won’t know,” she says. “When appraisers are testifying on the stand, they need to be able to pinpoint how AI reached the conclusions it did. We need to ensure that it is reasonable and credible when evaluating property.”
Market challenges can happen in any sector, but it’s how relocation appraisers adapt and seek growth opportunities that can set them up for success. “After 10 years in the appraising field, I sought out other niches to grow in and found relocation appraising. I wanted to leverage my analytical skills,” Miller says. He adds that in many cases, people who enter the field are embarking on a second career, but more needs to be done to attract college graduates who may have an affinity for augmenting their work with technology.
The relocation appraisal field faces some challenges, but those already in the industry are looking ahead to capitalize on growth opportunities, adopt new technologies to improve their appraisal processes, and demonstrate how rewarding the career can be.