Could Appraiser Shortage Mean Rising Costs to Borrowers?

One component of the reverse mortgage—and general mortgage—business seems to be shrinking fast, in spite of rising demand: Appraisers.

Once a booming business, many appraisers left the industry upon the housing crash, never to reenter the market. More generally, though, changes including new regulations have led to a decline in qualified appraisers at a time when borrowers are starting to need their services increasingly once again.

“A lot of appraisers left when business volume tanked and many were frustrated with AMCs that offered very low fees,” says Erik Richard, CEO of Landmark Network. “Appraisers are an aging population and then couple that with the difficulty there is now in becoming an appraiser, and the number of appraisers are way down.”


Today’s regulations require appraisers in training to partner with a working, certified appraiser in a sort of apprenticeship role. Historically, that process allowed a new appraiser to get the right education while logging a set number of hours before applying for a full license.

Under the arrangement, trainees were able to complete appraisals with the certified appraiser, essentially co-signing the report. But today, there are fewer certified appraisers and more importantly, very few will bring on trainees. Exacerbating the problem, few financial institutions will accept work done by a trainee.

“It really is the perfect storm when you add the rise of loan applications and the stabilization of home values in many markets,” Richard says.

Further, the industry is having a hard time recruiting new people.

“The appraisal industry is in a dire situation,” says Brian Coester, CEO of Coester VMS. “New appraisers are not coming in and old appraisers are getting out.”

“The problem is exacerbated by the inability to attract the next generation of appraisers to the profession,” wrote Michael Kleber-Diggs of Vesta Valuation in a January article in online publication Appraisal Buzz.


Source: The Appraisal Institute

With the market for appraisals beginning to show an uptick through homeowners refinancing under The Home Affordable Refinance Program (HARP) II, as well as values beginning to drive sales again in a few select areas of the country, the shortage is actually leading to longer turn times for getting an appraisal.

“A lot of appraisers that are strapped and are busy,” says Davide Stroop of Mortgage Information Services. “They’re pushing their turnaround times out a bit. Normally, we’d find another appraiser to take care of the overflow, but that’s where we’re seeing the reduction. There are not as many who are able to take that work on today. Turnaround times haven’t been impacted that greatly, but where’s the next wave of appraisers coming from? Where are they?”

Looking ahead, the lack of supply and growing demand could also lead to rising costs to borrowers. In some markets this is already the case, AMCs say.

“Appraisals will cost a lot more,” Coester says, as a result of the supply and demand. “Borrowers have a big enough problem paying for appraisals now in the reverse mortgage space.”

Written by Elizabeth Ecker

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  • I don’t blame the appraisers for getting out of the business.  They have more work to do for less money.  The home I live in was appraised last week and the appraiser told me he gets $150.00 of the $450.00 being charged.  That just doesn’t seem right. What am I missing in this equation?

    • Its easy to see why no one wants to get into the proffession either, barriers to entry are high: college degree, 2,000+ hrs of training post college and another 180 hrs of appraisal specific education. And that is all required to make $10-$15/hr after you account for expenses. I’d rather greet people at walmart.

    • That appraiser should not have accepted that assignment for that fee.  If all appraisers would start treating their business as a business fees paid to the appraiser would go up.  There is no reason why the borrower needs to pay an AMC $300.

  • Another factor is the underwriter/lenders expecting appraisals to come in lower citing a “declining” market when it isn’t. Together, we will kill this entire industry by our greed and the government’s use of the “crisis” to take over the entire industry. Can’t say we haven’t been warned.

  • I’ve been appraising since 1993 and I’m making more money than ever.  I work for the VA, Fannie & Freddie and a little AMC & private stuff.  I won’t take an order for less than $350. 2-4 units (and there are many of these in my market I get $450.  The VA pays $425 & $550. 

  • in my 28 years of appraising I have NEVER reconciled how any lender originating a Federally Regulated Loan (FRT) that is backed by their depositors and/or the American Tax Payer can get so hung up over a $400 +- residential appraisal fee given the potential loss, especially after the 2008 crash. They have had such success at manipulating the typical appraiser into hitting convenient target values that the appraisal ordering became nothing more than an unecessary cost to them and virtual joke. Guess what. I see it all coming back full circle as they are indirectly manipulating the AMC’s, using their bail out money to lobby politicians to go back to relaxing regulations suggesting the appraisals are a major road block to getting the housing recovery back on track. Welcome to the fall of the American Empire. Joyce J. Potts, SRA

  • There is no shortage of residential appraisers my friend.   There is however a developing shortage of appraisers who are dim enough to work for $150 to $250.  Throw in the fact that their work load (1004MC, UAD, 6+ comps, etc) and you shouldn’t be surprised. 

    Even the dimmest (lowest watt appraisers) have now had 3 years to figure out that they are working for wages slightly below minimum after you take expenses into account.

    AMCs are now being forced to bump the fees slightly because a refinance bubble has developed.  Once the bubble dies down it’s business (rape) as usual and fees will once again drop.

    Appraisers gave away their livlihood hook, line, & sinker when they failed to organize and boycott AMCs who refuse to pay full fee for their work orders.

    Your friends at

  • What about the fact that most AMCs and Banks will not allow trainees to sign and many do not even want them listed in the addendum section. I do know of Appraisers who want Trainees, unfortunatly due to tremendous liabilities placed on them and few clients who will allow them to work on the assignments, it’s a dead end.

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