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The Changing Market for Appraisals

by Bill Rigdon on Aug 14, 2015 General Appraisal 1241 Views

I for one am concerned about the future of the appraisal business.  It’s not like it’s the first time that I have become concerned but it seems I’m having to reevaluate my future in the industry more often than I had in the past several years.  It’s my opinion that the score is currently Appraisers 0, Negative Influences 10.  Here are some of the reasons why I think it’s getting more difficult to remain an appraiser:

Fewer Reports Are Needed

The number of appraisal reports ordered over the last few years has come down dramatically even through the mortgage interest rate is down, sales are supposedly up and mortgage rates are near a record low at 3.9%.

Almost everyone who could refinance their home after the 2008 bust has done so.  Appraisers have benefitted in the past from the typical upward and downward movement of interest rates, but the government’s control of rates has had a strong negative impact on the real estate appraisal business.

The government’s involvement in mortgage lending, like the governments involvement in almost everything else, has not been positive for the appraisal business. There are now more regulations, more levels of review and it takes more time to finish a report than any time in the past, and there has been no additional compensation. 

Appraisal Requirements Are Increasing

If you are familiar with the new FHA requirements you know that the government just can’t control itself, it has to keep dreaming up new rules.  Even though some of the rules are benign others can become harsh and are as painful as thorns.  There is a negative psychology associated with government work that makes you want to avoid it, but for some of us we have become locked into the system.

Appraisers need fewer rules and regulations not more.  Now there appears to be a move on to dump or rewrite USPAP in favor of global rules like those already adopted by the Royal Institution of Chartered Surveyors (RICS).  The switch would probably prove to be a positive one for appraisers who currently have to track UPAP changes every few years.  One has to ask oneself “Are USPAP rule changes every few years really a benefit to me and to the appraisal profession?”  I think the answer is no, things in the appraisal business don’t change that often and putting appraisers through a USPAP educational ringer every few years helps no one but educators. 

Some continuing education is reasonable but how many other professions have their rules rewritten every few years?  Let me answer that for you, not many.

Competition Is Not on the Wane

While appraisers may be leaving the business I haven’t seen the “shortage” of appraisers that has been touted by article writers.  The poor economy has seen more of the older appraisers keeping their foot in the door rather than retiring.  While I haven’t seen the numbers on a state-by-state basis I would guess based on my experiences that the labor shrinkage has more to do with the decreasing volume of appraisals needed than the voluntary retirement of appraisers from the industry. 

If the number of appraisals falls by 10% and the number of appraisers is reduced by 5% is that going to create a shortage of appraisers?  I don’t think so.

Appraisal Costs Increase but Fees are Slow to Increase

In search of funds some states have decided in their wisdom to implemented taxes on services, so now appraisers have to file tax forms and submit tax funds on a monthly basis.  Who pays for those service taxes and who pays for the time to file them?  Appraisers are not like grocery stores or fast food restaurants.  When they competitively bid on something everything that is an expense has to come out of the fee including any service tax or cost to file it.  It’s not easy for appraisers to pass service taxes and time to file along to the public.    

Appraisal software, automobile costs, postage, computer equipment, taxes as discussed and the general cost-of-living keep going up, but appraisal fees do not.  Real estate brokers generally benefit from the increasing price of homes but appraisal fees do not automatically adjust when everything else goes up.  

In my market there always seems to be several competitors who are willing take assignments for very little compensation.  Yes competition I have been told is the basis for our capitalist society, but does that me that appraisers must drive each other out of business?

AMC’s don’t help and in my opinion they are a blight on the appraisal business.  They charge much more money for the work that I do than I do and they laugh all the way to the bank, who cuts up the money with them no doubt.       


The scary part of this short article is that I consider myself an optimist, but being an appraiser of late has been an uphill climb.  I’m not even going to get into the horrors of health insurance.  It’s just another nail that is making it difficult for an appraiser to survive.   

Bill Rigdon, ASA is a real estate appraiser located in Henderson Nevada doing business as W Rigdon Appraisal Service, he can be contacted at and his website is

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Bill Rigdon

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Henderson based certified general appraisal

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