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AQB Digs In: College Degree, Experience Requirements to Change
By Isaac Peck, Editor
On March 15, the Appraisers Qualifications Board (AQB) issued its third exposure draft which reiterated its original proposal allowing for two alternative paths to the bachelor’s degree requirement for Certified Residential appraisers. And there’s more.
The AQB has been considering changes to the Real Property Appraiser Qualification Criteria for nearly two years and its latest exposure draft indicates that while the AQB believes that a bachelor’s degree is “a significant component towards ensuring the public trust in the appraisal process,” it also recognizes “the substantial time and financial commitment necessary” to obtain a Bachelor’s degree while operating a competent and ethical appraisal practice. For those licensed appraisers who lack a degree, this certainly comes as good news.
Bachelor’s Degree Requirement
In keeping with its previous Exposure Draft, the AQB is now proposing the complete elimination of all college coursework for the Licensed Residential credential and allowing an alternative to the Bachelor’s degree requirement for the Certified Residential credential.
Instead of needing a bachelor’s degree to earn the Certified Residential credential, candidates would now only need to pass a series of College-Level Examination Program (CLEP) exams covering the following areas: (1) College Algebra, (2) College Composition, (3) College Composition Modular, (4) College Mathematics, (5) Principles of Macroeconomics, (6) Principles of Microeconomics, and (7) Introductory Business Law.
A second alternative in lieu of the CLEP exams would be for a candidate to complete 21 semester hours of accredited college level coursework in the following subjects: six hours of English composition, six hours of economics or finance, six hours of mathematics (algebra or higher), and three hours of business or real estate law.
There is fierce disagreement on this topic among appraisers, with some arguing that any alternative to the bachelor’s degree lowers the profession’s standards and is only a ploy to drive down fees. However, a 2016 survey conducted by Working RE (Future of Appraisers Survey) found that the majority of appraisers are in favor of the AQB’s proposed changes. Over 3,800 appraisers participated in the survey, with 60% indicating that they are opposed to the bachelor’s degree requirement, and 82% in favor of a path to Certification without a bachelor’s degree.
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Appraiser without Experience?
In its first exposure draft in May 2016, the AQB initially proposed the creation of Practical Applications of Real Estate Appraisal (PAREA) coursework that could be used to satisfy up to 100% of a would-be appraiser’s experience requirements when pursuing the Certified Residential credential.
While the AQB reduced the eligible experience waiver to 50% in its second exposure draft, its latest proposal once again returns to the idea that a would-be appraiser may be able to substitute 100% of their experience requirements with PAREA coursework. The PAREA modules as proposed by the AQB will be able to satisfy 100% of the required experience for the Licensed Residential and Certified Residential levels, and 75% of the required experience for the Certified General level.
The PAREA model, as proposed by the AQB, would consist of three modules not less than 150 hours each:
1. Basic Practical Applications (150 hours)
2. Residential Case Studies – Complex Properties (150 hours)
3. Practical Applications (150 hours)
Applicants can substitute Module 1 for the experience requirement to earn a Licensed Residential credential, which the AQB is now proposing to reduce to 1,000 experience hours. Modules 1 and 2 together can be used to meet the experience requirements to be a Certified Residential credential, which the AQB is now proposing to reduce to 1,500 hours. Appraisers who currently hold a Licensed Residential credential could satisfy the experience required for the CR credential by completing Module 2 only. Individuals completing Modules 1 and 3 would receive 1,500 hours towards the 2,000 hours required for the Certified General credential.
The AQB notes that in feedback received for its earlier exposure drafts there was widespread support to develop alternatives to current training methods. Such alternatives are necessary because of “the current lack of training opportunities in appraisal firms and the financial disincentives inherent in training programs for both the mentors and trainees.” There is also a potential advantage to such coursework, as it offers a consistent training methodology and ensures qualified mentors, as some respondents were quick to note that not all mentors in the appraisal field are competent or ethical.
In response to those appraisers who feel that there is no substitute for actual field experience, the AQB writes that “the goal of the practical applications program is to emulate actual field experience. The module structures will include actual field experience. As a result, individuals completing these modules will perform actual and/or virtual appraisal assignments.”
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Experience Requirements
In keeping with its earlier proposed changes, the AQB is proposing revising the experience hours required as follows:
-Licensed Residential: 1,000 hours of experience (no minimum time frame)
-Certified Residential: 1,500 hours of experience (no minimum time frame)
-Certified General: 2,000 hours of experience, with at least 1,000 hours in non-residential appraisal (no minimum time frame)
Such a move would reduce the required hours for each credential by 1,000 hours and remove the minimum timeframe limitation that previously required would-be appraisers to wait 12, 24, or 30 months to achieve a particular credential.
In its rationale for why it finds such changes necessary and timely, the AQB writes that while the experience requirements have not increased since 1998, there have been substantial enhancements in education and examination components of the Criteria that make it appropriate to reduce the experience requirements.
Timeframe for Changes
As has come to be expected from the AQB, appraisers hoping for quick relief on the bachelor’s degree or experience requirements will need to be patient. The AQB writes that depending on the feedback received and timing of any subsequent exposure drafts, any changes, if adopted, will go into effect no sooner than January 1, 2018.
Send Your Feedback!
Appraisers are encouraged to submit their (concise and considered) comments to the AQB before the May 12, 2017 deadline: Email: aqbcomments@appraisalfoundation.org or mail to: Appraiser Qualifications Board, The Appraisal Foundation, 1155 15th Street, NW, Suite 1111, Washington, DC 20005.
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About the Author
Isaac Peck is the Editor of Working RE magazine and the Director of Marketing at OREP.org, a leading provider of E&O insurance for real estate appraisers, inspectors and other real estate professionals in 50 states. He received his Master’s Degree in Accounting at San Diego State University. He can be contacted at Isaac@orep.org or (888) 347-5273.
Send your story submission/idea to the Editor: isaac@orep.org
by binary today trader
bookmarked!!, I love your blog!
-by Tom
We finally started to be respected when the 4-year degree was necessary to be certified; now we are lowering standards for the 4-year degree just to get more people into the business. I am 100% against any lowering of the appraiser’s standards if anything I think the exams should be tougher and the requirements increased. What other profession has had to lower standards, it’s not the CPA’s or the lawyers or doctors or dentists?
-by Pamela Wyant
I find it rather frightening that AQB apparently feels a college degree is necessary to improve the profession’s credibility, however real life appraisal experience apparently isn’t essential. Staged learning is just not as effective as real life experience. Would you want a wilderness guide who had read about it in books and practiced skills in the woods behind the university, or one who had actually led people on trips in the true wilderness before? Would you want a surgeon who had practiced only on cadavers, or one who had assisted in actual surgeries under the guidance of a more experienced surgeon?
-by C Whitworth
Appraisal is one of the few fields that women can complete on an even plane. When my children were younger, I was able to work part-time to earn my way through working in an established appraisal firm and taking coursework that applied only to the appraisal profession. I have been Certified General since 1993. There is no substitute for field work and mentoring experience; however, when times get uncertain, and there is a more litigious atmosphere, there are fewer of us willing to take the risk training new competition. There has been an increase in the uncertainty across all aspects of the lending industry for many years. You cannot legislate morality. Perhaps if the penalties were substantially increased for those who are less ethical, there could be a decrease in government intervention.
-by A Greene
I think a 2 year degree in the least should be required. It shows a level of commitment from the candidate. I have seen so many appraisers come and go, most of them did not have degrees. Appraising is my 2nd career so I already had a 4 year degree. The classes I took in college made it easier for my to obtain my certified license. It’s a win win for the appraiser and the employer.
-by Caryn Shoemaker
I have been in the Appraisal business since 1998. Although I understand that education is definitely valuable, I feel that experience is the key in any field. I have attended more continuing education classes than suggested and nothing can replace what I have learned from other appraisers and being in the field. I should’ve been certified with all the years I’ve been in this business, but I have issues with test taking. Without getting into the issues of my personal life, what I can say is I am a very creative person and honestly multiple choice to me is like walking into 31 flavors ice cream shops, meaning that I could at least think of two examples that I could choose with explanations and why I would have to choose those answers. I have passed my training and my licensed tests by taking them several times, and unfortunately for certified, the time ran out and the college education came into play. I do have a degree in travel, with several years of Appraisal under my belt, but unfortunately I was required by the OREA ( at that time )to go back to college. It’s not that I was opposed to it, I just felt that the years of experience should Account to something, I tried to fight it but I lost.
-I do not feel that the quality of the appraisers will be lost just by taking the education away. We have plenty of courses that we have to take and the test will still be put in place. Not to mention, plenty of people that are willing to train new appraisers, but that has also been taken away from me with my FHA designation also. I am one that will jump up-and-down with being given another chance to be able to upgrade my to my certified licensed level! I love my job and just because I do not have a bachelors degree does not mean I am not a great appraiser!
by Marsh Bilby
With the recent release of Fannie Mae Selling Guide Announce SEL-2017-01 we are going from an environment where the supervisory appraiser must inspect every property with a trainee for up to two years, to any LAYMAN can inspect the property with ZERO experience. This “property inspector” will then send photos to a “Certified Appraiser,” quite possibly out of state, who has ZERO real life experience and has inspected ZERO properties themselves. This “Certified Appraiser” learned how to appraise by taking a three-month class. And best of all, when this “Certified Appraiser” makes the inevitable errors and omissions, they are responsible, not the BIG Appraisal company- their employer! It is like leading lambs to the slaughter!
This is the future of our industry. BIG AMC SOLICITS MORTGAGE BUSINESS FROM BIG BANK, BIG AMC SENDS APPRAISAL REQUEST TO BIG APPRAISAL FIRM, BIG APPRAISAL FIRM HIRES BIG APPRAISER EDUCATION PROVIDER TO TRAIN APPRAISERS, NEW APPRAISER RECEIVES PHOTOS AND FIELD NOTES FROM A LAYMAN IN ANOTHER STATE, NEW APPRAISER COMPLETES APPRAISAL WITH ZERO REAL LIFE EXPERIENCE BUT HAS ALL OF THE RESPONSIBILITY!! How can this possibly be in the public’s best interest?
Any reasoning provided to support this absurdity is only camouflage for the real objective! If you care about your industry, this is your last stand.
-by Edd Gillespie
Mr. Peck,
Thanks for once again showcasing this discussion and kudos to the AQB for saving at least a few vestiges of their original proposal.
Unfortunately, the conversation about appraiser educational requirements must accompany discussion about two other issues. The first is what is expected from appraisals? In other words why are we in demand? And the second is, “Can we earn a fee that sustains us?”
The appraisal industry has been and still is almost completely controlled by and dependent upon the lending industry, and when viewed from the perspective of earnings it is easy to conclude that lending clients are not interested in paying more for what most of us are trained to do. Fees are not going to increase appreciably. Also from the perspective of the lending client, it has been said we are not offering what is highly relevant to their business and that is prediction of the future.
It is time to cut Fannie Mae and her loan originators loose. They have telegraphed loud and clear that they do not need or respect us. Many appraisers have been competing for that business for far too long on the bases of cheap and fast and it is abundantly evident that is not a sustainable business model, particularly if USPAP matters.
And the world has moved on. Just look at the technological innovations that have come about in the last 20 years, Things are changing fast and they are going to change faster. Appraisers must augment their skill sets in order to remain relevant. The fastest and most reliable way to do that is through education.
The question is should that education be vocational or formal? Clearly if we are to ever enter the ranks of the learned professions, the education we need to survive in the changing world must be in a university setting and it must continue for a lifetime.
Despite the results of the Working RE surveys, the day is gone when average will be rewarded with respect, trust or fees. We must demand of leadership that educational requirements become more stringent and each of us must commit to life long learning from excellent instructors and difficult curricula. We must raise the bar to both entry and tenure in appraising and press forward to creating a learned profession.
-by Mike Ford
Edd, I’ve watched many “University Setting” news articles on the evening news. I’m underwhelmed.
In any event I’m tired of flogging that particular dead horse. Of the two issues, experience is by far the most important.
150 hours of classroom experience cannot match 150 hours of varied, real world experience where the convenience of text book scenarios and answers are non existent.
150 hours of real world experience in ‘complex’ assignments is also next to nothing in terms of qualifying one to be certified. TEN assignments? Fifteen? Perhaps three assignments of sfr’s; three as condos, co-ops or “own your own’s (California)”, three duplexes with one subject to rent control? One fourplex and last a C3 vacant lot where residential use is permissible? Think about it. If this were ALL of the complex experience your appraiser had would you really consider them worthy of certification?
It only qualifies the student to LEARN for another three years as a licensee…NOT to lead in the profession as a certified appraiser.
-by David Bramuchi
I disagree. A college degree DOES NOT do anything for the “public trust”. That can’t be proven. However, EXPERIENCE, sure does. I started in 1963, out of high school, working for a title company. 3 years later I went to work for the Assessors office in Shelby County, TN. Started in abstract dept., then to mapping dept., s brief stint in permits, then into appraisal dept., upon my return from Vietnam in 1971. I quickly rose through the appraiser levels, because of my drive, common sense and wanting to learn the process. I took some related courses along the way but no college degree, just a degree in common sense backed by experience.
-Now, with a total of 54 years in real estate experience, including the title company time, and along the way getting my real estate associates license in 1974.
I am very experienced and am told so, by the “PUBLIC” when I’m on site and they ask how long have I been doing this. They are amazed and I might add feel very comfortable that a professional is doing this work. I have NEVER been asked about my education level I reached. Time after time when this happens, and it happens quite often, I am very proud of the satisfaction the property owner or Realtor displays. Realtors don’t need a college degree but look at the big bucks they get paid. And, no one asks them if they have a college degree, and they don’t have to prove anything to their client like we do!
by Mike Ford
David, I agree 100% and thank you for your service then and now. I got out in ’71 as well.
-by Spencer
If we can agree there is not an appraiser shortage, but a shortage of appraiser’s willing to work for crappy fees and cut throat AMC’s, why then is there such a push to change the major components of the Cert Res Appraiser License (regarding the level of education)? To me, it appears to be a watering down of quality appraiser’s, which is the opposite of what is needed. I feel the higher education is a means to have candidates that would fit the mold of proper analytics, communication that is necessary in this field. I completely understand that a piece of paper does not mean you are trustworthy, etc, but is a necessary step in the right direction.
I do think the time restraints to finish the testing and work experience should be cut down, or done away with. I had to wait 6 months before I could take my AQB testing. This could cut the time down drastically, assuming your mentoring appraiser is relatively busy.
Just my thoughts on this topic.
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