Appraisal Foundation survey of thousands of appraisers reveals extent of lender pressure

A 2004 survey of appraisal practitioners by The Appraisal Foundation, the results for which were reported this month, found that more than half of residential appraisers feel they are expected to hit a certain value or risk losing business.

7,646 practitioners returned complete or partial surveys, which were distributed to some 55,000 appraisers attending USPAP update courses.  Thirty-eight percent of respondents – or 55 percent of residential respondents – reported being expected to hit a number.  Sixty-two percent agreed that they had lost work for failure to meet a prescribed value.

The survey asked about the prevalence and influence of Automated Valuation Models (AVMs) in the lending industry.  Twenty-five percent of respondents said they felt the use of AVMs by lenders have a direct impact on their business.  Only 11 percent (555) of appraisers said they use AVMs in their practice, in a field that included 167 respondents who identified mass appraisal as their primary practice area.

Sixty-three percent of respondents said they do some drive-bys, but only 18 percent said they represented a “significant” part of their work.

Half of respondents said they were affiliated with one of the Appraisal Foundation sponsoring organizations (Appraisal Institute, NAIFA, NAR, etc.). Significantly, 20 percent indicated they had been a member of one or more of the sponsoring organizations but no longer maintained membership.  More than 40 percent of respondents answering the question indicated they belonged to no appraisal organization.

Forty-three percent of respondents expect regulation within the mortgage/lending industries to increase.  Sixty-five percent feel that increase regulation on the lender side would lead to greater appraiser independence.

Ninety-four percent of respondents said they considered appraisal a profession, not a trade, cheering us that we’ve been using the right term in this newsletter all this time (because we think so, too).

A summary of results for all questions as well as demographic information can be found in Microsoft Word format here.