Bill Pastuszek, Shepherd Associates

I recently was part of a panel at a mortgage lenders conference. My fellow panelists were a conveyancing attorney and a realtor. We spoke of different matters but the message was somewhat the same: Real estate professionals are finding it increasingly difficult to carry out professional responsibilities in an increasingly competitive and regulatory stifling environment. We all discussed in some details recent developments that often create obstacles in discharging our professional duties. We all agreed that performing to our highest professional standards is essential, but found that the encroachment of non-professionals and the insensitivity of regulatory requirements can make expert performance increasingly difficult.

Not surprisingly, the conveyancer eloquently complained about TRID, the real estate closing set of procedures that is now firmly entrenched in residential real estate closings. What does TRID stand for? It is the “TILA-RESPA Integrated Disclosure rules.” The rules are also known as “Know Before You Owe” and were implemented Oct. 3, 2015. Aren’t you glad you asked? Most of us blame the friendly folks in government who fashioned the Dodd Frank Act on behalf of the consumer.

The upshot of the attorney’s remarks is that TRID is not going away any time soon. The speaker agreed that consumer protection is a laudable and indeed necessary goal of government. In light of the abuses that occurred during the Great Housing Crash, something had to be done. But did it have to be so inflexible and so technologically forbidding?

The Realtor discussed challenges to the primacy of the Realtor Brand and the positive, particular expertise Realtors bring to the real estate sales process. Competition includes non-Realtors, technology and more pervasive consumer access to real estate information. The real estate sales process has seen some fundamental changes over the past 5-10 years and will continue to see change. The challenge for Realtors is to continue to find the competitive advantage that makes their services a value add for buyers and sellers.

Residential appraisers are working harder than ever and aren’t always enjoying it. For most career appraisers, appraising has been a reasonably interesting way to make a living. This appears to have changed for many appraisers since the crash. Things ain’t what they used to be.

It’s useful to note who makes up the appraiser profession. Here are some facts:

• Appraisers are overwhelming white.

• Appraiser ranks are 75% male.

• The largest cohort is in the 51-65 age range with an equal number in the over 65 and less than 35 age groups.

• Since 2010, there has been a steady decline in the number of appraisers.

An appraiser shortage seems to be just around the corner. This actually represents a great opportunity at the entry level. Where are the appraisers of tomorrow going to come from?

Here are some barriers to curing the appraiser shortage soon. Concerns are in the details, not in the requirements:

• Increased educational requirements. Are we training appraisers to know what they really need to know?

• Standardized Exam. Does it actually test what appraisers need to know (see above.)

• Supervisor/Trainee oversight requirements.

• How to get experience? That’s the TRAINEE problem: many lenders/intended users just don’t want Trainees on residential reports.

The powers that be are slowing recognizing that there just might be a problem. Getting them to act may be another problem. But there are people working on it.

Meanwhile, appraisers are faced with a re-engineering of the appraisal process that they don’t have much control over. Some of these enhancements include:

• Uniform Appraisal DataSet, otherwise known as UAD, which reduces much of the input in an appraisal report into a code, requiring a cheat sheet to understand. But it’s designed to be read by software not humans.

• Collateral Underwriter. “Provides an automated risk assessment of an appraisal report to support proactive management of appraisal quality.” Not the appraiser’s friend.

• MC1004 Market Conditions Addendum. A great idea, to have a quantified inventory analysis. Not well executed and an invitation to a USPAP violation.

• Liability. Pretty much unlimited.

Things are not all bad however. Given the number of appraisers aging out and those others who are moving into allied professions in assessing and within institutions, there is room for those willing to invest the time and money to meet the requirements of an appraisal profession. Will there be a market for an individual trained to think and analyze, and who will be adequately rewarded for doing so? Check back five years from now. I hope so. We’ll see.

Bill Pastuszek, MAI, ASA, MRA, heads Shepherd Associates, Newton, Mass.