Arizona Real Estate Appraisals


Debra Rudd
Manager, Real Estate Appraisal Division
Arizona Department of Financial Institutions


We live in a time of immediate results. If we are unable to obtain the answers to questions instantaneously, we work on ways to speed up the process. An example of this pertains to real estate appraisals and the recent attempt from the Appraisal Qualifications Board to shorten the time it takes to become an appraiser.

There is a perception that a shortage of appraisers either exists today or will in the near future. Two monumental changes occurred as a result of the recession and the mortgage meltdown that may contribute to this perception:

  • The Federal Appraisal Qualifications Board increased the requirements to become an appraiser in 2008 and again in 2015.
  • Many appraisers from 2007 to 2010 dropped out of the appraisal profession.

When demand for real estate waned in 2007 and throughout the recession years, the need for appraisals also lessened. Simply stated, the supply of appraisers exceeded the demand. Those of us that have taken a basic economics class know that as demand and supply are out of balance, the price can be affected. In this case, the price of the appraisal dropped, as the demand decreased. The turnaround time, or the time it takes to get an appraisal, also decreased. An appraisal could be done quicker for less money because there were fewer jobs demanded.

As a result, the number of appraisers dropped as their income decreased. In 2008, there were 3,065 Licensed or Certified Appraisers in Arizona. Today, there are 2,000. This decline of approximately 33 percent in such a short period would point to a possible shortage of appraisers – if the number of appraisers in 2008 were the norm. However, we are not sure what the normal or optimum number of appraisers is to meet demand. Looking back in time, there were 1,668 appraisers in July 2000. Comparing the number of appraisers in 2000 to today indicates there are 22 percent more appraisers now. Was supply and demand in equilibrium in 2000? The comparison may be irrelevant when looking at the current market and processes in place.

Real Estate Appraisal Turnaround Time
How long does it take to obtain an appraisal report today? The Arizona Department of Financial Institutions have received calls from lenders claiming they are waiting for three weeks to have a home appraised in Phoenix metro. Moreover, the Department also receives calls from appraisers saying the typical time to complete assignments are three to five business days. Why is there such a gap between the lender receiving the report and the appraiser finishing it? It could be due to the appraiser’s internal processing of appraisals, or the lender could be using a third party vendor to handle this process.

Third party vendors, such as Appraisal Management Companies (AMCs), have flourished in the past eight years. These companies are now taking on the duties that previously were handled by lenders. One such duty is the review of appraisals for Uniform Standard of Professional Appraisal Practice (USPAP) compliance. It is not unusual for an AMC to review a report and send it back to the appraiser for revisions; then for an underwriter to request more information or further revisions; and finally the borrower to request yet more revisions. The revisions take time away from new appraisal assignments, which in turn causes more delays. In reviewing complaints filed with our Department, it is not unusual to see two to seven revisions completed on each report.

Additionally, at times our Department sees engagement letters with unrealistic expectations, such as requiring the appraiser to make contact for accessing the property within four hours – even if the order comes out at 5 p.m. on a Friday evening. Some lenders also require the appraiser to inspect the property within 24 hours and return the report within 24 hours from inspection. That may be okay if the appraiser received the request while sitting with nothing else to do, but if they have any other assignments at the time, it may not be possible.

Several lenders will refuse to send more work if the appraiser turns down too many assignments. To avoid being removed from a lenders approved list, some appraisers are refusing to take on a client with this strict time constraint. An increase in the number of appraisers will not necessarily fix this issue.

The Impact Of Increased Criteria To Be An Appraiser
Some believe the increased criteria beginning in January 2015 has not produced the positive effects that they hoped to achieve. Others think there has not been enough time to see these changes. The 2015 requirements for newly certified appraisers is:

  • A four-year college degree
  • 250+ hours of specific real estate appraisal education
  • 2500 hours and at least 24 months of experience with a Designated Supervisory Appraiser
  • The passage of a national exam
  • A criminal background check

These are much higher requirements than many other professions. But, when you consider the requirements to become an appraiser in say Sonora, Mexico, it is not out of line. To be a real estate appraiser in Sonora, you must first have a four-year bachelor’s degree in either civil engineering or architecture before you can begin training as an appraiser.

We have heard many say this criterion is too steep of a hill to climb for the rewards received at the end. However, we currently have over 80 Registered Trainee Appraisers in Arizona that believe it is worthwhile to pursue a career as an appraiser. We also know that of the original 274 Arizona licensees in August 1991 that were up for renewal this past August, 89 percent renewed their license yet again. This high number of renewals demonstrates satisfaction with the profession enough to renew their license for the 24th year. How many other professions can say that?

Lessening the criteria to become an appraiser might seem like a good solution to ease the current wait time for appraisals. We certainly encourage small business growth in our state, and the lessening of needless regulations. But, is it a good idea to lessen the requirements to become an appraiser considering the recent history we have experienced in our state with real estate? And even if the qualifications could be substantially lowered, changing the criteria could likely take a year or two for regulations to become effective. Perhaps a streamlined change could happen in our state, to allow for the government to operate at a speed of business.

What Can Happen Now?
A better understanding of the current criteria and easing the unrealistic expectations of appraisers might help to alleviate the backlog. Those appraisers who have refused to do work for AMCs or lenders with too quick of a turnaround time or too low of a fee, might agree to do work again. AMCs and lenders may consider to allow for more appraisal time and adjust fees to be more reasonable for the expectations of the assignment.

Ultimately, changing when the appraisals are ordered is probably the biggest help that can be accomplished immediately. Often the appraisal is the final step in the loan process. Ordering the appraisal earlier, giving the appraiser at least 5 business days, could eliminate some of the mistakes made due to unreasonable time constraints on the appraiser.

If the appraiser had more time to review the appraisal and anticipate the questions or comments that particular appraisal would originally require, it could eliminate some of the revisions and speed up the process in the long run.

This is not an instant answer, but it is one that can be changed quickly as we head into 2017.



Debra was the Executive Director for the Arizona Board of Appraisal from November of 2012 until the agency was consolidated into AZDFI on July 3rd, 2015. Her background as a former Board Member of the Board of Appraisal, and as an appraiser for over 35 years, has provided her valuable knowledge to be a state regulator for real estate appraisal issues in Arizona. She has a Certified General Appraiser license. Debra will be the 2016-17 President of the Association of Appraiser Regulatory Officials (AARO), a national organization dedicated to the regulation of real estate appraisers and appraisal management companies.




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