The appraisal industry must come together to attract young professionals
As far back as 2012, Real Estate Weekly ran an article with an alarming headline suggesting the appraisal industry was all but doomed: “Brain Drain Decimating the Appraisal Profession.”
Fast forward to today, and the appraisal profession is alive and well, but its ranks are graying. The reality that Real Estate Weekly foretold—and we’ve yet to remedy—is that young people aren’t entering the profession. Nearly half (49 percent) of real estate appraisers are 51 to 65 years old, and 13 percent are 66 and older, according to the Appraisal Institute. That means large numbers of seasoned appraisers are set to retire, and no fresh-faced newbies are stepping in to take their place.
A Call to Action
Our industry is in the throes of a talent crisis, and it’s time we took action.
At BBG, industry advocacy is a priority for 2018. We want to inspire others to learn from our success bucking the appraisal industry’s demographic trend.
The BBG Model
Although BBG has a stable roster of experienced appraisers, we actively recruit and mentor younger professionals. Our industry is built on knowledgeable, experienced, veterans to this industry, but we must continue to build out the industry with the next generation. At BBG, we are creating a culture where that knowledge and experience can be passed on and grow beyond the previous generation.
But as BBG is not immune to this industrywide talent shortage, we call on all appraisers to promote commercial real estate valuation as a rewarding career path.
Lack of Awareness
Admittedly, appraisal is not seen as a glamorous career choice, but the profession has less of an image problem than an awareness problem. “This industry tends to be something people back into and do not directly seek. Most college graduates just starting out aren’t even aware of appraisal as a career option,” says Brett Wilkerson, 39, managing director of BBG’s Denver office.
An informal poll of BBG’s younger appraisers confirmed that most were referred or got here “by chance.” Senior Managing Director Grant Griffin, MAI, entered the profession at age 22 on the advice of a family friend. Before that, “I didn’t even know what an appraisal was,” says Griffin, now 37.
Somewhere along the way, someone took the time to educate them about what the appraisal profession has to offer. Established appraisers, we believe, have a responsibility to do the same. Talking up the profession is critical in the current climate because lack of awareness could be compounded by steeper barriers to entry and advancement.
Impact of Regulations
As appraisers are well aware, the education, experience, and examination requirements to become certified are onerous, and at the same time, fees for appraisals are decreasing. As a result, some real estate professionals point to a perceived cost-benefit imbalance and steer young people away from the appraisal option. On one online forum, a broker told someone considering appraisal that, starting out, the job “borderlines on being volunteer work.” Of course, we know that appraisers who hustle can earn a decent living from the start, and we need to amplify their voices and share their success stories.
Since most young people have no knowledge or impressions of the industry, we have an opportunity through outreach efforts to craft the messaging. Despite its stodgy image, the appraisal profession holds a lot of appeal for millennials, who prefer flexible hours and opportunities to work remotely.
Now a senior managing director at BBG, Rodman Schley, MAI, noted that many young appraisers like the flexibility to work hard and play hard. “Those who are willing to put in longer hours each day can create a four-day work week. That’s a very attractive schedule for a young person,” the 48-year-old says.
Ideas to Attract Young Talent
Recent studies show that millennials aren’t as fickle as previously believed and actually crave job stability, so we can emphasize that appraisal is not as volatile as other areas of real estate.
Trumpeting the industry’s use of technology might also attract young people.
Social media is a great way for all of us to freshen the industry’s image. At BBG, we try to project a vibrant corporate culture and show that our company and employees are active and do charitable work and support good causes, which is important to millennials.
Beyond that, as an industry we need to band together to elevate our profile and attract new blood. The Appraisal Institute plays a crucial role, but it is only as strong as our support of it.
“It would help if each local AI chapter got involved with nearby universities, where we could talk to real estate classes and attend job fairs,” Wilkerson says.
BBG Director Grant Williamson, 31, took a real estate appraisal class at Baylor University, which few colleges offer. Perhaps approaching universities with a sample curriculum would make appraisal courses available to more students. Even funding a scholarship might prompt students to look into the appraisal profession where formal instruction is not an option.
Real estate appraisal firms that have the means to do so should offer internships and mentorship programs. Companies and AI chapters could provide scholarships and other forms of support to meet stringent educational requirements for licensing and to achieve designations. BBG provides on-the-job study time and financial compensation for testing fees, for example.
On the flip side, there need to be incentives for firms to take on trainees. Unfortunately, it’s not always economically viable.
Last but not least, we need to flex the AI’s lobbying arm to address regulatory burdens and licensing requirements.
Many BBG appraisers support bringing back pre-2008 education requirements, but there are those who devoted time and effort satisfying the current standards who feel their investment would then be depreciated. “It can be a sensitive issue, but it’s one of the biggest reasons our industry is losing people,” says BBG CEO Chris Roach. “Texas has 900 trainees statewide but the problem is getting them through the system.”
Those who stay are saddled with the “trainee” designation for three years, and Griffin suggests dropping the title. Millennials are ambitious and expect rapid career advancement, and though they’re eager to learn the ropes, the prolonged trainee status may seem like a badge of dishonor. It is indeed a liability, as lenders balk at working with trainees.
The Time is Now
At BBG, we are fortunate to have several rising stars as well as seasoned appraisers on our team, and since the industry as a whole is losing talent, we feel called to use our strengths and stature to reverse the trend. We challenge our colleagues to do the same.