SIOUX FALLS, S.D. (KELO) — Amy Frink’s 10-month-old car already has 22,000 miles on it.
With more than 20 years of experience in the appraisal industry, she’s accustomed to the drive time covering her 100-mile radius around Aberdeen. She’s not used to seeing the profession she loves come under scrutiny after a recently published media report was followed by a news release response and video outlining “the facts on appraiser certification in South Dakota” by Gov. Kristi Noem.
In a video response to the Associated Press story that details Kassidy Peters’ application to become a certified real estate appraiser, Noem said she never “asked for special treatment for Kassidy” and added she’s “heard for years about how difficult it is to become an appraiser in South Dakota.”
Frink, who serves as the Vice President of the Professional Appraisers Association South Dakota, admitted many appraisers know the designed system of getting people into the unique industry has its flaws. She said appraisers have been looking to find solutions and find ways to encourage more people to join the profession.
“We have realized there are barriers to it and we’ve found it’s the supervisor,” said Frink, who has supervised three appraiser trainees. “I don’t think it’s too hard. The standards were set nationally and everyone across the United States has to do the same thing. If it’s too hard here, it’s too hard everywhere.”
Frink stressed all but one of the requirements to obtain an appraiser credential in South Dakota are federally mandated. South Dakota’s program required a trainee level exam, in which trainees could “take it as many times as it takes” and “very few people don’t pass it.”
“It’s more of an aptitude and basic concepts test,” Frink said. “If you don’t pass it or you find it difficult, then maybe this isn’t for you and you get to find out right away. I don’t see it as a stumbling block to get people in; it’s more to protect the public, competency-issue.”
Congress set the system in place for establishing minimum standards and requirements for appraisers in 1989. The Appraisal Subcommittee (ASC) monitors each state’s appraiser licensing and certification regulatory programs and Appraisal management companies regulatory program. South Dakota was last reviewed in August 2018 as “good” for compliance with Title 11 in the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
Jim Park is the Executive Director of the ASC and he agreed the appraisal industry, which is regulated by parts of the private sector as well as state and federal governments, is unique.
“There’s nothing like it,” he told KELOLAND News.
Park said “in some ways” he would agree trying to become a licensed appraiser is too hard. He cited the experience requirements as especially tough considering not every licensed appraiser is also a good supervisor.
“South Dakota has had a history of issues with shortages,” said Park, noting he’s seen written letters of concerns by Sen. John Thune (R-S.D.) and Sen. Mike Rounds (R-S.D.).
“You have to be a jack-of-all-trades and know a lot about a lot of different things,” Park said, adding appraisers are “researchers” and need to know real estate laws as well as areas of construction and finance.
It’s not rocket science, but there certainly needs to be reasonable minimum requirements to become an appraiser.Jim Park
Executive director of Appraisal Subcommittee
‘We can change the market’
Frink followed her father’s footsteps into the appraisal industry. Based in Aberdeen, she covers nine counties within 100 miles of Aberdeen and as a rural appraiser, she’s had weeks where she’s appraising a variety of properties, including a “manufactured home on 40 acres, a governor’s home in a small town or three-story Victorian in the middle of an industrial park.”
In 2021, she said future appraisals are booked out in advance for four or six weeks “all the time.” Of the nine counties Frink works in, only two county courthouses have information needed available online.
“I have to go to the courthouse and collect the data,” Frink said. “Some only have five transfers a month. They can do it on paper; it doesn’t economically make sense (to be online). They don’t have enough activity to warrant the cost.”
Frink noted unlike many other states, South Dakota allows appraisers with no experience, known as “state-registered” credential, to appraise. To reach the second level of a licensed appraiser, a new appraiser needs six months and 1,000 hours of endorsed work by an “appraiser supervisor.”
“We can change the market if you don’t know what you’re doing,” Frink said. “You can sway how the market could go.”
There’s 476 licensed appraisers in South Dakota, but only 225 are listed with business addresses in the state.
“Sioux Falls and Rapid City have lots of appraisers,” Frink said. “Their fees are lower than mine and their turn times are short.”
Federal review of SD’s appraiser program delayed until 2023
South Dakota’s appraisal industry will not undergo another federal review of compliance standards until 2023. Park said the COVID-19 pandemic has delayed the ASC’s compliance reviews, which are comparable to an audit, until 2023.
The Professional Appraisers Association of South Dakota was hoping to get answers and information about Noem’s involvement with the appraisal industry from the ASC. Park said any complaints regarding wrongdoing within South Dakota’s appraisal regulatory program would be reviewed during the state’s compliance review.
He added if the ASC received specific information relative to ASC oversight of the state’s program, the ASC would likely look into it. He also said any state investigations would likely be looked at if they were given to the ASC to determine if issues fall within ASC’s jurisdiction.
Concerns of wrongdoing by lawmakers were reviewed by attorney general Jason Ravnsborg, who referred the issue to the Government Accountability Board on Wednesday.
Park emphasized South Dakotans should have faith with the state’s appraisers. He said South Dakota’s Experience Training Program for appraiser-trainees has potential to help aspiring appraisers get the required experience. He said it could become a model for other states around the country.
The program goes into effect in 2022 and Frink said many appraisers hope it succeeds in helping future appraisers join the industry.