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| The Appraisal Profession |
Types of employment for professionals with an appraisal background
1. Fee Appraising - The independent fee appraiser provides appraisal services to the buying public, and generally has a number of clients. Fee appraisers are typically one of the following,
- Residential Appraiser - A residential appraiser appraises single-family residences and two to four unit residential properties. Most residential appraisers prepare form appraisals as compared to narrative appraisals. Generally the residential appraiser does not posses the skill set to perform commercial property appraisals.
- Commercial Property Appraiser - The commercial property appraiser appraises all types of real estate, and some even appraise single-family residences. Most commercial property appraisals are narrative reports as compared to form reports. The commercial property analysis typically includes more emphasis on financial benefits of property ownership and uses more complex mathematical concepts.
2. In-House (Staff) Appraising - There are job opportunities within financial institutions for appraisers to prepare independent appraisal analysis and or review appraisals on a full time basis as an employee of a financial institution. These positions are available with national, regional, and local lenders and mortgage investors.
Everyone should be aware that, over the past 18 months, it has become more difficult to enter the field of appraisal. To that end, those who are considering a career in appraisal, should speak with multiple appraisers and determine if this is a viable career. This is an article for those already in the field
2008- the business as an appraiser has changed for many appraisers. The laws have changed and the regulations, educationally has increased as well.Prior to 1-1-08: Entry to the industry was 90 hours. Now it is 150 hours. Certification requirements were 120 hours and are currently 200 hours and an associates degree. Certified General was 180 hours and is now 300 hours and a bachelor degree. The Associates degree and bachelor degree are now required as listed, even though they were not previously. If a candidates does not have this degree, same individuals can take specific college courses instead of a degree- call NYS for information. It may not be easy, but it makes it more straight forward.
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| Top 10 Reasons to be an Appraiser |
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1. Independence - The ability to schedule your work time to fit your life.
2. Income Potential - Based on a 1999 study, the average income for real estate appraisers was over $58,000 with a maximum of $225,000.
3. Ease of Entry - There are minimal educational requirements to become an appraiser.
4. Education - 2008, the educational requirements for becoming an appraiser is 150 hours.
5. Technology - The appraisal industry has embraced technological changes at a much faster rate than the majority of the real estate community.
6. Variety - Appraisers enjoy a wide variety of assignments within continually changing markets, and no two days are the same.
7. Indoor / Outdoor - An appraiser has the opportunity to spend time out of the office during the beautiful sun filled days and work in the office when the weather is less appealing.
8. Full Time / Part Time - Based on ones life situation, it is possible to be an appraiser on a full or part time basis.
9. Viewing a Wide Variety of Properties - Every appraiser has a number of fascinating stories about the properties that they have inspected. This contributes to interesting work and an interesting appraiser. There are houses you may not want to relive as well.
10. Trustworthy - As a result of being independent, organized, and unbiased appraisers are considered to be extraordinarily trustworthy.
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The economy has changed, and business has slowed down for residential appraisers starting in 2005-2006. Business was busier up to this point.
In New York, a great deal of work and energy is expended to obtain clients. With many mortgage brokers on the Island closing shop, many appraisers who were prevously busy have found themselves with less work. To that end, many active appraisers are reinventing themselves to offering appraisals for: pre-sale price point appraising, FHA, FHA 203K, VA and REO Appraisal work.
Attorneys, who were a small source of business are now being marketed as a steady source of business for pre-foreclosure short sale valuations, divorce work, and estate transactions. Even though business has slowed significantly, versus 18 months ago, reasonably it is still a business one can make a living in, as long as they market themselves effectively and efficiently. Hard work does pay off.
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3. Review Appraising - Review appraising opportunities exist for independent fee appraisers as well as in-house appraisers. There are frequently in-house review appraisers at financial institutions or governmental agencies that review the work of fee appraisers. Additionally, they order and coordinate the appraisal process for the financial institution. This function is considered an important part of risk management for the financial institution or agency. There are opportunities for review appraisers with backgrounds in residential appraisal as well as commercial appraisal.
4. Assessors - Many of the employees of the ad valorem tax assessor's office have real estate appraisal training. The techniques are different (mass appraisal) than the fee appraiser but the concepts are the same.
5. Where an Appraisal Background Can Be Helpful - Mortgage brokers, real estate lenders, real estate brokers, and related positions represent opportunities for individuals with an appraisal background to bring specialized expertise to these positions. Additionally, financial analysts with appraisal training who work in these arenas frequently have a competitive advantage in the job market.
Where do I get a job after I complete my appraisal training? Remember, is is tougher to break into the business, now that the market has softened.
1. Fee Appraisers - Contact fee appraisers in your community to offer assistance as a basis for learning the appraisal process. It may be challenging to secure an appraisal trainee position, however, a positive attitude and a willingness to offer the extra effort that less experience requires will result in an opportunity to learn more about appraising. Fee appraisers can be identified in the yellow pages, from the state licensing agency or professional appraisal organizations.
2. In-House Appraisers - Contact financial institutions in your community to determine if they hire appraisers on staff and if they have openings. Developing a working relationship with the appropriate sources within these organizations could either result in employment or setting the stage to secure work as a fee appraiser with the organization.
3. Assessors - Contact assessor's offices to explore employment opportunities in their organization. Be sure to determine if the contact that has been made is for the entire organization or only one division.
4. Appraisal Trade Associations - In addition to providing a list of members, appraisal trade associations frequently have information on companies looking for appraisers as well. Trade associations can be identified in the yellow pages of major metropolitan areas and on the internet.
5. Appraisal Management Companies - Appraisal management companies appear to have in insatiable need for appraisers. Appraisal management companies coordinate the appraisal ordering and review function for a number of institutional clients. Appraisal management companies can be identified on the internet using the key words "appraisal+management".
How much can I expect to make as an appraiser?
Based on a 1999 study that was published in the Journal of Real Estate Research, the average income for United States real estate appraisers was over $58,000 with a maximum of $225,000. RePEc:jre:issued:v:18:n:1:1999:p:377-393
Entry Level - During an appraiser's "apprentice" period, it is likely that an appraiser could make more as an in-house appraiser than as a fee appraiser. It is our experience that compensation for appraisal assistants is around $15 per hour, or 30 to 35 percent of an appraisal fee. This can vary depending on an individuals related work experience. An example would be someone who worked as a real estate broker or broker's assistant prior to becoming an appraiser may be able to contribute more than someone without any real estate in their background. Each case is different.
Residential Appraisers - As a fee appraiser many appraisers work on a "fee split" basis. This means the appraiser is compensated based on a percentage of the revenue that is generated for each appraisal. The fee split generally ranges from 30 to 50 percent of the gross fee. Within a year, an entry level appraiser should be in a position to produce an average of at least one single-family residential appraisal per day. If the typical appraisal fee is between $300 and $350 and a fee split of 30 to 50 percent; this would be $90 to $175 per day or $21,600 to $42,000 per year (48 weeks per year x 5 days per week).
Experienced residential appraisers have been known to produce as many as two and three appraisals per day. This would result in 500 appraisals per year or more. Based on the same $300 to $350 fee for an appraisal and a 50 percent fee split this would be $75,000 to $87,500 per year (500 appraisals per year x 50% fee split). Even at 1 appraisal per day, 5 appraisal per week, your income would be higher than that of other professions in NYS.
Obviously, if one owned their own company and generated these levels of production the income could be higher. The costs would also be greater, if onw would bear the entire cost of an entire business entity.
Commercial Appraisers - Commercial appraisers generally work on a fee split as well. This fee split generally ranges between 30 to 50 percent depending on the amount of support that is being provided by the senior appraiser / appraisal firm and the contribution that is made by the junior appraiser.
The amount of revenue that commercial appraisers generate varies widely. The variables include differing levels of
- competition in various geographies
- competency
- areas of specialization
- marketing expertise
- amount of energy that one is willing to commit to work
The potential exist for commercial appraisers to generate $150,000 of gross revenue per year and more. The potential for any given appraiser is largely dependent on their willingness to commit time, energy, and focus to their appraisal career.
Summary
The income potential for a real estate appraiser is appealing. Additionally, many find the time flexibility, respect from other professionals, and relative ease of becoming a professional appraiser to be motivating. Both education and experience are required to reach your full potential, and finding a mentor who is willing to teach you the appraisal profession is an important part of the process. The potential for a rewarding, professional career that is well compensated is dependent on each individuals desire, motivation and commitment.
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Each person in this business must look at appraising as you would look at any other career in the State of New York. Appraising only required 90 hours of coursework (now 150 hours of coursework) to enter the field. Other careers with less opportunities require hundreds and even thousands of hours of education. A Massage therapist is a 1000 hour program, yet the potential income levels are not deemed to be higher than that of full-time appraiser in NY State.
A Medical Assistant may attend 1 to 2 years of education to earn their certification, to be employed in a medical office for an average starting wage of $ 10-15 per hour. Many appraisers have indicated how the market has slowed down. Sales are off, That is absolutely true. Many have already refinanced their home, again true. What work is still happening for appraisers. (Personally, I believe that an appraiser should be able to generate oiver $ 15.00 per hour)
Bankrupcy work, divorce actions, pre-foreclosures, REO transactions, HUD programs, including 203B(traditional FHA) and 203K (Rehab loans). Home equity loan, IRS actions, not to mention the sales which do occur, the refi's which still ocur and the second mortgages which still occur.
My other article includes discusion of the potential changes which may occur as a result of the HVCC, and how it will effect many appraisers. Still too, is the limitation as to how many appraiser can be supervised at any one time. All of these things must be taken into account when considering a new career.
This article is more for those currently in the appraisal business, to give them an understanding of the benefits of this career. Is it tougher to get work out there? Yes!
For those who are unable to make it in this business, I wish you much luck and success. We tell our children to work hard, and success will happen. Sometimes, those in this business are and have unrealistic expectations of their ability to generate a signicant income after only several weeks of schooling. As I always said in class, you may believe the streets are paved in gold. We are sweeping the streets, getting paid for our work, and we are not allowed to touch or be tempted by the gold.
Many realize, with fair more hours invested in others fields, that sucess does not just happen. Appraisers are no different. Did anyone really expect to become rich after 1-2 weeks in school, without a great deal more education and a great deal of real life training???...I hope not. I never, ever promised anyone vast sums of weath, but some hear what they want to hear. Once benefit, will be that some will leave the business, nd others will stay. Business will result at a more normal pace, and those who remain will start gaining market share. This is not an unrealistic cycle.
AGAIN, THIS ARTICLE IS FOR THOSE ALREADY IN THE APPRAISAL PROFESSION. PREVIOUS ARTICLES HAVE BEEN WRITTEN FOR THOSE CONSIDERING THIS AS A CAREER. IT IS SOMETHING ONE SHOULD SERIOUSLY THINK ABOUT BEFORE BELIEVING THAT THIS CAREER DOES NOT HAVE A DOWN SIDE. LIKE ALL CAREERS, APPRAISING IS NO DIFFERENT!
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