Posted by LynnNC on 9/13/06 12:05pm
Msg #145754

Real Estate Appraiser

After talking with a borrower last night, I would like to find out more about the real estate appraiser business. He told me that the person who appraised his house does four a day at $250 each, and only works eight months a year.

In NC, the technical schools offer a series of three appraisal courses, after which students should be able to sit for the National USPAP examination.

I think that there will be opportunity in this field for those that have a bachelors degree, as one will be required beginning in 2008.

I am interested in the thoughts of others on this board.

Reply by Charles_Ca on 9/13/06 12:27pm
Msg #145760

Hi Lynn. I work with a lot fo appraisers and there are two types. If you appraise for government loans you have to State licensed with specific guildelines stipulating the process. Some States also folow the guidelines for all appraisers. The guidelines usually require a ste of courses that must be completed followed by a two year apprentiship under a certified appraiser and then you can sit for the certification test. The certification is not easy to get and then there are levels of professional certification from the major appraisal organizations with one of the prestegious the MAI (Member. Appraisal Institute).

Reply by newlysmomva on 9/13/06 1:26pm
Msg #145773

And no one is willing to give you the hours of apprenticeship...I did all the courses and couldn't get the hours!

Reply by Paul_IL on 9/13/06 1:28pm
Msg #145774

Charles,
The MAI is the lowest designation offered by AI. SRR(Residential) and SRPA(Commercial) are the most prestigious.

Reply by Nate_MN on 9/13/06 1:57pm
Msg #145779

I actually don't agree with you, but since they don't really catagorize them it's clearly open for debate about which is more prestigious. This is however what the website says.

Here are the requirement for MAI

"The MAI membership designation is held by appraisers who are experienced in the valuation and evaluation of commercial, industrial, residential and other types of properties, and who advise clients on real estate investment decisions. The current requirements that an appraiser must fulfill to receive the MAI designation are as follows:


Education:

Receive a passing grade on 11 examinations that reflect 380 hours of classroom instruction and that test the appraiser’s knowledge of basic and advanced appraisal principles, procedures and applications; report writing; valuation analysis and standards of professional practice
Receive a passing grade on a four-module, two-day comprehensive examination
Hold an undergraduate degree from a four-year accredited educational institution
Experience: Receive credit for 6,000 hours of experience, including 3,000 hours of specialized appraisal experience, all of which must meet strict criteria."

Here are the requirements for SRPA

"Education:
Received a passing grade on a series of examinations that tested the appraiser’s knowledge of basic and advanced real estate principles, procedures and applications and standards of professional practice
Hold an undergraduate degree from a four-year accredited educational institution (or satisfy specified alternatives)
Experience: Received credit for real estate appraisal experience, at least half of which had to relate to income-producing properties

Demonstration Report: Received credit for one income property demonstration appraisal report, which exhibited two forms of depreciation, physical incurable deterioration or either functional or external obsolescence. "

You be the judge.

Reply by Charles_Ca on 9/13/06 2:16pm
Msg #145784

Yep Nate, I do believe that the 6000 hours separates the

men from the boys! I certainly don't use SRPAs because they don't understand commercial properties as well but I do use a lot of MAIs. I'd hate to see the struggle an SRPA would have with a $874M shopping center that just closed; 15 stores and 3 anchors plus a food court and some ancillary businesses. Thanks for elaborating Nate.

Best regards,
Charles

Reply by Paul_IL on 9/13/06 5:37pm
Msg #145836

Re: Yep Nate, I do believe that the 6000 hours separates the

Yes it appears I made an error. I was under the impression that MAI was required for the others.

So Charles what is so difficult about the $847M shopping center? I doubt the SRPA would struggle with it as much as you seem to think. Note regarding your MAI referrence. That MAI is not that big a deal if the appraiser has no experience with a shopping mall. That is like saying that just because you have the MAI you have experience in all phases of commercial developement. I sold a golf course last year and when it came to the appraisal we found someone that specializes in golf courses.

Just a question for you Charles if the shopping center was so difficult for you how did you manage to assist your client with a value range on the property?

Reply by Charles_Ca on 9/13/06 5:59pm
Msg #145838

I'll let you figure that one out on the next multi million $

shopping center deal you do ;-)!

Reply by Paul_IL on 9/13/06 6:16pm
Msg #145841

Re: I'll let you figure that one out on the next multi million $

Not really that much of a problem for me Chuck. I would be happy to help you on any project. I charge a $500 per hour consulting fee for commercial real estate projects. BTW I have a BA in Finance and an MBA in Real Estate and Urban Planning so I do know what I am doing.

Reply by Charles_Ca on 9/13/06 7:06pm
Msg #145848

I think that's great, You're one smart guy, of course

without a profile you can say anything you want.

Reply by Charles_Ca on 9/13/06 2:09pm
Msg #145783

Thanks Paul but I think Nate got it rignt! n/m

Reply by Nate_MN on 9/13/06 1:45pm
Msg #145776

I dabble in both closings and appraisals, and here are my thoughts, some of which I said a few days ago. I find doing appraisals to be enjoyable, but I think they are more work than closings, which may or may not even out because you are paid more (in theory, but I will get to that shortly). The appraisal industry however is facing significant challenges, some the same as signing agents. There is what appears to be a pretty strong movement towards large lenders using appraisal management companies, so this is essentially the same as signing services (lower fees, more babysitting, ect). There are too many appraisers, therefore since the next guy will do it for less, you lose assignments. There is a lot of pressure to hit values, and considering your liability this can be risky. If you can't hit values, some of your clients (usually the ones you are probably better off without) will find an appraiser that sees values a little differently. In addition, it could be difficult finding a mentor, due to over supply lots of appraisers won't take them on because there is not enough work, and then also, some lenders won't let trainees do appraisals period. Finally, you will split fees with your mentor and this can change greatly with mentors, but be ready to give up 65% of that fee starting out. Also, payment is not guaranteed, be ready to not be paid if you don't hit the value, and if the closing falls thru for any reason. (some fees are collected at the door, but many are on the HUD)

I certainly would not discourage you from doing it, but be prepared it's not the easy money you think.

Ofcourse, some appraisers do more work than others too. Most say the average is 4 hours per appraisal, some say as many as 8 hours per appraisal.

Reply by Traveling2U on 9/13/06 2:07pm
Msg #145782

My son took signed up with a school that guarantee that you will pass the test the first time or they will refund your cost of the course. He didn't pass the first time and he had forgot about the refund.

He was so upset that he didn't pass (it was the legal stuff) was diffcult. However, he was able to retest in 30 days. He regrouped had passed the second time. He was refunded his $800.00 I think it was. He passed the state test the first try.

He is trying to complete his apprentice credits. Since he took Appraisal class and test he became a loan signing agent. Last week he done a loan signing for his friend's Mom and was paid 1/2 have of the appraisal fee of $150.00 + $150.00 for the signing. the person my son is working with gets $350.00 for each job. If he could sign off on the appraisal I'm sure he would had taken the the appraisal over the signing since he couldn't do both.

if you can swing both that is great while building the credits getting $150.00 isn't bad since and he didn't have to look for the lead. I'm really impressed how two young men in their early 20's networking with each other with joy of helping each other. His friend is the one who told him about about the loan signing and his mom works for a title company.

She got her son work with the company to do their overages on call.

Reply by NCLisa on 9/13/06 6:13pm
Msg #145840

It's 4 classes

That you have to take to become an residential real estate appraiser trainee. I've taken them, and should be taking the state exam in a couple weeks. The classes are intense and very hard. Out of the 45 students we started with, only 20 finished the program. The second class with was all math, made my brain hurt. I took the classes that were full weekend classes, and would NOT advise anyone to do that. If I were going to do it again, I'd take sememster classes or spring for one of those schools that teaches 8 hours a day for a couple weeks.

By the way, most appraisers make $350 an appraisal. The hard part is finding someone to do the trainee part for. The real estate market is still pretty dead, and the appraisers don't want to hire trainees, because they have to pay them a %. No one from our classes has found a job as a trainee yet.