Residential Appraisers Dos and Don’ts
Residential appraisers are a critical piece in the puzzle that is determining a property’s “true” value. But in today’s market, the role they play is more pivotal than ever. When every dollar counts (as the players of the game may still be licking their wounds from the oh too recent housing crisis) sellers want to be able to get the highest value possible for their property and buyers certainly do not want to overpay for a home, so working with an appraiser who is trained to perform services in an ethical and professional manner with rich knowledge of the market is a necessity. As an appraiser, your role is to provide an unbiased, methodical assessment to a home in order to better gauge its selling price. Even though the market continues to ebb and flow with the economic times and the appraiser will also adapt along with the industry, these are some Dos and Don’ts that generally withstand the times and are worth keeping in mind in order to continue providing the value to the buy-sell equation of residential property.
DO obtain a trainee license. Becoming a licensed appraiser does not happen overnight. In order to reach your overall goal of becoming a professional independent appraiser, most states will require that you first attain a trainee license. Specific licensing requirements vary from state to state, but almost all of them require some form of experiential learning and education. The pursuit of gaining a trainee license often involves a designated number of hours of education focusing on the principles and procedures of appraisals as well as formal examinations. To determine what you in particular have to do, check with the licensing board in the state you wish to conduct business in.
DON’T neglect finding an appraisal mentor to shadow. Some of the greatest knowledge you can receive about the market as well as how to perform an appraisal successfully will come from firsthand learning experiences. Supervising appraisers can give you tips and lead you down the right path in order to succeed in the industry. The process of finding a supervising appraiser may seem challenging at first, but the valuable, hands on experience you will receive is something you cannot find in a classroom setting or get from textbooks.
DO look for a trainee job while working towards getting your license. While the pay may be minimal, working for a real estate appraisal office as a trainee or for an experienced appraiser will help you immensely in the long run. Not only will you gain respected experience but also an opportunity to network with professionals for your future career as an appraiser.
DON’T put off applying for an individual appraiser license. Once you have satisfied the minimal hours of education required as well as gained all essential experience, you are ready to apply for a license. You will have to take a state test as well as know the ins and outs of the Uniform Standards of Professional Appraisal Practices (USPAP) and the Truth in Lending Act (TILA). These are nationally recognized laws that should be taken seriously in order to avoid future legal conflicts. Licensing requirements vary on a state-by-state basis.
DO conduct thorough research of the current real estate market in order to form an unbiased, credible opinion and guarantee accurate appraisal services. Appraisers need to take into account the property’s size, location, and condition among other important factors when determining its value. Having knowledge of recent sales prices among similar or comparable homes is key.
DON’T succumb to committing specialized favors by accepting requests from lenders and brokers. By law, all appraisals must be performed by an individual who has local knowledge of the market, not an appraiser the lender chooses explicitly. If this happens, the lenders or brokers involved could wrongly attempt to influence the appraiser to put a higher value on the property than the current market would otherwise determine. This simply is not allowed.
DO communicate with lenders and brokers in order to establish a professional and trustworthy relationship. It is important to know the intended use of the appraisal and this can only be done by interacting with the lender involved. If it is discovered that an error was made on a finalized appraisal, lenders may reach out to you requesting amendments or further details and explanations. As the appointed appraiser, it is your responsibility to correct any misrepresentations or errors made. Dismissing questions or concerns about a finalized appraisal will ultimately damage your overall professional reputation and could lead to possible legal conflictions.
By keeping these Dos and Don’ts tips in mind, pursuing your goal of becoming a residential appraiser should run smoothly. For any additional information on real estate appraisal or specific regulations, directly contact the state in which you desire to do business.
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DO run for the nearest exit.
DON’T be fooled into thinking “if I can just hold on long enough there will be a shortage and I can name my fee”.
DO take the time to explore alternative careers daily. They are both plentiful and far more profitable but they are also invisible to appraisers who don’t possess an open mind.
DON’T believe for a second that scope creep is typical in all small businesses. Few small business owners would accept what appraisers endure year in and year out.
DO put your goal on paper (getting out of the business) along with the precise date you intend to leave.
DON’T be tempted to use “supporting my family” as an excuse for staying in the business. They deserve a more stable means of financial support and they deserve more than the scraps of time you have remaining after dealing with those GD AMCs each day.
DO make the effort to understand that you are participating in extortion every time you accept an AMC order. Pay To Play = Extortion folks.
DON’T fool yourself into believing you are an ethical appraiser if you continue to accept orders from AMCs.
RA, I absolutely have to hand it to you for being consistent and having a sense of humor wrapped around your cynicism!
In this instance, I think you are right. Surety bond providers should NOT be writing appraiser and appraisal articles, as if they know what the hell they are talking about. They COULD have provided insight based on their claims made experiences, but they went down another path and wasted all of the readers time.
omg, One eye is crying, and the other is laughing.
Attracting new appraisers is going to take more than instruction on how to train properly. It’s going to take better compensation for appraisers. The problem is lack of appraisers, the solution is to financially incentivize the growth of the appraiser servicing base. Currently the appraiser base is shrinking yearly. That’s because assignment companies would rather keep the appraiser compensation frozen in time, indefinitely. 20 years now with a $400 base fee. I put servicing first for clients who pay more, not less. The author of the blog post mentions professional reputation, without any mention of how it’s the assignment companies and their under trained non licensed staff whom hinder the process, have been the most damaging entities to the appraisers professional reputation. If you’re someone who’s thinking about joining the appraiser profession, it’s probably best to wait another decade or so, until the existing appraisers can finally manage to get control of these overbearing assignment companies whom try to prescribe the appraisers income at a lower level than their own non licensed clerk and paperwork shuffling staff is compensated. Imagine the secretary at a law firm being in control of money distribution and paying him or her self more than the attorneys, just because the money went through their hands first, and attorneys would be powerless to stop that, unless they simply quit and found another place to work. Welcome to appraising.
This article is interesting but the advice appears to be totally unnecessary! Today is 6/8/2015 at 10:32 pm and I just read on USAjobs website about an employment opportunity as a VA Review Appraiser. This job is for the Department of Veterans Affairs located in Atlanta, GA.
I am not interested in seeking employment but like to look on occasion at what jobs are being offered for real estate appraisers. I looked at all of the information presented in this VA Job Posting but did not see any requirement for the applicant to hold a license or certification of any type as an appraiser. How in the HE!! can someone seriously pretend to be a “REVIEW APPRAISER” when they do not have the qualifications necessary to legally prepare an appraisal on their own? The next thing you know they will be writing “HANDBOOKS” for all of us to comply with! What a joke this occupation is turning out to be!
Wayne as a former GS13 1171 series appraiser I can guarantee that if a person does not have a current real estate appraisal license they will not be hired for that job. Oddly enough, I looked for the GS Standards that existed when I was hired by Treasury (IRS) back in 2009 and could not find them from the particular link. I had even interviewed by phone for VA Special Adaptive Housing Program appraisal positions back there and promise you no one has much shot at this position without STRONG review and supervisorial review appraisal experience. The qualifications are in the scoring high enough to qualify for the GS 13 level itself. The better positions would have been in Sacramento CA at GS 14 level (DAMN! Position closed!). GS 14 base level PLUS 27% COLA. Talk about reasonable fees for appraisal!
Now THATS what Id like to see the Appraisers Guild promote. Fees comparable to the federal pay scales for 40 hour work weeks; all federal holidays off, allowances or special benefits for retirement and medical; mileage.