Real estate appraisers estimate the value of real property—land and the buildings on that land— before it is sold, mortgaged, taxed, insured, or developed. Appraisers work for banks, mortgage companies, local governments, or are self-employed, aka “independent fee appraiser.” Many self-employed positions are typically based from a home office, making this another home business option.
Appraisers and assessors are not the same. Appraisers typically value one property at a time, and they often specialize in a certain type of real estate, commercial or residential. When estimating a property’s value, appraisers note the surrounding area, structural conditions, renovations and additions, and typically visit and photograph each property. The appraiser documents and estimates value based on observations, recent local sales of similar properties (comparables), and income potential, if applicable.
Assessors mostly work for local governments and value properties for property tax assessments. Unlike appraisers, who generally focus on one property at a time, assessors often value an entire neighborhood of homes at once by using mass appraisal techniques and software programs. These positions are typically employees and not considered in this document.
Real estate appraisers typically have the following duties:
• Research legal descriptions of real estate properties in public records
• Inspect new and existing properties, noting improvements or concerns
• Take exterior and-or interior photographs of the property
• Use “comparables,” or recent local sales, to help determine value
• Prepare written appraisals on the property value
According to the U.S. Bureau of Labor Statistics, employment in this field is expected to grow around 7% between 2010 and 2020. The median annual wage of real estate appraisers was $48,000 in May 2010. Wages vary significantly by geographic area and for the self-employed that are paid a fee for each appraisal.
An appraiser will be outdoors to examine properties and working on a computer to research information and write reports. Appraisers may use laptops or tablet computers, allowing for on-site property data entry and related photographs.
Need to Have
Each U.S. state has specific requirements and education criteria for appraisers. In general, most appraisers of residential property must have at least an associate’s degree, while appraisers of commercial property must have at least a bachelor’s degree. In some areas, appraisers may qualify with a high school diploma.
Federal law requires that most appraisers have state certification. The level of certification determines what type of property a person may appraise. The two federally required certifications are:
• Certified Residential Real Property Appraiser
• Certified General Real Property Appraiser
Some states offer a third level of certification, the Licensed Residential Real Property Appraiser. Check with each state’s Office of Real Estate Appraisers for specific requirements.
At minimum, an appraiser needs to complete the Certified Residential Real Property exam to appraise a residential property with a loan amount over $250,000 or any other type of property even if the loan amount is less than $250,000. This certification requires:
• An associate’s degree or 21 units of continuing education
• 200 hours of appraiser-specific classroom training
• 2,500 hours of work experience over at least 2 years
Higher level certifications require more education and-or on-the-job training as well. In addition, many states require ongoing classes or continuing education to maintain the license.
The most important qualities for an appraiser include:
• Analytical skills – appraisers will research, evaluate, and compare properties for estimated value
• Communication skills – written reports and oral communication with clients and customers
• Time-management skills – self-employed appraisers may have several properties to evaluate on any given day; traffic and distance must be managed.
A newer computer, high-speed – and reliable – Internet connection, printer, scanner, fax, and a separate business phone line. An office software suite with word processing and spreadsheet programs is necessary and appraisers may need special programs for clients. A personal accounting package for billing and invoicing is appropriate for any freelancer/contractor.
Potential appraisers should check with a state’s Office of Real Estate Appraisers for certification and licenses required. For the self-employed, on-the-job experience is a must. Contact local banks, mortgage companies, and realtors for potential appraisal needs. Partner with an established appraiser for experience and references.
Though not a high-growth field, demand for this position is high. Independent appraisers can work as much as desired or possible for additional money. Higher level certifications make a potential appraiser more attractive in the industry. Continue with ongoing education, ensure certification is current, and be aware of changes in local, state, and federal laws.
By Dion D. Shaw
Dion D. Shaw is the founder and owner of Homepreneurs
Homepreneurs. New Day. New Opportunity.
Homepreneurs does not endorse nor have any relationships with any of the services listed. Homepreneurs receives no compensation or consideration for its suggestions. Homepreneurs strongly urges all interested parties to conduct research and accepts no responsibility for any losses incurred.
© Homepreneurs 2010 – 2012, All Rights Reserved
image credit: grunge_sale by grafixar
image location: http://morguefile.com/archive/display/214132