Have you ever wondered who decides what a house is worth? As with most things, part of the answer is that houses are worth whatever people are willing to pay. However, there are also people who examine buildings to determine what a fair price is. These neutral parties are known as real estate appraisers. Let’s dive into what you need to know to become one!
What do Real Estate Appraisers Do?
Typically, real estate appraisers decide the value of a property as the initial step before purchasing any private or public domain. Appraisers can choose to specialize in residential, commercial, or both. People in this field provide a vital service to banks and are essential to our national economy.
A real estate appraiser’s role is to supply an impartial and unbiased property assessment. They must be able to examine information from numerous sources and use sound reasoning to establish the value of a property. An appraiser’s work is essential for people wanting to buy a home or those wishing to secure a property for a business endeavor.
To be an appraiser, a person must have traits essential for success in the field. These traits include:
The ability to be impartial
A real estate appraiser should have no personal stake in the property, the potential owner, or the buyer. Remaining a neutral party allows the appraiser to complete their work with impunity. Also, being impartial lets the buyer and seller make the best decisions when entrenched in negotiations.
Being organized helps keep the appraiser on track and allows them to meet deadlines. Time is a necessary commodity, and organization is vital for appraisers. The better managed an appraiser can be, the more accurate the evaluation will be and the more money they will earn.
Many appraisers are independent and run their own appraisal businesses. Being self-motivated can help to keep an appraiser ahead of their competitors.
An appraiser needs to be able to look at a property and scrutinize every aspect of it to make a sound judgment. So, being able to observe details and then draw relevant conclusions is definitely a necessary quality.
An appraiser must take into account many aspects of a property. These include the property’s history, the current state of the market, and the neighborhood or location, to name a few. Appraisers must have patience when reviewing any related report or paperwork of the property so they submit a fair value.
Anyone who has worked in real estate can tell you that changes occur constantly. Being able to adapt to the fluctuations of the industry will help to keep your appraiser data relevant. If you are willing to stay current on what is occurring in the economy and learn new skills, you can do well in this field.
Real estate has been around for a long time, but how people assess properties changes every few years. Technology has increased people’s awareness of how much a property is worth. Appraisers who embrace technology can make a name for themselves in the field.
Does the thought of limitless information excite you? Then you are a data-driven person and have an advantage over those who are not. Reviewing data from various sources about the property and using it to give the best estimate of the asset will put you ahead of your competition.
A Typical Day
Real estate appraisers typically have three parts to their job. They need to visit properties and thoroughly inspect them, research the history of the building, and write reports. If you end up working as a real estate appraiser for a company, they might schedule property visits for you, interspersing it with the time you need to do research and present your findings in a report.
While your schedule is likely to be more stable working for a company, some people prefer to have more control of their schedule. As an independent appraiser, you will likely have more flexibility to group tasks together. You could spend a whole day driving around visiting properties and then use the rest of the week researching and compiling your thoughts and findings on each property into a report.
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School and Education
There are different levels of being an appraiser. Attending college or university is not required to be a real estate appraiser trainee, as becoming a trainee only requires a certification. But if you want to earn more, you will need an associate degree, at minimum. However, many states require a bachelor’s degree. We recommend choosing a related field, like real estate, business, or statistics.
Schools that offer well-respected degrees in real estate and business include:
|University of Wisconsin-Madison
|University of Pennsylvania
|Tuition and Fees $63,452
|New York University
|Tuition and Fees are $58,168
|University of Texas at Austin
|University of Georgia
|University of California, Berkley
|University of Southern California
|Tuition and Fees are $64,726
|Florida State University
|University of Florida
|University of North Carolina at Chapel Hill
How to Become Certified or Licensed
Acquiring a certification is essential to becoming a real estate appraiser. Certification requirements vary from state to state, so you must check the state where you plan to work and what you will need to become fully certified. However, if you’re interested in becoming an appraiser, you should know about the Uniform Standards of Professional Appraisal Practice (USPAP). It’s an ethical code that appraisers in the US must follow.
Let’s take a look at some of the requirements you might find in a specific state by examining Georgia. The Georgia Real Estate Appraisers Board (GREAB) oversees appraisers in the state. Here are the Georgia requirements to become an appraiser trainee:
- An individual must be at least 18 years old.
- Must obtain a high school diploma or an equivalent certificate of high school completion
- Must complete a minimum of 90 hours of state board-approved courses:
- Basic Appraisal Principles – 30 hours
- Basic Appraisal Principles – 30 hours
- USPAP – 15 hours
- Residential Report Writing and Case Studies – 15 hours
- A college degree is not required.
There are different appraiser levels in Georgia, each of which has additional requirements. To become a certified residential appraiser, you must complete 200 hours of qualifying education, including:
Basic Appraisal Principles – 30 hours
Basic Appraisal Procedures – 30 hours
USPAP or Equivalent – 15 hours
Residential Market Analysis & Highest and Best Use – 15 hours
Residential Appraiser Site Valuation and Cost Approach – 15 hours
Residential Sales Comparison and Income Approaches – 30 hours
Residential Report Writing and Case Studies – 15 hours
Statistics, Modeling, and Finance – 15 hours
Advanced Residential Applications and Case Studies – 15 hours
Appraisal Subject Matter Electives – 20 hours
Experience: 1,500 hours of acceptable appraisal experience in not less than 12 months.
As for the educational requirements, you have choices. You could get a bachelor’s degree in any field or have an associate’s degree in business, economics, or real estate. The state also accepts 30 college semester credit hours in specific topics or people who have passed the College-Level Examination Program (CLEP) 1 exam. So, some education past high school is definitely required!
Let’s take a look at another example. In California, a person must go through eight steps to acquire a real estate appraiser license:
- Be 18+ years of age
- Complete 150 hours of coursework. Each class typically includes a proctored exam. You have three attempts to pass, after which you must retake the class.
- Apply for an Initial Appraisal License
- Pass a Background Check
- Pass the State Exam
- Work 2000 hours as a real estate appraiser trainee under the supervision of a real estate appraiser.
- Once your supervisor has signed off on your 2000 hours of work, you can apply for a residential Real Estate Appraiser License
- Receive your Real Estate Appraiser License
The good news is that in California, an associate’s, bachelor, or doctorate is not required to become a licensed real estate appraiser. You’ll still have to take classes and pass exams, but they’ll be directly related to the knowledge you’ll need as a real estate appraiser.
How long does it take to become a real estate appraiser?
The time it takes to become certified will depend on a person’s commitment to the process and the state where they want to work. However, no matter where you live, you’ll start off as an appraiser trainee. Your time as a trainee will be about a year or two, depending on your other commitments. Of course, if you have to get an associate’s or bachelor’s degree first, you’re looking at a 3 to 6-year commitment.
Real estate appraiser jobs are estimated to have an average growth of 4% over the next eight years. The increase is about the same as all occupations in the US. Each year 6,800 openings are projected. These openings are a combination of need, workers transferring to other professions, and those who retire.
How much do real estate appraisers earn?
The median yearly income for a real estate appraiser was $61,340 in May 2021. Your earnings will vary depending on location and length of time in the occupation. Another factor is if the appraiser is working for a company or independently. If the role is for a company, wages could be limited by contract and hours. As an independent worker, an appraiser can work as many or as few hours as they want.
Your location also matters. Real estate appraisers working in Hawai’i earn $80,712 on average, while in Massachusetts, they earn just under that at $79,778 per year. Nevada, Connecticut, and Rhode Island also offer average salaries above $77,000 per year.
Benefits and Industry standards
A small or large company will provide insurance and benefits as the company sees fit. If the appraiser works for themselves, they will have to secure these incentives independently. But this could be beneficial as the appraiser will have more choices in providers and additional coverage for protection.
Once people become appraisers, many stay in the field until they retire. With the job’s flexibility and high earnings, the quality of life for an appraisal can be pretty high. Also, retirement can come earlier than expected because of one’s earnings.
Do most of these jobs require you to own your business?
It is not a requirement for an appraiser to own their business but creating an LLC will help to protect personal assets. Many people choose to offer their services as independent contractors, which gives them the freedom to choose the most lucrative jobs. However, an appraiser can earn well while working for a company.
Who is hiring in this industry?
Real estate and appraisal firms hire many appraisers. Specific employers include Altus Group, Jones Lang LaSalle, Cushman and Wakefield, Prudential Financial, and Northwestern Mutual. If you are more entrepreneurial, consider starting your own business and exploring your options there.
Pros and Cons
Becoming a real estate can be an appealing and highly paid career in the real estate industry. Like any career, however, there are pros and cons. It’s up to each person to decide if this career path is right for them. Consider the following:
|Pay and salary are competitive, stable, and fulfilling.
|Pressure to correctly assess the property and have an accurate report
|Many appraisers work for themselves, giving them flexibility in their work and life.
|Some people will question an appraiser’s final evaluation.
|The industry will always need an appraiser as real estate stays steady.
|An appraiser may be required to travel more to complete work.
|Expert evaluations and insight can make you a high commodity in the industry.
|Years of education and practice are needed to earn to become a certified appraiser and qualify for upgrades.
Appraisers have a high job satisfaction rating of 79.4. People in the profession are much happier than other Americans working other jobs. For comparison, only 54 percent of American workers are satisfied with their jobs.
Why are appraisers so happy? Here are the five reasons why appraisers find enjoy their work:
- They have a flexible schedule
- Outstanding and healthy work/life balance
- They enjoy a substantial income
- The work is challenging
- Numerous work opportunities
There is also spontaneity in an appraiser’s day. Every day is unique, and there is no typical day of scheduled duties. The dynamic nature of the work is exciting for many people in the field. They would not trade this for anything.
The real estate industry has brought a fantastic opportunity to many people. Focusing on one area of the industry, such as appraisal, can give people a life of satisfaction and importance. If you are interested in being a real estate appraiser, find local real estate groups and join them. Seek out an appraiser in these groups and ask them questions about work.
You can also investigate real estate or business programs at a school nearby. If you are in high school, now would be a great time to speak with your high school’s college and career specialist about your goals.