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Some of our most frequently asked Appraisal questions are answered below:
Fee Appraising -The independent fee appraiser provides appraisal services to the buying public and has a number of clients. Fee appraisers are typically one of the following:
Residential Real Estate Appraiser - A residential appraiser appraises single-family residences and two-to-four unit residential properties. Most residential real estate appraisers prepare form appraisals as compared to narrative appraisals. The residential appraiser does not possess the skill set to perform commercial property appraisals.
Commercial Property Appraiser - The commercial property appraiser appraises all types of real estate. 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.
In-House (Staff) Appraising - There are job opportunities within financial institutions for real estate 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 as well as with mortgage investors.
Review Appraising - Review appraising opportunities exist for independent fee appraisers as well as in-house appraisers. You will frequently find in-house review appraisers at financial institutions or governmental agencies that review the work of fee appraisers. Additionally, these appraisers 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 real estate appraisal as well as commercial appraisal.
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.
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 areas frequently have a competitive advantage in the job market.
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 which having 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.
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 can result in employment or setting the stage for securing work as a fee appraiser with the organization.
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.
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.
Appraisal Management Companies - Appraisal management companies appear to have an 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 by searching on the internet using the key words "appraisal+management."
As of December 31, 2013, the number of active real estate appraisers in the U.S. stood at 81,050. The number of appraisers decreased at an average rate of 3.0 percent per year over the past five years. A broader analysis suggests the rate of decrease could rise sharply over the next 5 to 10 years due to retirements, reduced numbers of new people entering the appraisal profession, economic factors, and greater use of data analysis technologies.
Entry Level - During an appraiser's "apprentice" or training period, it is likely that an appraiser can 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%-35% of an appraisal fee. This can vary depending on individual related work experience.
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 ranges from 30%-50% 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%-50%, this would equal $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 between 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 50 percent fee split this would be $75,000 to $87,500 per year (500 appraisals per year x 50% fee split).
Commercial Appraisers - Commercial appraisers work on a fee split as well. This fee split ranges between 30%-50%, depending on the amount of support that is being provided by a 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
The potential exists 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.