Did you know how excellent the job outlook is for real estate appraisers? The expected employment growth rate for U.S. appraisers is 14% for the next few years. It's double the average growth rate for all occupations over the same time period. If you have an analytical mind and an interest in real estate, it might be time to consider a career as a real estate appraiser.
A real estate appraiser, also known as a real property appraiser, is called upon to value a home or property. This valuation is called an appraisal. If you've ever wondered how a house gets its price tag, an appraisal is often part of the pricing process.
What does a real estate appraiser do?
A real estate appraiser provides an objective and unbiased estimate or appraisal of the value of a property. Appraisals are prepared for lease negotiations, mortgage lending purposes, tax assessments, and more. Appraisers inspect the property's features and compare it to similar properties to determine its value.
They consider the following when making their appraisal:
Determine the exterior condition of a property
Assess the interior condition with a room-by-room walk-through
Evaluate amenities such as a finished basement or swimming pool
Look for safety or health code violations
After the appraiser has gathered information about the house, they'll compare it to similar homes in the area to make their estimate. Strong analytical, critical thinking, and writing skills are a must for real estate appraisers.
Soft skills like listening and verbal communication are equally important. With these skill sets, you'll be well-equipped to understand your client's needs, complete your appraisal, and clearly communicate your valuation. Appraisals are the key to ensure the home buyer, mortgage lender, and seller receive an accurate estimate of the home's worth.
The mortgage lender or financing organization typically hires the appraiser. It often takes an hour or two to complete an appraisal, and you should receive the report within a few days. This amount of time can vary depending on the property size, report type, and other factors like a lender or bank review.
Appraisers can work for large appraisal companies, a local appraisal firm, a bank, or work independently. They're paid an appraisal fee for each property -- factors that impact amount include:
The individual appraiser's experience
The type of property being appraised
Damage or repairs to the property
You can search for real estate appraiser roles on job search websites to see how much appraisers are making in your area.
How to Become a Real Estate Property Appraiser
Now that we've taken a closer look into the role of an appraiser, let's dig into the steps to become one.
1. Understand the minimum requirements to become a real estate appraiser.
The Appraisal Qualifications Board (AQB) sets the minimum requirements, or the Real Property Appraiser Qualification Criteria, that aspiring appraisers in the U.S. must meet. The necessary training to become a licensed or certified real estate appraiser varies by state -- and some require state-specific courses in addition to the ones required by the AQB.
The Appraisal Subcommittee (ASC) oversees individual states as they license and certify real estate appraisers. A full list of the state appraiser regulatory agencies can be found on the ASC's website -- your state's agency will provide you with more information on state-approved courses, prerequisites, and exams.
2. Become a Trainee Appraiser.
The next step to becoming a real estate appraiser is to start as an appraiser trainee. The following courses are required by the AQB:
Basic Appraisal Principles: 30-hour course
Basic Appraisal Procedures: 30-hour course
National Uniform Standards of Professional Appraisal Practice (USPAP): 15-hour course
In addition to these courses, confirm with your state's appraiser regulatory agency to ensure that you've met all course requirements.
3. Find a Supervisory Appraiser.
Once your trainee courses are completed, the next task is to find a Supervisory Appraiser who can mentor you and supervise your appraisals. Under your Supervisory Appraiser's watch, you'll need to rack up approximately 1,000 hours of experience in no fewer than six months.
No college-level education is required, but you'll need to complete additional courses to make the leap from trainee to licensed professional. Here's a summary of the AQB minimum requirements:
Residential Market Analysis and 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
Again, be sure to check with your state's appraiser regulatory agency to ensure you've met all state and national requirements.
5. Get approved to take the Licensed Residential Exam.
Now that your courses and 1,000 hours of experience are complete, reach out to your local state advisory board to register for the Licensed Residential Exam. The exam covers much of what you learned in your previous courses, such as:
Types of real estate value
Real estate market and investment analysis
Check with the organization you took your appraiser courses with -- they might be able to provide you with exam tips. And practice questions can be found online.
6. Submit your application to become a Licensed Residential Appraiser
Congratulations, you passed your exam. The final step is to submit your license application to your state licensing board, which can be found on the ACS website.
Real Estate Appraiser License
Trainee Appraisers receive their license from their state, once they complete required coursework, hours of experience, and pass the Licensed Residential Exam. When they're given their license, they become a Licensed Residential Appraiser and can do appraisals on their own.
With your license, you can perform appraisals on your own without the supervision of a Supervisory Appraiser. As a Licensed Residential Appraiser, you have the ability to, " … appraise non-complex one-to-four residential units having a transaction value less than $1,000,000 and complex one-to-four residential units having a transaction value less than $250,000."
But what's the difference between non-complex and complex? Non-complex often means the property you're valuing is normal in comparison to the other properties in the area. A residential unit can be labeled complex if it's a historic property, a beachfront luxury home, or varies in architectural style from the homes around it.
If you'd like to further your career in real estate appraisal and work on more complex cases, you can become a Certified Residential Appraiser. Once you've met the minimum requirements, gained additional experience, and completed the necessary exams, you're set to apply to become a Certified Residential Appraiser.
Appraisers' valuations play an important role in the purchasing process of a home. As a licensed or certified real estate appraiser, you'll paint an accurate picture of a home's worth for the buyer, seller, and lender. And if a career in real estate feels right for you, check out these real estate blogs and learn how to start a real estate business.
This article does not constitute legal advice. The steps required to obtain a real estate appraiser license may differ from state to state, so you should seek your own legal advice to ensure you follow the correct process.
Originally published Oct 5, 2018 7:30:00 AM, updated October 05 2018