Ever wonder what a real estate "Appraiser Apprentice" job interview, with a recent college graduate, would sound like? The author, R. James Girardot ( aoi@oz.net) says . . . Let's see:
First - Job candidate, can you work for 2 years with no income?
Second - You won't mind setting your schedule around mine because I have to walk through all properties with you. Yes, I know doctors, attorneys, dentists, engineers, teachers, etc. don't require that stipulation, but you see, I am not sure I can tell you that you are entering a "profession" nor even a "business" in which anything from your degree is usable anyway.
Third - After 2 years of working for free and of scheduling your schedule around mine [especially since I will have 2 other apprentices in the same category plus will be doing appraisals myself so that I can financially subsist] your fees will be totally dependent on how many appraisers there are out there at that time competing for the same business that is left after the AVMs and the BPOs do their thing in government approved property valuations for mortgage purposes. Could you gross $30,000 per year? You might. But, again, the trend currently is downward when it comes to appraiser fees.
Lastly, I cannot lie or mislead you, you will have expenses taken out of whatever fees you will earn: those will include:
- errors and omissions insurance,
- licensing for an appraisal software program,
- membership in a local agent multiple listing service,
- monthly fees for a reliable data source from which you can expect to get reasonably reliable property characteristics from county records,
- gas and wear and tear on your car,
- a place to work either in your home or renting a space somewhere,
- purchasing your paper supplies,
- paying telephone and internet connections,
- paying your own social security and, of course,
- paying all the local, state and federal taxes that will be based on the fees that you are paid.
You say your college buddies are getting 2 weeks vacation, medical insurance, 401(K) and more. No, no, no, you don't get any of that by being an appraiser. If there is income left from the wages you are paid for the appraisals you complete, then you might be able to take a vacation and do all those other things.
You think we should just charge more for your professional services? Sorry, again the answer is "no." There is no way you can charge what you need to in order to be an appraiser; those days are gone just like the dinosaurs. Appraisal fees today are totally beholden on how much of the appraisal fee (that the borrower pays the lender at the time of applying for a mortgage) that the lender and its appraisal agency are willing to pass on to you as the appraiser.
But appraisers are independent business people. Don't they set their own fees? Sorry, again, there are just not enough real appraisers out there to change that situation. The reasoning that is most heard is that "if I don't accept those wages, I will have to go back to the assembly line and I would do anything rather than that. Besides, I like not having a boss."
How many appraisals would you project you could do once you become licensed or certified? THAT is a good question. The answer is really dependent on whether or not you want to have any free time for yourself, your family and your hobbies or, alternatively, whether you want to invest the time in each appraisal to do the right job. You see, while reducing the fees paid to appraisers, those who assign appraisals to appraisers today also insist on getting their reports back within 1 or 2 days.
Yes, you are independent; as I said before, you will have no bosses. However, if you do not meet their timeline requirements, you will also have not appraisal business? So what approach would you use: find out how to cut corner? take the time to do the right job? And given either situation, how many appraisals do you project you could do if you are going to do them correctly, do them within the 1-2 day requirement and still have a private life.
Weekends? No, those who assign appraisals say you do not have to work weekends. BUT remember their clocks begin to tick away time once they send an order to an appraiser.
Could you compete to obtain more business because you are good and honest? Is that your question?I feel like I am apologizing for the Gulf oil spill I am saying "I am sorry" to you so many times. No, there is no competition in the "profession" today. You simply try to find what are called appraisal management companies, otherwise known by the acronym AMCs, see if they will let you register with them, look at their wage sheet to see if you can live with the wages they are offering (keeping in mind ALL expenses and fringes of life are yours to be paid by those wages only) and then see if they actually accept your name. That is just part of the system. The next thing you do is sit and wait for them to notify you that they have an appraisal for you to do.
How many orders will you receive and how often will you receive them? Very good question indeed. You see, the answer to that is totally dependent on how many appraisers that company has approved in its rotation directory. Based on experience to date, I would rather that you plan on a minimum of appraisal orders rather than how many an ambitious, bright and hard-working person you appear to be.
Okay, if I understand what you are saying now, you saying you really do not and never wanted to be a business person who owns their own business? So you had thought you could go to work for an appraisal company, conduct as many appraisals as you were willing to commit and physically able to do and leave all the other registering, delivering of appraisals, tax withholdings, business promotion and business retention to the appraisal company itself.
Again, and I really do mean this: I AM SORRY! Because of the wage scale the companies that assign appraisals impose on those who are willing to do their work, companies like those with regional supervision and all the other benefits of a company team are gone like the dinosaurs, too. You see, those companies used to structure their pay on the experience of the appraiser, the ability of the appraiser and the fees that they used to be able to charge lenders for appraisals which used to allow a good businessperson the ability to budget money to actually pay a staff. But that is gone now that fees charged by appraisers are gone and have been replaced by wages payed by those who order appraisals.
Yes, I am sure your spouse's parents just paid $500 to have an appraisal done on the home they just purchased. But therein is the crux of the story: ask your in-laws to see if they can find out how much of that money actually went to an appraiser to appraise their new home. While this next step might be disappointing, too, you might also suggest that your in-laws now obtain a private appraisal not using their lender's appraiser. The only reason I say that is because of the number of loan officers with banks of all kinds and all sizes apparently now telling their mortgage borrowers not to depend on the bank appraisal as the actual value of the home.
I well appreciate your questions, "So why did I go to college? Why didn't someone tell me all of this before?" Rather than answering with the same answer you have heard me say so many times during our interview, let me just say I sincerely apologize for you feeling that way. Truly, going back to how or whether you will receive appraisal orders that we discussed just a few minutes ago, there is one other thing you should be aware of:
You know how you got grades in college? Well, you will still be receiving grades.
- However, now you will be graded on whether you called the borrower within a day,
- whether you delivered the appraisal in the time frames required by the assigners of appraisal orders,
- how many spelling errors you had in the report,
- how many typos there were in the report,
- whether the AVM conducted by the company that ordered the appraisal agrees with the conclusions of your appraisal and,
- if it doesn't, how quickly you respond to a follow-up request to submit what the company demands for the appraisal and
- whether you filled out the Fannie and Freddie appraisal forms the way that each appraisal orderer demands and
- provide any and all additional information that the orderers demand regardless of what USPAP, Fannie and/or Freddie publish in their standards and guidelines.
So you don't think you needed a college education to be able to fill out a form? So you think you will be communicating that to your congressperson?
Why don't we just provide training classes on how to fill out forms as other businesses do rather than make someone think they need college education to do that? You might also ask your congressperson that question if you do write a letter.
It was a pleasure meeting you. I can tell from the interview that you are exactly the kind of new blood we need: you appear very professional, very honest, speak like you are ethical in all aspects of your life and your philosophy of life and I do believe you when you said you just wanted to provide an honest service for the benefit of those who are buying or refinancing the single largest investment they make in their lifetimes--their homes.
I would be interested in hearing what you decide to do for a career. Thank you for the opportunity to meet and chat with you.
Author: R. James Girardot [ aoi@oz.net ]
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