Mike,
Let's put aside the fact that residential appraisal as we know it is currently is a state of flux, to put it mildly, and that it is threatened by the trend toward using automated valuation models (AVMs) instead of appraisals for a large percentage of SFR mortgages. And this threatened market is precisely where you are pulling your potential income estimates from. Read through this forum going back even just a couple months and see how much concern appraisers have about the AVM threat. Many appraisers will tell you that you are contemplating leaping into a dying profession.
Instead, let's talk about your income projections. 10 appraisals a week as an average means that for every week you only have five orders (and there will be several weeks like this every year), you'll have to be able to pull off 15 orders in another week. Of course, there's a difference between doing 10/week and getting paid for 10/week.
I live in SoCal and spent my first 5 years in appraising covering the 4 county area, working from north Orange County. Yes, it is indeed the land of the tract house; and yes, there is probably no easier geographic area in the world to work in from a technical standpoint. Homogenous construction, large tracts of conforming neighborhoods, high quantity and high quality data. Exactly the same features that contribute to AVM accurancy and utility. SoCal is an AVM's dream market and will possibly be the first to fall if AVMs are successful in taking the majority of the residential market from appraisers.
But let's get back to the numbers. If you're doing mostly 2055/Exterior appraisals, you may very well be able to average 2/day. However, the volume won't hold that steady during the course of any year. All it takes are a couple slow weeks here and a couple slow weeks there for your average to go down in flames. The holiday season usually slows down quite a bit for about a month. Then there is the pace necessary to put out 10/week. We're taling about driving 1,000 miles a week. You need to ask yourself how many years you can keep such a pace going. I know a lot of people, in SoCal, who burned out ofter only 2 or 3 years like that.
The other thing to remember is that our business is indeed cyclical and is now being fueled by the lowest interest rates in memory. Once these rates go up even 1%, a lot of the volume (like about 70% of it) will come to a screeching halt. Once the price appreciation trends in the area stabilize (interest rates going up could cause that) and there is no more new equity on which to base a new loan, the refi volume will stop. These are both situations that can occur at any time and will eventually happen just as sure as the sun rises in the morning.
Ask all you appraiser friends in SoCal how they were doing during the early and mid-90's. Ask them how many of their peers from the '80s are still in the business, and how many of them were unable to make a living during the slow periods. That's if any of them have even been around that long. Your fixed expenses do not decline just because you only have a couple of maybes to work on this week. It will cost you $1,000 a year in California just to maintain your E&O and your license, and that's if you don't do a single appraisal, own a single piece of equipment, subscribe to any data sources or use your car. If your license lapses for 2 years (like during a lean year), you'll have to start over from scratch.
You are not just talking about changing jobs, you are talking about a career change in which you will have to survive every year, with some years being easier than others. You also aren't talking about supporting only yourself because you also have to support a family. This raises the stakes to a do-or-die level. Ask me how I know. Even so, the money should be the least significant factor in this decision. Since the potential income is the main gist of your question to us, I'd guess that isn't the case with you.
No one on this forum is saying it flat can't be done, but I will tell you that even in SoCal, not just anyone can pull off 10/week. An average of 3 hours per assignment is not typical at all, unless they are cutting corners like not using MLS and/or not trying to verify any of their sales. Either of which will eventually cause some serious problems with the OREA. My average on a tract house with no big glitches is about 5 hours for a full URAR, and maybe 1/2 to 1 hour less for a 2055/exterior inspection only. I suppose if I were only doing SFR appraisals my times would go down a little bit, but not that much. 4 hours of driving every day is still 4 hours of driving.
Not everyone has what it takes to be successful in our profession, which is why only a fraction of the people who take the classes end up earning a permanent license. Ask around and see if I'm exagerrating. I've taught the appraisal CE courses for years, and I can tell you that there are a number of high volume appraisers out there who have only a very superficial understanding of what they're doing. Further, I know of a number of appraisers who had difficulty in getting their experience log past the OREA because they had started out working for a high volume shop wherein the typical appraisal reports were substandard in some significant way(s). I've know of trainees being directed to take more education classes, pay fines and do more hours of work; and of their mentors being required to pay fines and take discipline because an entire fee shop was in violation. Oh yeah, and the trainess still didn't get their license right away after that. In short, what I'm saying is that the fact that an appraiser is busy is not always a sign that they're any good. Sometimes yes, sometimes no. You need to look before you leap.
What I would recommend you consider is to take the courses, pay the fees and get your trainee license. Start working the appraisal gig on a part time basis for 2 months, like during the weekends. You might be able to schedule 2-3/day on your weekends and spend your evenings during the week writing them up and researching your next week's assignments. If you (and your mentor) are able to get all these appraisals you do in the first couple months past underwriting without any serious glitches, then that is probably an indication that your mentor is doing the right thing and that you have some potential for making it to journeyman level at some point in the future. It should also give you an idea of the amount of work necessary to do 10/week as an average.
If, after a 2-month period, you find that you love the work and that nothing else compares, then go for it with our blessings. Until then, you should keep your day job. Think of your family.
George Hatch
