An Open Letter To Appraiser Wanna-be's

[Restrain]

Every week I get a letter (or 3) from someone wanting to be an appraiser. They range from the housewife who hasn't worked in the real world for 5 years and thinks that this would be cool, to the unemployed techie who knows the insides of a computer but knows nothing about real estate. I got one last week from a former architect. He really needs to go back and go to work being an architect-pays much better.

Guys, the business is off from last summer. We are no longer 6 weeks out. We are able to make the payments on the home, car, etc., but we are cutting back on expenses. We don't have the money to spend on a trainee or the time, and we really don't want to take on a two-plus year commitment that we may not be able to honor.

I know that this sounds discouraging to those of you who want to go into this business but you need to see the side of a small appraisal firm. I know that there are large firms (sweatshops) or start-up firms that may want to take on a trainee. If you can search them out, great. Go for it. But things have slowed down for most of us and we don't see a significant upturn for the forseeable future. The Boom is over, guys and we are business people who have to react accordingly.

The ONLY way I would consider a trainee would be if the trainee could generate the additional business to support the trainee, which is very difficult to do. The trainee would have to come into the office with the business in hand, not just a promise of trying.

So, for those of you who are reading this board trying to decide what to do after being laid off at Megacorp, think long and hard before investing your money and time in this field. There are other avenues of employment that will generate income far faster than appraising. Tax representation, home inspection, real estate sales..all these in Texas can be licensed in a matter of a couple-three months and allow the person to advance their business potential as opposed to a minimum of two years in a business where the prime users (lenders, etc) are trying to eliminate it.

Again, this is not to sound negative, but rather to give a straight-forward view of the industry at this time. At least if you decide to pursue this field, you should know what you are facing.

Good luck.

Roger Strahan, IFA

 

[Willie]

Roger, you are just saying that because you don't want any competition. :rofl:

 

[Willie]

Roger, you are just saying that because you don't want to train competition. :rofl:

Folks, it really is not that way! Really. :lol: :rofl:

 

[Dee Dee]

Adding to Roger's post:

I think that trainees and wannabe's also need to understand that the industry as a whole is going through a serious purging process.
There are quite a number of licensed appraisers who are taking on countless trainees and signing off on their work who are either being investigated or on the verge of being busted for fraudulent practices. Unfortunatately it is up to the rookie to figure out if they are a part of the problem, and if so they can be held accountable for it.

Here are some things that trainees need to consider if they want to avoid losing their license or being called to court before they ever even get in their hours for full licensure, or in some cases after they think they are home free:

First and foremost....your supervisor signs that they physically inspected the property when you know that he/she didn't.
Don't think you're off the hook just because you didn't sign at all but are mentioned as having assisted in the assignment. The lender/borrower/buyer have all been misled to believe that an experienced appraiser participated in the physical inspection of the property. Playing stupid while frantically logging in hours is not going to hold up before your state board or a court of law, because knowingly participating in this deceptive practice is a violation of USPAP, which you are held to as a licensed trainee.

You may not be dragged into the spotlight now, but a couple of years from now you might be, most likely if the homeowner defaults and the lender starts looking a little harder at the appraisal.

A common thing that trainees don't understand is that just because the appraisals go through underwriting and the loan closes, it doesn't mean that the file is closed forever. A couple of years down the road if the homeowner defaults, that appraisal with your name mentioned somewhere on it is going to be dusted off and scrutinized. Sure, the supervisor will be the first on the firing line, but how are you going to explain that you did a couple hundred appraisals under him and were convinced that he/she actually inspected the properties when the homeowners will easily be able to identify YOU as the only person who entered the home? You're going to look like an idiot if your supervisor's office is 100+ miles away.

Stand back and take a hard look at how your supervisor runs their business.
If there are an unusually high number of trainees working under him or her, you KNOW that it's physically impossible for that supervisor to be inspecting all of those properties. A full blown investigation into an appraisers files, even if one of yours wasn't the one that triggered the investigation, will eventually bring your name up for questioning.

MAKE SURE you keep accurate copies of your work file, which should include a copy of the final report that exactly as it is sent to the lender. If your supervisor has access to your digital signature, they could be changing the report, or adding or removing your signature without your knowledge.

 

[HelenTestin]

I am approaching the end of my 1st year appraising. Things are slow, but I am surviving as a trainee. However, I would have to say that this is probably the worst time in years to consider doing this as a career. I average around $400 a week, which if I were still working in insurance would not even be enough money for me to consider rolling out of bed in the morning. I grossly underestimated the kind of money that one can make as a trainee. I do continue to do it because...

1) I like it.
2) I dont feel like going back to Insurance at this time (or ever).
3) I have come this far, and hate to not complete the training period.

I have my Real Estate Sales license. However, their are a MILLION sales people out there cutting commissions to nothing just to try to get a listing. I have known friends who sell that spent months working with couples only to see them work a deal on a FISBO themselves, and all the showings and @ss kissing was for nothing. In most New England states, it is even harder now to become a Home Inspector. I looked into it myself. People will not take on trainees due to the incredible legal liability.

As for banks trying to eliminate appraisers, it may one day happen. But, what can one really do about it? Their are no guarantees anymore. Computer jobs are going over seas and every other industry is trying to cut down the "human element" as well. I guess their is always what is left of retail work.

The one important thing to think about for those considering appraisal right now is the current slow down. Why try to enter the field when their is no work for you to do? Better to stay where you are and hopefully a year or two down the road things will pick up again.

I sometimes, even though I enjoy appraisal, wonder how I currently find myself in my early 30's punching a cash register for 15 hours a week and conbining that with appraisal to make ends meet. Will it be worth it? Only time will tell. For me it is worth the gamble. But, I would not even consider starting from scratch in this market. Run for the hills and come back when conditions are more favorable.


Helen

 

[Willie]

Helen, $400 a week? That's alot better than what I was making 10 years ago. It was $300/week. And the fees have not increased. You go girl!

 

[Jungle Boy]

All of the above are to be seriously considered.

Very accurate !

2 years in. The last month or 2 have been tough.

With 6 mouths to feed, considering a side job starting January if things don't pick up.
First gotta sit for the State Cert. exam. ( this slow down gives me extra time to study. Gotta look on the bright side ) :yellowblack: :yellowblack: :yellowblack:

 

[Tim Hicks (Texas)]

Roger, you made a very informative and eye opening post. Hopefully, it will be read and accepted because it is nothing but the truth. Unfortuantely, many refuse to accept the truth and will accuse us of being afraid of competition or somebody will expect us to train somebody anyway because, after all, somebody had to train us. I saw many a hopeful trainee including my own cousin die on the vine the last time when experienced a down turn. I hate to see it happen, but it is unavoidable.

 

[Michigander]

Excellent post Roger.

Sorry to say, it is all true, and that I agree with you whole-heartedly. I've been a full time appraiser for 15 years, and prior to that sold real estate for 5 years. Most of my work is divorce, estate or ERC, and even that is down considerably. I've got extensive education, my SRA, and it is still slow. I've worked this market for 20 years and know most of the Realtors in the area. Now is simply not a good time to be getting into the business. If the old-timers are having a hard time, just think how it is going to be for the newbies!

Reminds me of the mid-90's....

best to all, Rachel

 

[Kalum Johnson]

Just wondering how Appraisers are doing in Chicago. I just passed my exam and have found a trainer. I'll get a 65% cut of the business that I bring in. Is my situation the norm and can I eek out a living in this Chicago market.