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Cooper8

Thread Starter
Freshman Member
Joined
Feb 23, 2019
Professional Status
Appraiser Trainee
State
Pennsylvania
I am currently a Licensed Appraiser Trainee in the state of PA, working under my supervisor who is a Certified General Appraiser. He is a sub contractor for a Certified Residential Appraiser. It is just the 3 of us in this office doing appraisals.

Before I joined in as his trainee, my supervisor was getting a 60/40 split. Once I joined, it became a 50/30/20 split. Supervisor - 50%, Owner = 30%, Trainee = 20%.

At this point in my training I have the primary responsibility for all aspects of the appraisal. My supervisor is no longer required to come with me on interior inspections, etc. He just reviews my reports, signs his name and we include my info in a supplemental addendum.

Both my supervisor and myself have become frustrated with the owner as she takes the majority of orders, and gives us the "leftover", i.e. more complicated appraisals she doesn't really want.

For instance, last week she did 7 appraisals and we did 2. Is this common practice? This is a slow season in our area (being winter) so business is slow for everyone right now. She has bills to pay (as we do) so I understand her getting priority, but this seems unreasonable to me.

As a result I have been asking my supervisor if he ever considered going out on his own. At this point he is not interested because he is nearing 70 and is not very tech savvy etc. He is looking to slow down (hence why he is training me) and not take on any new responsibilities. You probably see where I am going with this.

I am tech and business savvy and planned to run my own appraisal business at some point in the future. So lately I have been thinking, why not now?

I have only recently started appraising, but I have worked on and off in real estate since 2003. My thought is that I can own the business and hire my supervisor as an independent contractor and offer him a much more generous split than what he is receiving now. I know It seems backwards for the trainee to hire out the supervisor, but would it make sense in this situation?

Has anyone heard of this type of arrangement? Does anyone think this set up could be problematic when working with AMC's? We have good relationships with several local lenders but the majority of our work does come from AMC's.

I have already started figuring out the initial and monthly investment on my part to start the business, (E&O, MLS memberships, Appraiser software purchase, tech support, other business costs, etc). Even with all my start up expenses, over the course of just one year, both my supervisor and myself could make more money (doing less appraisals) by going out on our own.

Would love some feedback on this idea! Especially if anyone out there has done this before!
 
Last edited:

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
If it turns out to be legal....
Brilliant!!!
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Agree with UC above.

You can own anything. If your mentor is the front man to get the orders, the ownership of the company doesn't matter. You will have problems getting the orders as a trainee, even if you own the company. No appraiser has to own an appraisal management company, and as long as you have less than 15 appraisers working for you, you are not an AMC.

Good Luck.

.
 

Cooper8

Thread Starter
Freshman Member
Joined
Feb 23, 2019
Professional Status
Appraiser Trainee
State
Pennsylvania
Okay. That’s what I thought. Doesn’t matter who owns the company as long as my mentor/supervisor is the one getting the orders. I have no interest in becoming an AMC, Just in owning my own appraisal business. ;) thanks for your feedback!

Agree with UC above.

You can own anything. If your mentor is the front man to get the orders, the ownership of the company doesn't matter. You will have problems getting the orders as a trainee, even if you own the company. No appraiser has to own an appraisal management company, and as long as you have less than 15 appraisers working for you, you are not an AMC.

Good Luck.

.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
You could also own a RE Sales company too.

Why limit yourself?

.
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
For instance, last week she did 7 appraisals and we did 2. Is this common practice?
Yes ... it's her company. I'm not saying it's right or wrong, but does not sound "unheard of" either

And ... I think you answer your own question in your next sentence
This is a slow season in our area (being winter) so business is slow for everyone right now. She has bills to pay (as we do) so I understand her getting priority
Her, being the owner, and your employer, has higher responsibility/overhead than you as an employee.
It may not seem that way to you right now as a trainee, etc but ... it doesn't seem "unheard of" nor "unreasonable" (to use your terms)

As I've said numerous times on here, you have to WANT to become an appraiser, and it's not for everyone. Yes, there should be some "reasonable" and "professional" balance to that (pay/income/salary should be part of that) But at the end of the day, you have to WANT to do the 2+ yrs to complete that training. It's not for everyone
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
My thought is that I can own the business and hire my supervisor as an independent contractor and offer him a much more generous split than what he is receiving now. I know It seems backwards for the trainee to hire out the supervisor, but would it make sense in this situation?

Has anyone heard of this type of arrangement?
Maybe each state is different and I'm not going to look it up, but ... Past CE courses (live courses, NOT online) seems that this becomes a conflict of interest

As the instructor (I've taken several CE with him and this always comes up in the STATE LAW part of the course) - I paraphrase - basically, how can a "supervisor/mentor" do their job if someone below their Certification, AND IS A TRAINEE, OWNS the company .... i.e. As the owner (BUT AM A TRAINEE!) I was just wondering if MY (owner) opinion of this property states XYZ, what do YOU (Supervisor, but EMPLOYEE!) think of THIS analysis? Oh you disagree? Bye Bye ... Next employee .... and so on ...

That's why it doesn't work
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Okay. That’s what I thought. Doesn’t matter who owns the company as long as my mentor/supervisor is the one getting the orders. I have no interest in becoming an AMC, Just in owning my own appraisal business. ;) thanks for your feedback!
Consult a CPA/Tax Accountant and an Attorney before doing anything else. Do a "what if" ..........:
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
Maybe each state is different and I'm not going to look it up, but ... Past CE courses (live courses, NOT online) seems that this becomes a conflict of interest

As the instructor (I've taken several CE with him and this always comes up in the STATE LAW part of the course) - I paraphrase - basically, how can a "supervisor/mentor" do their job if someone below their Certification OWNS the company .... i.e. As the owner I was just wondering if MY (owner) opinion of this property states XYZ, what do YOU (Supervisor, but EMPLOYEE!) think of THIS analysis? Oh you disagree? Bye Bye ... Next employee .... and so on ...

That's why it doesn't work
In this specific scenario....
The employee has the upper hand....
70 years old employee not looking for volume....
And employer a trainee that will require at least 5+ years to get on appraisal panels....
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
In this specific scenario....
The employee has the upper hand....
70 years old employee not looking for volume....
And employer a trainee that will require at least 5+ years to get on appraisal panels....
UC, the OP's question for him/her to own their own business
My thought is that I can own the business and hire my supervisor as an independent contractor and offer him a much more generous split than what he is receiving now. I know It seems backwards for the trainee to hire out the supervisor, but would it make sense in this situation?
Not for his/her immediate supervisor to open up their own business and then hire them as a trainee
 
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