Appropriate salary/fee split for commercial appraisers

[Gobears81]

Hello

I searched for similar topics and found several, but every situation is different. Nonetheless, I apologize to anyone that is tired of reading these types of threads.

I have roughly seven years experience and am essentially a full-time commercial appraiser. I am close to attaining my MAI, but of course, don't want to chance fate by saying that I am nearly there.

Right now, I am paid a salary, with benefits including 401k, insurance, office space provided, and 2 weeks vacation per year. My appraisal classes are paid for, as well. My current salary versus my current production equates to roughly a 20% - 25% fee split. If you factor in all benefits, it would probably be in the neighborhood of about 30%.

I am starting to bring in quite a bit of business, which is not something I could claim to a few years ago. I suspect that my current arrangement is not entirely equitable. So, my question is, what is a realistic range of fee splits (or a salary equivalent to a fee split) that I could expect?

Thanks

 

[BRCJR]

Hello

I searched for similar topics and found several, but every situation is different. Nonetheless, I apologize to anyone that is tired of reading these types of threads.

I have roughly seven years experience and am essentially a full-time commercial appraiser. I am close to attaining my MAI, but of course, don't want to chance fate by saying that I am nearly there.

Right now, I am paid a salary, with benefits including 401k, insurance, office space provided, and 2 weeks vacation per year. My appraisal classes are paid for, as well. My current salary versus my current production equates to roughly a 20% - 25% fee split. If you factor in all benefits, it would probably be in the neighborhood of about 30%.

I am starting to bring in quite a bit of business, which is not something I could claim to a few years ago. I suspect that my current arrangement is not entirely equitable. So, my question is, what is a realistic range of fee splits (or a salary equivalent to a fee split) that I could expect?

Thanks

Who pays the rent, utilities, office staff, insurance, business license, R&M, FICA tax, etc?

Factor your portion of overhead into your equation and the ratio will change.

 

[Gobears81]

BRCJR-

I agree with you. The boss has mentioned in the past that those costs tend to increase the total labor expenses by about 30% which is where I arrived at a ratio of approximately 30% of salary vs production. But that wouldn't count for office staff, R & M, rent, or utilities, as you mentioned.

 

[Joe Flacco]

I know a commercial appraiser (not MAI) that works in a four appraiser shop and I was told she gets 40% for first 100k invoiced, 45% for next 100k invoiced and 50% on remaining amount invoiced for the year. No benefits. She seems to work around the clock but said she makes $180k+ per year.

 

[Michael S]

In my limited experience I've seen a range from about 1/3 to 1/2 depending on experience, billings, what expenses are included, and benefits.

I work on commission and there's always pressure to bill more. I would of course make more money that way but there's only so many hours in the day and I would like to spend some of them either sleeping or with my family. Depending on your situation I could see accepting lower pay for a more predictable 9-5 schedule. Staying up all night, working evenings and weekends because things are busy, etc. It's rough on the family.

I would say given your experience and the fact that you're bringing in some work that at least 40% of gross billings would be reasonable. If your boss balks at that then maybe make an agreement to increase your salary or go to a fee split once you get your MAI.

 

[PL1957]

Hello

I searched for similar topics and found several, but every situation is different. Nonetheless, I apologize to anyone that is tired of reading these types of threads.

I have roughly seven years experience and am essentially a full-time commercial appraiser. I am close to attaining my MAI, but of course, don't want to chance fate by saying that I am nearly there.

Right now, I am paid a salary, with benefits including 401k, insurance, office space provided, and 2 weeks vacation per year. My appraisal classes are paid for, as well. My current salary versus my current production equates to roughly a 20% - 25% fee split. If you factor in all benefits, it would probably be in the neighborhood of about 30%.

I am starting to bring in quite a bit of business, which is not something I could claim to a few years ago. I suspect that my current arrangement is not entirely equitable. So, my question is, what is a realistic range of fee splits (or a salary equivalent to a fee split) that I could expect?

Thanks

PM me and I'll be glad to talk to you ...

 

[chad hampton]

Being on salary doesn't make much sense for either side. So it doesnt matter if your appraisals bill $2,500/mo or $25,000/mo, you still make the same?

I know a few gen appraisal, you are ind contractors, they make 40-50% of what they bill for each month. Most all of the overhead is paid by the owner.

If you are bringing in business, I'd re-negotiate those jobs.

 

[Terrel L. Shields]

I used to think 30% of my income was "high" for office and overhead. Today, I suspect my overhead is well above 50% - auto, office, software, fees, insurance, licenses, E & O, etc etc.....and you will have to "manage" the office meaning you won't have 40 hr. to work but will have to go after hours to get production up.

If you make $50,000....I bet you are doing "OK"... if you are working full time and making only $30,000...well then I suspect you might do better on your own.

 

[Doug DeMars]

So many variables to think about...

In any case...if you have a good relationship with your mentor...I'd be frank about your expectations and ambition.

I just started my commerical career/training with a local MAI/mentor while keeping things going with my solo residential business (15 years on the rezi side is punishment enough ).

I'm being hired strictly as an IC with a 30% split for the jobs I'll be working on. IMO, this is VERY generous since I'm going to be a PITA for a while...and I know just enough to realize I don't know squat. Of course, I'm on my own with health, IRA, vacation, etc...plus I have my own home office that I work. I'm not sure how this is all going to go. My goal is to get my MAI...but first things first with getting my general license, etc.

My mentor has realistic goals and plans and I wouldn't be surprised if there would be a partnership down the road? He's got 30+/- years of commerical experience but has done very little with residential. I also plan on getting my SRA...so that's going to look good when "we" sell our services within the marketplace. Whatever happens, I'm thankful I found this opportunity to expand my career. In some ways, I've always liked being "on my own"...but there are significant advantages to joining forces and having the whole be greater than the sum of the parts. Then there's his exit strategy...he's only 10 years my senior...but he's already mentioned that he's not going to do this forever.

 

[J Grant]

Perhaps keep the fee split the same for the jobs fed to you by the office, but negotiate as high a fee split as possible for the work you bring in.

Start at 60%, for example and see their response. This is work they would not otherwise have, correct? Would seem anything less than 50% for you is cheap but that is jmo.