Commerical And Industrial Vs Residential

[Walter Kirk]

An Appraisal is an appraisal period. Some of the factors considered in a residential appraisal are different from some of the factors considered in a commercial appraisal because the motivations of the buyers are different.

Residential appraisal is considered easier since there are more residences than commercial properties and less variables in residential properties. Also most residential appraisals are reported on forms while commercial reports are reported as naratives. If you can find a mentor who does commercial work and who is willing to spend a lot more time with you than a typical residential appraiser by all means try it out.

I think that it would be more practical for you to begin with a residential appraiser.

 

[Dean Brand]

Thanks in advance for everyone's feedback.

Figured if I could learn commercial first than I'd be all set when I opened my business (to do both). However, I think the residential appraising will give me more flexibility to run my rentals. In this case I could run both. Much better suggestion.

I did in-fact get hooked up with an excellent lady who is providing a nice hourly wage for the first 3 months and once acclimated fee split down the middle, for work given and work brought in.

Think this will work much better for me.

Dean.

 

[Walter Lea Thomas]

I currently perform both residential and income property appraisals. Like many others, my residential business has dropped off significantly in the last several months. I prefer commercia/industrial work myself but I noticed one post saying that you will probably find one or the other better suited to you. I will say that since I started, many years ago, I've seen a lot of the appraisers I knew as residential appraisers then have become income property appraisers now. I've not seen much in the reverse. I guess I've seen more people start in residential and later make the move and it will probably bee easier, since there are many more residential than income propert appraisers. If you're totally undecided after all other considerations, go for the most money. :*)

 

[Mountain Man]

Commercial... residential, two very different creatures. Like George said, the learning curve is longer with commercial, but it's much more financially rewarding. I've left the residential field behind because of too much competition and fees going down to less than what I was making in 1993. Did one residential this past week as a special favor, they needed a CG and I was the only one approved. I've almost forgotten how! I looked at the new forms, and felt like a newbie all over again. :icon_lol: Holding my breath waiting for the UW to call and tear me up... I’m use to doing things my way and not being questioned with silly stipulations.

 

[Smokey Bear]

The first is with a residential firm, and I want that so I can open my own business.

This worries me. If you're doing res work on the new Fannie forms, your supervisor is signing that YOU are THEIR employee or IC. Also, the IRS doesn't recognize trainees as ICs, they are employees and your employer has to take out taxes for you, and pay social security, unemployment, worker's comp and disability on your behalf.

 

[Walter Lea Thomas]

Cynthia, first, I think you'd be wise to check with the IRS, if you haven't done so. When I started out a number of years ago, I was an Independent Contractor and filed for taxes that way. There were certain conditions that must be met and I don't remember them all right now. It may be as you say and not allowed at all anymore. But I would check.

As for starting your own business...that's probably a good idea but don't get in too much of a hurry. Also, I would suspect that someone who is going to hire you as a trainee will also have a non-compete clause in the contract. I don't even know how enforceable they are in court but I wouldn't want to be bucking one. Having your own business is nice but it ain't always everything it's cracked up to be either. I've been at appraisal a good long time and I still wonder if I'd be better off sometimes with another appraiser. Of course, I'm a poor example, since I work in an area that I realize is not terribly active and stubbornly want to stay here because it's home. And I could easily eat up every dime I make joining various MLS's, professional affiliations, ERC, AppraisalUSA.com, Appraisal.com,dues for this and dues for that, software, equipment, etc., etc. When business is slow, there is nowhere to turn except to get out and pound the pavement trying to get new clients (probably ought to do that all the time). And the bills, like for everyone, keep coming but then you have all the extra bills. WOW! Didn't I paint a rosy picture! I think I just depressed myself. Do keep in mind though that if you're in a good area and you work hard, having your own business can be very rewarding. Just don't go into it with blinders on.

Anybody need a good staff appraiser near Milton, NC??? :*)

 

[Phil McDonald]

Commercial Training

Hello Dean,

I was faced with a similar decision when I entered the appraisal field over 10 years ago. It was an easy decision for me. I interviewed with a few of the high volume residential shops and had no interest. What I was looking for was training. I wanted to spend my time in a place that would allow me to learn everything I could about appraising.

I was fortunate when I found my mentor. He did about 80% commercial and 20% residential. He spent the time required to teach me how to think, what to do, and what not to do. I received my commercial experience as a trainee and it was the best decision I made.

Had I not received my commercial training when I did, then I would have most likely remained a residential appraiser forever. After I became Certified, I was ready to do my own thing. I doubt that I would have stopped doing my own thing to go back and work as trainee with a commercial firm.

Keep in mind, there is a trade off that you will make. If you want to receive a high level of training, you will be a better appraiser down the road, but you are likely to make less money during the training period.

God Luck
Phil

 

[Jim Onderisin]

Maybe the answer is different depending on what area you live and what age you are. If I were younger without responsibilities and, did I mention, huge health insurance premiums, I'd start out in commercial appraising given the opportunity. That's just me.

I asked the same question you did to the veteran appraiser who trained me. He said that, in our area, residential appraising is still the bread and butter work even for commercial appraisers.

 

[Smokey Bear]

Cynthia, first, I think you'd be wise to check with the IRS, if you haven't done so.

As a matter of fact, I HAVE researched this issue and revenue rulings etc, and the majority of my law courses ICs because they need training and supervision. Licensed appraisers can be ICs because their license allows them to work indepenently. And even though you filed as an IC, that doesn't mean you filed correctly, it just means that nobody looked into it. I've written on this many times on the forum.

Also, you still haven't overcome the Supervisor's Cert #3 on the new Fannie forms that say that the supervised appraiser is an employee or IC of the supervisor. (Fannie couldn't care less about tax issues.)

I'm not the only one who takes this position, there is an Appraisal Independent Contractor's Defense Manual out there, written by an appraiser and a lawyer, that basically shows you're hosed if your IC trainee files for unemployment or an SS-8 Determination of Worker Status with the IRS.

 

[xm4yb7]

Maybe the answer is different depending on what area you live and what age you are. If I were younger without responsibilities and, did I mention, huge health insurance premiums, I'd start out in commercial appraising given the opportunity. That's just me.

I asked the same question you did to the veteran appraiser who trained me. He said that, in our area, residential appraising is still the bread and butter work even for commercial appraisers.

I don't really agree with your mentor. Most commercial guys we know are just as busy as us, and we are completly slammed and have been for a few years. We send all residentail jobs to other firms because there is no way we could take on those asignments, and still finish our commercial jobs. My boss has seriously contemplating going to strictly commercial at our office because our percentage of revenues from residentail has become smaller and smaller every year.