Commerical And Industrial Vs Residential

[xm4yb7]

Of course a residential appraiser who appraised in multiple states would know more about it than one who stays in one area only. It's just not very practical to do that, so you don't see many in the residential field in multiple areas.

They may have experience in more areas but I would bet that they are not as competent in specific areas as another appraiser who focuses on that area only. You said you work in your surrounding area and know it like the back of your hand. Would you have that same knowledge if you only did a few assignments there and the remainder throughout your state?

I can only talk for our company but if we were hiring an experienced appraiser and a certified appraiser applied for the job with “a little” experience in a many property types, they would not get past the first interview. We would have to spend too much time taking someone with general knowledge and making them competent to appraise a specific property type. We have people who focus on two fields at a time retail, industrial, apartments, etc., and the learning curve was still a few years, and that was when they dealt with only two property types.

I still feel that it is better to pick a couple areas to become great at, then to appraise everything and be ok at them. Once you have learned an area, then diversify and learn a new property type or two, but become competent first.

 

[xm4yb7]

Think so? Most of the lawyers I know (and I know a lot of them) have experience with just about every kind of beginning law you can name. They tend to specialize after passing the bar.

But our industry does not have real "appraisal schools" where you learn a little about every property and pick a field after you are licensed. Lawers and doctors specialize in a field to become experts in that field and provide the best possable service in that field. An appraiser that does everything can not be an expert, there is just not enough time in the day to know everything about everything in real estate, and therefore cannot provide the best service possable.

 

[Steve Owen]

Were they audited specifically on that issue, or was it just part of an audit for another reason? If it's specifcally on that issue, it's because someone has filed an SS-8, which would result in a private letter ruling.

Don't know. I only know what I was told. But... the person in question knows a lot of Missouri appraisers, and she stated it in the multiple... "I know appraisers who have been audited while they were doing that and they survived the audit."

That's all I know.

 

[Steve Owen]

But our industry does not have real "appraisal schools" where you learn a little about every property and pick a field after you are licensed. Lawers and doctors specialize in a field to become experts in that field and provide the best possable service in that field. An appraiser that does everything can not be an expert, there is just not enough time in the day to know everything about everything in real estate, and therefore cannot provide the best service possable.

Never said that they could know everything. But, I've heard the old line that the best appraisers are ones who specialize in one specific property type... and, I have to tell you, that's Bull! Some of the worst appraisals I ever saw were from so-called specialists. And, come to think of it, a couple of the worst doctors I've had were specialists, too. You could choose to be a cancer specialist and you'd make more money than a family doctor... you also might misdiagnose the flu.

We had one of the so-called specialists whiz into town and appraise a piece of land for a truck stop a few years ago. All he specialized in was knowing what the company was willing to pay... apparently. Missed it so bad it took over 9 years for inflation to finally catch up and make him right.

Simple fact is, appraisal is a multi-faceted profession. That does not mean you will know how to do everything... no one does. But, the more experience you have, especially in the early years, the broader your career will be. That doesn't mean that you can't specialize if you want... I know a guy who only does motels, and he does a good job from what I can tell. But, there are too many different property types out there for each property type to be appraised by specialists. The industry also has to serve our clients, just as there is a need for family doctors because that profession also has to serve its clients.

 

[xm4yb7]

We had one of the so-called specialists whiz into town and appraise a piece of land for a truck stop a few years ago. All he specialized in was knowing what the company was willing to pay... apparently. Missed it so bad it took over 9 years for inflation to finally catch up and make him right.

Simple fact is, appraisal is a multi-faceted profession. That does not mean you will know how to do everything... no one does. But, the more experience you have, especially in the early years, the broader your career will be. That doesn't mean that you can't specialize if you want... I know a guy who only does motels, and he does a good job from what I can tell. But, there are too many different property types out there for each property type to be appraised by specialists. The industry also has to serve our clients, just as there is a need for family doctors because that profession also has to serve its clients.

I have a police officer as a neighbor and he is a jerk, but that doesn’t mean that all police officers are jerks. One appraiser you know "specializes" in a specific property type and has no idea what he is doing, so no appraisers should specialize? We know that one comparable does not make a market. A few experiences does not make something reality.

This whole debate comes down to competency. Become competent in one area first. You don’t have to "specialize", commercial or residential is as specific as you probably need to be in beginning, but pick one. After you become an expert in that area, then you can diversify. Appraisers with a general knowledge of most property types are a dime a dozen, the ones who are truly knowledgeable seem to last the test of time.

 

[Fred]

Appraisers with a general knowledge of most property types are a dime a dozen

Not in this chat room.

Kyle and Steve O
Both of you write as if analyzing data is not a skill set unto itself. When you guys write of proficiency in an "area," I am not sure if that means region or property type.

 

[Steve Owen]

I have a police officer as a neighbor and he is a jerk, but that doesn’t mean that all police officers are jerks. One appraiser you know "specializes" in a specific property type and has no idea what he is doing, so no appraisers should specialize? We know that one comparable does not make a market. A few experiences does not make something reality.

I never said he had no idea what he was doing. I believe he was competent in every area except one.... geographical. And, I've seen the same thing play out over an over again. When a specialist comes into the area who really wants to be competent geographically, I can always tell... because they call me (and the five or six other appraisers here who know what's going on) to find out what's happening.

Some of them are very good... and most appraisers specialize to one degree or another. But:

I can only talk for our company but if we were hiring an experienced appraiser and a certified appraiser applied for the job with “a little” experience in a many property types, they would not get past the first interview.

I've been around the block a few times... this is my third career (fourth if you count those youthful years selling parts). I've been hired for jobs where no experience was necessary. I've lost out in a situation where my qualifications were higher than what they wanted to pay for. But, I've never heard anyone make such a blanket statement that some experience was so bad that anyone who had any wouldn't get past the first interview.

And... tell your guy who specializes in apartments to come on down. He'll starve to death in this market.

 

[The Warrior Monk]

I can only talk for our company but if we were hiring an experienced appraiser and a certified appraiser applied for the job with “a little” experience in a many property types, they would not get past the first interview.

<sarcasm>

Let's say that "little" experience includes a half-dozen of each of the following properties:

• Convenience Stores;
• Service Stations;
• Multitenant Office Buildings;
• Industrial Properties;
• Strip Shopping Centers;
• House of Worship;
• Municipal Structures;
• Proposed Subdivisions;
• Hotels;
• Contaminated Properties;
• Easements.

Now that's somebody who I wouldn't want working for me...experience is too spread out...plus, as we know, appraisal technique happens in a box and doesn't overlap.
</sarcasm>

 

[Steve Owen]

Your sarcasm didn't come over strongly enough, David.

 

[xm4yb7]

<sarcasm>

Let's say that "little" experience includes a half-dozen of each of the following properties:

• Convenience Stores;
• Service Stations;
• Multitenant Office Buildings;
• Industrial Properties;
• Strip Shopping Centers;
• House of Worship;
• Municipal Structures;
• Proposed Subdivisions;
• Hotels;
• Contaminated Properties;
• Easements.

Now that's somebody who I wouldn't want working for me...experience is too spread out...plus, as we know, appraisal technique happens in a box and doesn't overlap.
</sarcasm>

I made the statement to choose between commercial or residential in the beginning. No where did I say only appraise a specific property type like churches or hotels. I said that at our firm people learn two property types at a time, in general fields like retail or office, then they expand and learn new property types (ex. apartments and subdivisions). Over time they have experiance in many fields, but most importantly have competancy in all those fields also. Trying to experiance everything in the beginning just makes it longer to be competant in anything.

And yes appraisal principles overlap for most properties, but the techniques can be diffrent. The way you perform the income capitalization approach for a gas station is not the same way for an office building. Market behavior is different for retail then office. Just because most properties use the same three approaches does not mean that those approaches cross over to all property types the same way.