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Contract Training

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Steve Gish

Sophomore Member
Joined
Apr 28, 2003
I was approached by an individual and presented with a "possible" offer for training, we did a home inspection together yesterday:

His offer:
Two year contract (so I don't bolt after I get my hours), I get 100% of my own clients, 50% fee split. 10 apps as a team, 10 apps closely supervised, then I'm on my own, he doe's the "did not inspect" thing.

My counter:
Two year contract, 50% split, you feed me minimum of 3 appraisals a week until such a time as my own clients meet that, starting from day 1 (as a licensed trainee), with a buy out clause for $XX,zzz should either one of us want to break the contract.


I can live on $1800 (150x12) a month for a while, I already have all my tools and car's paid for. BUT and here's a big BUT... he's got 2 months as a Cert. under his belt, 2 years in industry. Seem's sharp enough, but talking to him, he only has 1 main client feeding him 50% of his work and he's real careful to keep him happy. If he looses that client, there go my 3 a week (thinks me). He does seem to care about USPAP, quotes it frequently, from a trainee's viewpoint he seems proficient enough to teach residential. He didn't say specifically, but I get the impression he's doing 8-10 apps a week.

He's thinking about my counter offer and is supposed to get back with me in a couple of days. I get the impression he thinks I'll make it, it's just "does he want to spend the time and effort for the return". He already said that if he decides not to embark on a trainee relationship he will recommend me to some other appraisers.

1) I'm not sure I even like the arrangement, but a guy's gotta eat and it's awful hungry around here.
2) I'd like to be in a position to learn commercial work as soon as possible, not really an option here.
3) He'll start training now (2 months 'til my trainee licensing), I can count the hours, but will sign no reports.
4) Our market is SATURATED with appraiser trainees begging for a place to work.

What say ya'll
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
My first concern is 10 inspected, 10 that are basically proof read. That does not sound like much training to me....... maybe a months worth??

Anyway, if both of you can agree on an arangement, I'd say track some leds, and go make the calls together. I don't think many lenders will be willing to send too many request to a trainee. But if they saw you both, knew you both were going to work together, they might give you a shot.

Other than that, get on the net and contact some AMC's. I know we rag 'em, but it's some work to get you started. You can slowly fire them as you replace them with better clients.
 

Steve Gish

Sophomore Member
Joined
Apr 28, 2003
I had that same thought. One of the things I did think about was we could probably get those 10 out of the way in the next 2 months while I'm still in trainee class. I won't get paid, but I'll have the experience.
 

Frank Lostracco

Junior Member
Joined
Mar 13, 2003
Professional Status
Certified Residential Appraiser
State
New Jersey
Check with your state license board, here in Delaware you can request to go out on your own only after you have 250 hours (which is about 50 inspections) of experience after you get your trainee's license.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Will he be available to help on those non-cookie cutter (the lender didn't tell me it was THIS) deals? I guess the 10/10 thing to start is okay, but I would expect him to be reasonably available for questions/help when you just don't know which way to go. And how would he be willing to bill that, 50/50 split on those occasional tough ones? Later on, after you get the basics, that's how you really learn....... taking the tough ones. I guess I just have a problem with a set training schedule like that. If it is a typical easy job, no problems. But on the tough ones, I'd expect he at least inspect it with me, answer some questions, and review my work before it's sent out.

This is a profession where you need someone close by to bounce things off of every now and then. Even my father, the Big Kahoona of real estate, will call me on occation for my humble opinion. We do the big and tough ones together.
 

Steve Gish

Sophomore Member
Joined
Apr 28, 2003
but I would expect him to be reasonably available for questions/help when you just don't know which way to go.
Since he'd be signing as supervisor, he WILL be available or they wouldn't get done. ;)

And how would he be willing to bill that, 50/50 split on those occasional tough ones? Later on, after you get the basics, that's how you really learn....... taking the tough ones
I'd think that's where he earns his 50% on all the ones he get's paid for which I don't need any assistance. It's in his best interest to ensure he/we don't end up on the wrong side of USPAP and put out a quality product, afterall it has his name on it too. And we do have a very high percentage of cookie cutter work in my area.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Steve,

What do you have to pay for that 50%? You state that he only has 2 years + a few months. If your in a high area of cookie cutters this may be all right for training and you can come here to get advice on the real Head scrachers. You also state that you want to learn commercial work in the future and with him there is no potential. Why not continue to look for a mentor that does both . The buy out clause would concern me though. Also in regards to the pay does it increase over time? Just some things to think of for right now.

Ryan
 

Steve Gish

Sophomore Member
Joined
Apr 28, 2003
The buy out clause would concern me though. Also in regards to the pay does it increase over time?

The buy-out clause was my idea and although specific details were discussed beyond what I've said, I expect it'd stay at 50% until the 2 year point. Yes even after I'm Certified.

What do you have to pay for that 50%?

I don't have to pay anything up front (maybe E&O), he get's his on the back end. It's tough finding anybody who will even talk to a new trainee, let alone let them in the door. The buy out clause will give me an out a year from now if I should decide to go on my own or move to a commercial office once I get my Cert. If things are going that well, then it'd take me roughly 67 appraisals or 5-4 months to recover a 10K buy-out. (Actual buyout figure hasn't been discussed).

Why not continue to look for a mentor that does both

This contract won't start until we agree on everything of course, and I am still looking. The buyout clause will again give me a release where we can both feel ok about the deal if say 6 months down the road a high power commercial appraiser hears about me and just has to have me. He gets some money for his training time, I get some experience and the networking into a better position with establiblished clients of my own. It's hard enough to get a SFR office to take a trainee, I can't imagine how long I'd go hungry looking for a commercial opportunity to start out in.

Great questions, great idea's to think about, thanks. I may or may not do this, he may back out, I'd only give him 50/50 chance right now of continuing this line of discussion with me. He was that unsure he wants a trainee. But it all makes for interesting discussion here. This also may open up some people to new ideas for letting trainee's in.
 

Tim The Enchanter

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Doesn't sound bad for a trainee. As you noted it's real hard to get your foot through the door and get that trainee position. :D
 

gary white

Freshman Member
Joined
Jan 29, 2003
Professional Status
Real Estate Agent or Broker
State
Maryland
You want to be a commercial appraiser??? Regarding potential commercial work, is he Certified General? For you, after you get your state appraisal trainee license, it now takes 3,000 hours of total appraisal work time, (1,500 hours must be commercial appraisals -actual hours) - 180 hours (documented) and accepted educational training, plus 30 months of documented log sheet experience to get a (CG) commercial appraisal license (plus take the advanced test again and submit 3 each complete or self contained demo narrative reports), AND he must be qualified and state approved to sign all of the reports... Check out the current and new upcoming requirements on the Appraisal Foundation website - for all states: (It gets worse....) ....Sounds like a pig in a poke and wishful thinking. Find a MAI willing to sign you up. .. good luck....
 
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