New Trainee Entry Pay With Tiers

[Carnivore]

OK, gals and guys. I am taking on a trainee.

Any recommendations for starting percentages with a green trainee.

Tiers, bonuses etc.

Post here or PM is acceptable.

Thanks

ps. looking to be as fair as possible.

 

[Lysander in Charlotte]

Well howdy fellow Charlottean. Don't you let that trainee become a number hitter. Charlotte doesn't need another one I'm not really worried about that.

I think a trainee should receive periodic fee split percentage increases as progress is made and less intense supervision is required. This gives the trainee a sense of progress and some goals that are more immediately attainable than certification. The obvious and largest increase should be after the first 50 appraisals after which time you no longer have to accompany on inspections.

As to where to start and where to finish, I don't have any suggestions. There are too many variables regarding who pays what expenses. One firm I know in Charlotte pays 45% throughout the training period. I've heard of others paying less.... I'll be interested in what you work out. I'm planning to take my son on board as a trainee next year.

 

[Terrel L. Shields]

You said tiers? Or, tears? like in blood, sweat, toil and ...?

If you pay them what they are worth, they will starve for a year or two. 33/67 start, 50/50 after a couple of months. After they can go on the easy ones by themselves, I went to a 60/40 split in their favor. For certified help w/o my assistance I take $50 off the top for the referral. 67/33 if I have to co-sign. But that's me, I want them around to take the overload more than to exploit for my personal profit.

 

[Tater Salad]

When I started, I was paid $50.00 a pop when the boss did all the work with me. After I could do the research and report completion on my own, he took me to 60/40. After I could sign on my own, 75/25 (but he regretted the bump-up on this one). Business slowed down, and he had to cut me off (I was down to <10 a month from my own clients over a 4 month period) and I was forced to go out on my own. So, be careful about offering too high a percentage for 2-years into the future. You can always increase it when the time comes, and you'll be viewed as a great guy instead of a $#%^$ for backing out on your word. Just my experience.

 

[Mike Garrett RAA]

Beat me to the tears pun.....darn it! Anyway, yes...have a plan to increase the fee to the trainee as they become more experienced is, in my not so humble opinion, a good thing! Martha will roll over in her jail cell.

I start out my trainee at 50% then 60% and finally 70% when I don't have to do anything but review and sign. If business gets really tough I will probably lower that to 40%, 50%, and 60%. One other thing, my trainee helps me for free doing research, entering data on the form, etc...so there is some extra compensation to me there.

 

[Pine Tree]

I don't have any trainees.. But I once worked in a large office.. Prior to current trainee requirements, so supervisory requirements were not the same.. anyway..
We has a sliding split.. 35, 40, 45 and 50 dependant upon how much was completed in a 2 week pay cycle. In theory you would be able to do more as you required less supervision. I was accompanied by the supervisor on 1 single inpsection. We were employees and not contractors to this company..
As far as freebies.. I marketed, I gave classes to brokers ( developed the class and got it approved for their CE ) and did lots of office work , setting up new clients includng AMC's, even chasing outstanding invoices, the last year I also trained new appraisers, mostly taking them on inspection and teaching them the data system, (I didn't co-sign with them) for no compensation.. SO, after 2 1/2 yrs I said thank you very much and went on my own with a pretty good understanding of what it would take to be in business on my own.. that was 10 years ago.. I sure didn't make much money those first years but it was an increadible learning opportunity and I was allowed to try anything I wanted to ... Which I did.. It really is an apprenticeship.. I appreciate the opportunities I had. but it was a two way street. Still feel I gave as much as I got.. So benfits to supervisor and trainee can be measured in more than just dollars.
Just my 2 cents.
Wendy

 

[Richard Carlsen]

Looks like the decision is already made.

Pay for a trainee should be two things:

#1 Fair for the trainee, commensurate with their contribution to the appraisal process and the out put of the company. (Their raises become effective as soon as they do.)

#2 Profitable for you as the company owner. No need to tell you that if taking on a trainee does not make you additional money over and above the time you spend on them, it is not a good business decision.

 

[Richard J. Glesser]

This is somewhat related but I'm posing a training question: From reading this and other topics, it seems that the overall opinion of the contributors is that a Mentor is obligated to inspect physically all properties with the trainees until 2,000 hours and licensing is accomplished which is the intent of USPAP and most state regulations. Again, from what I read, this is not the practice of most of the contributors who serve as mentors.

Now, for clarification and to make clear that I'm not trying to speak from a pulpit, I have not trained an appraiser since the early days of licensing when the ramifications of the legislation where not yet clear and I could merely sign-off as the Supervisory Appraiser without viewing the home while the trainee signed as the appraiser. This is not out of regard for the law but rather fear of it. In Michigan, I must give credit to the trainee for contributions to the appraisal on the certification page but sign as the primary appraiser, thereby stating that I physically inspected the home. While this is commonly overlooked by the state regulatory division, my luck would have it that I would be their test case in the strict enforcement.

Having trained over a dozen appraisers who I consider to be some of the finest in their market areas, I don't personally believe and actually feel that 2 years of physical inspections to assure learning is ridiculous. My experience dealt with the individual and based upon how quickly they were able to complete thorough inspections, I varied the amount of inspections with them. I believe it ranged from about 5 to slightly over 20. After that point, I either went out after their inspection to determine what they were unsure of or had standing instructions to take pictures of anything odd or that you don't know so we can determine it back at the office.

Again, I feel it's an overly burdening guideline which, in fact, effectively reduces the number of trainees entering the field if the Mentors follow to the letter of the law. I believe it should be changed and am often frustrated when my turn time gets long due to volume while my competitor hires several "trainees" and simply puts them out on the road.

What's not only the feeling of you folks on 2,000 hours of physical inspections, but also the actual practices? :usa:

 

[Liz South]

My only question is

have you consulted with your accountant as the IRS is very specific about what an employee is and what a self employed person is. If your trainee can only work as a trainee for you (which I think is how most of us handle it, then they likely become an employee) which means FICA etc and all that.

There was an article recently in Appraisal Today, I think that dealt with this issue specifically (is a trainee an employee vs subcontractor)

How much do you think you can get away with with the IRS?

Liz S

 

[Joshua Fookes]

Richard J. Glesser said,

From reading this and other topics, it seems that the overall opinion of the contributors is that a Mentor is obligated to inspect physically all properties with the trainees until 2,000 hours and licensing is accomplished which is the intent of USPAP and most state regulations.  Again, from what I read, this is not the practice of most of the contributors who serve as mentors.

In CA it is totally up to the supervisor regarding the trainee doing inspections by themselves. After 2000 hours, a trainee can apply for their own "by themselves" license.

From OREA's Licensing Requirements Handbook pg 15

Supervisor’s Duties
The supervising appraiser must do the following:
• Personally inspect the property with the Trainee until the
supervisor determines the Trainee is competent to make
unsupervised inspections, in accordance with the
Competency Rule of USPAP for the type of property
being appraised;
• Review the Trainee’s appraisal report;
• Accept responsibility for the appraisal report by signing
and certifying that the report is in compliance with
USPAP;
• Review and sign each page of the Trainee’s appraisal log
to verify that the work was completed under his/her
supervision; and
• Maintain records of the appraisals in accordance with
USPAP.

Michigan must be different, and I have no idea about the other states.

Josh in CA