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Pros/Cons of Commercial Appraising?

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cardsfan

Freshman Member
Joined
Feb 8, 2010
Professional Status
Certified Residential Appraiser
State
Missouri
Hello,
I'm considering a career change, and I'm interested in getting feedback on the pros and cons of the commercial appraisal world...

I'm currently employed as an analyst at small bank, where I review commercial real estate and construction loans (including appraisal reviews). The work, for the most part, is pretty monotonous (I do enjoy the appraisal review aspect, however). I have a bachelor's degree in business, and prior to the bank, I worked as a residential appraiser for several years (still have an active resi license). I find the commercial side of real estate more complex and challenging, so the thought of becoming a commercial appraiser has intrigued me for some time...I'm in my early 30's, married, and have a baby, so there's obviously a lot of things to consider before I would make career move. My questions are:

  1. What do Commercial Appraisers enjoy most/least about their work/career?
  2. What is a ballpark on salary expectations for the first year or two, and say 5 years down the road- assuming a solid firm, good mentor, and enough work to keep me busy? I know this varies by market, firm, etc. - just trying to get a very general idea.
  3. Would you recommend Commercial Appraising as a good career move for someone in my position? Why/Why not??
Any other info/advice would be greatly appreciated! Sorry for the long post- just thought I'd try to get a little more feedback before I start bugging some local firms (that I may end up applying with).

Also thought this topic would be better posted here as the "Newbie/Appraiser Wannabe" section appears to be more geared towards residential wannabes.

Thanks Again!!
 
1. What do Commercial Appraisers enjoy most/least about their work/career?
2. What is a ballpark on salary expectations for the first year or two, and say 5 years down the road- assuming a solid firm, good mentor, and enough work to keep me busy? I know this varies by market, firm, etc. - just trying to get a very general idea.
3. Would you recommend Commercial Appraising as a good career move for someone in my position? Why/Why not??
Click to expand...

I worked for an MAI for a number of years before my wife decided we needed to move to Michigan. The assignments that the MAI I worked for were fascinating and challenging. I credit the assignments and the due diligence he required as the key to what I know now and what I think is my skill level.

I could not be a residential only appraiser, I could not take just appraising houses but I also could not take only doing commercial work I like the variety. Sometimes after 2-3 commercial properties I want some easy residential assignments that only take a day or two.

Some commercial appraisers never do residential properties. As an appraiser with only myself and a part time assistant the bad thing is getting flooded with work and working late sometimes (like tonight). The other bad thing is sometimes having very slow times.

With commercial properties you get exposed to a lot of different property types and if trained correctly they are easily completed. I find that most residential appraisers are not willing to do the research on sales and other information needed to produce a credible report. It may take weeks to find comparable properties and to fully verify the sales.

It is very common for commercial appraisers to quote 30 day turn times which is not common at all in residential.

Salary, I dunno; I do know that if you want to be with the best you will want to work for an MAI, and typically they want quality. Down the road (without a designation) you could make $100,000 making many assumptions.

If I did not have a commercial license I would not be appraising.
 
cardsfan said:
Hello,
I'm considering a career change, and I'm interested in getting feedback on the pros and cons of the commercial appraisal world...

I'm currently employed as an analyst at small bank, where I review commercial real estate and construction loans (including appraisal reviews). The work, for the most part, is pretty monotonous (I do enjoy the appraisal review aspect, however). I have a bachelor's degree in business, and prior to the bank, I worked as a residential appraiser for several years (still have an active resi license). I find the commercial side of real estate more complex and challenging, so the thought of becoming a commercial appraiser has intrigued me for some time...I'm in my early 30's, married, and have a baby, so there's obviously a lot of things to consider before I would make career move. My questions are:

  1. What do Commercial Appraisers enjoy most/least about their work/career?
  2. What is a ballpark on salary expectations for the first year or two, and say 5 years down the road- assuming a solid firm, good mentor, and enough work to keep me busy? I know this varies by market, firm, etc. - just trying to get a very general idea.
  3. Would you recommend Commercial Appraising as a good career move for someone in my position? Why/Why not??
Any other info/advice would be greatly appreciated! Sorry for the long post- just thought I'd try to get a little more feedback before I start bugging some local firms (that I may end up applying with).

Also thought this topic would be better posted here as the "Newbie/Appraiser Wannabe" section appears to be more geared towards residential wannabes.

Thanks Again!!
Click to expand...

Cardsfan, you seem to have a good background for getting into commercial appraising, and you're the first wannabe I've seen in a long time who can correctly spell the word "commercial". You would probably be considered a strong candidate for entry level openings in this field.

In answer to your questions:

1. What I enjoy most is the variety and intellectual challenge of commercial appraising, and the ability to get out of the office and even travel. I was a bored, clock-watching civil servant before I became an appraiser.

What I dislike most is the volatility of the business. There are times when I'm working 7 days a week under the pressure of deadlines and other times, like January and the 3 weeks before Labor Day, when I have nothing to do. There was even a 3-year period when I had to change careers.

2. I don't know what entry level appraisers are being paid nowadays. The LA County Assessor starts its entry level appraisers at about $32,000 per year, but now gets thousands of job applications. Trainees at fee firms in my region are not well paid.

3. If you can live frugally (it would help if the wife works), this would be a good time to get into the profession, as there seem to be so few young people entering the profession right now. At age 52, I am still younger than the average commercial appraiser in California, and many will be retiring or dying off in the coming years. Young commercial appraisers should have a lot of opportunities in the future.

Take a lot of appraisal courses, preferably from instructors who have actual field experience and a strong grasp of appraisal theory. You are more likely to find these courses offered by professional associations such as the Appraisal Institute than at colleges or real estate schools.

Also, for maximum mobility and career satisfaction, try not to box yourself into thinking "I am only an appraiser". You will develop skills that can be useful in other areas such as loan portfolio acquisition and investment analysis. The most miserable commercial appraisers are the ones who have boxed themselves into thinking the only thing they are allowed to do is write long narrative reports that no one will read.
 
1. I've been a commercial appraiser trainee for about 9 months now. So far It's been interesting to work on so many different property types. I previously worked in commercial real estate so I had a basic understanding of the common property types: retail, industrial, office, multi-housing. Now I'm dealing with such diverse property types as residential subdivisions, auto dealerships, RV parks, truck terminals, etc. In the future I'll probably encounter some other stuff like hotels, senior living facilities, health care facilities, etc. Every job is new and has at least some interesting little wrinkle that I haven't seen before. That may be partially due to my inexperience but in the end every property is unique. There have been some long hours which have been hard on my family. In the past I've put in 10-12 hour days for a few weeks at a time if we've been swamped, I've also had to work on weekends from time to time.

2. Ballpark I'm in the low 30's. It's basically a flat amount with some incentive for higher production/billing. I.e if I have to work evenings and weekends I expect higher compensation than a normal 8-5 schedule. I did straight commission for a few months but I have kids and my wife stays home so it was more important to have a steady income. Once I get certified and my MAI designation I think 6 figures is certainly obtainable.

3. I think it's a good time to enter the field. The simple fact that high barriers to entry will always make it an attractive field to enter. Finding a mentor, taking classes, getting certified, etc. Especially when you consider the barrier to entry to get the MAI designation. It's easily 4-5 years plus $10-20,000 in education and travel costs (depending on how many education offerings there are in your area) in my case I assume I'll have to travel out of state for all of my qualifying education courses at a cost of roughly $1,000 each between the course, airfare, and food/lodging.
 
Great responses above. I have worked on and off with a commercial office for years. In that office we did it all. From a 700 s.f. rancher to a 25 million dollar industrial complex. We did golf courses, shopping malls, train stations, farms, subdivisions, highway strip takes, railway easements, etc... The experience has made me a much better residential appraiser. And in doing residential work I take with me the experiences from all of those large narrative reports. However, from my perspective, I prefer residential work. I detest the AMC model and the constant stips, short turn times, and reduced fees. However, I do prefer the residential side. I like staying relatively close to the office. I like interacting with people in my community. I like being able to spend a day or a few days on an assignment and then move on to the next one.

Spending a couple of months or more on one commercial report is common. Getting paid can take a very long time too, however, the check you recieve will be much larger. Not many people do those kinds of assignments, maybe 5 to 10 percent of the appraisers nationwide. If you go that route, get your CG, and get some experience you will do okay financially. I don't have hard numbers on income though. When I was with the commercial office I would get the occasional "extra" check out of the blue anywhere from $2,500 to $7,500. The front desk secretary who knew what the fees were for those reports would only tell me I would be amazed at how much those reports can cost clients.

Dan
 
Cardsfan, what is the typical pay range for an analyst at a small bank? I assume you are an employee with some sort of medical insurance, retirement plan, etc. Is this correct? If I were in your shoes, I'd probably try to get the CGA while working in your current job. Start by taking all of the educational requirements for the CGA, preferably from the Appraisal Institute. This will benefit your current career and put you in a stronger position for exploring opportunities. Live classes are also great for networking and gaining perspective.
 
 
Wow guys, thanks for all the great insight! Your input is greatly appreciated. I'm definitely getting a better feel for the industry-the good & the bad! Previous to working at the bank, I was a residential appraiser for roughly 3 years, so I can relate to the volatily of the business. I eventually left the residential appraisal field because business dried up, I was getting paid on about half the reports I completed (under a mentor), pressure to "hit value," and the fact that the better quality work I did, the more clients I lost. Anyway, I know some of this crap may exist in the commercial world to a degree, but I get the overall impression that commercial appraisers are generally more highly regarded, don't get bullied around by loan officers, and have less issues with collections - if I'm wrong, please let me know.


Graybadger - to answer your question, I'm in the $55-$65k range at the bank- I've been there about 3 years. Yes, I get medical, 401k, 2 weeks paid vacation, etc. The benefits & steady income are nice, but I just don't know how much longer I can stay sane sitting in a cubical 9 hours a day copying data from access & pasting it into excel, in addition to not getting the chance to see daylight unless I didn't bring my lunch and I get to run to Subway-yay. Sounds like I'd have to put in 2-3 years (or longer) to get back to that level of pay if I make the move to commercial appraising, but based on the pros/cons people have discussed, I need to seriosly consider making the career change.

Sorry for the rambling- just a lot of things on my mind! Thanks again to everyone for their input. If anyone else would like to add their 2 cents, go for it!
 
Well if you base cons on the actions/characteristics of a few commercial appraisers here, you may want to make sure your Obamacare Health plan covers rectal stick removal.
 
AnonApprsr said:
Well if you base cons on the actions/characteristics of a few commercial appraisers here, you may want to make sure your Obamacare Health plan covers rectal stick removal.
Click to expand...

And should you decide to get into residential appraising, the stick removal coverage will be very necessary.

You've been given some good insights and resources to explore--ignore the residential troll behind the curtain! Good luck!
 
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