Questions about getting started in Commercial Real Estate Appraisal?

[kcjch]

I've been researching career paths lately and commercial real estate appraisal has come across as a career path I would like to take. I have another two years before I graduate college with my B.A. and just had a few questions about getting started in the field. My questions are as follows:

1) What classes are needed to become involved in commercial real estate appraisal? Are there different classes to be taken for residential appraisal and commercial appraisal? If I were interested in becoming licensed in both residential and commercial appraisal, how long would that take and how much more work (both education and work wise) should I expect?

2) How many hours on average would I need to dedicate to classes? Can only one class be taken at a time or are multiple classes allowed to be taken?

3) At what point on the path of becoming a commercial real estate appraiser does one start earning a salary? Do trainees earn money?

4) If I wouldn't to move to another state how would the transition be as a commercial real estate appraiser? Would it be difficult to find employment even after I educate myself through their state's appraisal courses?

5) What's the estimated cost to earn an appraisal license through education courses?

5) Are there any opportunities I should be aware of or take as an undergraduate or as a college graduate starting my education in appraisal?

Thanks in advance for your time.

 

[Howard Klahr]

Does your college offer a real estate program?

 

[argllc]

You want to work towards "certified general" if you want to do commercial appraisals. It also allows you to do residential, but residential has a lot of challenges at the moment. Many residential appraisers are having a hard time making a living, and many have quit in recent years. I suspect a lot of people here will tell you not to bother with only residential unless some fundamental changes take place. Read up on appraisal management companies (AMC's) and such on this forum.

I think there are 300 hours of classroom education (in addition to a college degree, mentoring period, a fairly challenging exam and other hoops to jump through). You will probably have to take at least a dozen courses. They are mostly four day classes with a couple of two day ones. I highly recommend Appraisal Institute classes if you want to appraise commercial real estate. Their website has tons of info. It is more of a commitment than it may sound like, and you may want to continue on to get an MAI (which is a huge commitment on top of everything else you will have accomplished to get your commercial license).

While some states may allow online education, I suggest traveling to the classes and meeting your instructors and peers. I suspect that, if you try, you will most likely make important connections and pick up enough to make it worth the extra expense.

You can earn a living as a trainee. However, it may not be a lot in the beginning. It should ramp up as you get experience and have more to offer your employer. Get a good mentor.

You can move to most states fairly easily, but I think Florida and possibly some others have some additional criteria that make it hard to go from other states to there. I am guessing a Florida license would have reciprocity in most other states, though. Check out the state licensing websites that you are interested in.

Off the top of my head, I probably spent close to $15,000 in classes and travel expenses, and took a big hit in lost income at the same time.

A few colleges offer programs, but I do not know much about them. Search the threads as I think there was a recent one about this.

Since you are still in school and may be able to change things up, I have heard that getting an accounting degree, becoming a commercial appraiser and getting your MAI can offer some good opportunities. That takes many years, though.

Get a summer job doing anything for a commercial appraiser to see if it is something you would even like. Look at other options in life too.

 

[kcjch]

Howard Khlar, my school does not offer a real estate program.

 

[kcjch]

Thank you argllc for your insightful advice!

 

[KHS445]

I would recommend that if you are serious about pursuing commercial appraisal work that you:
- Find an appraiser that is willing to act as a mentor and to accept you as a trainee. If possible you might try and find someone near where you are going to school. That way you could work for them part-time during the school year and possibly full time during breaks.
- Begin taking your initial classes. I agree that attending in person is ideal, but sometimes time, distance and schedule will not work out and you may need to take a class or two online. If you really work at it you may be able to get the majority of the classes required for your initial license completed before you head back to school this fall.
- Obtain your trainee license as soon as possible and begin building your experience log. As a college student and in the right situation you can make pretty good money and be able to work around your schedule.
- Recommended courses would be business, finance, accounting , stats, construction, business law, computer science, writing classes, ethics, critical thinking, etc.
- Being an appraiser is a profession, be proud of it and work hard every day to gain knowledge and to improve your work product. There isn't an appraiser out there who will tell you they know everything (some may but they will be incorrect), but they will tell you today's report is better than yesterday's and my next report will be better yet.

Unfortunately college does not offer the two most important qualifications any appraiser needs; experience and common sense. Every appraisal assignment is different. For me a residential assignment being used for a lending decision is the most difficult because in addition to arriving at an estimation of market value you have to complete the report based on a number of lender specific requirements and guidelines. From that standpoint I feel commercial work is easier as their are fewer lender imposed restrictions and requirements. All appraisals are guided by the same set of USPAP Standards.

As a young person starting out in the commercial appraisal field probably the most difficult tasks are going to be to earn the confidence and respect of your clients, property owners and fellow appraisers. I know we all shoot our mouths off on this and other forums, but when it comes down to dealing with the client and/or property owner you need to be the calm one in the room that has all the facts possible and be able to support and justify your line of reasoning and conclusions.

I have been involved in mortgage lending, commercial lending, bank management and appraising for nearly 40 years and still enjoy appraising. Every day is a little different and every assignment is a new challenge. Good luck and let us know how things progress.

 

[Howard Klahr]

1) What classes are needed to become involved in commercial real estate appraisal? Are there different classes to be taken for residential appraisal and commercial appraisal? If I were interested in becoming licensed in both residential and commercial appraisal, how long would that take and how much more work (both education and work wise) should I expect?

The licensing classes for a trainee license are the same for commercial and residential. The courses become more focused on residential or commercial as you move to a certified license which is either residential or general. The theory is the same but the coursework for the general license is more income focused. How long it takes is up to you and where you are able to find a supervisor. Each certified license requires different number of hours of experience but some residential experience can count toward your general certification.

2) How many hours on average would I need to dedicate to classes? Can only one class be taken at a time or are multiple classes allowed to be taken?

The answer here depends. Are you taking the full day courses over a couple of weeks as opposed to other offerings that are a couple of hours a few days a week. There is a lot of information being conveyed, I would start out taking only one class at a time and see how you progress from there. Keep in mind that some course offerings are setup where you will only be able to take one class at a time.

3) At what point on the path of becoming a commercial real estate appraiser does one start earning a salary? Do trainees earn money?

Compensation varies considerably based on the firm you select. Keep in mind that as a new entrant in the field you are more of an expense to an employer as opposed to a revenue source. But yes, trainees do earn money.

4) If I wouldn't to move to another state how would the transition be as a commercial real estate appraiser? Would it be difficult to find employment even after I educate myself through their state's appraisal courses?

It will depend on the economic environment at the time you are ready to apply. Currently, many of the larger firms in the south Florida market are quite busy, but employment opportunities are mostly focused on experienced candidates. Things do change over time and some firms may consider new entrants, you just need to reach out and take the temperature of the market.
5) What's the estimated cost to earn an appraisal license through education courses?

This is going to vary on how you go about your education. Local community colleges are probably to lowest cost option, private real estate schools will be higher and professional organizations such as the appraisal institute are higher still but each offers more intense education options as well. Don't let price be the sole deciding factor.

6) Are there any opportunities I should be aware of or take as an undergraduate or as a college graduate starting my education in appraisal?

There are various scholarship offerings out there if you are interested. A good listing of some of them is on this web page from Florida International University. Real Estate Scholarship Programs

Specifically related to real estate appraisal, the South Florida chapter of the appraisal institute has three to four meetings per year. Attending these functions will give you exposure to various real estate topics as well as potential contacts with local employers.

While these brochures are fairly limited in scope, they may provide more details for some of your questions.

http://www.appraisalinstitute.org/education/your-career/qualifying-education-for-licensingcertification/

https://netforum.avectra.com/eWeb/DynamicPage.aspx?Site=TAF&WebCode=HomePage/s_appraisal/sec.asp?CID=148&DID=206

Finally, you previously indicated that your school does not have a real estate program. What are you majoring in? You might consider focusing on Finance and Economics as a course of study for your degree.

If you have any other questions feel free to post again. Best of luck in your endeavors.

 

[GregoryK]

The Appraisal Institute has a good website that can answer many of your questions. There are a few Universities that offer graduate degrees in Real Estate Appraisal - and the Institute works with many if not all of these on the curriculum. But first focus on getting the BA or BS degree - it will soon be required in all states. I would focus on finance and economics courses as an undergrad. Work hard in getting a firm understanding of statistics.

Not sure of your age, but younger students tend to do a lot better at on-line or asynchronous courses, many of which are offered by the Appraisal Institute.

 

[leasedfee]

Transfer to a university offering a real estate major. Take many finance classes. Economics, while fascinating and intriguing, is not very applicable and arguably can be nearly a waste. Econ was my major, but finance was more applicable. (Many non-b-school economics majors looked like deer in headlights when the prof talked about how bond values and interest rates applied to monetary policy.) Take an economic geography class -- something sadly neglected. Throw in financial accounting, cost accounting, behavioral econ, and a sociology class or few.