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Gary Leduc

Thread Starter
Junior Member
Joined
Jul 23, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Hi ya'll,
Just a quick note for advice.
Remember when you started in the appraisal business?
For some it was a long time ago and for others not too long ago.
I am finished with my schooling and I am waiting now for
the State of Georgia to send me my appraisal register #.
I have alamode (just received it), M&S residential costing manual,
joined my local MLS and ready to go.
What did you do to get your business up and running?
I am ready to go it alone or take a few assignments from an
appraisal company to get going.
Any sound advice out there?
Best reards and thanks in advance.
Gary Leduc
 

BenLuby

Senior Member
Joined
May 28, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Gary,
You just getting your registration number? I have mine as well, and, first thing you should know, you can't go it alone.
You were probably told in class, but I will restate it. You now have to get 2000 hours of appraisal experience under the guidance of a licensed appraiser. Then you can go it alone.
No one would take your work at this point, and, in honesty, you need to get trained properly.
The text side of the issue is not even skimming the surface. Now is when you really get to learn how to be an appraiser. Find a mentor, and then you can get to work. After you learn how to do it.
I am still learning. I figure about the time I retire I'll have the basics down.
 

Gary Leduc

Thread Starter
Junior Member
Joined
Jul 23, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Ben,
According to the laws of the Georgia Real Estate Appraisers Board,
I can appraise without a licensed appraiser during the first 2000 hours.
I can do appraisals in any amount except for banks and credit unions,'
which has to be $250,000 or less, until you become licensed.
Thanks for your reply.
Any other advice out there?
Sincerely,
Gary Leduc
 

Liz South

Junior Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Virginia
You might be able to do appraisals - however lenders who market the loans through Freddie or Fannie probably will not accept your work until you are licensed.
Even if you can get work - there is soooooo much that you need to learn about the process that you really need a mentor to teach you.
No day passes that I don't have to learn something new or deal with something different. Don't think that it is a straightforward cookie cutter world. What you learn in class is only 1/10000000 of what you learn doing the work.

If you think that you know it all - go ahead - contact management companies - market yourself - but be ready to be in situations where you have NO IDEA what to do - and going it alone means you really don't have someone to ask questions of. You can post questions here - but none of us know the specifics of your market.

Get a mentor - its worth the limited income for what you will learn. Remember that nothing of value comes cheap.

Liz S.
Praying for more rain on the east coast.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I am ready to go it alone or take a few assignments from an
appraisal company to get going.

You gotta have a mentor, can't go it alone.


I can appraise without a licensed appraiser during the first 2000 hours.

You also can buy a truck, put on a tool belt, get bizniz cards and call yourself a contractor. :roll:

I can do appraisals in any amount except for banks and credit unions,'
which has to be $250,000 or less, until you become licensed.

No, you can ONLY do appraisals for any NON Federaly related insitution. That includes ANY company that is insured by or that borrows federal money. Where do you plan to get work if you can't do the most common type of appraisals, which is for loan collateral?

With out a mentor, you may get a big surprise when you turn in your credit hours log. You don't have to stick with one mentor, can be on a sub-contractor basis. But you just gotta work under a supervisor for a while.
 

Gary Leduc

Thread Starter
Junior Member
Joined
Jul 23, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
M Leggett,
Below you will find what is described as a federally related transaction
and that a registered appraiser can do it.
Everyone says get a mentor, the truth to the matter is all of you mentors don't want to take the time to train a new appraiser.
So how does anyone with zero experience break into the appraisal
business?



Obtaining an
Appraiser Classification

Types of Appraiser Classifications
Georgia issues the following appraiser classifications:

State Registered Real Property Appraiser - A registered appraiser may perform appraisals on any type of property except when the purpose of the appraisal is for use in a federally related financial transaction.*

What is a Federally Related Transaction?
The determination of whether or not an appraisal assignment involves a federally related transaction is important to Georgia appraisers for two reasons:



(1) only licensed or certified appraisers may perform an appraisals to be used in federally related transactions and

(2) those appraisals must comply with the Uniform Standards of Professional Appraisal Practice (USPAP).

Georgia's Appraisal Act [43-39A-2(12)] and the act of Congress that established the regulation of appraisers in the United States — Title XI [12 U.S.C. 3331-3351] in SEC. 1121. Definitions [12 U.S.C. 3350(4)] — define a federally related transaction as any real estate related financial transaction which



(1) a federal financial institutions regulatory agency or the Resolution Trust Corporation engages in, contracts for, or regulates; and

(2) requires the services of an appraiser.

Real Estate Related Transactions
Title XI [12 U.S.C. 3350(5)] also defines a real estate related transaction as "any transaction involving:



(A) the sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof;

(B) the refinancing of real property or interests in real property; and

© the use of real property or interests in property as security for a loan or investment, including mortgage-backed securities."

Therefore, in determining whether an assignment is a federally related transaction, an appraiser must begin by answering two questions. First does the appraisal involve the transfer of an interest in real property, the financing or refinancing of a transfer of an interest in real property, or the use of an interest in real property as security for a loan or for mortgage-backed securities.

Second, does the financial transaction for which the appraisal assignment is to be performed involve a federal financial regulatory agency or one of the agencies specifically named in Title XI that require the services of a licensed or certified appraiser.

Federal Financial Regulatory Agencies
Title XI identifies the following agencies as federal financial regulatory agencies:



(A) the Board of Governors of the Federal Reserve System (In addition to the 12 member banks, the Federal Reserve has regulatory authority over state-chartered banks and bank holding companies);

(B) Federal Deposit Insurance Corporation (FDIC) (In addition to insuring the accounts of depositors in member banks, the FDIC regulates savings banks and state-chartered banks that are not members of the Federal Reserve System);

© Office of the Comptroller of the Currency (OCC) (The OCC regulates more than 2,500 national banks all across the U. S.);

(D) Office of Thrift Supervision (OTS) (The OTS regulates the nation's savings and loan or thrift institutions); and

(E) National Credit Union Administration (NCUA) (The NCUA insures the accounts of depositors in federally chartered credit union and regulates those institutions).

Other Affected Financial Institutions
In addition, Title XI specifically requires appraisals by licensed or certified appraisers for financial transactions for the Federal National Mortgage Association (Fannie Mae); the Federal Home Loan Mortgage Corporation (Freddie Mac); or the Resolution Trust Corporation (RTC), the agency created by the Congress to liquidate the assets of the nation's failed savings and loan institutions. Although not specifically mentioned in Title XI, loans insured by the Federal Housing Administration (FHA) and loans guaranteed by the Veterans Administration (VA) are also considered federally related financial transactions.

Requiring the Services of an Appraiser
The final consideration in determining whether an assignment involves a federally related transaction is whether the transaction requires the services of an appraiser. Title XI [12 U.S.C. 3341(B)] provides that each federal financial regulatory agency can establish a threshold below which a licensed or certified appraiser is not required for performing an appraisal in connection with a real estate related financial transaction. In 1992 the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of Thrift Supervision individually adopted appraisal guidelines that included a threshold transaction amount below which an appraisal would be required. Two years later those agencies formally and jointly adopted a threshold of $250,000, commonly referred to as the "de minimus."

Therefore, in theory a real estate related financial transaction having a value of $250,000 or less is not a federally related transaction. However, the federal financial regulatory agencies and their regulated institutions may require appraisals by licensed or certified appraisers for real estate related financial transactions with values at or below the de minimus, effectively making those transactions federally related. Alternately in lieu of an appraisal, they can order an evaluation of the property containing an opinion of value. According the appraisal guidelines adopted by the federal regulatory agencies, evaluations do not require the services of licensed or certified appraisers and do not have to conform to USPAP.
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
Gary,

I don't want to discourage you, but I don't think it'll come down to whether your intentions are legal or not, they may very well be legal. However the fact is that I've never gotten a single client without them first having proof of my being licensed, along with other documents. Good luck, go prove me wrong, and come back and tell us all.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Gary,

I may be reading your original post wrong, and if that's the case I apologize. It looks to me like your intentions are to set up a business where you are the primary appraiser and are basically operating without supervision. Let's skip the legalities and the ethical implications of your proposal for a moment and cut right to the practical implications. If your goal is to obtain a permanent license or state certification at some point down the line, you're going to need some help. The reason I say this is because nobody is born to appraise. There is no innate quality that automatically qualifies an individual to tackle appraisal situations wherein they have no prior experience. Competent appraisal practice is all about education and experience. 100% learned skills.

The appraisal courses you have completed thus far for your license requirements are completely insufficient to prepare you for all the ins and outs of solo appraisal practice. They only represent some basic theory and a few applications. I dare say that it will be at least a few years before you are able to consistently relate the principles that were covered in the course (note that I did not say that you 'learned' them) to the majority of the situations and variations you are going to run into.

I have been appraising for 17 years now, I have had my Certified General license for over 11 years, I have taught USPAP and other appraisal courses and have developed some course for ACE accreditation (which allows them to be used nationwide for distance education courses). I even have been certified by The Appraisal Foundation to teach the USPAP courses. I split office space with a 35-year appraisal vetrano, who has seen more properties and taken more appraisal related education than possibly any member currently sitting on The Appraisal Foundation's ASB or AQB. In some ways, I still have a mentor.

Despite what some people might (or might not) consider a pretty broad base of knowledge and experience, I decline appraisal assignments for properties located in my market area on a regular basis because I do not consider myself competent to appraise them, even with the sage advice of my partner. Okay, it doesn't happen every week and sometimes a month will go by, but the fact remains that despite all the types of properties and situations that I am comfortable with, there are still some situations that I avoid because they fall outside of my knowledge and experience. When I can, I refer these assignments to appraisers whom I believe do have the necessary knowledge and experience to do the job properly.

Now you might (or might not) be interested in hearing why I avoid these assignments. Simple. They don't pay. I don't mean there isn't a fee or that the fee involved is insufficient compensation for a competent appraisal. No, the reason is that in order for me to come up to speed on these things, enough so that the end result is reasonable (we're not even talking about perfection), I'll have to spend so much time in developing the necessary knowledge and experience to comply with competency requirements that the fee will turn out to be a loser for me. I'll always make more money by sticking to those assignments wherein I have some competency. It's all about the money, right? And this is my main point.

Assuming an appraiser is interested in doing the right thing, and I hope this is a reasonable assumption to make for everyone on this forum, the following will hold true: Anytime a professional appraiser is working beyond their competency they are going to lose money, at least in the near term. This will be true whether the deficiency is technical or geographic in nature. Yeah, I know appraisers who will say "have data, will travel", but when push comes to shove, and occasionally it does, they will be unable to demonstrate competency and their exposure to claims of malpractice and malfeasance increase dramatically. Dramatically.

So what does this mean to a relatve newcomer, such as yourself? Simple. You'll make more money in the long run if you find a mentor. At this point, everything is a new situation for you. Because you lack experience, there is no assignment you can do right now that you can say that you're qualified for by virtue of your education and experience. Everything you do will take longer and be more risky for you. When you go to submit a log of experience for advanced licensure, you'll be at increased risk for turning in work samples that won't qualify as applicable experience because of deficiencies that you were unaware of. You will be turning in work that has problems, not because you're somehow stupid or anything, but because we all make mistakes and because you won't have anyone there to catch and correct yours before it goes out.

The only thing that an appraiser has to sell is their expertise and their reputation, perhaps demonstrable by their license and their professional references. At the moment, you have neither expertise nor professional track record. If you want to build a good reputation, your best bet (truly) is to align yourself with the best appraiser/mentor you can find. Struggle with the split fee and reduced income in the beginning so that the foundation you build will be based on competent appraisal practice, not desperation. Participate with your peers as much as you can so that you'll gain the maximum exposure to the maximum number of scenarios, thereby increasing your education and experience and shortening your learning curve. It takes a little longer to get to the 'big bucks' this way, but it will absolutely pay off in the long run.

I'm not trying to be cruel here, I just don't want to see another lamb go out face the slaughter in ignorance. If you go it alone, you're primary source of work will be clients who are unable to achieve their goals using proven appraisers. I hate to say it, but basically the bottom feeders we constantly complain about on this forum. You may get a couple accounts up front, but you'll constantly be faced with the struggle to maintain your integrity while you try to hold onto these clients. If you knuckle under to one of these guys and do something that runs counter to your better judgement, it will be like putting a 'WELCOME' mat on your back; you'll get walked on like you can't believe. You can expect to have numerous 'one-night stands' and unpaid invoices while these people try to suck everything they can from you; only to be tossed aside the first time you don't hit a number or decline to not disclose a deficiency. I am not exaggerating here. Meanwhile, your reputation as an eager-to-please rookie will will spread. Once established, it will be hard to overcome such a reputation because no reputable appraiser or reputable client will want to take you on, reagrdless of any change of heart you may have.

I would like to think that everyone on this forum is here to advance themself and become the best they can be in our chosen profession; and this goes for you, too. But there's a reason you are getting responses from myself and other veterans in this thread advising you against this course of action. You ignore such advice at your own peril. While I wish you well in your endeavors, I'm hoping you decide to take the road more commonly traveled. At least it's paved.


George Hatch
 

Gary Leduc

Thread Starter
Junior Member
Joined
Jul 23, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
George,
Thanks for your time and fatherly advice. I accept it completely.
A good friend of mine is an appraiser. Has been for the last 4 years.
His business is real good right now.
Does not want to train me or be my mentor because I won't commit
to working for him the rest of my life.
My question still is unanswered here....
How does one find a mentor when it seems like they are afraid of
you stealing their business once you become competent?
I have the desire to learn this business or else I would not
have spent the $$$ and the time to get going in this profession.
Again, how does one get going in this business without a mentor
willing to take you on?
Many on this forum from what I have read, will not be a mentor
to a newbie. Why?
What is your advice to finding that important, competent mentor?
Thanks again for your words of wisdom.
Gary
 
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