Splits.....

[patmccabe]

First of all, I just want to say hello. I recently found this board, and it appears to be a great source of information.

I know this topic has been talked about before, so I am sorry if this is repetitive, but I was not able to find what I am looking for by using the search function.

Anyways, I am not sure if this is the right spot for this post or not, but I thought it was a safe place to start.

I was wondering what some of you thought a fair/market split would be for a somewhat experienced commercial appraiser. Here are a few details:

1. I have been appraising commercial property for four years (don't know if that gets me out of the noob range yet or not....haha).

2. I graduated college with a major in real estate. In other words, all the required classroom time to satisfy the state requirements has been completed. I have also completed the required work related experience to satisfy the requirements to qualify to be a certified general appraiser. I just need to take the state test (I know I have been remiss in doing this, but the way things are currently set up, there was no real incentive for me to get it done quickly). However, at this point in time, I am highly motivated to (finally) take the test and get it done with.

3. I have taken several Appraisal Institute courses.

4. I have appraised, and have experience with, a wide variety of commercial property types including (special purpose properties, institutional properties, industrial, retail, office, mixed use, etc.). I am very familiar with, and competent, using income analysis software (ARGUS), as well as the typical computer programs (excel, word, etc.).

I am currently an employee on a salary, not a sub. In other words, I have some benefits (401K, health/medical for myself (not my family which is big bucks by the way 8O ), admin. and production help, reimbursed work related expenses, an office, computer, camera, etc.

So, here is the million dollar question...... What do you all feel is a reasonable/market split? I am located in the midwest, if that makes a difference.

Thanks in advance for your insights!

 

[Farm Gal]

Welcome to the board, Pat!

Congrats on attempting to use the search function which many frequent posters haven't quite figured out !

Because of the fact that you are talking commercial, I think you may wish to post to that fourm (above). Most of the newbie advice posted here tends to residential, as I am sure you noticed.

My thoughts about your market share on a fee split basis runs thusly:
At 4 years experience you legitimately qualify as 'having experience' but lacking that all important document that says you are certified means that you are wet behind the earsand getting hired even ofn a fee spit basis is going to be rough. Until you get the actual document, don't quite your day job.

DO run through this newbie forum for advice on 'how to survive your entree into the world of fee appraising, without straving to death or getting sick'. There are some EXCELLENT posts. You would do well to do some deep research and inquiry, particularly with regard to the need for health insurance.

You *May* have some luck nobbing with the MAI sort through the AI, but unless you are interested in acquiring that designation, that isn't much use in working that angle real hard either..(some posts on THAT subject are findable using search :wink: )

Good luck!

 

[Ross (CO)]

Pat, .....With all the variables defining and differentiating one commercial assignment from the others, so are the related fees one would likely charge and resultingly have to divvy-up with another who helped. My guess is that you have perhaps always been the assistant, but on a salary, and you may not know if the income is better being in a freelance fee-split relationship with the source of the work or a new source of commercial work....or staying in that salary situation. Only you know what is a reasonable split, and again, that could perhaps vary with the assignment. Grab your yellow pages and visit another commercial appraiser's office. Sell yourself and discuss the possibilites. I could say 30/70, and another could say 40/60 and another may think 50/50 was just right. Only you know what is a good fit. One thing I have gathered from talk with others is that commercial jobs involve bidding, waiting, insisting on partial payment to get started and residual before sending report out....and that there often ends up being more work and liability than the fee ever sufficiently covered. I am not "going there" anytime soon but I would very much like to tag-along with someone working on one just to learn the ropes. Good luck.

 

[patmccabe]

Lee Ann and Ross.....

Thanks a lot for your quick responses, I appreciate your insights. I am well aware of the fact that without a certificate (i.e. State Certification) I am considered to be somewhat inexperienced - that being the main reason I am finally getting my butt in gear and finishing up the loose ends (finishing the paper work and taking the test). For the most part, I am very happy in my current situation. I like my co-workers, job volume, and types of assignments that I work on (a good mix of institutional and local lenders). The reason for my question is mostly for my own benefit, and to possibly use as a negotiating tool. I have been in this situation since I graduated (I kind of fell into it, but it has worked out well), and for
lack of a better way to put it, I just don't know what else is out there and what is considered typical. I think that I am being compensated fairly, but for peace of mind, I just want to make sure. As far as # of assignments/volume goes, our shop does as much work as we want. In other words, we are all very busy and turn down jobs. So, I am not worried about finding work, as I am not planning on going out out on my own at this point in time. I was just looking for what typical shops are offering state certified appraisers (who are not subs). In other words, what benefits are typical, what services are provided, what fees are reasonable? My boss/mentor is an MAI, so I am very familiar with that whole side of the equation. Basically, I do all my own work, talk through unusual issues with him, and he reviews all my projects - I am pretty self sufficient with respect to the projects I am assigned. I do not bring in my own work, nor do I get involved with fees and timing, but have a general understanding of what is involved. As you pointed out Ross, many clients are required to pay retainers, and many others fall into the delinquent side of things with significant time passing before payment is made. Also, many clients will not pay until a "final" review is made of our workproduct...this can be a long time after the issuance of the report. So, in other words, the cash flow is not real predictable, and that was something else I was wondering about...do the people on fee only get paid when the client pays, or is there a "holding tank" that their portion comes out of? Are you now responsible for delinquent accounts because you have a vested interest in collecting (moreso than I do now anyways).

Also, should I move this up to the commercial forum?

Thanks again for your responses.

Have a great New Year!

 

[Farm Gal]

do the people on fee only get paid when the client pays, or is there a "holding tank" that their portion comes out of? Are you now responsible for delinquent accounts because you have a vested interest in collecting (moreso than I do now anyways).

:lol: Depends on the shop, but mostly if the boss don't get any you can pretty well kiss off any hope of $$ flowing your way! :evil:

Don't forget to factor in that some shops expect you to bring in your own clients, and in those shops collections tends to be entirely YOUR problem, payment of fee split is due immeidately (natch).

Also, should I move this up to the commercial forum?

I already sayed that :wink:

Have a great New Year!

You too!

I can understand wanting to know what you are worth, anecdotal evidence is probably all you are going to get from ANY source. There ARE some geographically distinct web sources you can access, will try to recall which one I though told the fewest lies :wink: .

I STRONGLY urge you to follow through (like yesterday) with acquiring your certification. 8O Without it if the principal in your shop dies or closes up you could be hitting the pavement with nothing but a " I DID this stuff, honest" resume 8O and proving your experience history to the state, if you don't have full copies in your own garage or storage space could become problematical as well :!:

 

[patmccabe]

Depends on the shop, but mostly if the boss don't get any you can pretty well kiss off any hope of $$ flowing your way!

Don't forget to factor in that some shops expect you to bring in your own clients, and in those shops collections tends to be entirely YOUR problem, payment of fee split is due immeidately (natch).

This is exactly what I thought, just wanted to make sure... haha


Thanks a lot! Take care :lol: