Strategy for switching to commercial

[jevon]

My husband has been contemplating a switch from residential to commercial for about a year now, and the biggest obstacle for him has been the potential for an initial drop in pay due to lack of experience. He is quite established in residential, but is certainly concerned with the trends on the residential side. We have been considering purging a lot of expenses in order to make the finances work out, with our house being our biggest expense, but it is the only debt that we could reasonably dispose of somewhat quickly (student loans are our other big debt item). He has had to pass up on a couple of opportunities in commercial appraising or a related field over the last year because of our financial obligations, and a significant drop in initial pay. What makes it more difficult is that we have a small child, and I am only able to work part-time, so he is essentially the sole provider for our family.

Thanks in advance

 

[EquianAvante]

He shouldn't give up his residential work load, start a marketing campaign for commercial and find a good mentor for commercial. It will definitely be slow at first, so don't drop residential, juggle the commercial work as it comes in, slowly work it in. Eventually, his commercial work load will overtake his residential work load. Hope this helps.

 

[George Hatch]

Step 1, if he hasn't already done it, is to take the coursework. Those courses have a very high failure rate and a lot of appraisers who take them never pass. If he can't pass the course then that pretty much settles that.

Step 2, if he hasn't already done it, is to become familiar with word processors, spreadsheet software, and doing a lot of high-quality writing.

These are bare minimums. A commercial appraiser who's considering a trainee needs someone who has at least a cursory grasp of the basics and who can write well. Candidates whose primary qualification is that they've hacked out 500 or 800 form reports on houses and condos are a risky bet.

I wouldn't anticipate a residential appraiser would have a lot of luck working up their own clients and finding a commercial appraiser to sign off. Some of the residential supervisors were that stupid, which is the main reason why the residential end of the business has the huge oversupply of appraisers. Most commercial appraisers I know are way too savvy to take the short attention span point of view. Someone who's looking to make the transition from residential to commercial should be adopting a 5-year plan because that's the minimum length of time it will take to the point where they can stand on their own.

That being the case, the money probably won't be that great for the first year or so; although that depends on who a trainee hooks up with and what type of work they're doing. I started out appraising houses and I had to take a sizable pay cut to break into the commercial end of the business. It just takes a while to become both reliable and productive.

 

[Fred]

Recognize that the big problem is the mentor. I think they are likely hard to find in general and they maybe even harder to find for residential appraisers. I know some commercial appraisers would rather hire newbies because it is easier to train a blank slate, than to retrain what are perceived as some commercial appraisers as bad habits. Even some appraisers making the transition who post here have acknowledged they had to "un-learn" quite a bit.

So, my advice is to test the waters. Try to find someone(s) with whom you can establish a rapport, someone(s) who will at least give some serious consideration to taking him in, before starting to count up lost wages for the transition period, or investing in coursework.

 

[jevon]

Thanks for the input! All very helpful. My hubbie recently purchased a study guide from the appraisal institute for commercial appraising (income, i think). He is planning on taking an income course in the fall of this year and has a couple of leads for sponsors. He was also thinking about studying up on some of the software programs that general appraisers would use other than the spreadsheet software or word programs since he has working knowledge of those.