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Training fee?

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Sean Barsky

Thread Starter
Freshman Member
Joined
Nov 4, 2002
Professional Status
Certified Residential Appraiser
State
Connecticut
Hey folks. I'm just finishing up my 75 hours of classes in order to get my provisional license and am starting to talk to some local appraisers reguarding employment. Had a meeting the other day with an appraiser who says he has around 25 employees working for him. I have 3 questions. One - this gentleman charges trainees a $295 training fee in order to motivate people to "stay with the company and not just get their training and leave." A red flag went up for me when he told me about the fee. What do you folks think? Two - this outfit employs a sliding incentive plan that rewards productivity:
1-5 appraisals / 15 day cycle= 40% fee split
6-10 " " 45% "
11-20 " " 50% "
21-30 " " 55% "
31-40 " " 60% "
41-50 " " 65% "
Any opinions on the sliding incentive plan?
Three - do you folks have any opinions on working for a one-man operation v.s. an outfit that is substantially larger, all things being equal? Thanks for your input!
Sean
 

DeseretJohn

Sophomore Member
Joined
Jul 3, 2002
Professional Status
Appraiser Trainee
State
Utah
One word answer:

RUNAWAYQUICKLYDONTLOOKBACKTROUBLETROUBLETROUBLE





(have a nice day)
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
As to the graduated fees for the numbers you manage to produce....

STAY AWAY FROM THAT PLACE!!!!!!!!!

You're a trainee.... you have a lot to learn. I'm still learning as are all ethical appraisers. That kind of fee schedule for production only over quality is not good.

I'm being 'nice' about this instead of ranting with my full opinion.
 

slacker

Junior Member
Joined
Feb 20, 2002
As to the graduated fees for the numbers you manage to produce....

STAY AWAY FROM THAT PLACE!!!!!!!!!

You're a trainee.... you have a lot to learn. I'm still learning as are all ethical appraisers. That kind of fee schedule for production only over quality is not good.


<span style='color:blue'>Notice the guilt starting already with the volume="bad ethics" routine. Why can't he start out slow with the 1-5 schedule and work his way up. Or is 1 or 2 a week unethical too? Go for it.

You have no idea what kind of operation this is. Check it out. If you don't like it and are not getting the training you need then move on. But don't run away because some people have a built in stereotype of large operations. If you do like it, you'll get your fee back after a couple jobs.

He does have a lot to learn and always will, but running away from oportunities won't get him anything. And there are plenty of volume operations that hold their appraisers to much higher standards than some Mom and Pop shops I've seen.


"Opportunities multiply as they are seized."</span>
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Pam, your tongue must be hemorrhaging! :lol:

Check out the supervisor with the state. Ask lenders and Realtors of their opinions.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
P.S., if the lenders and Realtors say that they are the best and ALWAYS make their deal work...... that is not good. :wink:
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Hi Sean,
Simple solution here.
Ask the man how many of his 25 employees are licensed or certified appraisers and how many are trainees. If he hasn't got at least a few other qualified appraisers to assist him in training you, then I would follow John and Pamela's advice.
For what it's worth, for some reason the guy must be losing quite a few trainees or he wouldn't be charging.
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
I'd have to disagree with some of the other's views of the upfront fee idea. I like it and agree with it. There are too many people that just jump from one idea to another. I think that the upfront fee of $295 could help to cover the beginning time that gets wasted just getting a new trainee setup and acquainted with office procedures / rules. $295 isn't anything if you're planning on making appraising your career, and I think that after a trainee investing some of their own money, they'll probably pay better attention and care more.....at least until a couple of paychecks.

I agree with finding out how many "trainees" there are in comparison to the number of licensed / certified. If most are trainees, then you can pretty well surmise that the shop isn't the most wonderful place to work, otherwise more people would be staying around after licensure. The fee splits don't look too bad, depending on how much the typical fee is. I'd make sure to ask about that. If it's a cutrate shop that does appraisals for $150, then you'd better make sure you have a 2nd job to actually pay the bills. However if the fees are in the $350-$450 range per appraisal, then it may be very well worth your while. Just make sure that the shop has some sort of training / mentoring plan in place. If they expect you to just go out on your own and start doing appraisals right away, then I'd suggest you find somewhere else.
 

Rob Bodkin

Junior Member
Joined
Nov 9, 2002
Professional Status
Certified Residential Appraiser
State
Washington
Sean,

Good luck in this new venture and welcome.

I had the good fortune of learning the craft from my father initially and then when I "knew it all" (about 6 months) I left there and joined a large firm here in Seattle. Sweat shop to be sure. 1 certified appraiser and 25 non certified, but this was in 91' and certification was still very new here and that ratio was not uncommon. It was a trial by fire place and good experience but in retrospect I wish I had found a smaller shop with more experienced people.

I don't have a problem with an owner charging a fee to start with but you should make sure that the shop plays by the rules. i.e. they are on the up and up with their data providers about usage, no "sharing" MLS keys/passwords/software that has not been purchased. If the owner charges you a "training fee" you should then expect not only good one on one training but a good professional place to work and learn. If there is a high ratio of new people to certified ones your training will not be as good.

You also have to balance the realities of learning curve and experience with the graduated fee split. I am uncomfortable with paying new appraisers more for more volume. I understand the concept, but how can it not lead to cutting corners and a poorer product?

I would suggest a mid sized shop over a one person or sweatshop. That would be enough supervision and training with the opportunity to do a broader scope of work.

Also, and I can't stress this enough, make sure you have a good independant contractor agreement and track your own experience and money. Even if they say they will do that for you, you need to know how much is owed and for how long.

Again, welcome I hope you find our deal as rewarding as I have.

Rob Bodkin
Freestone Partners
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
I got $.02, I got $.02!!!!

If the fee shop is truly above board and intends to invest some time into their trainees, the "training fee" will be a real loser for them. The only reason they are charging it is to ensure the trainee won't give up too soon. On the other hand, if this is a sweat shop then the fee will be sufficient only for a training program that is limited to 1 or 2 inspections with the appraiser, and a 'we'll-answer-questions-as-they-come-up' attitude. In other words, you'll be on your own. I would avoid that one if that's how it's going to be. I've seen appraisers with 3 and 4 years of experience in that kind of environment turn out to be no more knowledgable than a 1-year newbie from a good shop, and a whole lot less ethical.

The sliding fee schedule is clearly geared toward production. Just the fact that the schedule rewards a person more for producing in excess of 20 assignments a week is going to be a red flag to most real appraisers. However, it is possible that the counting of those assignments includes only those assignments that don't require heavy re-work by the principal. In other words, the assignment might not count unless you did a good job. If I had to rate the probabilities on this I'd have to say it's 70/30 in favor of quantity and turn times being more important than quality.

Slacker's response notwithstanding, when an appraiser is focusing on volume over quality, corners are going to get cut. It's as simple as that. So you can either listen to someone who was telling us in February of this year that he was doing 2 appraisals a week in addition to his regular day job (this makes him a beginner, even if he's been doing it this way for 5 years) and who probably shouldn't even be working without supervision himself, or you can listen to the rest of us; the choice is obviously going to be yours.

As a couple of the other responses on this thread have suggested, I would look closely at the ratio of junior appraisers (trainees and licensed appraisers with less than 3 years experience) to certified appraisers in the shop. In a functioning fee shop, that ratio shouldn't be more than about a 60/40 ratio between junior appraisers and certified appraisers, with a large percentage of the junior appraisers having at least 1 year of full time experience. So in a 25-appraiser shop, there shouldn't be more than 5 or 6 trainees at the most. If there are more than that then you have a bona fide sweat shop. The chances that everyone is doing the right thing are exceedingly small.

Incidentally, junior appraisers should not be working on all types of SFR appraisals by themselves. A Licensed appraiser, who would be farther along than a Trainee, is considered by the feds as having insufficient education and experience to work on complex appraisal assignments. The definition of a complex assignment includes "the property to be appraised, the form of ownership or market conditions are atypical". If you think about it, that definition includes a lot of homes, transaction amounts notwithstanding. What this means to your situation is that the types of assignments given to a trainee should consist of the most simple types of SFR appraisals; trainees and licensees shouldn't even be working on complex SFR assignments without significant personal supervision. Even as a trainee appraiser, the Competency Rule in USPAP applies, so look before you leap on these assignments. When it comes to competency, no appraiser, from trainee to guru, has any business "just going for it." It might be cool for the American business ethic (all you have to do is work hard and deliver) to accept assignments that are over your head and then work your way through them but it is specifically prohibited when it comes to our profession.

Getting started in this business is hard. It's always been hard and it looks like it's only going to get harder as time goes on. Bite the bullet now and try your absolute best to do the right thing always and you will eventually prevail. But if you give into the impulse to succumb to the "this is just another business" mindset, you will eventually face the prospect of being known as a hack rather than a professional.

George Hatch
 
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