Yearly Billings

[slim525563]

I'm a commercial appraiser who works on a fee split doing mostly mortgage work, 35% trainee, 40%, licensed, 45% general certified, and 50% MAI. I have several friends who are also commercial appraisers with various compensation formats. Some are paid a yearly salary regardles of their production, other get a % of the billings and write the whole report, and still others get a smaller percentage of the fee with an analyst who writes the front end.

I'm curious, and trying to figure our the most effective method for increasing your billings. Any input regarding the amount a typical appraiser who writes the whole report from front to end bills in a year is appreciated. Also, any input regarding other compensation structures and yearly billings is also appreciated.

 

[PL1957]

Any input regarding the amount a typical appraiser who writes the whole report from front to end bills in a year is appreciated. Also, any input regarding other compensation structures and yearly billings is also appreciated.

I really don't think there is such a thing as "typical" for a commercial appraiser. It really does depend on the market you're in, types of appraisals you work on, and clients you serve. It sounds like you have a good handle on what is "typical" for your market - don't try and do comparisons with what is typical for NY, Chicago, LA or Topeka.

 

[JT1974]

I'm curious, and trying to figure our the most effective method for increasing your billings. Any input regarding the amount a typical appraiser who writes the whole report from front to end bills in a year is appreciated. Also, any input regarding other compensation structures and yearly billings is also appreciated.

Slim,

One way to increase your billing is to specialize. If you carve out a niche in one or two property types (i.e. apartments) you can increase your productivity. I know several appraisers that do this and they are quite successful at it. However, it generally only works for large markets. I hear that this is also somewhat popular at the national firms, where their appraisers tend to specialize in certain sectors such as retail, industrial, multi-family, etc. I guess it depends on what type of company you currently work for or anticipate working for in the future.

Compensation structures are also going to be all over the map. One thing to remember is that some companies pay benefits such as health, dental and 401K in addition to the fee split percentage so make sure you are aware of that before getting too hung up on the percentages.

The bottom line is that you need to look at the total compensation and decide whether or not you will be happy with it. In other words, don't get too worried about how much profit the boss is making or what the raw percentages are. Rather, ask yourself if you are happy with the actual income you are making. Also, take a look around and ask yourself if you are earning more or less money than other people your age with similar educational backgrounds and use that as a guage to see whether you are being fairly compensated.

I think in the end you will come to realize that you've got a pretty decent career with a bright future ahead of you.

 

[Vernon Martin]

In addition to these other comments, I would add that the ability to bring in business is one of the most important ways for a commercial appraiser to increase income. I know this is not immediately practical advice for a trainee, but something to consider once you master a certain niche in the market and you are able to effectively market that particular expertise. When you get to that stage where you are able to obtain your own customers, then fee splits will become irrelevant--you'll be able to have your own practice.

 

[PL1957]

When you get to that stage where you are able to obtain your own customers, then fee splits will become irrelevant--you'll be able to have your own practice.

I think many appraisers make the mistake of thinking that, if they have their own practice, they'll make more money. Of course, in some cases, that's exactly the way it works - on the other hand, many appraisers would be much better served if they stayed and developed their niche practice within the auspices of a larger firm.

 

[Tcorry]

True, that it is more productive to carve out a niche and specialize in one or two property types, but I think that it is in your best interest to work on and understand how to appraise multiple property types. When the market is hot, ie. 2000 - 2005 you can make a killing specializing in one or two property types because there is so much work. With the way the market is today you need to be able to diverse and take on different assignments. You most likey will not be able to stay busy appraising only one or two types of property.

 

[Vernon Martin]

Valid points raised by all. When I use the word "niche", though, I mean more than just a property type. It could also be a particular type of appraisal service, such as litigation support, eminent domain or property tax appeals, or a certain type of client with specialized needs, such as foreign lenders or US government agencies. And the most important caveat is to have your clients lined up before you go independent.

 

[jimstein]

At a trainee level, one of the most practical ways of increasing your billings is becoming highly efficient in your work. One thing I always suggest to trainees is read reports, read reports, read reports! The more familiar you are with the report format, analytical methodology and writing style of your trainor, the faster you will be able to complete appraisals. So, when you have nothing to do at night, turn off the television and read reports. They also help with sleep!

 

[Mountain Man]

Another way to increase your income as a trainee is when you see a helluva deal, turn down the request and buy it!