4 Questions Appraisers Have Before They Upgrade Their Appraisal License

appraisal licenseLicensed appraisers often come to us with questions about upgrading their appraisal license. A few weeks ago, John. F. asked us this question via Facebook:

“I am thinking about upgrading my appraisal license from residential to certified general. I have several questions and considerations, but I’m curious about some of the common questions McKissock students have about upgrading.”

While pondering an appraisal upgrade, it’s common to have a lot of questions. We rounded up the ones we hear most frequently:

What are the different appraisal licenses I can upgrade to?

A real estate appraisal career involves a series of steps to upgrade to different license levels. Appraisers begin their careers as trainees (called Trainee Appraiser, Apprentice Appraiser, or Registered Appraiser, depending on which state you’re working in). After you become an appraisal trainee, you can choose to upgrade to Licensed Residential Appraiser (which means you’re qualified to execute appraisals of non-complex residential buildings on your own), Certified Residential Appraiser (which qualifies you to appraise more complex, higher-priced residential buildings) or Certified General Appraiser.

Some appraisers find they can have life-long remunerative careers as Licensed or Certified Residential Appraisers. Some go on to earn the designation of Certified General Appraiser, which allows them to appraise larger multifamily residential properties, as well as various types of nonresidential real estate.

Can upgrading my license boost my income? 

Generally, yes. However; it will depend on your market, assignments, specialties and more. In August of 2017, Payscale shows the median residential appraiser earning a median income of $51,375. The median annual salary in 2017 for a commercial real estate appraiser is $95,408.

David Wimpelberg, president of Peconic County Appraisal Service (Mastic Beach, New York), specializes in the Five Eastern Towns in Suffolk County: the eastern portion of Long Island. He says that in his market, the mixture of high-end residential, land, and commercial property favors the General Appraiser, and notes that he has found many more opportunities to win assignments since he obtained that license.

“I work in the Hamptons, so I appraise a lot of higher-value residential properties that bring in good fees—but if your business is mainly cookie-cutter residential, getting a General license can represent a substantial boost in your income and an expansion of your base,” he says. “A lender might be looking at an investment that involves multiple properties, or a mix of residential and commercial, and might handle the transaction through its commercial lending department—which would naturally assign the job to a general appraiser.

The fees that come through the commercial department may be higher than you’d get from the residential department, and you’ll have a chance at assignments you wouldn’t even have known about otherwise. Recently a lender’s commercial department needed a portfolio of residential properties appraised, so they sent me 14 appraisal orders that I would never have seen if I’d been a Residential Appraiser.”

What property types will I be able to appraise if I upgrade my appraisal license? 

A Certified General Appraiser is more likely to be assigned to complex residential properties, such as those that have an agricultural reserve property attached to them. This might already be a working farm, or the current owner might be using it simply to keep horses, or as an extension of their back yard. In that case, a commercial appraiser would be needed to determine that land’s highest and best use.

“Properties like that might be subdivisible, and might require a subdivision analysis,” Wimpelberg notes. “That requires a general appraiser. Your fees might be higher for commercial appraisals, depending on the client. A portfolio appraisal, or an appraisal for a private bank, might pay more. In any case, your job is more interesting if you’re a General Appraiser: something new is always coming up.

“Your clients usually don’t expect you to do the extra work they might demand of a Residential Appraiser, and a General license is a way of insulating yourself from market fluctuations. Prior to the mortgage crisis, when residential was booming, I was doing really well as a Residential appraiser, but when that market went south I decided to get a General license so that I’d be diversified in future cycles when one category of real estate slows down.”

What other things should I consider before I upgrade my appraisal license?

  • Do you live/work in a market where appraisals consist mainly of modestly priced tract-style homes, or does the market have a wide variety of single-family homes, condos, and estates, with a considerable spectrum of price points?
  • Is your market almost entirely residential, or are you likely to find many opportunities to appraise other types of property?
  • Are you likely to relocate to a market where the character of the real estate differs dramatically from what you work with today?

How to upgrade to Certified Residential Appraiser

Ready to take your appraisal career to the next level? Learn more about upgrading and find all of your AQB-approved education hours.

 

 

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