As a residential real estate appraiser, you specialize in valuing a home. An appraisal is needed in real estate transactions because of the nature of property – that they are unique depending on their location and that they aren’t dealt with on a frequent basis. Homes don’t have the same level of exposure as stocks, which are traded every single day.
Usually, a residential real estate appraiser develops a market value opinion for a property. This means that an appraiser gives an estimate for how much a property can be bought or sold on the valuation date between a buyer and seller. Other kinds of value determined by appraisers include:
Use Value – also called value-in use; refers to the cash flow an asset brings an owner when used for a specific purpose.
Investment Value – the value of an asset to the owner for investment for operational objectives.
Insurable Value – the value of a property that is covered by an insurance policy.
Liquidation Value – this kind of value is commonly used in bankruptcy proceedings.
Being a residential real estate developer requires certain skills to succeed as well. For instance, an inkling for detective work can be useful in making the best valuation possible. Detectives like finding clues and consider the whole surrounding when performing their duties – all of these essential to your work as an appraiser. Why is that the case? For one, location plays an important role in how much you value a property: Is it near the beach? Is it in a prime location in the city? Is it in a peaceful village far away from the city?
A certain love for math is also valuable as a real estate appraiser given that you have to prepare reports on the value of a property. These reports are important tools in determining mortgage loans and settling estates. Appraisal reports also factor in divorce and taxation apart from being used to set the price a property will be sold.
Lastly, people skills are necessary as you have to communicate with different people as you go about your work.
Residential real estate appraisers play a huge part in valuing, selling and buying homes. Focused on the residential sector, your job involves appraising different kinds of homes, as well as preparing appraisal reports, keeping updated on the local real estate market and performing other responsibilities based on what’s required.
Apart from writing reports on the value of a property, other duties of a real estate appraiser include inspecting and taking photographs of a property and preparing legal descriptions of a property.
Residential real estate appraisers usually work for real estate companies. However, there are some who are employed by banks, mortgage companies and other related organizations.
Being a residential real estate appraiser also means spending quite a lot of time in the field where you visit houses for inspection and valuation. Some appraisers who work for banks usually spend more time in the office.
Just like most jobs, a full-time appraiser works a 40-hour week. However, you can also go the self-employed route and work when you’re most convenient.
Becoming a Residential Real Estate Appraiser
There is no required degree for becoming a residential real estate appraiser, however, most of those who hold this kind of job have either an associate’s or bachelor’s degree. Programs you will study when trying to become a residential real estate appraiser include basic appraisal principles, basic appraisal procedures, the appraisal sales comparison approach, as well as courses in business, computer science, economics and market analysis.
Having a license to practice real estate appraisal depends on the state you are in. Then again, almost all appraisers are required by law to get certified by the state. The two certifications needed by appraisers are the Certified Residential Real Property Appraiser and the Certified general Real Property Appraiser. These two determine which kinds of properties you are allowed to value.
There’s also a third certification offered in most states: the Licensed Residential Real Property Appraiser. This kind of certification requires training, as well as time spent as a trainee and passing the required exams. An ongoing education requirement is also needed in several states.
In most countries, having a license or certification to practice appraising is required. In the UK, this kind of job is known as valuation surveyors.
Whether you choose to be employed by a real estate agency or decide to go the self-employed route, you need all the experience and help you can get. After all, what better way to learn about the profession you want to earn a living in than by talking to people who have had this kind of job and immersing yourself in their world.
Since most states do require residential real estate appraisers to have a license or be certified, it’s best if you work on getting one. As for training, try to get a job at your local real estate appraiser’s office; this will give you a hands-on experience of what life will be like as an appraiser. Another option is to look at which banks are looking for trainee appraisers.
You can also hone your people skills while you train as an appraiser. For one, you could network with professionals in your area. Try to talk to them and learn from what they have to share. All of these will be valuable whether you decide to be employed by an organization or choose the road to self-employment.
- A complete understanding of appraisal methodology.
- Solid skills in math and business.
- A keen attention to detail.
- Strong analytical skills.
- Great customer service skills.
- Skills in organization and time management.
- Strong problem-solving skills.
According to PayScale, an online salary, benefits, and compensation information company, a real estate appraiser’s salary can be as much as $60,000 per year on average. With that, pay can also range between $35,000 to 4104,000 each year – this factor in bonuses and profit sharing.