Table of Contents
What is Real Estate Appraisal
Imagine you want to buy a home or refinance your mortgage. How do you know how much a property is worth? This is where real estate appraisal comes into play.
Real estate appraisal is an assessment of the market value of a property performed by a licensed or certified professional. The goal is to determine the fair market value of a property, which is the price a knowledgeable buyer would pay and a motivated seller would accept in an open and competitive market.
Why is Real Estate Appraisal Important?
Real estate appraisals are important for several reasons:
Property Appraisal: Appraisal helps determine the current market value of a property, which is important when buying, selling, or refinancing real estate.
Lender Requirement: When you apply for a mortgage, lenders usually require an appraisal to make sure the value of the property is enough to cover the loan amount.
Property Tax Assessment: Local governments often use assessments to assess property taxes based on its value.
Investment Decisions: Investors rely on valuations to make informed decisions about buying or selling a property.
How Does Real Estate Appraisal Work?
During an appraisal, a qualified appraiser inspects the property and considers a variety of factors including:
Location: Proximity to the neighborhood and property amenities.
Property characteristics: Size, condition, layout, age and features of the property.
Comparable Sales: Recent sales of similar properties in the area.
Market Trends: Current real estate market conditions.
Based on these factors and using special appraisal techniques, the appraiser determines the value of the property.
Who Conducts Real Estate Appraisals?
Appraisals are generally performed by licensed or certified professionals who have received specific training and are knowledgeable about real estate markets and appraisal methods.
Real estate appraisal is an important process that is used to determine the value of a property. Whether you’re buying, selling, or refinancing a home, the appraisal provides an unbiased estimate of how much the property is worth in the current market.
What is The Impact on Property Value?
Location: Proximity to schools, amenities and safety can have a significant impact on price.
Condition of The Property: The age, size and maintenance of the property are major factors.
Market Conditions: Supply and demand play a role in the local real estate market.
Role of A Real Estate Appraiser In Property Valuation
A real estate appraiser is a certified and trained professional who is responsible for conducting property appraisals. Their primary role is to provide an unbiased and expert opinion on the value of a property based on thorough analysis and valuation.
Key Responsibilities of a Real Estate Appraiser
Property Inspection: The appraiser starts by physically inspecting the property. They assess its size, condition, characteristics, and any distinctive features that may affect its value.
Market Analysis: Appraisers research the local real estate market to understand recent sales of comparable properties (similar to the appraisal) in the area. This helps in determining the market value of the property.
Appraisal Process: Using their expertise and collected data, appraisers calculate the property’s value considering factors such as location, condition, amenities, and market trends.
Preparing the Evaluation Report: The final step involves documenting all the findings and preparing a detailed evaluation report. This report includes a description of the property, the methods used for appraisal, comparable sales data, and the final estimated value.
Who Can Become A Real Estate Appraiser
Know The Different Levels of Appraiser
In the United States, there are different levels of licensure for real estate appraisers, each with their own educational requirements. The levels typically include:
Trainee Appraiser: This is the entry level position where you start your journey. This requires completing basic assessment education.
Licensed Residential Appraiser: This level allows you to appraise non-complex residential properties. This requires additional education beyond the apprentice level.
Certified Residential Appraiser: With this certification, you can appraise all types of residential properties, regardless of complexity.
Certified General Appraiser: This is the highest level and allows you to appraise all types of real estate.
How To Become A Real Estate Appraiser In 5 Steps
Meet the Educational Criteria
Step 1: Complete Appraisal Pre-Licensing Courses
The first step toward becoming an appraiser is to complete and pass at least 75 hours of basic appraisal qualification education, which includes three courses: Basic Appraisal Principles (30 hours), Basic Appraisal Process (30 hours), and the National USPAP Course (15 hours). In addition, you must also complete a supervisor-trainee course.
These are the minimum education requirements outlined by the Assessment Qualifications Board (AQB), and education requirements vary by state. For example, California, Colorado, Florida, Georgia, Kansas, Kentucky, and Wisconsin require more than 75 hours of qualifying education coursework to become an apprentice.
Step 2: Find An Appraisal Supervisor
Finding a certified supervisory appraiser to serve as a supervisor is the next essential step in becoming an appraiser. You must find a certified assessment supervisor who agrees to supervise your on-the-job training before you can apply for your apprentice license.
Working under a certified supervisor will ensure that you will learn the business and gain an in-depth understanding of the evaluation process. You will work closely with them to gain practical experience conducting physical asset inspections and completing research and reporting.
Step 3: Apply To Become A Trainee
Once you’ve passed your basic pre-licensing coursework and have a supervisory evaluator, you’ll apply for your apprentice license (sometimes called registration or permit). Typically, the steps involved are:
1) Submit your application and fee to the state board
2) Submit your fingerprints and background check information
3) Get your license or permit from your state board
Remember, the steps and licenses are not the same in every state, so you may want to check your state for specific information or scroll down and click on your state below.
Step 4: Gain Experience While Completing Remaining QE
With your apprentice license, you can start working and earning money as a trainee appraiser. While gaining on-the-job experience under your supervisor, you will complete your remaining qualifying education requirements and be prepared to take the national examination to become a Licensed Residential Appraiser, Certified Residential Appraiser, or Certified General Appraiser.
Each licensing level has different education and experience requirements, and again, state requirements vary as well. To make choosing your path a little easier, we’ve included more detailed information in the table below.
Real Estate Property Appraiser Qualification Criteria
Step 5: Pass The Appraisal Examination
Once you have your qualifying education and apprenticeship hours, you will need to pass the National Uniform Licensing and Certification Examination as the final step toward becoming a licensed or certified real estate appraiser. To get your real estate appraiser license beyond the apprentice level, you must pass a national exam.
There are three different exams—one for each license level:
Licensed Residential Exam
Certified Residential Exam
Certified General Examination
Each level has different education and experience requirements, as well as college-level course requirements.
Once you have earned the Licensed Appraiser, Certified Residential Appraiser, or Certified General Appraiser credentials, you can begin working independently without a supervisor.
Specializing In Different Types of Appraisal
If you’re just entering the world of real estate or are curious about the role of appraisers in property valuation, you’ve probably encountered different types of real estate appraisers. Everyone is adept at appraising different types of properties, and understanding these differences can be valuable, whether you’re a homeowner, an investor, or someone who wants to pursue a career in real estate. Let’s explore the common types of real estate appraisers you’ll encounter in the United States:
Residential Appraisers
Residential appraisers focus on appraising single-family homes and residential properties. They assess the market value of homes, condominiums, townhouses, and other residences. These appraisers play a vital role in real estate transactions, helping lenders determine the value of a property before approving a mortgage.
Commercial Appraisers
Commercial appraisers, on the other hand, specialize in appraising large properties used for business purposes. This may include office buildings, retail space, hotels, industrial sites and vacant land for commercial development. Their valuation helps stakeholders make informed decisions about buying, selling or financing commercial real estate.
Industrial Appraisers
Industrial appraisers have expertise in valuing properties used for manufacturing, storage or other industrial purposes. They assess factors such as location, size, zoning regulations, and specific characteristics related to industrial operations. Their assessments are important for investors and businesses involved in industrial real estate.
Special Purpose Property Appraisers
Some properties have unique purposes, such as schools, churches, hospitals, or special-use facilities. Evaluating these properties requires special knowledge due to their specific characteristics and functions. Special purpose property appraisers have the expertise to accurately appraise these non-traditional real estate assets.
Land Appraisers
Land appraisers focus only on valuing vacant land or plots intended for development. They consider factors such as location, zoning laws, topography, potential uses and market trends that affect land values. Their valuation is important for investors, developers and government agencies involved in land transactions.
Certified Residential Appraisers vs. Certified General Appraisers
Within the appraisal profession, there are distinctions based on certification levels. Certified residential appraisers are qualified to appraise residential properties up to four units, while certified general appraisers can appraise all types of properties, including residential, commercial, and industrial.
Understanding the different types of real estate appraisers can provide clarity when engaging in the property appraisal processes. Whether you’re buying a home, investing in commercial real estate, or considering a career in real estate appraisal, knowing these differences empowers you to navigate the diverse landscape of property appraisal in the United States.
Remember, appraisers play a vital role in ensuring fair and accurate property valuations, benefiting both buyers and sellers in the real estate market. If you ever need a property appraisal, choosing the right type of appraiser based on the type of property you have will ensure a comprehensive and reliable appraisal.
Is Real Estate Appraiser Career Right for You?
If you’re considering a career in real estate appraisal, you’re probably curious to know what the profession involves and whether it’s a good fit for you. Real estate appraisal is a specialized field within the real estate industry that involves determining the value of properties. Appraisers play a vital role in various real estate transactions including sales, purchases, refinancing and property tax appraisals.
Here are some important points to consider if you are considering a career as a real estate appraiser:
- Analytical Skills: Appraising real estate requires strong analytical abilities. You will need to evaluate market data, assess property condition, and apply appraisal methods to determine an accurate property value. If you like problem-solving and attention to detail, this may be a good choice for you.
- Interest in Real Estate: Passion towards real estate and property market is beneficial. Appraisers spend significant time researching local real estate trends, regulations and market conditions. Having a genuine interest in these areas can make the work more satisfying.
- Flexibility and Freedom: Many real estate appraisers enjoy the flexibility of their schedules. Although there are deadlines to meet, you often have control over your working hours and can manage your workload independently. If you prefer a career with autonomy, this may be attractive.
- Education and Licensing: Becoming a real estate appraiser usually requires education and licensing. Specific requirements vary by location, but most states or countries have guidelines regarding courses, exams, and practical experience. You must commit to continuing education to maintain your license.
- Job Outlook: The demand for real estate appraisers can fluctuate with the real estate market. However, there is a constant need for appraisers in various sectors including residential, commercial and government. Research the job market in your area to understand local demand.
- Communication Skills: Appraisers frequently interact with clients, real estate agents, and lenders. Effective communication is essential to explain assessment methods, justify assessments, and address client concerns. If you enjoy working with people and can explain complex information clearly, this skill will serve you well.
- Ethical Standards: Real estate appraisers are expected to maintain high ethical standards. Objectivity and fairness are important when determining property values. Maintaining integrity in your work is essential to building trust and credibility in the industry.
- Earning Potential: Real estate appraisers can earn competitive incomes, especially with experience and expertise. Earning potential may vary depending on factors such as location, expertise and customer base.
When researching how to become an appraiser, you will want to consider which appraisal license level is right for you. Each level requires you to develop new skills that allow you to evaluate different types of assets. There are four federal appraiser classifications:
Licensed Apprentice
Licensed Residential Appraiser
Certified Residential Appraiser
Certified General Appraiser
You don’t need to follow a linear progression to upgrade your real estate appraiser license from apprentice appraiser to the next level. In fact, you can choose to upgrade directly from Apprentice to Certified General, or upgrade sequentially at each license level. It’s really up to you.
Here’s What You Can Appraise At Each License Level
FAQs
1. What does a Real Estate Appraiser do?
Real estate appraisers assess properties to determine their value. They inspect properties, analyze market data, and prepare detailed reports that are used in real estate transactions, financing, and property tax assessments.
2. What are the Education Requirements?
To become a real estate appraiser, you typically need a high school diploma or equivalent. However, to advance in the field, you’ll need additional education. Most states require coursework from an accredited college or technical school. This coursework covers topics like real estate law, appraisal principles, and ethics.
3. Do I need a License?
Yes, becoming a licensed appraiser is crucial. The requirements vary by state, but generally, you’ll need to complete specific education hours and gain practical experience under a qualified supervisor. You’ll then need to pass a state-administered exam. After obtaining your license, you may need to pursue further certifications as you progress in your career.
4. How do I Gain Experience?
Experience is essential in this field. To become a fully licensed appraiser, you’ll typically start as a trainee under a certified appraiser. During this period, you’ll learn hands-on skills and techniques while completing a required number of supervised appraisal hours.
5. What Skills are Required?
Real estate appraisal requires a blend of analytical, communication, and problem-solving skills. Attention to detail and the ability to interpret market trends are crucial. Additionally, good interpersonal skills are important for dealing with clients and explaining complex appraisal reports.
6. How Long Does it Take to Become an Appraiser?
The time to become a licensed appraiser can vary based on your state’s requirements and the path you choose (residential or commercial). Generally, it can take 1-3 years to become fully licensed, including education, training, and exam completion.
7. How do I find an appraiser supervisor?
If you have a certified appraiser in your network, such as a friend or family member, they can serve as your supervisor to help you meet your experience hours. If not, you can also contact banks and real estate companies, check job boards to search for companies hiring trainee appraisers, or begin networking to connect with possible supervisors. Dive deeper into how to find a supervisor.
8. Do I need a college degree to become an appraiser?
Whether or not you need a college degree depends on two factors: where you live and what level of licensing you want to obtain. The Appraisal Qualifying Board (AQB) sets the minimum education prerequisites for each level:
- Trainee appraiser: No college degree is required.
- Licensed residential appraiser: No college degree is required.
- Certified residential appraiser: The AQB requires a bachelor’s degree, associate degree in an approved field, or 30 college semester credit hours in specific topics or completion of CLEP exams.
- Certified general appraiser (or commercial appraiser): A bachelor’s degree or higher in any field is required.
However, individual states may have stricter requirements. For example, Alabama follows the AQB prerequisites, but Indiana requires certified residential appraisers to have a bachelor’s degree.
9. Do I need a real estate appraiser license to appraise houses?
Yes. In all 50 states, you are required to obtain some level of real estate appraiser license or certification before you can appraise homes. As an appraisal trainee, you can appraise houses only under the supervision of a supervisor. Once you advance to the level of licensed residential appraiser, certified residential appraiser, or certified general appraiser, you can appraise houses independently. Explore the average appraiser salary for each license level.
10. Is Continuing Education Required?
Yes, maintaining your license requires ongoing education. This ensures that appraisers stay updated on industry standards, regulations, and best practices.
11. What are the Career Prospects?
Real estate appraisal offers solid career prospects. As long as there is real estate, there will be a need for appraisers. Many appraisers work independently or for appraisal firms, while others are employed by banks, government agencies, or real estate companies.
12. How Much Can I Earn as an Appraiser?
The earning potential for appraisers varies by location, specialization, and experience level. According to the U.S. Bureau of Labor Statistics, the median annual wage for real estate appraisers was around $58,650 in 2022.
13. How do I Get Started?
If you’re interested in becoming a real estate appraiser, start by researching your state’s specific requirements. Reach out to local appraisal organizations or schools offering appraisal courses. Consider talking to practicing appraisers to gain insights into the profession.