When most people think about real estate careers they think of agents or brokers, but real estate appraisers play an essential role in property transactions.
If you have an analytical mind and an interest in real estate, it might be time to consider a career as a real estate appraiser.
What is a real estate appraiser?
A real estate appraiser, also known as a real property appraiser, is a professional that is called upon to determine the value of a home or property. This valuation is called an appraisal. If you’ve ever wondered how a house gets its price tag, an appraisal is often part of the pricing process.
Although most people are familiar with appraisers in the residential sector, appraisers can also work in commercial real estate. Commercial real estate appraisers determine the value of office buildings, shopping centers, hospitality and hotels, land, and more.
What does a real estate appraiser do?
A real estate appraiser provides an objective and unbiased estimate or appraisal of the value of a property. Appraisals are prepared for lease negotiations, mortgage lending purposes, tax assessments, and more. Appraisers inspect the property’s features and compare it to similar properties to determine its value.
They consider the following when making their appraisal:
- Determine the exterior condition of a property
- Assess the interior condition with a room-by-room walk-through
- Evaluate amenities such as a finished basement or swimming pool
- Look for safety or health code violations
After the appraiser has gathered information about the house, they’ll compare it to similar homes in the area to make their estimate. Strong analytical, critical thinking and writing skills are a must for real estate appraisers.
Soft skills like listening and verbal communication are equally important. With these skill sets, you’ll be well-equipped to understand your client’s needs, complete your appraisal, and clearly communicate your valuation. Appraisals are the key to ensuring the home buyer, mortgage lender, and seller receive an accurate estimate of the home’s worth.
The mortgage lender or financing organization typically hires the appraiser. It often takes an hour or two to complete an appraisal, and you should receive the report within a few days. This amount of time can vary depending on the property size, report type, and other factors like a lender or bank review.
Real Estate Appraiser Salary
The median pay for a real estate appraiser is $61,340 per year. Incomes range anywhere from $36,940 and $72,210, and like many other fields, this range will vary depending on your education and experience. As a Trainee Appraiser, your income will likely fall on the lower end of the range, while a Licensed or Certified Real Estate Appraiser will earn much more.
Appraisers can work for large appraisal companies, a local appraisal firm, a bank, or work independently. They’re paid per appraisal, but some positions are salaried, especially when working for a larger firm or agency. Factors that can impact salary include:
- The individual appraiser’s experience and certifications
- Appraiser’s location
- Property size
- Property location
- The type of property being appraised
- Damage or repairs to the property
For those who work independently, being an appraiser can be a very lucrative career. However, working for yourself often means working longer hours and more days per week. You can search for real estate appraiser roles on job search websites to see how much appraisers are making in your area.
How to Become a Real Estate Appraiser
Now that we’ve taken a closer look into the role of an appraiser, let’s dig into the steps to become one.
1. Understand the minimum requirements to become a real estate appraiser.
The Appraisal Qualifications Board (AQB) sets the minimum requirements, or the Real Property Appraiser Qualification Criteria, that aspiring appraisers in the U.S. must meet. The necessary training to become a licensed or certified real estate appraiser varies by state — and some require state-specific courses in addition to the ones required by the AQB.
The Appraisal Subcommittee (ASC) oversees individual states as they license and certify real estate appraisers. A full list of the state appraiser regulatory agencies can be found on the ASC’s website — your state’s agency will provide you with more information on state-approved courses, prerequisites, and exams.
2. Become a trainee appraiser.
The next step to becoming a real estate appraiser is to start as an appraiser trainee. The following courses are required by the AQB:
- Basic Appraisal Principles: 30-hour course
- Basic Appraisal Procedures: 30-hour course
- National Uniform Standards of Professional Appraisal Practice (USPAP): 15-hour course
In addition to these courses, confirm with your state’s appraiser regulatory agency to ensure that you’ve met all course requirements.
3. Find a supervisory appraiser.
Once your trainee courses are completed, the next task is to find a Supervisory Appraiser who can mentor you and supervise your appraisals. Under your Supervisory Appraiser’s watch, you’ll need to rack up approximately 1,000 hours of experience in no fewer than six months.
To find a supervisor, explore your local real estate appraiser organizations and sites like LinkedIn and Indeed — these are valuable resources to help find Supervisory Appraisers in your area.
4. Complete required real estate appraiser courses.
No college-level education is required, but you’ll need to complete additional courses to make the leap from trainee to licensed professional. Here’s a summary of the AQB minimum requirements:
- Residential Market Analysis and Highest and Best Use: 15 hours
- Residential Appraiser Site Valuation and Cost Approach: 15 hours
- Residential Sales Comparison and Income Approaches: 30 hours
- Residential Report Writing and Case Studies: 15 hours
Again, be sure to check with your state’s appraiser regulatory agency to ensure you’ve met all state and national requirements.
5. Get approved to take the Licensed Residential Exam.
Now that your courses and 1,000 hours of experience are complete, reach out to your local state advisory board to register for the Licensed Residential Exam. The exam covers much of what you learned in your previous courses, such as:
- Types of real estate value
- Real estate market and investment analysis
- Valuation methods
- Appraisal math
Check with the organization you took your appraiser courses with — they might be able to provide you with exam tips. Practice questions can also be found online, so make use of them as the exam is 125 questions long.
You’ll have the ability to take the exam in a proctored setting near you or take it from home with someone monitoring you via webcam.
6. Submit your application to become a Licensed Residential Appraiser
Congratulations, you passed your exam. The final step is to submit your license application to your state licensing board, which can be found on the ACS website.
Real Estate Appraiser License
Trainee Appraisers receive their license from their state once they complete the required coursework, hours of experience, and pass the Licensed Residential Exam. When they’re given their license, they become a Licensed Residential Appraiser and can do appraisals on their own.
With your license, you can perform appraisals on your own without the supervision of a Supervisory Appraiser. As a Licensed Residential Appraiser, you have the ability to, ” … appraise non-complex one-to-four residential units having a transaction value less than $1,000,000 and complex one-to-four residential units having a transaction value less than $250,000.“
Complex vs Non-Complex Appraisals
But what’s the difference between non-complex and complex? Non-complex often means the property you’re valuing is normal in comparison to the other properties in the area.
A residential unit can be labeled complex if it’s a historic property, a beachfront luxury home, or varies in architectural style from the homes around it. In other words, a complex property is atypical and contributing factors can be both internal and external — from ownership irregularities (ie. community land trust) to the home’s layout or location.
If you’d like to further your career in real estate appraisal and work on more complex cases, you can become a Certified Residential Appraiser. Once you’ve met the minimum requirements, gained additional experience, and completed the necessary exams, you’re set to apply to become a Certified Residential Appraiser.
Is an appraiser role right for you?
Appraisers’ valuations play an important role in the purchasing process of a home. As a licensed or certified real estate appraiser, you’ll paint an accurate picture of a home’s worth for the buyer, seller, and lender. A career as an appraiser can be rewarding, but be sure to pay close attention to your state’s requirements.
This article does not constitute legal advice. The steps required to obtain a real estate appraiser license may differ from state to state, so you should seek your own legal advice to ensure you follow the correct process.
Editor’s note: This post was originally published in October 2018 and has been updated for comprehensiveness.