On The Road Again

I spent a few days visiting rental complexes so we could have rental information when jobs came in. I visited some interesting areas. There were some places where I didn't feel comfortable getting out of the car. I always love visiting these places, seeing how crappy some of them are and then going onto apartmentratings.com to see what the tenants and former tenants say. Usually my impression isn't that far off from what people have to say. I have told many of my friends that these little trips make you realize how lucky you are. I can bitch and moan about little things every now and then, but I can pay my bills, I live in a safe environment, my house is clean and rid of any pests. Some people don't have a choice, and it isn't necessarily because they don't work hard. Of course, it works both ways, I have been inside of 10,000 square foot homes with indoor pools thinking to myself, 'wow.'

Again, it was liberating to not be tied to a desk or office all day. It was a nice day, and it was nice to get out and see a few different counties. I usually will get a rental car when I'm taking a long trip. The guys at Enterprise Rent-a-car were impressed that I put over 300 miles on one of their cars in one day. On this day I had my own vehicle because, although I was going to be traveling quite a bit, I felt pretty close to home and didn't feel the need to get a rental car.

This was a slow period. We've had them off and on and you will experience them too if you chose to get into this field.

Sorry to cut this post short, but I have a residential to work on. . .

Next up, Is This The Thing For Me?

Sh*t Work

Well, I knew that day was going to come. I didn't know exactly what it was going to be, but I knew that the grunt work would be there, and I would be expected to do it. That's okay I guess, but there seemed to be an awful lot of it, all at once.


Nothing like being the low man on the totem pole! First it was running errands and getting copies made. At least I got some fresh air. Then I would deliver our clients' reports. After that it was emptying the trash, that wasn't terrible either. Believe it or not, the task that I hate doing the most is having to call people and convince them to give me information that they have no incentive to give me. Many times people are rude (and in some cases, very uneducated.)

If you are looking to get into this field, don't think that it is all going to be a bed of roses. Also, don't think that you are going to make a lot of money (at first.) In most cases, it is actually costing your mentor to keep you around, but I think you'll find that it is worth it. We just have to make a few years worth of sacrifices to make it happen.

I had a really hard time convincing the people closest to me that I would actually have to take a large pay cut to pursue this career. Poeple sometimes have a hard time dealing with the fact that a person with a college degree and 15 years of work experience could actually make $10.00 per hour. I had to convince people to think of it as an internship or an apprenticeship, in the end the cut will be worth it and I will end up making a lot more money and being happier in the long run.

I've had some concerns. I have had to provide my own health insurance and retirement. I'm driving an eight year old car that I haven't made a payment on in years. I'm making very little money and if that car craps out I could be screwed. In the end, I'm just going to try to have faith that things are going to work out.

Next post, On The Road Again

The Experience of Travel

The first time I traveled for work it was about 100 miles away. My travel, research and photographing was a full day assigment. I had always had a job with no flexibility, where I was stuck in an office all day long. There was no freedom, no fresh air, a miserable boss, and no flexibility!


Getting out on the road to a city I had never had occasion to go to was very exciting! I made a map of my journey so I knew what order to visit properties in, grabbed my iPod, fired up my GPS and got going. The weather was beautiful, the drive was beautiful and I was so excited to be doing something different. I couldn't believe I was being paid to do this job, but I was!

I had some wonderful experiences that felt very fulfilling. I will admit that on some occasions this is a lonely job. Luckily my employer is okay with a significant other or pet traveling with me although I really don't have much opportunity to do that. I did take my dog one weekend when I went 15 miles from my house to explore a land sale. I was in a position before that was very social. I talked to probably 50 or more people in a day, it was a very difficult adjustment to not be seeing or talking to this many people anymore.

We'll see if I can continue to hack it!

Next up, Sh*t Work!

Later In That First Week

That first week I learned about my very first assignment. I was to work on a rent comparability study. It is exactly as it sounds, an assignment to research market rents in a certain area. Usually the study is commissioned when a buyer, seller or managment company wants to see where they stack up compared to other market rate properties in the area.

A rent comp study does require a decent amount of research. It is crucial to touch base with managers and owners of the market area to find out what their asking rents are and what is included when a tenant pays this rent. It is very important to compare apples to apples, so you need to make adjustments to compensate for amenities that the subject or comparables have.

One of the first major rules you will learn in classes is that in your grid you never adjust the subject. You always adjust the comparables. If your subject property is $900/mo. but includes heat, hot water and a parking garage and your comparables are $700/mo. but all utilities are paid by the tenant you must make an adjustment in that comparable because the subject property would be superior. As the appraiser, you may decide that heat and hot water are worth $100/mo., and garage parking might be worth $80.00/mo. you would add these to the rent of the comparable to make it more comparable to the subject.

What people consider the worth of, say, a washer and dryer in the unit will very by market, and it is the appraiser's job to figure all this out by asking questions of various property managers and owners. You can conduct a paired analysis to see how much higher a tenant will pay in a certain area to have this amenity. It is also important to see the properties, both the subject and the comparables, so early in my second week I was on the road. I traveled to the market, photographed our subject and talked to the property manager and then moved on to the comparables. The purpose of this is to see, not only the comparable, but the neighborhood that the comparable is listed in.

Talking to locals who are aware of the market, and seeing all the properties give you a clear picture of the market area. Since it was my first week, I didn't make any adjustments, but did do the research and photographing of the comparables. It was an interesting experience!

Coming up next, The Experience of Travel

The Very Beginning

When I first began my journey, I really didn't know what to expect. What made it more difficult is the fact that I had been in my former position for 14 years. I knew my old job inside and out and could have done it in my sleep, and now here I was, trying to begin at the beginning and learn something new.

My first days were hectic. I had my very first exposure to my local multiple listing service or MLS and found it to be a very interesting tool. In fact, it is addictive! I had never seen it before, because it is a database for real estate professionals only, and we had none of those in my family. As your local MLS is good for residential and some commercial properties, I also learned how to use a product called CoStar to find commercial comparables and listings for sale. In CoStar, you can find information on everything to a billion dollar portfolio sale of multi-family properties, to a little commercially zoned lot for sale. I am not sure how much this service costs the firm that I am with, but it is a very valuable tool. They do offer a demostration of the product on their website.

If you don't have the highest skills in computer literacy, don't worry, your local MLS and CoStar are very similar to using Google. If you can use Google, or any other search engine for that matter, you can learn these two products.

Another thing that I did on my first day was read through some completed reports. They were a little intimidating at first: long narrative reports that seemed to go on forever. I had some composing and editing experience, but this was mostly smaller newsletters and websites. I also helped proofread a book for a friend a few years prior. This was going to be like working on a book every week. After you dive in and get used to it though, it is pretty easy and straightforward. Of course, by choosing to work in this field, the information is interesting to me. This was helpful for me too to learn the language that is used in these reports.

I also read through some residential reports, personally, I have worked on four residentials now, and have started a fifth. Residential is interesting, because we can all relate to it, but the forms are boring. As far as being able to complete an assignment, of course, residential is the easiest. I suppose appraisers who only do residential work can do three of those in a day if they really work at it. Any more than that and I might question their thoroughness in finishing the job.

You will learn quicky, as I did, that every job is different. One thing that I really like about my position now, in contrast to my old career, is that every day is different. There is always something exciting going on, whereas I knew my old job so well that I would practically fall asleep at my desk.

Coming up next, Later In That First Week

Preparing For Your Interview(s)

One thing I picked up on very quickly is that most appraisers will be just as uncomfortable interviewing you, as you will be uncomfortable being interviewed. These aren't corporate people who do a lot of hiring, firing or catering to personnel issues-- they are businessmen/women; their time is money and they need help.

I guess my advice to you is this, don't spend huge amounts of time figuring out what you are going to say when the interviewer asks "Where do you see yourself in ten years?" I was never asked that question. I'm not saying don't prepare, but don't waste time on it either.

My first piece of advice would be to know your interviewer and their specialties. What kinds of jobs do they take on? Will they take on anything to stay busy? There are some interesting specialties out there, I interviewed with one company that did mostly litigation work; ad valorem tax appraisals and condemnation. Know what they specialize in and acquaint yourself with the issues involved.

Also, learn about any desigations that your interviewer may have. Many appraisers have lot of initials after their name. Look into the work and studies that were involved to earn these designations.

Some questions you may want to ask during your interview:

1. Does your firm do mostly narrative reports or form reports? Most commercial firms do narrative reports. Writing and proofreading skills will be good skills to highlight for this.

2. How much guidance would I have initially. Be leary of someone who will throw you to the wolves right away.

3. What tools do I need to have? Some firms, like mine, have anything you could possibly need. I don't even need my own camera or GPS, it just so happens that I do have those items.

4. Do I need to bring my own business?

5. Do I need to bring my own Errors and Omissions Insurance (otherwise known as E & O)

6. Does your firm pay or reimburse for education?

You can think of other questions too, just try to keep the dialogue going, you'll do great. It's mostly a personality issue. Most appraisers love to talk about real estate and appraisal business, if you can keep conversation going it will show them that you are knowledgable, well spoken and have a good personality.

Either before your interview or before contacting a firm check with your state licensing board to make sure there aren't disciplinary actions on your interviewer's record, avoid this at all cost. Another helpful tip would be to e-mail a few trusted friends from the appraisers forum or from your local AI chapter to get opinions on your interviewer. It is an unfortunate truth that some people don't play by the rules.

A very wise teacher gave me some advice that I followed through the entire process. . .

"Who you do your trainee hours with will stick with you for your entire career. Their career and their practices are your career and practices. Choose very wisely."

Coming up next, The Very Beginning

Tips For Finding A Mentor

If you are getting into this business one of the most frustrating issues is finding a mentor. Then, if you are lucky enough to find a mentor, you have to find one who is trustworthy.

I finished my classes in June of 2007. I didn't actively start looking for a mentor until I finished my classes. USPAP was my last course and I wanted to be able to say that I had completed it. Over the summer of 2007, I had three full-time job offers in commercial appraisal firms. I chose one, and began my journey in October.

Here are some tips that I can pass on to you from my search:

1. If you take Appraisal Institute courses, make sure that the coordinator for your chapter has your resume.

I had five interviews and two offers from the chapter coordinator forwarding my resume to people who were actively looking for trainees. PS: I wasn't a member of AI at the time, I would say that most will gladly accept your resume whether you are a member or not.

2. Make sure your resume is spotless.

I don't want to offend anyone by saying this, check to make sure names are correct, check for typos and mis-spellings. I reviewed resumes for years, you would be surprised at how many well educated people never proofread their resumes. If I found typos or mis-spellings, it was thrown in the trash immediately. My current employer also followed this criteria.

You must be detail oriented in this business, prove it with your resume.

3. Emphasize your pertinent skills.

Any real estate experience, research experience, writing experience etc. Do yourself a favor and visit your local courthouse (or check for court records online.) Get acquainted with the process involved in searching for deeds, mortgages, tax maps, etc. You will be surprised how much of this can be done online, and you can emphasize these skills on your resume.

4. Know if you would like to specialize.

This may come later in your career, but if you know that you want to specialize in residential appraising, multi-family housing, health care facilities, hospitality establishments, etc. reasearch companies that specialize in these types of appraisals. There are some interesting niches out there. Think outside the box!

5. Join AppraisersForum.com.

There is a lot of experience on that forum. People who have been working in this field for years. Everyone is kind and respectful and they want to be helpful to you. Not only is it a great way to meet people it is a terrific opportunity to get questions answered. They have a newbe/appraiser wannabe forum and also a jobs forum.

6. Appraisal Institute Chapter/Dinner Meetings.

Personally, I never did this, but everyone in the field recommends that if you are interested in joining the Appraisal Institute that you visit your local chapter and attend dinner meetings. It is a good way to meet many appraisers under one roof. It could be that they are not looking for a trainee, but they may know someone who is, since they are able to talk to you and see you, you have a better chance of getting your resume forwarded.

7. Find Names of Appraisers In Your Area.

This is pretty easy. You can look in the yellow pages and on the internet. I wanted to find someone with an MAI designation, so if you click on the link and go to the Appraisal Institute's website you can search for appraisers by area. Print the list and start sending out resumes or making phone calls.

8. Keep A Paper Trail.

I kept track of every company I sent resumes and cover letters to. I would suggest making a subfolder for each or naming each specifically so you know who got which letter and resume. For some firms I tailored my resume to them and wanted to know exactly what the resume looked like. Make a simple spreadsheet of who you sent resumes to and what day you mailed them.

9. Read, Read, Read.

Read your text books, read everything and anything you can get your hands on, you'll learn some valuable information and when you do get that interview you'll be able to have conversations about issues in the field.

Good luck!

Next, Preparing For Your Interview(s)

Essential Skills For An Appraiser

Appraisers & Appraiser Trainees have to be. . .

Detail Oriented

You have to keep track of everything. You never know when an appraisal could be questioned, reviewed or taken to court. You have to take meticulous notes about research you've conducted, people you have spoken to and places you have visited, AND, you have to make sure that you stow it in the work file.

Resourceful

Research is a big part of appraisals, especially commercial appraisals. I spend whole days sometimes picking through public records, zoning maps and tax maps to try and find information that is pertinant to an appraisal, or to its comparable sales. Here is a recent example: I had a one acre parcel of commercial land on a very well-traveled highway. The parcel sold for $100,000, which is extremely low for our market area? Why? It turned out that the parcel was land-locked. Without the parcel next to it there was no way to gain entrance to the site. The person who paid $100,000 for the parcel owned a small strip center that adjoined the property.

Personable

Yes, its true, you have to be personable and sometimes you have to bite your tongue. You could find yourself in a situation where you have to bring your own business. You will be meeting clients and will have to bend to fit their schedules. You will be required to verify information via the telephone, sometimes this information is somewhat personal, i.e. "Can you tell me the expenses that this building had in a typical year?" I reference biting the tongue because you will encounter people who are downright rude. Yes, it happens. I hate to say this, but Realtors almost never want to help you. You will have to have people skills to succeed.

Computer Literacy

Many appraisers went for years not having to rely on computers. When a job comes across your desk, you need to search comps via your local market MLS or a commercial service such as CoStar, review deeds and transaction data via public record, check tax maps and zoning (you can't do all zoning online) and prepare your report, all via computer. Yes, computer skills are essential.


Math Skills

Now I'm only just beginning, but I find that I use finance math and geometry the most. There are plenty of jobs that require for intense calculations, but I think you could make a living without being a math genious. You do need basic math skills and you have to be precise, there are a lot of formulas that you will learn in your basic courses that will address all this. You should also purchase and be familiar with an HP 12C financial calulator. I love mine, and you will use it for your entire career.


You May Have To Get Dirty Sometimes

This is true, sometimes you have to go into crawl spaces, attics, muddy yards, flower beds, etc. You may find your self in a situation where you have to trek through a few acres to get to the parcel of land that you are appraising. Dress appropriately.


Be Able To Run While Being Chased

This is just to make sure you are still paying attention. In all seriousness, I had a job offer from a company who did a lot of litigation work, they told me that there could be times (forclosures especially) when the person living in the property is hostile and doesn't want you there. People have been chased by dogs, tenants, homeowners, just keep your safety in mind.

Next time, Tips For Finding A Mentor

We'll begin at the beginning. . .

I am a real estate appraiser trainee. I hope to use this blog to chonicle my trainee period for those who are interested in the field. Check back often, I hope to post at least several times per week.

It is well known that the "barriers to entry" in this field are huge. Anyone who is looking for a mentor can substantiate that now. Especially now that the market is going south. In most cases, mentors have nothing to gain by taking you on, this is why lots of mentors require trainees to bring their own business. I was very fortunate that my mentors didn't make me do this. I think some mentors have a hard time finding good quality trainees too. Let's be honest, some people get into this line of work because they think it is quick money for very little effort.

Not true. If you have this attitude, throw it away now.


I had decided early on that I wanted to pursue a Certified General License. This allows you to appraise just about any piece of real estate that you are competent to appraise. I'm the type of person that I like to have options. I don't want to work this hard and get stuck only being able to appraise houses, or only being able to appraise restaurants, etc. I want to be marketable, and I want to be able to pull income from as many job sources as I can.



I was experiencing job frustrations when I decided it was time for a new career. I was working in the field of eduation, and had worked in that field for many years, when I decided to make the switch. Like a lot of people, in my former job I was experiencing way too much frustration for way too little money. I always loved real estate, but didn't feel like I would make a very good salesperson. I love finance and math and I'm a good analytical thinker, this is what pointed me in the direction of appraisal.



I signed up for a series of Appraisal Institute courses. For anyone considering this line of work I would wholeheartedly recommend their classes. For the money I spent I got a really good education. In four courses I accumulated 90 hours of classroom time. (I will need 300 hours to get my license) and there are plenty of mentors out there who will not consider someone without Appraisal Institute education. For those of you who are considering the online route I would advise you not to, especially for your preliminary coursework. The instructors work in the field and have years of experience, I was able to benefit from the work/business experiences of every instructor. I wouldn't trade it for anything.

The courses that I have taken are:

Basic Appraisal Principles (30 Hours)
Basic Appraisal Procedures (30 Hours)
Residential Market Analysis & Highest and Best Use (15 Hours)
Uniform Standards of Professional Appraisal Practice (15 Hours)

This is a good start for anyone, keep in mind though that most states will not let you count hours that you have acquired before taking your USPAP course.

Coming up next, essential skills for an appraiser.