Appraisal Business

Welcome to the fifth installment in our series, “How to Make More Money as an Appraiser.”

We’ve discussed managing time, upgrading your certifications, utilizing human capital properly, and managing business expenses. Let’s look at another way you might be able to earn a higher income: move to a higher-paying state.

The Rationale

This seems like a pretty drastic move (no pun intended) just to make a few more bucks. In some cases, you’re right, it is a pretty drastic move. In other cases, however, it might actually make sense!

As you know, the average income for real estate appraisers varies state by state. The U.S. Bureau of Labor Statistics lists the 2019 median pay as $57,010, or $27.41 per hour. If we compare state to state though, there’s a significant gap of $57k between the top earning state and the lowest earning state. The top earning state, District of Columbia, had an average income of $97,200 versus the lowest earning state, West Virginia, with an average of $40,360. That’s quite a difference!

Let’s look at this a bit closer by examining the top 12 states. We’ll take into account the states’ cost of living rating along with the states’ average appraiser income. The cost of living rating is indicated as higher or lower than the national average of 100%. For instance, if a state has a cost of living rating of 143, that means it’s 43% higher than the national average of 100, ouch! (Nevada and Nebraska are not included as the BLS had no income data for them.)

• District of Columbia ($97,200)/162.4
• California ($85,970)/148.53
• Alaska ($80,160)/122.88
• Washington ($79,080)/122.18
• Colorado ($77,580)/107
• New Jersey ($75,950)/124.28
• New Hampshire ($75,260)/105.25
• Ohio ($74,810)/91.56
• Connecticut ($74,340)/121.59
• Massachusetts ($73,530)/128.44
• Minnesota ($72,550)/103.56
• Iowa ($71,840)/91.12

The lowest state (West Virginia) is another $31,000 below Iowa’s average. With such a large gap between the top states and the lowest states, considering the wages in prospective states might be a good way to go for an appraiser. However, keep in mind that the higher wages are watered down by the higher costs of living. The top earning states all have above average costs of living ratings, except for Iowa (and Minnesota is pretty darn close to the average mark).

Is it Worth It?

Relocating simply for the chance to make more money is the most drastic step out of our tips for making more money as an appraiser, but if you have other reasons to relocate and your choice is between California and Oregon or New Jersey and New Hampshire, for instance, considering the income increase along with the cost of living rating might help tip the scales as to which state to move to.

Do You Want More Tips?

Interested in more tips on how to make more money as an appraiser? Here they are!

How to Make More Money as an Appraiser: Manage Time

How to Make More Money as an Appraiser: Upgrade Certifications

How to Make More Money as an Appraiser: Human Capital

How to Make More Money as an Appraiser: Manage Business Expenses

Watch for two more posts in this series: “How to Make More Money as an Appraiser: Obtaining New Clients” and “How to Make More Money as an Appraiser: Adopting New Technology” in the next two weeks!

Happy Appraising!

Welcome to the fourth installment in our series on “How to Make More Money as an Appraiser!”

Managing Expenses

Part of making more money is knowing how to manage your expenses! Managing expenses is a broad subject that is dissected in thousands of books, taught frequently in company trainings, and introduced on high school and university campuses throughout the world. Such a broad subject might mean that this post is going to be really long, but never fear! I’ve curated some of the best ideas for this short article (yes, it will be short!), and with expert input from Rick Lifferth, DataMaster’s founder, it’s all here for a quick read.

Let’s see what you can learn today to work into your money-managing processes!

Live on Less!

Rick Lifferth, DataMaster founder and CEO and appraiser for over 47 years, sat down with me and shared a couple of his most important financial lessons learned.

For the first few years of business ownership, Rick had a silent partner. He did not realize how much of an impact that partner had. This silent partner took 20-30+% of his revenue every year! When Rick hired employees, he had to pay half of their FICA taxes to this silent partner.

Every year when tax time came around, the silent partner took its enormous cut. The tax bill was always surprisingly high and usually came as a shock to Rick. When he was starting out, he had no idea just how much this silent partner was going to take from his business. As you have deduced, that silent partner was (and still is) the government.

It took a few years, but when Rick finally realized that his silent partner wasn’t ever going to quit and would always be around, taking its monstrous cut of revenue, he came to a realization. This realization was the most significant financial lesson that Rick has learned learned from his 47 years of business ownership. The realization was this: he had to learn to live on less!

Rick also realized that he had forgotten the difference between revenue and spendable income. Once he remembered that there was a difference between these two key aspects of finance, and accepted that he had to live on less, things went much better and his business grew. He also took steps to prepare for tax day by stashing the tax money into a separate account every pay period.

Rick’s lesson made a significant impact on his business. He now employs over 45 employees and his company continues to grow!

How Do You Live on Less?

You might be wondering how to live on less when it seems as if you’ve slashed every extra expense you have.

Rick observed that:

The difference between a rich person and a poor person is the ability to save on a regular basis. Obviously, there are many circumstances in life that preclude being able to save, but save when you can, even if it is only $5 per month. You will feel better about yourself and improve yourself confidence.”

Here are more helpful tips to consider:

• Drive a cheaper car and drive it longer
• Pay less for a house than the mortgage company will give you
• Track your daily spending on everything, including the little things
• Eat home-cooked meals more often
• Buy generic brands when possible
• Shop at discount clothing outlets

Living on less entails changing your entire mindset. It means developing an awareness that the little things add up and that big things don’t need to be quite so big!

Looking for more ideas for how to cut spending? Here is a fantastic article that shares 42 ways to spend less. These are doable, clever ideas that you’ll wish you’d known about sooner! Check out “How to Live on Less Money: 42 Hacks to Thrive by Veneta Lusk.

Raise Your Rates!

Rick not only shared the number one lesson he’s learned over the last 47 years, he shared the second most important lesson that he learned: occasionally raise your rates on your regular cadences !

Let me explain.

As Rick was learning how to operate his appraisal business at a profit (something all successful business owners must figure out sooner or later!) he learned how to navigate not only the ups and downs of cash flow, but also the ever increasing costs associated with owning a business.

For example, when new requirements from Fannie and Freddie increased the length of time that it took to complete the appraisals, Rick realized that he had to increase his fees or go broke by working for nothing. He had to determine “which broke [he] would rather be.” His choice was to keep his fees at the current rate and slowly go broke or raise his fees to an amount that would allow him to stay in business, which in his mind typically raised the risk of losing customers. Rick also realized that nobody would have the benefit of his knowledge and expertise if he was out of business. He needed to do what it reasonably took to stay afloat!

Early in his career, this decision was very difficult and scary. Over time, it became much easier. Increasing his fees happened about every 3 years or so, but the increases were relatively small and reasonable. While he may have lost a customer here and there, it was usually only for a short period of time. Most customers understood the need for increased fees and agreed to pay more for appraisals, especially after enjoying a 3-year period of stable appraisal fees.

Rick feels fortunate to have been able charge enough for his appraisal services to stay in business for 47 years. His impact on the appraisal business has been significant!

Automate

Let’s look at a couple more tips that will help you save money!

Any expense process that can be automated should be automated! This not only saves you time, it saves you money in the long run!

A long-time favorite of business owners is Quickbooks. PC Magazine labeled Quickbooks “Editor’s Choice” and gave the software a 4.5 out of 5 star rating. Easy to use and accompanied by good support, Quickbooks claims that they “keep everything organized in one place, so you’re tax ready all the time.” They connect your bank accounts, sort your expenditures into categories, and save you money on taxes (the company states that “QuickBooks customers find on average $3,534 in tax savings per year.”)!

If you want to look around at other financial software a bit more, here are some other good options:

• Zoho
• Kissflow
• Sage Intacct
• Xero

Harness Technology

One of our favorite sayings around here is “Give some time, so you can save some time!” It takes some time to learn how to use technology that will give you far more time then you invested in it! If you can spend an hour or two learning something then use what you learned to save you weeks of work a year, wouldn’t you do it?

Yes, I’m talking about learning how to use DataMaster! Thousands of appraisers have figured out this time-saving, money-saving tool and they use it to manage their time!

How much time does the appraisal data management software save you? Depending on your level of expertise, DataMaster saves you an hour or more on every-single-one of your appraisals! Think about the long-term implications of that number! Depending on how many appraisals you do a day, a week, a month, and a year, you could potentially save weeks of work every year! What would you do with an extra few weeks a year? More work? More vacation?

The possibilities are definitely worth finding out more! Go to datamasterusa.com or call us at 801.657.5769.

Cashing Out

Interested in more tips on how you can make more money as an appraiser?Take a look at the first three installments in this series:

• How to Make More Money as an Appraiser: Managing Time
• How to Make More Money as an Appraiser: Upgrade Certifications
• How to Make More Money as an Appraiser: Human Capital

There’s more to come! Catch a few more installments coming over the next few weeks!

If you have any insights from your own experiences, please share them in the comments! We would love to hear your tips!

Happy Appraising!

This is the third installment of the series “How to Make More Money as an Appraiser.” I’ve already addressed:

• How to Make More Money: Managing Time
• How to Make More Money: Upgrade Certifications

Browse through the first two installments and be sure to watch for the remaining articles over the next few weeks!

Human Capital

“Alone we can do so little; together we can do so much.”

Helen Keller

It might seem like the benefits of hiring some assistants are outweighed by the costs of paying the assistants wages, benefits, and taxes. In most cases, this is not true. An extra pair of hands that can complete the office work, make phone calls, and help with other errands, allows an appraiser to focus on the more lucrative part that they are trained for, appraising.

An Appraiser’s Experience

Gentry Lawson, an appraiser at Lifferth-Lawson Appraisal in Layton, Utah, filled me in on his experience with making more money by hiring office staff.

Gentry relates:

On my own I am limited to what I can accomplish during the day.  I can only complete so many appraisals before I run out of daylight (and I might add steam). It’s easy to get burned out by churning out appraisals late into the evening.

I’ve found that employees can greatly assist with capacity and workload. By leveraging a trainee and/or an office assistant, I can turn over the more mundane and time-consuming tasks so that I can focus on being an appraiser.

With the assistance of employees, I’ve found I can accommodate significantly more appraisals during a given week than I could otherwise accomplish on my own. This business model is more managerial based whereas the typical appraiser is a sole proprietor working out of his or her basement.

Gentry continues:

Moreover, I get the added benefit of knowing I’m giving back to my profession. Many appraisers have the misconception that bringing on a trainee is like training their competition. This is a misnomer that in the long run will only hurt our industry since capacity has not kept up with demand. I get great satisfaction in helping employees learn the trade and setting them up for success so they can support their families. So human capital has dividends beyond just monetary value.

Conclusion

Wondering if there are more pros and even some cons of group work? Check out this article by Indeed: What Are the Pros and Cons of Group Work? Keep in mind that the dynamics will be different depending on the various personalities in your group and your leadership skills.

Ultimately, we think that you’ll find that working with an assistant or two will benefit you and your business, not to mention that you’ll be helping someone else get into the field of real estate appraising!

Happy Appraising!

Introduction

This is the second post in our series on “How to Make More Money as an Appraiser.” We started out with “How to Make More Money: Managing Your Time.” Let’s move on to how to make more money by getting your certifications completed!

Make More Money

It makes sense that the more complicated your appraisal certifications, the higher your income rises.

According to McKissock, average income varies for appraisers according to license and hours worked per week. How does each licensing upgrade help your income? Let’s find out!

Licensed Residential Appraiser

In 2019, Licensed Residential Appraisers earned an average of $63,750 and worked an average of 37 hours. What exactly can a licensed appraiser do?

A Licensed Residential Appraiser may perform any appraisal that falls into one of the following categories:

• Non-complex one-to-four unit residential properties with a transaction value less than $1,000,000.00
• Complex one-to-four residential units having a transaction value less than $250,000

How do you qualify for the Licensed Residential Appraiser certification? You must pass the classes and examination for at least 150 hours of state-approved coursework, including the 15-Hour National USPAP Course.

You’re also required to pass a Licensed Residential Real Property Appraiser exam approved by the Appraiser Qualifications Board (AQB). In addition, 1,000 hours of experience are required to be obtained in no fewer than six (6) months.

Certified Residential Appraiser

With the Certified Residential Appraiser certification, the average income in 2019 was $73,861 and the average hours worked was 40 hours a week.

To earn reach this level, an appraiser can appraise:

• One-to-four unit residential properties without regard to transaction value or complexity
• Any type of real property where the transaction value is less than $250,000.00

To earn the certification, appraisers must pass the course and examination for at least 200 hours of state-approved coursework, including the 15-Hour National USPAP Course. The appraiser must also pass an AQB-approved Certified Residential Real Property Appraiser exam. In addition, 1,500 hours of experience are required to be obtained during no fewer than 12 months.

Certified General Appraiser

The average income for a Certified General Appraiser is almost $30k more a year than the Licensed Residential Appraiser’s average income. At $91,574 in 2019 and with an average of 43 hours worked per week, the Certified General Appraiser works more but earns significantly more than the Licensed Residential Appraiser. The Certified General Appraiser can appraiser any type of real property for any purpose.

Depending on your state, the exact steps to become a Certified General Appraiser will vary. The general guidelines you’ll need to follow to meet the Appraisal Qualifications Board (AQB) criteria to become a certified general appraiser are:

• 300 education hours
• Bachelor’s degree or higher (in any field)
• 3,000 hours of experience in no fewer than 30 months
• 1,500 hours must be in non-residential appraisal work

Get Educated!

If you want a clear pathway to making more money, work your way up the real estate appraiser certification ladder! While challenging and time-consuming, the dividends of putting in the work and getting educated will be well worth the time and money spent on the process!

Our next post will focus on how to make more money by managing your business expenses, with some valuable insight from DataMaster’s founder and CEO, Rick Lifferth! Stay tuned!

Who doesn’t want to make more money? As an appraiser, your income potential is great! The trick is knowing HOW to grasp that potential, chew it up, and swallow it whole!

I’ve done the research for you using several authoritative sources and gathered tips and advice for you from two seasoned appraisers. I’m going to share what I’ve discovered about how you can earn more money as an appraiser over the course of several bite-size posts! Watch for them on our blog at https://www.datamasterusa.com/in-the-weeds-blog/ and on our Facebook, Twitter, and LinkedIn pages over the next several weeks!

Managing Time

Manage your time right and you can get more done in a day, which means that you can earn more money in a day. That doesn’t take a genius to figure that out. However, it does take a lot of study, trial and error, and in-the-trenches learning for you to figure out HOW to manage your time right. This subject alone is enough to write many books on, some of which you might have read already. To save you some time, I’ve picked out some of the top time-savers and included them in this post.

Before we move on, I’d like to mention another article on managing your time by DataMaster’s Marketer, Marty Hamilton: “How to Get Things Done When Everything Feels Important.” Marty’s article has more great, time-saving tips for you!

Set the Timer!

After some thoughtful research, I settled on the tips in “12 Smart Habits That Save You Time” by TopThink that fits into how I have successfully managed my time for decades. Here’s the rundown:

Time and Productivity

Work around 40 hours over 5 days to find an efficient balance between time and productivity. I know most appraiser work much more than this. But this is something to consider, cutting your hours but making the hours you do work more productive! This line of thought follows Parkinson’s Law, which states that work expands to fill the amount of time available, i.e. responsibilities contract when time is limited and extra time delays productivity.

Organize Your Stuff

Have a place for everything and put everything in it’s place. How much time do you spend looking for your keys, your purse, your wallet, or your phone every morning? Save yourself some hassle and stress and give your stuff a home where they always reside! No more searching! I do this with everything and it’s a rare day when I can’t find something at my office or at home!

Track Your Time

Just like a few dollars a day on snacks or lunch can add up to a substantial sum each month, five minutes on Facebook (or whatever your time-spend is) here and there throughout the day can add up to an hour or more per day (imagine how much time a month)! In small chunks you might think that you aren’t wasting time, when in reality you spent enough time on Facebook to read some chapters of a book, finish a report, or make several phone calls.

Declutter

Sure, you’ve probably seen those studies that claim that creative people work best in clutter. Well, for those of us who aren’t focusing on creativity but are focusing on detailed, thought-squeezing work, clutter can actually distract us and throw our flow off. Get rid of the clutter and your brain will have less reasons to be distracted.

Consistently Follow Up

Preventative time-savers are great, and sending a follow up after every meeting will prevent problems in the future (saving you time!). Following up reminds you and your co-workers exactly what the meeting plans are, e.g. who is responsible for the photos of house A, who is calling Ms. Blanchard about the new appraisal request, who is taking the group to lunch next week (don’t want to mix that one up!) etc. Following up can prevent panic in the future, should those plans have been pureed up in the blender with the ten other main ideas that came out of the meeting.

Limit Your Internet

This goes hand-in-hand with the third bullet point above. Taking back some of your time throughout the day can provide big dividends. I’ll cover ideas on what to do with that extra time below in “Dead Time.”

Not sure how to keep your fingers off of your phone or keyboard? Control your internet surfing by using one of these apps suggested by Systweak:

• Social Fever
• Offtime
• Moment
• StayFree
• Stay Focused
• Freedom
• Flipd
• SPACE
• Quality Time
• AppDetozx

Tackle Immediate Issues

If a task will take less than 15 minutes, do it right away, otherwise by the end of the day you might have a queue of “small” jobs waiting to be done, and there goes an hour! What’s worse than thinking you’re done for the day only to realize that you have a few of those mini tasks waiting for you in a large pile topped with a dingy, frayed bow?

Dead Time

Say that you’re waiting for a report that you can’t proceed without, you’re stuck in a doctor’s office, you’re on hold on the phone listening to the Piano Guys (hey, that’s not so bad!), you have five minutes before meeting starts, and other moments during the day with potential. So what do you do with that extra time? Fill those small breaks with productive activity! Work through some emails, make some quick calls, start your next blog post, check in on Uncle Robert with a quick text, or organize your schedule for tomorrow. Make your downtime productive, don’t toss it into the bottomless pit of endless scrolling or mindless zoning.

Embrace Predictability

Sometimes change isn’t the best thing to embrace. Do you really need to shake up your routine just to shake up your routine? No! Don’t change your routine if you don’t need to. Resetting your routine takes time to figure out what works (when you already had figured out what works), and if you’re doing it just for the sake of change, rethink the changes. Routine isn’t always a bad thing, in fact, many times it’s a good thing if that routine saves you time!

Social Meals

Socializing is good for you and helps keep you healthier! Studies show that people who socialize are happier, healthier, and live longer, among other benefits. Being healthier keeps you productive and out there making more money instead of lying in bed with tissues and Tylenol! So whether you feel like it or not, make the effort to develop and maintain positive relationships with your family and friends!

Combine Errands

How much time does it take you to drive from your office to the store then back again, or from your home to the bank and back again? What if you cut out that extra “out and back again” time and clumped it together? Running your errands in chunks instead of back-and-forth trips saves you a lot of time, how much depends on how far your errands are from your office or home. I save my errands that aren’t time-sensitive and knock them out in one trip. It’s all about using time efficiently!

Closing Time

Give these time-saving tips a try! Add them to the time-savers you’ve already discovered on your own and see how much more efficient you can be with your most precious resource, your time!

Looking for more tips on how to make more money as an appraiser? Watch for the next post “How to Make More Money Appraising: Upgrade Your Certifications.”