Appraisal Business

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.”

It is not enough to be busy, so are the ants. The question is: What are we busy about?

Henry David Thoreau

We’re busier than we’ve ever been. How often have you talked to a friend about how busy you’ve been? How many important items do you have to get done? It’s one of those funny (not funny-haha) paradoxes. We have so many tools out there to help us but they never seem to help us feel more at ease.

(Over the past few months many of us really are busier than ever before. This post pertains to a non-Covid-19 world.)

Is Everything That Important?

How often have you run into a friend and asked how they are only to get the response “I’m so busy” or “I’ve got so much to do”? Or my favorite email response: “Sorry I didn’t get back to you sooner. Things have been crazy around here.”

I caught myself in that trap recently when I went to lunch with a friend I hadn’t seen in years. I walked in a couple of minutes late and (before I said anything else) I apologized about being late. Then I explained how I was so busy at work and how I never have time to do anything. As we spoke, he voiced some of the same concerns.

Be Ruthless With Your Time

First off, you’re not Genghis Khan, don’t be ruthless with the people around you. A recent study of office workers found that most workers only have about 72 minutes of uninterrupted time each day. Quick math – that’s only about 15% of an eight-hour work day. And it’s even less for people who don’t work typical hours.

When you understand how little time you actually have to work it’s easier to put things into perspective. With that in mind, you can ruthlessly decide on your top priority. Now you can focus on bigger-picture goals.

If you overestimate the time you have to get work done each day, you may also underestimate time leaks. Small time and energy leaks have bigger consequences than you probably realize. The time you spend finding your keys. The email you replied to immediately, even though you could wait. The perfect tweet that takes 10 minutes to craft (you know the one with the clever images and wordplay). These superfluous things can disrupt your flow and sap your energy. And the next thing you know, you’re waking up at three a.m. to get some time to yourself.

Make Use of Systems

By now, you’ve heard all the advice about waiting until a specific window to reply to non-urgent emails. This is one example of creating systems to save mental energy. But you can create systems for other tasks. Get a container for your keys so they’re always in the same place. Use a social media management program so you can set aside time to create multiple posts at the same time. If you write posts at the same time, you’ll notice that your Twitter zingers will be easier and more creative.

Creating systems will help you save time on infrequent tasks too. How often do you forget the steps it takes to do tasks you only do once a month or a few times a year?

For example, whenever I get low on printer ink I spend a few minutes looking for the ink code when I order it from Amazon. It’s only a couple minutes, but it throws off my groove and I have to spend time getting back to what I was doing.

via GIPHY

I decided to create a system for it. Now I save the ink number on my computer (and Amazon remembers it for me too). I use a program called Stickies to create notes that I can find easily. There’s also a Windows version called Sticky Notes. Here’s a link to get it.

Priority Matrix

One famous system is the priority matrix. Popularized by Stephen Covey in his “7 Habits of Highly Effective People”, you divide your tasks into four quadrants.

The priority matrix is nice for visualizing the tasks you have to complete. That said, you need to be honest with your ratings. It’s easy to classify everything into Quadrant I but all your tasks are not Urgent & Important. One tip is to use the due date as one of the criteria for your ranking. The closer the due date, the higher the task on the priority matrix.

Relative Prioritization

Another way to organize your tasks is to rank them against each other. This is a version of the system Google uses to give you search results. They use thousands of factors to rank search results against each other. The data they use is the background information they can get from a website. When you rank your tasks you can use your background knowledge of the tasks to make your decisions.

Here are the steps you would take if you have 10 unique tasks.

1. List all 10 tasks using a bullet list
2. Assign each task a number based on the relative importance of the task. Use 1 for the most important and 10 for the least important.
3. You can only use each number once.
4. Dive in and start completing tasks.

A technology tip for relative prioritization is to use a program with a “Kanban” view that allows you to drag and drop tasks. Here are some recommendations.

• Trello
• Microsoft Planner
• Monday

What About Interruptions?

I know that many of you are saying that no matter the systems and tools you use, you can’t get away from interruptions.
Touché.
There are some ways to lessen the impact of unanticipated time-sucks. Adam Rosenfeld has a framework to help.

1. Keep a notebook handy. I write interruptions down on a mind map.
2. If they fall into the context of work, I set a to-do accordingly earliest for the next day – this day is already booked.
3. If they require more involvement, I set a to-do to review the item during our weekly leadership meeting.
4. If I can’t effectively respond in the moment (focused work, taking care of kids, resting), I ignore the interruption. If it’s really important, it’ll come back again.

Your time is valuable and you have a right to prioritize it however you want. You know enough about your work style and your task list to make decisions. So, whatever system you put into place, trust your instincts.

via GIPHY

When I was researching this topic, our chief appraiser gave me a couple stories to illustrate it. I’ll use these stories as we go along.

A few weeks ago, he received an assignment to appraise a property for a pre-foreclosure. In the assignment conditions, it explicitly stated not to have contact with the homeowner.

He inspected the property from his car, so he wouldn’t draw unwanted attention. As he was finishing, the homeowner came out and asked Jared what he was doing. Instead of getting into it with the homeowner, Jared started his car and left.

That might have been the end of the story. But, the homeowner jumped in his car and followed Jared for several blocks before giving up the chase.
This is a reminder of the risks of appraising, especially in sensitive situations. It’s also a great illustration of confidentiality in appraising. If Jared had engaged the homeowner, he would have violated the terms of the assignment.

There are two reasons that must exist for appraisal data to be confidential. You must have both to be confidential.

1. The client (the lender) specified that the appraisal was confidential. And although the homeowner is a party to the loan, he wasn’t part of the assignment; and
2. The data is not available from a public source.

Confidentiality in USPAP

If you read through the FAQ for the Ethics Rule in USPAP you’ll see a section on what is confidential and what is not. The Appraisal Foundation issues guidance for appraisers. For a few years, they have included information about what appraiser can, and cannot, share.

Let’s review some of the information about confidentiality in appraising.

Physical Characteristics and Assignment Results

An easy way to determine what appraisers can (and cannot) share is to categorize the data. You can sort information into two buckets: Physical Characteristics and Assignment Results.

Let’s say you’re asked to provide a copy of a workfile to an attorney for a case. He wants you to work as an expert witness to strengthen his client’s valuation results. As you think about what he’s asking, you think through several implications of his request.

In your workfile, there could be confidential information from other assignments. You have an obligation to safeguard private information. As stated in the confidentiality section of the ETHICS RULE,

“An appraiser must protect the confidential nature of the appraiser-client relationship.“

(emphasis, The Appraisal Foundation).

But the question is which parts of your workfile are confidential and which can are not. Here’s a quick tip: Physical Characteristics are not confidential and Assignment Results are.

Physical Characteristics are usually not confidential because they can are observable or measurable. Physical Characteristics may even be available from a public source. Assignment Results are confidential because they involve professional judgment and analysis.

If you want to share a full workfile, you have to contact your client(s) to get permission. Otherwise, sharing your results violates USPAP guidelines. If you can’t get permission to share confidential information, you must decline the assignment. Or you can provide a sample report or a redacted version.

USPAP states you cannot disclose assignment results to anyone other than

• the client;
• parties specifically authorized by the client;
• state appraiser regulatory agencies;
• third parties as may be authorized by due process of law;
• or a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation.

Physical Characteristics

What are some examples of physical characteristics?

Remember, Physical Characteristics can be observed or measured. For example, the number of bedrooms or square footage. Physical characteristics are “facts to be found,” which are not open to interpretation.

Other Physical Characteristics include

• address
• square footage
• number and type of rooms
• dates of construction or improvement
• wall colors
• bathroom fixtures
• heat or air conditioning

Assignment Results

Assignment Results are analyses, opinions, or conclusions based on appraiser knowledge. If you perform a study about the effect of a feature on a property, your conclusions are confidential. If a home has functional problems you determine affect value, it is an assignment result.

To illustrate the difference between Physical Characteristics and Assignment Results, here’s another story.

Jared received an assignment to appraise a home in a small town in Utah. When he got to the home for the inspection, he found that it backs to a busy railroad. It also had no covered parking. He finished his report and provided it to the lender. The appraisal concluded that the value of the property was less than the listing price.

Several days later, he got a call from the listing agent asking about the appraisal. He didn’t share any assignment results with the listing agent. But he did share that some of the property’s unique features could affect value. The fact that the yard backed onto a busy railroad track is an observable fact. As is the fact that there is no covered parking.

The listing agent chose the “comparables” in her CMA to justify the seller’s asking price. She didn’t take into account the obsolescences in the property. She knew the property was recently remodeled and priced it to recoup some of those costs. But she missed that the properties she chose all had covered parking. She also didn’t account for the railroad tracks.

Jared could share that the external obsolescence and functional obsolescence affected the appraisal. He could not share that the effect was negative and the extent to the negative effect. Those were the results of his analysis and were confidential. If the listing agent wanted to see the appraisal, she would have to get permission from the lender.

Sometimes, situations like this become a gray area. Participants [in the transaction] want to understand the steps you take. They’re interested in your analysis, the results, and the impact on the value opinion. But you need to safeguard the client’s confidentiality requirements.

Conclusion

It’s important to remember the Confidentiality section of the ETHICS rule.

• An appraiser must protect the confidential nature of the appraiser-client relationship.
• An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.
• An appraiser must be aware of and comply with, all confidentiality and privacy laws and regulations applicable in an assignment.

You may be wondering how confidentiality affects appraisers in the same office. We will cover this topic in a future post. In the meantime, refer to FAQ 50 – 78 in the current edition of USPAP.

*The properties, agents, appraisers and situations depicted in this post are illustrations. Any similarity to actual persons living or dead, or properties, standing or demolished, is not entirely coincidental.