BECOMING A LICENSED APPRAISER WITH THE 2008 REGULATIONS By Coleen C. Morrison, IFA, GAA In an attempt to regulate appraisers, and create a more professional enterprise, becoming an appraiser has become a far more difficult accomplishment. As a licensed appraiser with the responsibility of maintaining a high level of public trust inherent in the professional appraisal practice, the qualifications necessary to ensure this do not appear excessive. Under Title XI of the Financial Institution Reform, Recovery and Enforcement Act, the Appraiser Qualification Board (AQB) establishes the minimum education, experience and examination requirements for state appraiser licensing. You can go to the web site for the Appraisal Foundation to get specific qualification requirements on each of the license levels (www.appraisalfoundation.org). In addition, there are also minimum requirements for a “Trainee or Apprentice” license classification. Basically you must complete 75 of the 150 minimum requirement hours (15 of which must be the USPAP requirement) and find a licensed appraiser who is in good standing, to become your mentor. This sounds simple, and the mechanics of it actually is. Trying to find a mentor to give you your 2000 hours of field experience (necessary to obtain a full license) in no less than 12 months, becomes the problem. In Maryland (where I am located) the trainee must accomplish the 2000 hours of field experience in no less than 24 months. This means being a trainee and having to work with a licensed appraiser for at least 2 years. Most appraisers work alone or in a small appraisal company and the work is not always plentiful; very much like real estate, it has its “ups and downs”. For the most part, appraisers either don’t have enough work to share with a new person, or have too much work to devote the time necessary to help the Trainee. Most clients for whom the appraisers do work for require a licensed appraiser to sign the appraisal as “physically did inspect the property”. This means your mentor must accompany you on each appraisal, and/or the licensed appraiser must also go to the property before completing the appraisal. This becomes double time, especially when the trainee starts to become more competent and should be able to accomplish this part of the job alone. Alas, herein lies the stumbling block found by most of you who are trying to become appraisers, and ultimately becomes the toughest assignment the trainee will have. To help you in your endeavors, I want to provide you with some hints which may help get your foot in the door: • Cold call other appraisers to see if they have any room for a researcher, trainee, etc. Don’t get discouraged, after all, every good actor was turned down many, many times before hitting the “big one”. • Get involved in any local appraisal organizations which may be in your area. These gatherings are usually open to anyone who can pay for their dinner. “Mingle” with the crowd indicating you are an “eager, anxious individual” looking to become an appraiser. Sometimes seeing you at regular meetings and realizing your devotion to becoming involved, can spike someone’s interest. • For a licensed appraiser to take on a trainee, it’s not cost effective to the licensed appraiser, especially in the earlier stages. This is true for any new employee in any business; the training period costs the employer money and there are no guarantees the employee will be around after they’re trained. For this reason, it may be to your advantage if you offer to make a commitment to the licensed appraiser once you become licensed, and/or sign a no-compete agreement so the mentor does not feel “uneasy” sharing his “secrets” with you. • Bring something to the table when seeking out a mentor. By this I mean, do you have any connections in this business already (i.e., real estate agents, lenders, banks, etc.), with whom you could possibly refer to the mentor for additional business. This is a real plus because a new client is not taking anything from the appraiser’s current cash flow, etc. • Always keep in mind that you are a beginner in this business and your income will reflect this. Appraisers, and/or their companies, handle the “business” of a trainee differently and there are no set rules with respect to this. The only rule I can suggest is that you become an employee of your mentor because IRS frowns upon independent contractors being given instruction or training. As long as you are a trainee, you should not be considered an independent contractor. Realize money is not the main goal in the beginning. • Try to barter services. Are you a good researcher? Can you type? Do you know computers well? Can you help in advancing the mentor out of the “dark ages” with computer technology? All of these things are great assets to an individual appraiser. • How hard are you willing to work? An important thought to a mentor is “how long will it take for you to get your 2000 hours?” This question encompasses a lot of issues, i.e., will you be training part time or will the mentor’s work load hinge on this question as well? Remember the sooner you accomplish your goal (2000 hours), the sooner both you and your mentor can “get busy”. Be sure you have the answer to this question when approaching a “hopeful mentor”. • Be ready to learn anything and everything. Perhaps a commercial appraiser has more work, or time, to help train you. You can get experience working for a commercial appraiser too. Don’t limit what you’re willing to learn. • If you are taking classes, or have taken classes, perhaps your instructor may be a good person to talk to. They may have some connections, referrals, or sage advice for you. Don’t be bashful. • Talk to some of your local banks or savings and loans. In many cases these companies have an appraisal department in which they may have a trainee opening. • Get on the internet and look for anything about appraising or appraisers. You may get a hit on something which could lead you to an opportunity. There are also many website chat rooms which can be very helpful with questions or thoughts you may have. The appraisal profession is very important to me and I would like to retire some day. I’m sure that I’m not the only licensed appraiser who feels this way. For this reason, it is important that you keep an open mind, be persistent and stay focused, in order to find the appraiser out there who understands we need to have an open door for “newcomers”. No profession should close the doors to the future, and you are our future. Good luck and keep your spirits up. Coleen C. Morrison, IFA, GAA Total Real Estate Services, Inc. E-Mail Coleen Morrison