Real estate appraisers, also known as real property appraisers, play integral roles in the real estate industry. As a valuation expert, an appraiser’s primary goal is to provide an independent, impartial, and unbiased opinion of a property’s value.
What do real estate appraisers do?
Real estate appraisers prepare comprehensive written appraisal reports that detail a property’s value. They research, observe, and weigh a variety of factors in the process. Just as a scientist documents the methods used when making a groundbreaking discovery, the appraiser does the same in the appraisal report. This document is a roadmap of the methods and evidence compiled and used to formulate the most accurate property value.
Appraisal evaluation and research methods include:
Inspecting the inside and outside of a property and observing its size, characteristics, condition, features, improvements, and surrounding area
Taking photographs of the property for documentation
Researching and verifying descriptions of the property using public records
Analyzing “comparables,” or comparable properties recently sold nearby to help inform value
Consulting sale trends in the local real estate market and surrounding neighborhood
Preparing an appraisal report can take anywhere from a few days to a week, depending on the complexity of a property.
Real estate property valuation is the broadest description of what an appraiser does regularly. Appraisers also research market trends, teach appraisal fundamentals, consult on other appraisals, and aid in litigation matters.
How much do real estate appraisers make?
According to Salary.com data for residential real estate appraisers, appraisers can make anywhere from $47,000 to $125,000+ on average annually.
That’s a wide range! And while real estate appraisal is a career that has lucrative salary potential, it’s important to understand the context of an appraiser's earnings. An appraiser's salary depends on several factors including license level, experience, who you work for, location, and the types of properties appraised.
Independent appraisers tend to make higher salaries while appraisers who work for appraisal firms, appraisal management companies, banks, and other organizations make moderate, but steady and higher-than-average, incomes.
You can learn more about the factors that affect an appraiser’s salary and get guidance on developing your incomes goals in this blog: How Much is a Real Estate Appraiser’s Salary?
How do you become a real estate appraiser?
Becoming a real estate appraiser is a journey. There are multiple career paths to choose from and, as an apprentice-level appraiser, you have lots of options to consider.
Most prospective appraisers start the same way: By completing the necessary coursework to become what's called a “trainee appraiser.” This is the track recommended by the Appraisal Qualifications Board (AQB) of The Appraisal Foundation. The AQB sets minimum qualifying standards for licensing in real property appraisal. The trainee license level is your gateway to earning valuable experience in the field and upgrading to more advanced license (and income) levels.
Three steps to become a trainee appraiser.
Step 1: Complete trainee appraiser qualifying education.
To earn a trainee appraiser license, you’ll need to complete 75 hours of national qualifying education required by the AQB. Three courses make up this curriculum, listed below. No work experience or college degree is required. You must be at least 18 years old and have a high school diploma or GED to start.
National trainee appraiser qualifying education.
| Appraiser Course | Coursework Hours |
|---|---|
| National Uniform Standards of Professional Appraisal Practice (USPAP) Course | 15 Hours |
| Basic Appraisal Principles Course | 30 Hours |
| Basic Appraisal Procedures Course | 30 Hours |
Step 2: Complete state-required education.
Next, you’ll need to complete any trainee appraiser qualifying courses required in your state. Check with your state’s appraisal regulatory board for specific requirements. Most states require you to complete an additional 4-hour Supervisor-Trainee course before you can apply for a trainee appraiser license.
Step 3: Apply for your trainee appraiser license.
When applying for your license, you’ll typically complete a state application, pay an application fee, get a background check, and submit proof that you’ve completed the required qualifying education.
What happens after I become a trainee appraiser?
As a trainee appraiser, you’re only allowed to work under a supervisory appraiser. You can work for an independent appraiser as a mentee or apply for appraiser positions at the trainee level where you will have a supervisory appraiser.
Often, trainees help established appraisers perform property and market research; measurement, sketching, and documentation; report writing; field appraisals; and more. This is your opportunity to gain experience in the field working with a trusted mentor who will teach you the ropes and help you build confidence.
Most trainee appraisers continue their qualifying education and log the experience hours needed to become licensed residential appraisers – who can work independently without supervision. There are three higher-tier appraiser licenses you can earn.
Here’s a breakdown of the complete appraiser licensing requirements as well as the types of properties you can appraise at each level.
| License Level | Required Qualifying Education | Required Experience Hours | Degree Requirement | Exam Requirement | Types of Property You Can Appraise |
|---|---|---|---|---|---|
| Trainee Appraiser | 75 Hours | None | None | None | Trainees cannot appraise property independently. They can only work under supervisory certified appraisers. |
| Licensed Residential Appraiser | 150 Hours | 1,000 hours while working under a supervisory appraiser. Complete in no less than six months. | None | Must pass national exam for licensed residential appraisers. | Non-Complex 1-4 residential units with transaction values of less than $1 million Complex 1-4 residential units with transaction values less than $250,000 |
| Certified Residential Appraiser | 200 Hours | 1,500 hours required. Complete in no less than 12 months. | Must have completed some college coursework. See page 22, Section II of AQB Qualifications for details. | Must pass national exam for certified residential appraisers. | 1-4 residential units, any complexity, any transaction value |
| Certified General Appraiser | 300 Hours | 3,000 hours required and 1,500 hours must be in non-residential appraisal work. Complete in no less than 18 months. | Must have bachelor's degree or higher in any field from an accredited college or university. | Must pass national exam for certified general appraisers. | All types of real estate, from houses to retail property, schools and office buildings to airports |
Why is real estate appraisal important?
Appraisals are valuable pieces of intelligence. They help buyers, sellers, lenders, insurance companies, and others understand a property’s reasonable value and make informed decisions during real estate transactions. They also act as safeguards for each party involved.
Let’s look at how appraisals help different groups in multiple scenarios.
Who needs real estate appraisals?
Buyers, sellers, and investors.
Buyers
Buyers use appraisals to ensure that they don’t pay more than the fair market value of a home or other property. In transactions where a buyer is applying for a mortgage loan, appraisals are a standard part of the purchasing process and often the last step before loan approval.
Sellers
Sellers use appraisals to understand the fair market value of their property and, when working with a real estate agent, for guidance in pricing a property competitively. A seller might also use an appraisal for help in deciding on home renovations that could increase the property’s value over time.
Investors
Investors use appraisals as buyers would, to ensure they’re not overpaying for a property. However, investors can also use appraisals to explore a property’s income-producing value. In the case of a rental property, for example, an appraiser examines past lease and occupancy rates to estimate value based on the income it can generate overtime. This is key information that helps investors gauge the profitability of an investment.
Banks and lending institutions.
Banks and lending institutions use appraisals as risk-management tools. They want to ensure they are lending buyers only the fair market value of a property, as the property is used as collateral for the loan. Lenders also consult appraisal reports when refinancing loans and when determining a homeowner’s eligibility for a home equity loan.
Insurance companies
Insurance companies look at appraisals through a different lens than buyers, sellers, and lenders. They use an appraisal report to help estimate how much it would cost to rebuild a property – specifically, when writing new homeowners insurance policies. In this scenario, the appraisal also protects the homeowner in the event of a disagreement over a settlement amount in a claim. The appraisal serves as the confirmation of value needed to resolve the dispute.
Probate attorneys and divorce attorneys.
Probate attorneys and divorce attorneys use real estate appraisals to understand the value of their clients’ assets. Appraisals provide the guidance necessary to determine estate values in succession proceedings and the division of assets during divorce matters.
Government agencies
Local, state, and Federal government agencies use appraisals to understand accurate values of properties to be bought and sold using Federal loan programs. Appraisals are also consulted for property tax assessments and in periodic updates of assessments based on shifting property values.
Should you become a real estate appraiser?
Real estate appraisal is a research-driven, data-centric career that offers multiple paths to success – and a potentially lucrative income. According to the U.S. Bureau of Labor Statistics, appraiser employment is expected to grow 4% through 2031. This is about average compared to other career fields. But this projection stands to increase, as there’s a significant percentage of retiring appraisers predicted to leave the workforce over the next decade.
There’s never been a better time to start your appraisal education. With its many paths to licensure, engaging and impactful work, multiple job options, and the growing need for appraisers – real estate appraisal is truly a career where you can succeed on your terms.
