Real Estate Appraiser

Getting an Education

Get approximately 75 hours of basic appraisal education. Before completing your real estate appraiser apprenticeship, you’ll typically need to complete around 75 hours of basic appraisal education. This coursework will focus on appraisal principles and procedures, and offer you an introduction to universal standards of professional appraisal practice.[1]

  • Contact the licensing department in your state or jurisdiction that issues professional appraisal licenses to find out about educational requirements for real estate appraisers in your area. They may have this information posted on their website, along with a list of approved schools in your area.
  • The exact number of basic appraisal educational hours will vary depending on your local laws and regulations.

Obtain a diploma relating to real estate to complete your education. In some jurisdictions, a 75-hour education will only be enough to get you into an apprenticeship with a real estate appraiser. To become licensed, however, you’ll likely need to obtain a four-year degree.

  • There are many degrees that might fulfill the diploma requirement, including a Bachelor’s of Business, a Bachelor’s of Land and Property Management, or a Bachelor’s of Property.
  • These courses will provide instruction regarding report writing, income approaches, sales comparison, statistics, modeling, finance, and case studies.
  • Contact your local labor department or real estate licensing authority for information about which degrees and institutions are acceptable for people interested in becoming real estate appraisers.

Focus on your area of specialty. Some educational programs offer additional training in how to evaluate property in rural or urban areas. If you intend to work primarily in a rural or urban setting, enroll in a program that offers appropriate specialty courses to strengthen your skill set and resume.

Getting Your License

Find out about licensing requirements in your area. Licensing regulations sometimes change, so it’s best to contact your local licensing authority for the most up-to-date information. Call or check the website of your local licensing, regulations, or labor board to find out what sort of education and experience you need.

  • Some of the most common requirements include citizenship in the nation where you wish to practice as a real estate appraiser and a clean criminal background. You’ll also likely need to be at least 18.

Become a trainee appraiser by contacting real estate appraisers. Ask the real estate appraisers if they will accept you as their apprentice. A trainee or apprentice appraiser will get hands-on training from a seasoned real estate appraiser. To find an appraiser who might be able to train you, run a search online for “real estate appraisers” or some similar formulation. Alternately, use your phone book to locate real estate appraisers.

  • In some cases, your local licensing authority will connect you with an appraiser.
  • You can often begin as an apprentice before beginning your educational requirements, but you won’t be able to complete your apprenticeship and become a licensed real estate appraiser without gaining the requisite education.

Complete the real estate appraiser application. The application varies from country to country, and regional variations often exist even within a single nation. Generally, however, you’ll need to include (or agree to) a criminal background check, provide copies of your academic transcripts, and provide basic contact information (including your name, phone number, and address).

  • Contact your local real estate licensing authority, labor department, or regulatory board for information about where to obtain the real estate appraiser application.

Apply for the license you’re interested in. There are often several types of real estate appraisal licenses. The types of licenses available in your area will define which types of real estate you can appraise. You can typically apply for more than one license, though additional licenses might require additional educational requirements and fees. Some of the most common licenses include:

  • State licenses, which allow you to appraise 1-4 family residential units with a value of less than $1,000,000.
  • Certified residential appraisal licenses, which allow you to appraise residential units for 1-4 families of any value.
  • Certified general property appraisal licenses, which allow you to appraise all types of real estate.
  • VA loan appraisal certification, for appraisers who wish to work with the Veterans Affairs Department.

Include the appropriate fee with your application. Most real estate appraiser applications require you to submit a processing fee along with your application. Check the application carefully for details regarding the cost of the fee as well as the acceptable payment methods.

  • Application fees range from about $20 USD to $100 USD, depending on where you apply for a license.

Complete the qualifying exam. After submitting your application to your local real estate appraisal authority, they’ll provide you with directions for taking your qualifying exam. You might be able to take the exam online, or you might have to sit for a traditional paper exam.

  • The exam varies from place to place. Even within a single country, the qualifying exam can be highly regional. Generally, however, you’ll be asked questions that test your competence in and knowledge of real estate appraisal techniques, theories, ethics, and best practices.
  • There is wide variation regarding the time limits and the number of questions on exams in different locations.
  • Consult a review guide and practice tests specific to your area. Your real estate appraisal authority can direct you to helpful resources.

Developing Professionally

Improve your credentials. There are various levels of licensure within the real estate appraiser profession. For instance, after completing your apprenticeship, you will typically become a licensed appraiser (that is, the state will validate your ability to appraise real estate). With more education and experience, you could become certified through a professional organization.

  • The precise educational and experiential requirements you’ll need to improve your credentials vary depending on the professional organizations that operate in your area.
  • Contact local professional organizations to find out about their certification programs.
Join a professional organization. In addition to offering additional certification opportunities, professional organizations like the Real Estate Appraisers Association allow you to network with other real estate appraisers at conferences and seminars. During these events, you’ll be able to hear all the hottest developments in the world of real estate appraisal. You might also gain access to professional journals, periodicals, and newsletters that can help you improve your appraisal skills.
Take on a variety of appraisal projects to gain more experience. The more experience you have, the more attractive your services and skills will be to people and businesses in need of real estate appraisal. Over time, you might branch out from a specific type of appraisal (like urban or residential) to a more general type of appraisal.

Renew your license before it expires. After you pass the exam, you’ll receive the license digitally or in the mail. Real estate appraiser licenses expire eventually. The length of time your real estate appraisal license is good for depends on the regulations and rules in your locale.

  • Licenses usually expire after two to five years.
  • Consult your real estate appraisal authority for information about how to renew your license.

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Calculate Real Estate Commissions

Calculating Common Real Estate Commissions

Step 1
Multiply the commission percentage by the purchase price to find out your total commission. To estimate commission, simply multiply the percentage by the purchase price of the property. Remember, to convert percentage to decimal first by dividing it by 100.
Rate: 5.5%; Purchase Price: $200,000 → .055 x 200,000 = $11,000
Rate: 4.75%; Purchase Price: $325,000 → .0475 x 325,000 = $15,437.50
Rate: 6.3%; Purchase Price $132,000 → .063 x 132,000 = $8,316
Formula = Comm%100∗PurchasePrice{\displaystyle {\frac {Comm\%}{100}}*PurchasePrice}

Step 2
Familiarize yourself with common commission amounts. When you buy or sell a home, the broker receives a percentage of the sale value as commission. This is their payment for helping your buy or sell the house. This percentage typically ranges between 5% and 7%, with the average currently around 5.5%.[1]

Step 3
Discuss your specific commissions before signing any paperwork. Some brokers have arrangements where there will be a certain percentage charged on the first $100,000 of the home value, and a smaller percentage charged on the remainder of the house. On rare occasions, the commission is a flat fee.[2] If you buy a house for $225,000, and your Realtor has a mixed commission (7% for the first $100,000, 3% for the rest), you would simply break the price up and calculate separately:
$225,000 – $100,000 = $125,000
($100,000 x 7% ) + (125,000 x 3%)
($7,000) + ($3,750)
Total Commission = $10,750

Step 4
Remember that commission is already tacked onto final sale price. A commission reduces the seller’s net proceeds from the sale. The seller pays it in one sense because it reduces the net proceeds. For example, if you are selling a home for $200,000, and if the dollar value of the commission is $10,000, you will receive $190,000 for your purchase.
If you sold a house for $150,000 at 5% commission, you receive $142,500 on the sale, or $150,000 – $7,500 in commission.
If you buy a house for $225,000, and your Realtor’s commission is 4.6%, then you’ll be paying your Realtor $10,350.
In a typical real estate contract in the United States, the buyers do not pay the real estate commissions. It is taken out of the seller’s proceeds. The buyer pays the agreed upon purchase price plus their closing costs. If you are buying a house and the seller is not offering a real estate commission, then you may end up paying the real estate commission on top of the purchase price. It depends on what you negotiate with the Realtor.

Step 5
Understand how commissions are split between brokers. The standard arrangement is that the broker representing the buyer and the broker representing the seller will each split the commission 50/50. At this point the broker would then split the commission according to the brokerage/agent contracted agreement. Note that if you choose not to use a broker, the seller’s broker would receive the entire commission. The commission fee between the seller and broker is always negotiable.
If you had $10,000 commission, $5,000 would go to the buyer’s broker, and $5,000 would go to the seller’s broker.

Calculating Total Cost of a Sale

Step 6
Settle on the commission amount ahead of the sale. Before selling a property, make sure to determine exactly what the commission will be in percentage form. Commissions are often negotiable, and do not be afraid to ask for a reduction in commissions, especially if you are selling a high-value property.
For this section, assume you settled on a 5% commission with your Realtor for a ranch house in Georgia.

Step 7
Determine the property’s gross sale price. Once the commission is determined, you need to determine the sale price of your property. Ask your agent for help in understanding the sale price of your home. The commission will be based on the total price of the home, not the amount the seller gets to keep after a mortgage or other lien is paid off. The sale price will only be finalized once you have agreed to an offer from a buyer and the appropriate legal documents have been signed and confirmed.
Continuing the example, pretend this GA ranch is worth $200,000.
Note that gross sales price refers to the price of your home before any deductions are taken off. This means before any taxes, commissions, fees, etc.

Step 8
Calculate the commission by multiplying the gross sales price of the property by the commission percentage that was agreed upon. For example, our ranch that sold for $200,000 with a 5% commission rate would result in a $10,000 agent commission. Remember to convert the percentage to a decimal (by dividing by 100) before multiplying if your calculator does not have a “%” button.[3]
200,000∗5%=10,000{\displaystyle 200,000*5\%=10,000}

Step 9
Add taxes to the commission amount. Since commission is being paid in exchange for a service, the commission amount is often taxed just like any other purchase with a sales tax. Sales tax rates vary between states and countries. To calculate this, simply find out what the sales tax amount is (say, 4%), and multiply 4% by the commission amount. This will tell you the amount of tax that is owed, and you can simply add this amount to the total commission owing to obtain the total cost of the commission.
For example, multiply 4% (or 0.04) by our $10,000 commission and you get $400 in sales tax. This means your total commission would be $10,400. Note that sales tax is not charged in all states on commissions.

Step 10
Subtract the commission from the total sale to determine your cut. To determine the net proceeds you will receive for your home after commission and other selling costs, subtract the commission and other selling costs from the amount of the purchase price.
For example, if commission was the only selling cost, and the ranch’s purchase price is $200,000 and your total commission was $10,400, then you would have net proceeds of $189,600.
Keep in mind that there are other selling costs besides commission to factor in when you are determining what the net proceeds are. A real estate agent can help estimate these costs for you.

Be a Successful Real Estate Agent

Getting Licensed

  1. Research the licensing standards in your state. Each state has different requirements to become a licensed realtor. Search online or contact a brokerage in your area to determine the education and licensing requirements in your state.
  2. Prepare for the real estate exam. Study the topics covered on the real estate exam as you prepare for the test. Many companies offer test preparation services, but it is entirely possible to succeed on your own with proper determination and study.
    • Be knowledgeable about the types of real estate contracts prevalent in your area: exclusive listings, open listings, net listings, among others.
    • Familiarize yourself with real estate terminology.—There are many terms specific to real estate negotiations. Read widely about the buying and selling process, to integrate the terms into your psyche.
    • Understand tax laws and tax implications associated with real estate.
    • Be familiar with fiduciary relationships and disclosure obligations.
  3. Register for the Real Estate Exam. Find a test center near you to register for the exam. There are usually fees associated with taking the exam and often required background checks. Each state has its own licensing board and you should contact it to learn specifics of your location.
  4. Apply for your license and insurance. Depending on which state you are planning to work in, there may be different requirements for obtaining insurance or a license. Check with your local realtor association to see what requirements exist in your state.

Creating a Network

  1. Partner with a registered broker. Most states require new agents to work with a registered broker for a minimum amount of time. You are still working for yourself during this time; however, new agents operate under the umbrella of the brokerage before they are able to branch out and be fully independent.
    • Consider the coverage area for each brokerage firm of potential interest to you.
    • Find out if the brokerage specializes in buying or selling.
    • Research the benefits the brokerage provides to its agents.
  2. Develop a list of contacts. Real estate is all about who you know. Becoming connected with a wide referral network will help create a substantial body of new contacts.
    • Use customer management software to keep up with your list of contacts so that no one is forgotten.
    • Ask clients for referrals.
    • Sponsor local events.
  3. Create a website and social media presence. Connect with people who aren’t in your immediate circle of contacts by reaching out to the masses through social media.
    • Make social media pages dedicated to your real estate business.
    • Tweet listings and real estate tips as you come across them.
    • Monitor what others are saying/doing on social media to promote any opportunities for new business.
    • Post your listings and ways to search other listings (such as MLS links) on your website.
    • Keep your bio and closing history up to date on your website.
  4. Exude an outgoing and welcoming personality to everyone you encounter. Your personality strongly affects the people you interact with, so it is critical to make your clients feel special by giving them full attention while you are with them.
    • Get comfortable discussing contract terms with people who are not familiar with the real estate market.
    • Engage with new people in the community to forge new connections.
    • Listen to your clients and tend to their needs.

Marketing Yourself

  1. Establish a schedule for prospecting. Set aside time each week to develop new leads through email marketing or phone calls. Take time to advertise your services in small venues such as coffee shops or community gathering spots. Although buying leads can develop new business, the most productive leads come from direct interactions.
  2. Get involved in the community. Keep your finger on the pulse of the market by establishing a community presence.
    • Attend local festivals.
    • Sponsor local schools and sports teams.
    • Introduce yourself to neighbors.
  3. Go virtual. Make sure you stay connected with potential buyers in today’s virtual market. Many buyers do extensive online searching before contacting listings. Make your listings stand out by utilizing technology to display properties online.
    • Create 3D virtual tours of homes you list.
    • Post walkthrough video tours of listings.
    • Include pictures on every post of a listing.
  4. Keep in touch with past clients. 75% of business for realtors generally comes from referrals. Make sure that you aren’t missing opportunities for new business by ignoring past clients.
    • Send a welcome home basket after closing.
    • Call clients 1-2 months after closing to follow up and make sure they’re satisfied.
    • Send a yearly newsletter to all your past clients; referrals may come several years after you first connected with a client.
  5. Sell yourself. As a realtor, selling yourself is just as important as selling property. Work to make connections with people first, and they will want to buy or sell their property with you.

Being a Life-Long Learner

  1. Surround yourself with real estate professionals. Making connections with people in the real estate industry gives you a network of professionals to draw from when searching listings. Keep your network strong by interacting with as many other realtors as you can.
    • Join local and national Realtor associations.
    • Connect with a mentor to ask questions and compare ideas.
    • Use client feedback to adjust your approach.
  2. Attend seminars. Many brokerages and realtor associations offer seminars on aspects of buying and selling or contract negotiations. Register to attend several seminars each year to keep track of new market strategies and to network with others in the industry.
  3. Observe market and neighborhood trends. Real estate markets are constantly changing. Be aware of the factors affecting pricing and availability in your area.
    • Keep a database of recent closing in the area to know comparable prices.
    • Track home values and trends in specific neighborhoods.
    • Monitor school rankings and test scores to share with clients.
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