Recently I interviewed Josh Bruno, a real estate appraiser located locally in Fresno, California. Mr. Bruno is an experienced appraiser with over a decade of professional experience working for MCD Direct. He has worked in real estate markets throughout the state and has extensive knowledge in the field of residential appraisal. I have been interested in the field of appraisal as a possible career and this is an exceptional opportunity to speak with a real world expert.
Bottom-line what does it take to be a successful real estate appraiser?
To find success as an independent real estate appraiser requires building a reputation among clients. Business relationships can be fickle. One bad experience can cost you what would otherwise be a lifelong client. The importance of time management for a private, fee appraiser cannot be overstated. Some days will be busy, others will be slow. It can be difficult to manage the workload without good organization and time management skills. Clients need an appraiser who is reliable. Appraisers need to be detail-oriented, or risk missing information vital to the final value opinion. Ultimately, I believe to find real financial success as an appraiser, you must find a niche. Competition in residential appraisal keeps fees low, and pressure high. Make yourself a specialist in say dairy appraisal, restaurant appraisal, etc.
What are the necessary educational and licensing requirements need to become a licensed appraiser?
In California, the Office of Real Estate Appraisers (OREA) is the agency tasked with issuing and enforcing appraisal licenses. Appraiser license requirements fall into 2 categories: education and experience. There are four levels of licensure in California. A trainee license does not require any appraisal experience, but only permits the license holder to work under supervision of another licensed appraiser. A residential license is the first level of licensure that would permit the license holder to work independently. 150 hours of education (classroom/online) covering all topics specified by the OREA and 2,000 hours of appraisal experience are required to qualify to sit for the residential test. The 15 hour national USPAP (Uniform Standards of Professional Appraisal Practice) course is required as part of the education requirement. I currently hold the certified residential license which is one step above the residential license. It allows me to appraise and residential property regardless of value or complexity. The final level of licensure is certified general, which permits appraisal of all real estate including commercial, agricultural, etc.
How did you get started in the field of appraisal?
I became interested in the profession while enrolled in a real estate appraisal course at Cal Poly. After graduation, I took a job with the Fresno County Assessor's Office as a property tax appraiser. My coursework at Cal Poly covered the education requirement and my time at the assessor's office covered the experience requirement for the residential license. I applied for the license, sat for the examination, and started work as a private fee appraiser upon receipt of my license.
Are you a commercial or residential appraiser?
The certified residential license that I currently hold allows me to appraise commercial property with a transaction value not to exceed $250,000. As you might imagine, this rules out most commercial property. While I have completed a few non-residential assignments, my day to day work is comprised almost entirely of 1 to 4 unit residential assignments.
How exactly does your report play into the lending process?
My report is an independent valuation of the mortgage collateral and is a tool the underwriter uses to make the most informed decision possible on whether or not the loan makes sense for the bank to pursue. The value of the collateral is a piece of the risk puzzle, and the bank decides what return is required to justify the risk.
Who are the majority of your clients?
My clients are almost exclusively mortgage brokers. Although a homeowner could hire an appraiser to tell them what their home is worth, the opinion is rarely worth $300.
What is a typical fee you would charge for doing a residential appraisal?
$350 is a pretty standard residential appraisal fee. Increases in complexity of the assignment, travel expenses, etc. would be added to that base fee. Any additional forms a lender may require (operating income statement for income property, etc.) would also be an additional charge.
How has the current credit crisis affected your business?
Well it has defiantly slowed down. The banks have more control now and it is all about who you know. Fortunately I know quite a few people.
Where do you see yourself in twenty years? How do you see the industry evolving?
I see myself continuing to pound the pavement. In this industry you need to be constantly evolving to fit your working environment. The field of appraisal is becoming more rigged and I expect this trend to continue well into the future.
I would like to personally thank Mr. Bruno for his time and insight into the world of appraisal. The knowledge gained through this interview has helped me to better understand the life of a real estate appraiser and what to expect should I choose this profession. I have learn a great deal and again would like to thank Mr. Bruno for sharing his knowledge with me here today.
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