Real Estate Appraisal Education
It's very important to keep educating yourself to stay up to date and knowledgeable. Join appraisal organizations and meet other appraisers. Some appraisal organizations have Errors and Omissions insurance offered to their members. Errors and Omissions insurance is not to be used as a safety net. Don't think that you can do bad appraisals and not have to worry about paying any penalties from lawsuits because you have E and O insurance. The purpose of E and O insurance is only in the event that you accidentally miss something on an appraisal. It's also used in the event that you get an unreasonable client who sues you for no-good reason. It only takes a small number of bad and dishonest appraisers that get a few really big lawsuits against them to cancel the E and O insurance program for everyone. So don't ruin Errors and Omissions insurance for everyone else. Do good, thorough and honest appraisals.
I'll give you a perfect example of what you don't want to do concerning E and O insurance. There was some Bozo in my area who jumped into the home inspection business without knowing anything about it. Anyway, this new home inspector must have figured that he could learn the business overnight. He was telling potential customers, while giving them price quotes over the phone, that they should hire him because he had insurance which guaranteed they wouldn't have to pay for any problems in the house that he missed. These customers would call me and ask me if my company carried E and O insurance. I said yes but then I asked them why. When they told me what this other inspector was telling people, I was amazed at the absurdity and ignorance of this new inspector.
Just because someone has Errors and Omissions insurance doesn't mean that their insurance company is going to send checks out to anyone who wants one! If an inspector or appraiser gets slapped with too many lawsuits, then his insurance carrier will drop him like a bad habit. If that happens, then who is going to compensate all of his other clients who had totally useless home inspections or appraisals from this clown for their time and aggravation? Also, who would want to buy a house and then find out later about some major problems that should have been identified during the home inspection or appraisal? If the problems are overwhelming, then you wouldn't want to buy the house anyway, regardless of whether an insurance company was willing to compensate you for some damages.
The best insurance policy and client referral potential is to do good, honest and thorough appraisals. Each of your appraisals should take about one to two days to complete. This includes the on-site inspection, taking your field notes and photographs, finding comparable sales, gathering the pertinent data, and then writing up the appraisal report. You can work on several appraisals in one day but the overall time you spend on each report should amount to about 1-2 days. I've heard of some appraisers doing three to four appraisals in one day. I could not believe it when I heard that. I couldn't even get one appraisal report completed in a thorough, professional manner in that amount of time! So don't be a "Walk-Thru" appraiser by taking people's money and running. Do yourself and your clients a favor. Spend enough time to check everything out properly at the job site, in obtaining the comparable sales, in gathering the data, and in doing the written appraisal report.
Some appraisal organizations have annual national seminars. They also have classes and real estate appraisal exams that are very good for keeping you on your toes and up to date. There are monthly newsletters that keep you up to date. You can get education credits for taking real estate appraisal classes. You need education credits to renew your Federal and State licenses and certifications, as well as, for any appraisal designation that you have.
I highly recommend you take some of the appraisal courses needed to obtain a State appraisers license. They have a class called The Standards Of Professional Practice that they require State licensed appraisers to take. This class will really open your eyes to the ethical and honest conduct that's required and expected of anyone in the real estate profession. (Unfortunately, some people who take the course are either asleep or daydreaming when they're in the classroom! This you'll see from the war stories I mention in this book).
Join home inspector organizations and meet other inspectors. I became a member of the leading home inspection organization in the country, as well as a State Certified Appraiser. That's something you may want to consider. Being a member of a top home inspection association gives you much more credibility in a potential client's eyes. You will have the edge over the competition when a client is calling around for price quotes and comparing the appraisal company services in your area. There are very, very, few people that are good home inspectors and appraisers. I mean top-notch home inspectors and State Certified and/or Licensed appraisers and not some guy who says he does both but has no extensive training in either.
Read books and talk to local appraisers, builders, contractors and building department inspectors to keep informed and educate your mind. There are constantly new technologies being applied to housing construction that you need to keep on top of. You also have to keep informed about the trends in the local real estate market.
Take some knowledgeable local contractors and appraisers out to lunch occasionally. This will enable you to find out about the new trends and technologies being used in new housing construction and you can compare your appraisal war stories. You may even be able to deduct it as a business expense! You'll be amazed at what you can learn from a contractor who specializes in a particular field. There are times when I come across something new that I haven't seen before during an appraisal. When this happens, I'll call a contractor who installs or repairs that item. I'll also call another appraiser and ask questions about it. People love to share their expertise with someone who's interested and willing to listen.
Take continuing education classes at local colleges. You may want to take a local building inspectors licensing course or test. This isn't required but it will give you more credibility and education.