Real Estate Appraiser Definition: What Is a Home Appraisal?

The real estate industry is facing an appraiser shortage. This has been true for a decade – many real estate appraisers have retired in recent years, and more are nearing retirement age. At the same time, the number of trainees has also drastically dropped.

During the pandemic, regulatory agencies allowed a lot of shortcuts, including drive-by and automated appraisals. However, industry experts say that in-person, walk-around appraisals aren't going out of style. Technology and analysis simply can't replace a person's trained judgment and attention to detail in accurately gauging the value of a property.

All in all, it's a great time to consider whether real estate appraisal is the right career for you.

What is an Appraisal?

Generally speaking, the definition of an appraisal is the expert valuation of an item – a supportable and defensible assessment of its value. A real estate appraisal is the valuation of a home or other real property.

Real estate appraisals are prepared before transactions, including:

• Mortgage lending or refinancing
• Purchase or lease negotiations
• Tax assessments and appeals
• Business mergers or dissolutions
• Government acquisition of private property for public use

Appraisals ensure that all the parties involved in a real estate transaction get an unbiased estimate of its worth before a transaction proceeds.

What Do Real Estate Appraisers Do?

A real estate appraiser is a professional who performs an estimate of a property's value. Appraisers may be employed by an appraisal firm (large or small), by a bank, or as a fee-based freelancer. 

Typically, appraisal services are contracted by the mortgage lender or financing organization, though property owners may also hire appraisers or appraisal firms directly. 

The most common type of appraiser is a residential appraiser, also known as a home appraiser or house appraiser. There are also general appraisers, sometimes known as commercial appraisers, who are qualified to assess the value of any kind of real property.

What Does a House Appraiser Do When Assessing a Home's Value?

Appraisal of all property follows a similar process, but since home appraisers are the simplest and most common, let's look at their appraisal process.

A mortgage lender will order a home appraisal after the buyer has made an offer and signed a purchase agreement.

Home appraisal visits usually take an hour or two. A field appraiser conducts a systematic walk-through to assess the property's condition and features, both interior and exterior. They look for safety or health code issues, assess lot and home size, evaluate amenities and building materials, and take note of home improvements or renovations.

Completing an appraisal report typically takes a few days. In addition to the walk-through results, home appraisers incorporate other factors into their valuation, including neighborhood characteristics, local housing market trends, and recent sale prices of comparable homes in the area.

What Affects a Real Estate Appraiser's Salary?

Estimates of the average real estate appraiser's salary fall between $55,000 and $60,000 a year.

There are a lot of factors that impact your earnings as a real estate appraiser. The first is whether you work for an institution, an appraisal firm, or yourself.

Most appraisers don't earn a regular salary. Those that do are employed by lending institutions or government agencies that rarely hire field appraisers. Instead, most in-house positions are for appraisal reviewers, who verify the findings of field appraisers, or tax assessors, who calculate taxable value.

Field appraisers are usually paid per job, sometimes called fee appraising. Fee appraisers either work independently or for appraisal management companies. Working for a firm saves you the trouble of finding or bidding on your own jobs, but the company takes a cut of each fee. Becoming an independent fee appraiser allows you to set your own rates and take home all the money, but it comes at the expense of the time you'll spend time securing business.

The fee for each job varies by the size, complexity, and type of property they're evaluating. For an average-sized single-family home, a typical fee is between $300 and $450. Certain commercial properties may command fees over $10,000. However, there's also an element of competition. In a large city with many field appraisers, the fee may be driven downward.  In a rural area or during an appraiser shortage, you can ask for more.

For fee-based appraisal, the volume of work can make a huge impact on your income. In a survey largely composed of Certified Residential Appraisers, the National Association of Realtors (NAR) reported an average of 243 appraisals a year. The individual volume varied heavily, though, with some completing fewer than 100 a year and a small percentage completing 500 or more.

For all the complexity of getting paid as an appraiser, the NAR survey shows you can make excellent money – over 40% of respondents reported making $100,000 a year or more.

How to Become a Home Appraiser

The Appraisal Qualifications Board (AQB) sets the minimum national requirements for becoming a property appraiser, but individual states can impose additional standards.  It's critical to check your state's requirements. 

The good news? In 2018, the AQB reduced its requirements for licensing, and many states followed suit. An associate degree is no longer required in many places.

The steps below are based on current AQB standards.

Step 1: Take Your Appraiser Trainee Courses

In order to become a trainee appraiser, you need to complete and pass 79 hours of specific courses, including:

• Basic Appraisal Principles (30 hours)
• Basic Appraisal Procedures (30 hours)
• Uniform Standards of Professional Appraisal Practice (USPAP) (15 hours)
• A supervisee/trainee class covering the expectations and responsibilities of both roles (4 hours)

Some state licensing boards require course providers to be state-approved, so keep that in mind when signing up.

Some states require you to pass an exam before working as a trainee, so check if yours is one of them. 

Step 2: Find a Mentor

This might be the hardest step. You'll be responsible for finding your own mentor, so if you don't have existing ties to an appraiser, you'll need to network and/or cold-call appraisers near you using your state's licensing board.

Step 3: Earn 1,000 Trainee Hours

Once you've secured a mentor, completed the required courses, and passed any state-specific tests, you can start doing appraisals under your mentor's supervision.  Before you can be licensed, you must log at least 1,000 hours of supervised experience in no less than 6 months.

It's theoretically possible to manage 1,000 hours in 6 months, but for some trainees, it can take as much as two years.  This is because:

• You may not be able to pay your bills on trainee income alone. That means making the time for a second job.
• Your mentor may not have enough work to constitute full-time hours for two people, or enough time to supervise and teach you on a full-time load.
• You may want to work through the additional pre-licensing coursework at the same time.

Step 4: Take Additional Pre-Licensing Coursework

The pre-licensing courses in Step 1 were only the classes you needed before beginning your trainee work. There are other courses you'll need to take before your licensing exam. In most states, the timing of the rest is flexible. You can take them before, alongside, or after your trainee hours.

There are at least 75 additional pre-licensing class hours to complete, including:

• Residential Market Analysis and Highest and Best Use (15 hours)
• Residential Appraiser Site Valuation and Cost Approach (15 hours)
• Residential Sales Comparison and Income Approaches (30 hours)
• Residential Report Writing and Case Studies (15 hours)

Again, check your state's specific requirements and make sure you're using a reputable and state-approved course provider.

Step 5: Register for and Take the Exam

Once you have your coursework and trainee hours completed, you'll submit all documentation to your state board and register for the Licensed Residential Appraiser Exam. Essentially, you'll be tested on what you've learned in your courses.

Step 6: Submit Your License Application

After you pass the exam, you'll submit an application to your state's appraisal board.  Upon approval, you'll be qualified to begin working as a Licensed Residential Appraiser.

Step 7: Gain Experience and Keep Learning

As a Licensed Residential Appraiser, you'll be allowed to appraise residential properties that contain 1 to 4 units, though there are limits on the "complexity" and value of the jobs you can take.

Appraisals earn the designation of "complex" when the property is atypical in some way.  For example, the property may be atypical for its area, unique in architectural style, historic, or luxury property. The form of ownership and the market conditions can also make an appraisal complex.

Eventually, you may want to level up to a Certified Residential Appraiser so you can appraise any type of 1- to 4-unit residence. Or you can become a Certified General Appraiser for even broader options.

These certifications require more education and training, but they can open up doors and increase your income. State requirements vary for advancement, but you can find the national minimums on the AQB's website.

Get Started with Online Courses

If you're ready to begin your journey to become a real estate appraiser, consider taking your coursework online.  It has a lot of advantages, including the ability to work on your own schedule at your own pace, from anywhere you have internet access.

We're a state-approved provider of pre-licensing appraisal coursework in Texas, New York, and many other states. Our courses are developed by industry experts, and we provide chat and phone support with a real person seven days a week.

Learn more about the steps to get your appraisal license.