THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, December 17, 1994 TAG: 9412160447
SECTION: REAL ESTATE WEEKLY PAGE: 10 EDITION: FINAL
COLUMN: WHAT IT'S WORTH?
SOURCE: Thomas Tye
LENGTH: Long : 106 lines
Q. I am interested in being an appraiser. I have heard varying requirements about what I would have to do to be qualified and approved to value properties. Can you please inform me of the requirements?
A. The most difficult aspect of entering this field is obtaining a training position.
Most local firms are small, two to 20 people, and cannot support an ongoing training program. When business is strong and funds may be available, it is difficult for the appraisers to do their job and train someone. When business is slack, the money is typically not in the budget.
Since the amount of work varies considerably with the economy, it is difficult to predict demand, and the need for additional staff.
With that said, the licensing requirements in Virginia include a minimum of two years of experience and a certain number of classroom hours, depending upon the type of license which you desire.
There are three licensing levels: Licensed Residential Appraiser, Certified Residential Appraiser and Certified General Appraiser.
The licensing requirements are minimal and it is suggested that you look into the best educational opportunities available. The Appraisal Institute, (312) 335-4400, can provide you with course offerings and also information on getting a professional designation.
They offer classes periodically throughout the country and will gladly send course information and requirements.
A professional affiliation is very important and while a designation is not required by the State of Virginia, it goes a long way towards adding credibility to your expertise. There are several organizations that offer appraisal designations but The Appraisal Institute by far is the recognized leader in the industry.
Training positions do, however, come up from time to time. It is important to watch the newspapers for these opportunities.
The best way to obtain a training position, is to make yourself stand out over the large number of applicants. Taking either Appraisal Institute courses or courses in appraisal from Old Dominion University will help do this. ODU offers a number of courses in real estate and real estate appraising and has a business degree available with a major in finance and a concentration in real estate.
An often overlooked source of employment is the city assessor's offices. All of the local cities have staff appraisers, and they periodically hire. I would highly recommend that anyone interested in this field contact the local personnel offices of the municipalities in which they live to determine if any openings for an appraiser trainee are available.
When the assessor's offices hire appraiser trainees, they expect a certain minimum level of education. Obtaining as much quality education in this field will increase your likelihood of landing a position, either in private industry or with a government agency. Why properties are worth less
Q. Ten years ago I bought a small townhouse in Virginia Beach as an investment. I have followed the prices in the newspaper and the house is worth less now than what I paid for then. I thought real estate went up in value.
A. It is not unusual, in many subdivisions in Virginia Beach, which contain multifamily housing for sale, to have prices now which are equal to or less than 10 years ago. This is caused by several factors.
The Hampton Roads real estate market experienced a very severe recession from about 1987 to 1991.
The lower level of demand caused prices, for all types of properties, to soften. Particularly, hard hit were lower priced multifamily for sale housing.
From 1987 to 1991, not only did the number of sales decrease drastically but the number of properties on the market increased. This caused a very wide divergence between the number of properties offered for sale and the number which sold. This large spread added to the softening of prices.
A number of subdivisions in Virginia Beach, which have lower priced townhouses, had a large amount of demand created by investors.
Investors would purchase these units and rent them hoping to have a favorable financial experience.
Federal tax laws changed drastically in 1986. These major revisions decreased the desirability of real estate investments so greatly that the demand for them declined. Since demand dropped, the prices eased.
Another item that affected the market for properties such as these is the lack of financing. Up until the late 1980s is was possible to finance one to four units with a minimal down payment with an FHA insured loan.
FHA changed their rules and with few exceptions, small investment properties can not be financed. Many conventional lenders also withdrew from the market and, if they were offering investment loans, they were at such noncompetitive rates that payments exceed income.
With larger down payments required, there were fewer people who could enter the real estate investment field and this too caused a lowering in the demand for these properties.
Hopefully, with time, the increases that we have experienced recently in lumber and lot prices will translate into higher prices for resale units. However, it is impossible to predict how long it will take for this to happen, and whether it will happen.
But the economics of real estate usually cause downturns to last for a certain time, followed by upturns and increases in price. MEMO: Thomas Tye is a Member of the Appraisal Institute and is a Senior
Residential Appraiser. He has evaluated commercial and residential
property in Hampton Roads for more than 15 years. Send comments and
questions to him at Real Estate Weekly, 150 W. Brambleton Ave., Norfolk,
Va. 23510.
by CNB