Chapter 18
THE PROFESSIONAL APPRAISER
CHAPTER TERMS AND CONCEPTS
Appraisal licensing and
Fee appraiser
certification
Impartiality
Competency Rule
Institutional appraiser
Conduct
Integrity
Designations
Jurisdictional Exception Rule
Ethics Rule
Professional societies
Experience
Record Keeping Rule
Federally related transactions
Scope of Work Rule
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LEARNING OUTCOMES
1. List the five key elements to becoming a
competent appraiser.
2. Define the typical state requirements for
appraiser licensing and certification.
3. List two major organizations of professional
appraisers.
4. Outline the first two standards of the
Uniform
Standards
of
Professional
Appraisal Practice (USPAP).
5. Discuss the different positions open to
appraisers.
THE APPRAISER’S BACKGROUND
Education
Experience
Knowledge
Judgment
Integrity
Federally Related Appraisals
1. Trainee License: Appraisal of properties that the supervising
appraiser is permitted to appraise, under close supervision.
2. License: Appraisal of non-complex one to four-unit residential
properties, up to a transaction value of $1 million; complex
properties only up to a transaction value of $250,000.
3. Certified Residential: Appraisal of all residential properties,
regardless of transaction value or complexity. Federal guidelines
limit this practice to property with one to four dwelling units.
Appraisal of nonresidential properties with a transaction value up
to $250,000 is also authorized.
4. Certified General: Appraisal of all real estate property transactions,
without regard to property type, transaction value, or complexity.
Basic Education
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AQB
The AQB will require the 30 specified college
semester credits for those seeking to be a licensed
Residential appraiser, and will delete it as an option
for those seeking the Certified Residential and
Certified General licenses, effective January 1, 2015.
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Experience Requirements
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PROFESSIONAL APPRAISAL GROUPS
Major Organizations
 American Society of Appraisers
 Appraisal Institute
PROFESSIONAL APPRAISAL GROUPS
Specialized Groups
 International Right of Way Association
 American Society of Farm Managers and
Rural Appraisers
 International Association of Assessing
Officers
 Association of Machinery and Equipment
Appraisers
 National Association of Independent Fee
Appraisers
 Institute of Business Appraisers
USPAP ETHICS RULE
Conduct
 Requires that the appraiser perform all
assignments ethically and competently in
accordance with USPAP and do so with
impartiality, objectivity, and independence, and
without accommodation of personal interests.
USPAP ETHICS RULE
Management
 Prohibits the payment of any undisclosed fees
or commissions in connection with the
procurement of an assignment. Accepting
compensation for developing an opinion of
value that is contingent upon the value
conclusion is also unethical.
USPAP ETHICS RULE
Confidentiality
 Requires that the appraiser not reveal
confidential factual data obtained from the
client, or the results of an assignment to
anyone other than: (1) the client and those
he/she has authorized by law; (2) state
enforcement agencies and third parties
authorized before “by law”; and (3) a duly
authorized professional peer review committee,
state enforcement agencies and authorized
third parties.
USPAP ETHICS RULE
Record Keeping
 Requires that the appraiser prepare and keep a
comprehensive work file for at least five years
after each assignment or at least two years
after the final disposition of any judicial
proceeding where testimony was given.
MORE USPAP RULES
Jurisdictional Exception Rule
 If any part of USPAP is contrary to the law or
public policy of any jurisdiction, only that part
shall be void and of no force or effect in that
jurisdiction.
USPAP ADDITIONAL RULES
Competency Rule
 Prior to accepting an assignment or
entering into an agreement to perform any
assignment, an appraiser must properly
identify the problem to be addressed and
have the knowledge and experience, in the
property type and location, to complete the
assignment competently.
USPAP ADDITIONAL RULES
Scope of Work Rule
 For each appraisal, appraisal review,
and appraisal consulting assignment,
an appraiser must;
o Identify
the problem to be solved
o Determine
and perform the scope of work
necessary to develop credible assignment
results, and
o Disclose
the scope of work in the report
STANDARDS OF PRACTICE
Standard 1
 In developing a real property appraisal, an
appraiser must identify the problem to be
solved and the scope of work necessary to
solve the problem, and correctly complete
the research and analysis necessary to
produce a credible appraisal.
STANDARDS OF PRACTICE
Standard 2
 In reporting the results of a real property
appraisal, an appraiser must communicate
each analysis, opinion, and conclusion in a
manner that is not misleading.
Impartiality
1. The appraiser should not have an undisclosed
interest in the property being appraised.
2. The appraisal fee should not be contingent on
the amount or direction of value concluded, or
on the occurrence of any event.
3. The appraiser should not directly pay or
receive referral fees, so that referrals will be
objectively considered.
APPRAISING AS AN OCCUPATION
• For many years, the major breakdown
within the industry was between those
who work for a salary, and those who
work for themselves and get paid a fee
for each assignment. Another common
separation is between those who
perform appraisals for loan purposes
versus those for other purposes.
• Increasingly, this last viewpoint is what
people talk about!
Who Do You Work For?
• The Institutional Position
• The Fee Appraiser
• Loan versus Other Assignments
What Is It Like to Be an Appraiser?
1. Work is varied.
2. Work is challenging, since no two
properties are alike.
3. Work involves us with what is going
on in our town.
4. Can perform appraisal inspections at
our own convenience to an extent.
5. There are a number of related areas in
real estate where our knowledge is
also useful.
SUMMARY
Becoming a competent appraiser requires many
different skills. Besides pursuing a formal education,
you also need to develop your knowledge of markets
and real estate operations. This kind of knowledge is
more often gained in the field than in the classroom.
Having sound judgment is also an important skill for
an appraiser. Developing good judgment usually
comes from a combination of experiences: in the
field, in education, and most important, as a result of
self-review. Integrity is also essential! Appraisers
must be able to say “no” in order to succeed!