| |
| Q.) |
|
What is
a real estate appraisal? |
| A.) |
In non-technical terms, an appraisal is an objective,
supported opinion of the value of an adequately described piece
of property, made by a person who has sufficient knowledge and
experience to accurately estimate its value. Appraisers use
comparable sales, rental information and listing data, plus
information about the property being appraised (the subject
property), its neighborhood, community, and region, and the
local and national economy, to support their value estimates. |
| |
| Q.) |
Why
would I need an appraisal? |
| A.) |
There are many reasons why you may need a real estate
appraisal. The most common purpose for an appraisal is to obtain
a mortgage on a home. Most lenders are required by federal and
state laws, as well as current banking regulations, to obtain an
appraisal in conjunction with most loans secured by real estate
(mortgages) given by the lender. Other common reason for real
estate appraisals include appraisals made for insurance
purposes, estate valuations, property tax assessments, for
buyers, sellers, and relocation companies. More complex
appraisals are required for most condemnation proceedings,
partial takings, leasehold valuations, various commercial
developments, and other related real estate activities. This
list is not complete, but it gives you an idea of why over five
million real estate appraisals are made each year! |
| |
| Q.) |
What's
the difference between a complete appraisal and a limited one? |
| A.) |
Complete appraisals conform to all of the Uniform Standards
of Professional Appraisal Practice. They are the most accurate
appraisals. Limited appraisals omit portions of the appraisal
process and are therefore less reliable than complete
appraisals. |
| |
| Q.) |
Who
preforms the real estate appraisals? |
| A.) |
There are over 80,000 licensed and certified appraisers in
the United States. Licensed appraisers are permitted to appraise
only non-complex 1-to-4 family residential properties. Certified
residential appraisers are certified for residential work only.
Certified general appraisers are permitted to appraise any type
of real estate. Licensing and certification is done at the state
level, but must be based on national standards. The Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)
requires that appraisals of property involved in federally
related transactions be made by a licensed or certified
appraiser. Some states require that all real estate appraisals
be made by licensed or certified appraisers. |
| |
| Q.) |
Can I
trust the appraiser? |
| A.) |
The Appraisal Foundation, through its Appraisal Standards
Board, has been mandated by Congress to develop a code of
ethics, which is called the Uniform Standards of Professional
Appraisal Practice (USPAP). All states require that real estate
appraisers who are licensed and/or certified comply with these
standards. All the various independent appraisal organizations
also have their code of ethics, which are enforced by internal
committees on professional standards. |
| |
| Q.) |
What
are appraisal designations? |
| A.) |
There are over 30 national appraisal organizations which
award designations to their members. To qualify for a
professional designation, appraisers must meet requirements,
which are set by the specific organizations with regard to
education, experience and ethics. Most appraisal organizations
also require that an appraiser submit proof of professional
competency in one or more demonstration appraisals and pass
examinations to substantiate their knowledge of appraisal
theory. |
| |
| Q.) |
Are all
designations the same? |
| A.) |
Some designations indicate that the appraiser is primarily
qualified to make residential appraisals. Others indicate that
the appraiser has the training to make commercial, industrial,
special purpose and other complex appraisals. Appraisers who
hold the identical designation may have been required to
demonstrate different levels of skill, depending upon when they
received their designations. It is common for appraisers to
include, as part of any appraisal they do, information about
their designations and about their education and experience as
well. |
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