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Frequently Asked Questions

Q. What is a real estate appraisal? 

A. An appraisal is a professional appraiser’s opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience and professional judgment of the appraiser. It’s an opinion backed up my facts, analysis, statistics and certain methodology. It’s a cumulation of an art (persuasive writing) and science (statistics and scientific method) to help others determine value.   


Q. What is the role of the appraiser?

A. The role of the appraiser is to provide objective, impartial and unbiased opinions about the value of real property — providing assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate. It can be risk management to help an estate divide an interest in land equitably.

Q. What qualifications must appraisers have? 

A. Currently, the government regulates only real property appraisers. Regulatory authority currently rests with the individual states and territories that issue licenses and certifications to real property appraisers. In addition, each state appraiser regulatory agency is responsible for disciplining appraisers. However, appraisers who become Designated members of the industry organizations go above the standard certification. 

Q. What are the components of an appraisal report?

A. Most appraisals are reported in writing, although in certain circumstances, an appraiser may provide an oral appraisal. A written appraisal report generally consists of a description of the property and its locale, an analysis of the “highest and best use” of the property, an analysis of sales of comparable properties “as near the subject property as possible,” and information regarding current real estate activity and/or market area trends.

Q. What are the most important considerations in the valuation of real property?

A. The value indicated by recent sales of comparable properties, the current cost of reproducing or replacing a building, and the value that the property’s net earning power will support are the most important considerations in the valuation of real property.


Q. When hiring an appraiser, what types of questions should I ask? 

A. The following questions would be appropriate: •  Are you licensed or certified in the state  in which you live? •  What professional designations do you have and from what industry groups? •  How long have you been in practice? •  What level of experience do you have in this particular market and with this type of property? • Are you familiar with property in this neighborhood? •  What types of clients have you had (homeowners, estates, lenders, government agencies)?


Q. What is the range of services appraisers provide? 

A.  Our non-lender works can include; Estate planning and estate settlements • Tax assessment review and advice •  Advice in eminent domain and  condemnation property transactions •  Dispute resolution—including divorce,  estate settlements, property partition suits, foreclosures, and zoning issues • Feasibility studies • Expert witness testimony •  Cost/benefit or investment analysis • Land utilization studies • Supply and demand studies • Acquisition/Disposal of Property • Leasing Analysis & Negotiations. Our lender work can included; multifamily, land subdivision, land developed/undeveloped, industrial, retail, commercial, church/special use, complex residential/high value, farm/wineries, large acreage and condominiums. 


Q. Are you Licensed or Certified, what’s the difference? 

A. There are three categories of appraisal licenses Licensed residential, Certified Residential and Certified General. A licensed appraiser is the lowest level of authorization by a state. Typically, these individuals are not allowed to appraise expensive or complex properties for lending purposes. A certified appraiser is the highest level of residential property (Single Family units and 1 to 4 unit properties) authorization by a state. Certified appraisers are allowed to appraise any residential or commercial property, in any price range, of any size and complexity. The licensing is based on formal education, years’ experience, work hours and federal qualifying education. 


Q. Do you have a Designation, like an SRA, MAI, IFA, R/W-AC?

A. Certified (higher license) or Licensed appraisers have passed the government’s minimum standard. A Designated appraiser indicates that this person has taken steps to become better than the minimum. These Designations have more than twice the education of Certified/Licensed appraisers. Their work has been reviewed by peers and passed additional tests for competency. Fewer than 3% of appraisers have taken the time to obtain an SRA or MAI (Appraisal Institute) or R/W-AC (International Right of Wat Association) designation. A designation is not the end-all be-all qualification, but it is a reasonable gauge of professionalism.

Q. Why do you belong to the Appraisal Institute, International Right of Way Association or American Society of Appraisers?

A. I want to excellence in my profession and promote organizations that do so in others as ell through professional ethics that protect the public trust; and provides valuation education to practicing appraisers while recognizing professional designations to qualified Members; fascinate the exchange of ideas and experiences among its Members.


Q.Where can we find information on the “correct” appraisal rebuttal process by banks, if the borrower does not agree with value?


A. As part of my answer, let me pose a question back to you: Would you need a rebuttal process if the appraised value was higher than what they thought?  Likely not. Now the better question:  Why should there be any rebuttal process just because the value isn’t what the borrower thinks it should be?  There is no reason to establish a rebuttal process since it appears that the borrower is attempting to influence the appraised value, which is illegal. Exception to the above – If the borrower can identify incorrect information within the appraisal, the borrower should prepare a written document pointing out the errors and submit the document to the lender. But every lender/bank is different, ask what their process is. The lender should review to determine if there is incorrect information.  If there is, then the document should be forwarded to the appraiser who can determine if the errors are significant.  If the appraiser determines that the errors are minor, then no further action is required.  If in the appraiser’s opinion the errors are significant, then the appraiser should supply an addendum addressing the errors and impact on value.

The process is simple, every lender must review every appraisal for compliance with USPAP.  If the appraisal passes the review, then make the loan.  If the appraisal fails the review, order a new appraisal.  The borrower’s opinion of value has no bearing on the appraisal process or value conclusion.


Q. What would you recommend we do about real estate agents applying pressure on the appraiser?


A. Complain loud and often to numerous entities. Start with notifying the AMC and lender of the problem.  Next, complain to the real estate agent’s managing broker.  Keep it polite, business-like and include a copy of the Dodd/Frank law that explains the illegality of their actions.


Q. What Types of Cases Call for Appraisers as Expert Witnesses?


A. Generally speaking, a Real Estate Appraiser is someone who gives their opinion in evaluating the significance, status, or monetary value of an asset by using USPAP - Uniform Standards of Professional Appraisal Practice. While court cases involving business disputes, real estate disputes, or arguments over personal property most often involve appraisers, an appraiser’s help may be necessary for any case in which the parties argue over what something is worth.

An appraiser may be called as an expert witness in any case in which the parties are arguing over value. Typically, the side that calls the appraiser as an expert witness would benefit from the item in question having either a higher or a lower value. The appraiser is called as an expert who can comment knowledgeably on what the item in question should be worth and why.

Attorneys may also choose to work with appraisers as consultants. When an appraiser works on a case as a consultant, he or she may be asked not only to conduct an appraisal report or to critique the opposition’s appraisal, but also to help the attorney determine which questions to ask in discovery, deposition, and at trial. The more complex an appraisal is, the more likely that an attorney will consult an appraiser for assistance.

Q What Types of Appraisers Commonly Serve as Expert Witnesses?


A. Real estate is the most common field in which an appraiser’s help is sought as an expert witness. The value of real property can vary significantly depending on a wide range of factors, and it can be difficult to determine without expert knowledge and skill. As a result, appraisers are often asked to discuss the methodology for determining the value of real estate in order to help one side establish that a performed appraisal is too high, too low, or just right.


Q What Role Does an Appraiser Play Before and During Trial?


A. Like other experts, appraisers must be evaluated for their suitability for the role they will play in the preparation and presentation of trial arguments. Their methodology should be considered as well, particularly in states where the rules governing the admission of expert witnesses dictate that questions about the appraiser-as-expert’s methodology may be raised.

As with all experts, appraisers should be chosen with attention to due diligence. Membership in an appraisal organization, such as the Appraisal Institute, American Society of Appraisers, or IRWA, as well as the appraiser’s education, experience, publications, and participation in previous litigation are examples of key areas to consider when seeking an appraiser to serve as an expert witness.

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