Choosing a Real Estate Appraiser
In August we discussed the role of the real estate appraiser and this article will be a guide to choosing the right real estate appraiser for your specific property type and use. The refined, intuitive skills that consumers apply to most goods and services are the product of years of experience comparing the prices and quality of various commodities. These skills are often lacking when it comes to real estate decisions, and are not equal when it comes to Real Estate Appraisers. The purchase or sale of residential real estate may be one of the largest financial transactions a person will ever make, so the reliability and competence of the appraiser are especially important. Evidence and assurance of ability and experience should be a top priority to users of the appraisal product.
The professional real estate appraiser is a specialist in appraising real estate. The state offers three categories of licenses for this profession. The licenses include the Trainee, State Certified Residential, and State Certified General categories. If you need a real estate appraisal you will be looking for either a State Certified Residential or State Certified General Appraiser license. The trainee status is an apprenticeship for a minimum of two years under a certified licensed appraiser. The trainee should not be advertising or running a business by law.
If the property were a typical residential property, the State-Certified Residential Real Estate Appraiser would be the minimum license to consider. If the property were a commercial property or a residential property with unusual attributes, a State-Certified General Real Estate Appraiser would be the minimum license to consider. However, license alone is not a qualification. The consumer should interview the appraiser to qualify them to appraise the property. The following will address some areas to question the appraiser prior to an appraisal engagement.
Service Area: Look for an appraiser that specializes in your market area. An appraiser from another county may not be as knowledgeable as a local real estate appraiser would be. Some appraisers service two or three counties while others specialize in a single county. It would only be reasonable to consider the local appraiser would have more first hand knowledge of the area. This would be more important for the residential user as commercial properties have more common value attributes requiring the appraiser to research outside the market area.
Years of Experience: The appraisal profession is difficult and takes a minimum of 5 years working with a variety of properties, good education, and a good mentor to produce a competent appraiser. My mentor told me it would take 10 years to be a good appraiser and after more than 25 years in the business I know he was right.
Education and Training: The training and educational background should be a consideration prior to hiring the appraiser. The state is continually increasing the educational and training requirements of appraisers and if the state finds it important to continue increasing these requirements it must be an area of concern. Prior to the state and federal government getting involved in the licensing of appraisers the Appraisal Institute was training and educating appraisers. The Appraisal Institute (AI) is the premier organization producing widely accepted textbooks and appraisal courses. Their standards have always been higher than the state and federal requirements for designing appraisers. Their classes are typically more difficult to pass and cost slightly more than other educational organizations. A few other appraisal organizations have been around prior to licensing such as the Independent Fee Appraisers, American Society of Appraisers (ASA), and American Society of Farm Managers and Rural Appraisers (ASFMRA). Many real estate schools in Florida meet the minimum requirements of the state but do not have the background of the organizations noted.
References: A list of local appraisers can be obtained from the Yellow Pages, Chamber of Commerce, Association of Realtors, and Internet. Be a wise consumer and gather references prior to hiring the first one you find. Ask a lender, real estate agent, attorney, or accountant for a reference. These professionals are users of appraisal services and are a good place to start.This does not relieve you from going further to interview the appraiser to be sure they meet the criteria discussed in this article.
Qualification of Appraiser: Every appraiser has a qualification sheet that provides background on the types of properties, education, licensing, and associations. Ask the appraiser to email, fax, or mail you a copy for review. The appraiser with a designation from one of the appraisal organizations mentioned has gone beyond the state requirements. This should say they are not satisfied with the minimum requirements and wish to be better than average.
Who will make the inspection and write the report? Just because you called an appraiser with a State-Certified Residential or General License does not mean the person appointed to do your appraisal will have that license. Don't assume this will happen. At the beginning of this article I discussed the trainee status. The trainee works under the certified appraiser. If you are satisfied with a trainee doing the work, then go for it but if you expect the job to be done by a more experienced appraiser, insist on the Certified appraiser making the inspection and writing the report. Appraisers are required to carry pocket license cards, ask to see the license upon arrival.
Experience in the type of property you need appraised: Even though an appraiser may have a license to do all residential or commercial type properties, it does not mean they have experience in all types. There is a competency ruling appraisers must follow. If they are not competent in a particular type property, they should not accept the assignment or should align themselves with someone that is competent or take measures to make themselves competent. If you were going to have brain surgery wouldn't you want someone that has done the surgery before? Apply the same logic to hiring professionals.
Fee Charged: The fee charged should be the last criteria. Not all products are the same and not all fees charged will be the same. Make this your last consideration keeping in mind; you often get what you paid to receive. Charlotte County has many professional appraisers and real estate agents. Take the time to interview them and make wise choices. The market is a difficult one and requires an experienced professional to assist in making wise choices.
Article written for Sun-Herald Newspaper – Market Place Section