Sandra Adomatis

The Role of an Appraiser

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.

I often hear the question, why should I pay for an appraisal when a real estate agent will do it free? That is a good question, now let me give you a few differences in the two products offered by the real estate appraiser and the real estate agent.

The real estate appraiser is a specialist in appraising real estate for a fee. The state offers three categories of licenses for this profession. The entry level license is a "Trainee" license held by a person that is new to the business. To obtain this status with the State of Florida, the person has taken a minimum of 75 hours of appraisal classes from any state approved real estate school. (I say 75 hours minimum but that has changed to 100 hours.) Once the educational requirement is completed, they must associate themselves with a "Supervisor" for two years. By law, the supervisor is responsible for the work product of the "Trainee", and should carefully review the work product and inspect properties with the "Trainee" until they have proven their ability to make a professional inspection. The supervisor must sign every report. The requirements are changing 2008 so stay tuned for the change later this year.

The State-Certified Residential Real Estate Appraiser has been through the "Trainee" status, taken additional classes, and passed a state test to achieve this license to appraise residential properties. This license does not require a supervisor.

State-Certified General Real Estate Appraiser has been through the "Trainee" status and taken additional classes, and passed a state test to achieve this license to appraise all types of properties. This license requires the most education and experience. This license does not require a supervisor.

The State-Certified Residential Real Estate Appraisers and State-Certified General Real Estate Appraisers with designations behind their name such as, MAI, SRPA, SREA, SRA, and RM have gone beyond the minimum standards of the state law. These designations require a college degree, appraisal classes from the Appraisal Institute, the premier appraisal school, written comprehensive exams, and demonstration reports that are similar to the college thesis.

An appraiser's goal is to produce an objective opinion about the market value of a property. The appraisal report should be supported with data from the market. The Residential report is 10 to 20 pages in length depending on the property. The commercial appraisal can exceed 500 pages. The appraiser is required to follow state law and the Uniform Standards of Professional Appraisal Practice.

The real estate agent typically provides a product called a competitive market analysis or CMA. The purpose of the CMA is to provide a listing price for a given property as of a given date. They usually do not charge a fee for this service. Their goal is to obtain a listing on your house and eventually a real estate commission. The real estate agent typically does not have formal training in the field of appraising. If the agent is a Realtor, they must follow the Realtor Code of Ethics. Their code is not as comprehensive as the Uniform Standards of Professional Appraisal Practice unless the agent calls their product an appraisal or holds himself or herself out to be an appraiser. If the agent calls their product a real estate appraisal or themselves an appraiser, they need to follow the state law and Uniform Standards of Professional Appraisal Practice. That's not to say agents do not have knowledge of value as most have a great deal of real-life knowledge of a given market area.

The CMA is often a 1 to 3 page document with some sales and/or listings that are most similar to your property. And most of all, remember the result is a bias opinion of value since the goal is to list the property and obtain a commission. The commission is a percentage of the sale price whereas the appraisal fee is a flat rate quoted prior to completing the appraisal based on the estimated time to complete the report.

Do real estate agents and appraisers talk? Of course, they need to work closely together to provide the best service for their clients. Appraisers rely on information provided by agents. Appraisers are required to verify the data used within the report and that verification process means speaking with a party involved in the transaction. The MLS and Public Record are only sources of data and do not provide verification. The real estate appraiser does not physically inspect the interior of every sale used in the appraisal report. Therefore, they call agents that have been inside the property to provide condition, cosmetic appeal, quality, and concession information.

The consumer must first determine why they need a value of their property. Is this reason a major financial decision? Will the product you receive be accepted by the lender, court, IRS, or person requiring an appraisal? Carefully consider these questions and then call a few appraisers and/or real estate agents to discuss your needs. Remember, this may be the largest financial decision you ever make.

If you have a real estate appraisal question email me at