The selection of a real estate appraiser is an important decision. The experience and competency of a real estate appraiser is an important factor. All states require that appraisers be licensed or certified in order to do business with federally regulated banking institutions. However, almost every appraiser is state licensed or certified. This means that they conform to the Uniform Standards of Professional Appraisal Practice (USPAP). It is important to make sure that the appraiser is state licensed or certified. In addition, the experience and competency of an appraiser is an important consideration. A personal referral is a good way to find a real estate appraiser or you can call a professional appraisal organization like the Appraisal Institute (312-335-4100). You can also log onto their website www.appraisalinstitute.org. If you call the Institute, tell them the address and property type of the appraisal you need and they will refer you to 1 to 3 appraisers who are near your property. If you log onto their website, you can select an appraiser primarily by location. Most appraisers have links to their websites. You can also search in the search box of any search engine.
When contacting an appraiser, you should ask if the appraiser is experienced and competent to appraise your property. Donít be afraid to ask this question. The word "competent" is a word used in appraisal terminology. If fact, USPAP requires appraisers to refuse an appraisal assignment if they are not competent to appraise the property.
The categories of property types and appraisers familiar with them are as follows:
1-4 family houses, coops and condos
Appraisers who are State Licensed Real Estate Appraisers or State Certified Residential Real Estate Appraisers are qualified to write appraisals on these properties. A State Certified Residential Real Estate appraiser is allowed to appraise a residential property whose value is $1,000,000 or more.
Commercial properties Ė retail buildings, office buildings, apartment buildings, mixed-use buildings, industrial buildings, land
Appraisers who are State Certified General Real Estate Appraisers are qualified to write appraisals on these types of property.
A summary of the different educational and work experience requirements of the above approval classifications are as follows:
Once you determine that the appraiser is competent to appraise your property type, you can discuss the appraisal assignment and ask if the appraiser has appraised similar properties recently. Your conversation with the appraiser will allow you to judge if this is the right appraiser for you. It is best to talk to two or three appraisers so that you can determine which is best for you. The appraisal fee and the time frame for the delivery of the report are critical components of the assignment. Appraisers usually quote a fixed dollar amount per assignment and payment is typically 50% in advance by regular check and 50% due upon delivery of the report, in most cases by bank check or money order. Unfortunately, appraisal fees are too small to warrant litigation. If a check bounces and a lawsuit follows, the balance of the appraisal fee is usually not big enough to pay an attorney. An engagement letter is required by most appraisers which sets forth the term of the assignment.
If you have any questions you can call me at 718-344-2083. Good luck!
By Peter Zachary