Become a Licensed Real Estate Appraiser
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A real estate appraiser is ofter referred to as “the eyes and ears of the lender”, making them responsible for obtaining an estimate of market value based on comparable sales within the market area of the subject. If you are honest and ethical, a good problem solver and are self motivated, you can do very well being an appraiser.
This blog is for people interested in becoming an appraiser and also to help Appraiser Trainees find out what it takes to find a mentor and what you might experience when trying to find a mentor to help you gain experience and complete your 2000 hours of work experience to become a fully licensed real estate appraiser.
Preliminary results from a nationwide survey by the Appraisal Institute indicate that 34% of appraisers had gross incomes of $100,000+ with 7% of those earning $150,000 to $200,000 and 9% earned $200,000+. Another 13% earned between $80,000 to $100,000. There is a lot of money to be made.
A real estate appraisal is performed by a licensed or certified appraiser who develops an opinion of value based upon the highest and best use of the subject property. The highest and best use practice is to determine the value of the land as a vacant property without any improvements. The improvements then are given value depending on the buildings and any additonal onsite improvements. To determine the highest and best use are based on the four parts to include if the value estimate is physically possible, appropriate for the parcel, legally feasible (due to zoning, etc.), and economicallyl feasible (if the improvements to the site would not cost more than the final estimate of value).
Appraisals are to be provided for a specific client and completed by an appraiser with ample experience in completing the requested appraisal. The appraiser must have experience or be able to obtain the experience to provide the final appraisal report. The appraiser must also be able to define the use of the appraisal in terms of what type of value is to be developed in the appraisal, i.e. market value, condemnation value, quick sale value, etc. Most of the appraisals that are required to be completed by an appraiser is often reported on a standardized form like the Uniform Residential Appraisal Report. The majority of the appraisals you will be asked to complete are for purchase transactions, refinances and for estate purposes which can all be completed on the standard Uniform Residential Appraisal Report.
There are minimum appraisal standards and qualifications are provided by The Appraisal Foundation which is chartered by Congress. In additon, The Appraisal Standards board periodically publishes the Uniform Standard of Professional Appraisal Practice (USPAP) which provides the minimum development and reporting standards that an appraisal/appraiser must meet. The appraisal Qualifications Board which is also administered by The Appraisal Foundation is responsible for setting the minimum qualification for appraisers to become licensed and certified. The AQB board is responsible for establishing the minimum education, testing, and experince requirements for a trainee to become a lecensed or certified appraiser.
Some of the newest requirements adopted in February 2004 by the AQB will become effective Jan 1, 2008 affects the requirements on how become a state licensed or certified real property appraiser. The changes include increased requirements for education, experience, and a new Uniform State Appraiser Examination.
The manner in which the Office of Real Estate Appraisers will implement the new criteria is important to understand. For all initial license applications and upgrade applications received on or after January 1, 2008, applicants must meet all components (education, experience, and examination) of the new requirements.
Initial or upgrade applications received on or before December 31, 2007, will be reviewed based on current licensing requirements. However, if an examination is not taken until after January 1, 2008, the examination content will be based on 2008 criteria. Therefore, anyone wishing to test under current requirements must submit a complete application prior to September 1, 2007, in order to allow sufficient OREA processing time and examination scheduling prior to December 31, 2007. Any deficient component of an application not completed prior to December 31, 2007, will be required to meet the 2008 new requirements. This pertains primarily to the education and examination components.
Please refer to this website frequently. Additional information will be posted as it becomes available.
AQB Minimum Real Property Appraiser Qualifying Criteria
(Effective January 1, 2008)
OREA Basic Education College Level Experience
License Levels Requirements Requirements
Trainee (AT) 150 Hours N/A N/A
Residential (AL) 150 Hours N/A 2,000 Hours
Residential (AR) 200 Hours Associate Degree* 2,500 Hours
Certified General(AG) 300 Hours Bachelors Degree** 3,000 Hours
AT Trainees must be supervised by a AR or AG appraiser under the new criteria. The supervisor can not supervise more than three trainees at one time when issuing experience hours to trainees.
* An applicant can complete 21 semester credits in courses covering the subject matters: English Composition; Principles of Economics (Micro or Macro); Finance, Algebra, Geometry or higher mathematics; Statistics, Introduction to Computers; and Business or Real Estate Law without obtaining the Associate Degree.
** An applicant can complete 30 semester credits in courses covering the subject matters: English Composition; Micro Economics; Macro Economics; Finance, Algebra, Geometry or higher mathematics; Statistics, Introduction to Computers; and Business or Real Estate Law; and two elective courses in accounting, geography, ag-economics, business management, or real estate to qualify without obtaining the Bachelors Degree.