Residential Appraisers Dos and Don’ts
Residential appraisers are a critical piece in the puzzle that is determining a property’s “true” value. But in today’s market, the role they play is more pivotal than ever. When every dollar counts (as the players of the game may still be licking their wounds from the oh too recent housing crisis) sellers want to be able to get the highest value possible for their property and buyers certainly do not want to overpay for a home, so working with an appraiser who is trained to perform services in an ethical and professional manner with rich knowledge of the market is a necessity. As an appraiser, your role is to provide an unbiased, methodical assessment to a home in order to better gauge its selling price. Even though the market continues to ebb and flow with the economic times and the appraiser will also adapt along with the industry, these are some Dos and Don’ts that generally withstand the times and are worth keeping in mind in order to continue providing the value to the buy-sell equation of residential property.
DO obtain a trainee license. Becoming a licensed appraiser does not happen overnight. In order to reach your overall goal of becoming a professional independent appraiser, most states will require that you first attain a trainee license. Specific licensing requirements vary from state to state, but almost all of them require some form of experiential learning and education. The pursuit of gaining a trainee license often involves a designated number of hours of education focusing on the principles and procedures of appraisals as well as formal examinations. To determine what you in particular have to do, check with the licensing board in the state you wish to conduct business in.
DON’T neglect finding an appraisal mentor to shadow. Some of the greatest knowledge you can receive about the market as well as how to perform an appraisal successfully will come from firsthand learning experiences. Supervising appraisers can give you tips and lead you down the right path in order to succeed in the industry. The process of finding a supervising appraiser may seem challenging at first, but the valuable, hands on experience you will receive is something you cannot find in a classroom setting or get from textbooks.
DO look for a trainee job while working towards getting your license. While the pay may be minimal, working for a real estate appraisal office as a trainee or for an experienced appraiser will help you immensely in the long run. Not only will you gain respected experience but also an opportunity to network with professionals for your future career as an appraiser.
DON’T put off applying for an individual appraiser license. Once you have satisfied the minimal hours of education required as well as gained all essential experience, you are ready to apply for a license. You will have to take a state test as well as know the ins and outs of the Uniform Standards of Professional Appraisal Practices (USPAP) and the Truth in Lending Act (TILA). These are nationally recognized laws that should be taken seriously in order to avoid future legal conflicts. Licensing requirements vary on a state-by-state basis.
DO conduct thorough research of the current real estate market in order to form an unbiased, credible opinion and guarantee accurate appraisal services. Appraisers need to take into account the property’s size, location, and condition among other important factors when determining its value. Having knowledge of recent sales prices among similar or comparable homes is key.
DON’T succumb to committing specialized favors by accepting requests from lenders and brokers. By law, all appraisals must be performed by an individual who has local knowledge of the market, not an appraiser the lender chooses explicitly. If this happens, the lenders or brokers involved could wrongly attempt to influence the appraiser to put a higher value on the property than the current market would otherwise determine. This simply is not allowed.
DO communicate with lenders and brokers in order to establish a professional and trustworthy relationship. It is important to know the intended use of the appraisal and this can only be done by interacting with the lender involved. If it is discovered that an error was made on a finalized appraisal, lenders may reach out to you requesting amendments or further details and explanations. As the appointed appraiser, it is your responsibility to correct any misrepresentations or errors made. Dismissing questions or concerns about a finalized appraisal will ultimately damage your overall professional reputation and could lead to possible legal conflictions.
By keeping these Dos and Don’ts tips in mind, pursuing your goal of becoming a residential appraiser should run smoothly. For any additional information on real estate appraisal or specific regulations, directly contact the state in which you desire to do business.