What Makes an Appraiser an Appraiser
By Charlie W. Elliott, Jr., MAI, SRA

Sometimes we are asked what makes an appraiser an appraiser. How does one become an appraiser and how does an appraiser demonstrate that he or she is capable of performing a creditable appraisal? Is there a degree that one must get to perform appraisals, does one pass an appraisal test? How does one get experience, etc.?

At first blush it would appear that there is not much to becoming an appraiser. An appraiser just looks at the property and goes back to the office and fills out a form. It couldn’t be that hard to learn. Perhaps a shake-and-bake approach would stand to reason in the making of an appraiser. Those with such a prospective might want to get out the cookbook and read the directions a bit more carefully.

The appraisal profession is not easy to break into. Requirements vary somewhat by state, but are similar throughout the United States. A minimum of two years experience is required in most states, and it is not unusual for appraisers to have three or more years experience prior to certification. In addition to extensive classroom work and the passing of a comprehensive examination, most appraisers will appraise hundreds of properties before becoming certified.

After the savings-and-loan crisis of the 1980s, the federal government mandated that all states implement an appraisal certification law requiring appraisers to meet minimum qualifications to become eligible to perform appraisals in connection with transactions where federal monies are at risk. As we know most financial transactions are federally funded in one form or fashion. Therefore, most loans for which an appraisal is required fall into the category of requiring a certified appraisal. Even in cases where certified appraisals are not required by law, state certification has generally become the standard by which appraisals and appraisers are judged.

In connection with this mandate the Appraisal Foundation was created by a number of major appraisal organizations and government agencies. The Appraisal Foundation developed the Universal Standards of Professional Appraisal Practice (USPAP). USPAP is a set of guidelines and regulations stating how appraisals must be prepared. All certified appraisers in all states are required to follow the USPAP rules. These rules are very specific as to the different types of appraisals, which an appraiser may provide a client as well as the necessary content required in an appraisal. Standards address such issues as appraisal development, appraisal reporting, real property appraisals, personal property appraisals, consulting, mass appraisals and business property appraisals. One of the major USPAP issues involving the preparation of an appraisal is that it not be misleading. Appraisers who do not follow USPAP are subject to disciplinary action by their state appraisal board. These actions may include suspension or revocation of their appraisal certification where serious violations are found.

In all states there are typically a minimum of two levels of qualification; State Certified Residential and State Certified General. Usually residentially certified appraisers are qualified to perform appraisals on any residential real property containing one to four units and generally certified appraisers may appraise any real property including commercial. Most states have a category of qualification entitled Trainee or Apprentice for appraisers in training who have not met the full requirements for working independently as appraisers. These appraisers may perform appraisals under the supervision of a certified appraiser. Some states have other categories of qualification for lessor levels of competency but those stated above are the most typical.

The requirements for becoming a certified appraiser in most states include 120 hours of successful classroom training for residential certification while general certification usually requires 180 or more classroom hours. There is typically a two-year minimum experience requirement for certification. Many, if not all, states require that in addition to the time requirement a certified appraiser perform a minimum number of appraisals prior to being certified. Some states require that a certified residential appraiser complete 300 appraisals before certification. It is not unusual for a state to require a trainee to be accompanied by a supervising appraiser or his or her first 50 appraisals.

All states require that certified appraisers take and pass a state board examination or test prior to becoming certified.

Most, if not all, states require that the appraiser, in addition to fulfilling all of the requirements for becoming a state certified appraiser, also attend continuing education classes on an annual basis in order to maintain certification. Typically an appraiser is required to attend 14 hours per year of state approved continuing education courses.

Most states do not currently require that an appraiser have a college degree, however such a requirement is being discussed within the Appraisal Foundation. One proposal was that residential appraisers possess a minimum of an associate degree and that general appraisers possess a minimum of a four-year bachelors degree from a qualified institution of higher learning. The jury is still out on this one, as no change has yet been made.

While it is not a legal requirement many appraisers, in addition to becoming state certified, also choose to earn appraisal designations. Designations usually, but not always, require more stringent levels of education and training than state certification. Some of the larger more recognized organizations offering appraisal designations are The Appraisal Institute, the American Society of Appraisers and the National Association of Independent Fee Appraisers. The Appraisal Institute offers two designations Senior Residential Appraiser (SRA) and Member of Appraisal Institute (MAI). The American Society of Appraisers offers Accredited Member (AM) and Accredited Senior Appraiser (ASA). Independent Fee Appraisers offers Member (IFA) and Senior Member (IFAS).

There are many other organizations, which offer appraisal designations not listed above. To learn more about the specific designations and the requirements for each, one could contact the specific organization. Most if not all organizations offering designations have a Web site on the Internet, which provides detailed information about the designations offered by the organization.

In conclusion, becoming an appraiser requires extensive training and experience. In addition to all of the challenges of taking courses and passing examinations the appraiser must find a supervisor willing to take him or her on as a trainee. This is not always easy since some, if not most states have strict requirements relative to the supervisor accompanying the trainee on property inspections. This is very time consuming on the part of the supervisor, which usually translates into less pay for the trainee during training.

Some in the profession question whether there will be a sufficient number of young people entering the profession given the substantial barriers to entry. So what makes an appraiser an appraiser? Perhaps the recipe contains more ingredients and preparation time than many of us realized.

Charlie W. Elliott, Jr., MAI, SRA, is President of ELLIOTT® & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889 or at charlie@elliottco.com or through the company’s Web site at www.appraisalsanywhere.com.