State Certified Real Estate Appraisers are technically qualified to appraise any type property for any purpose, so long as their level of certification fits the subject property. General Certified Appraisers are qualified to appraise any property regardless of type, while Residential Certified Appraisers are restricted to appraising one to four unit residential properties. Other than the issue of the type of property, there is no restriction on the purpose of the appraisal, excepting that the purpose must be stated within the appraisal. This being said, the title claim appraisal in many cases requires a different breed of appraiser having skills that go far beyond that of the average certified appraiser.

Simply put, not all appraisers are qualified to appraise properties where the purpose is to access damages relative to title claims. Most appraisers get their start appraising properties for mortgage loans. Mortgage loan appraisals address the total value of a property without regard to any diminished value relating to title flaws. Further the majority gain their experience using appraisal forms and not from narrative appraisals. Narrative appraisals are required where partial values of a property are of a concern, such as is the case in many title claims. Few appraisal trainees receive a foundation capable of supporting complex problems such as those typically found in title claims. Only appraisers with advanced training and complex appraisal experience should be trusted to perform title claim appraisals.

In selecting an appraiser to perform a title claim valuation, there are a many factors to consider. First, the type of damage incurred must be assessed. In cases where a single family home experiences a total loss, the task is much simpler and may be addressed by appraisers with the least amount of title claim experience. This appraisal can be performed by a certified residential appraiser on an appraisal form in much the same way as that of a mortgage loan appraisal. In the appraisal business we refer to this as a standard residential appraisal. In cases where commercial appraisals are needed and the loss is a total loss, this appraisal can be performed by a commercial or general certified appraiser and will typically be prepared in a narrative format. We refer to this as a standard commercial appraisal. In both cases finding and selecting an appraiser is a fairly simple and straightforward task.

Now, on to title claims requiring Diminution in Value appraisals or (DIVs). DIV appraisals are required where there is less than 100% damage to a property or a partial damage. Typically the value determined is a threefold process, which includes a value as unimpaired, a value as impaired and a value of damage representing the difference between the two. This is a major step up from the standard appraisal and requires expertise not possessed by most appraisers. The loss of rights or damages to be assessed typically include the fee simple loss of land, ingress and egress rights, utility easements and building encroachments only to mention a few. Damages may include the loss of one or more of the rights in the real estate bundle of rights.

The appraiser qualified to develop a DIV Appraisal will typically have many years of basic appraisal training and experience in traditional appraisals. In addition, he or she should have DIV appraisal education, training and experience above that of the basics. Appraisers demonstrating superior technical and analytical skills should be given first priority. While not an absolute requirement, appraisers processing advanced appraisal designations beyond that of state certification, deserve special consideration. The Appraisal institute offers the MAI designation and the American Society of Appraisers offers the ASA designation, both of which involve many hours of complex special appraisal training. Appraisers processing these designations have demonstrated a superior level of professionalism not processed by non-designated valuators.

Some of the challenges in selecting an appraiser go beyond the issues stated above. In some cases especially in rural areas, there are few if any local appraisers with the requisite qualifications to perform a title claim appraisal. This may require the selection of an appraiser some distance away.

Before attempting to engage an appraiser, a clear and concise written statement of the scope of work to be performed should be developed. Copies of all relevant documents should be available to the appraiser such as the title policy, claim letters, deeds, surveys, recorded easements, etc. This process will encourage some unqualified appraisers to eliminate themselves, which is a positive. Interested appraisers should at a minimum stand for a telephone interview and provide a current CV. Also asking for a copy(s) of previous work product may be an option.