Knowledge of the home appraisal process, and the differing credentials of those who provide appraisal services, benefits homebuyers and sellers alike. This knowledge is a powerful information tool to help them make wise real estate investment and sales decisions, according to the Appraisal Institute.
The appraisal process and written reporting formats vary, depending upon the nature and purpose of the appraisal. But the appraisal’s fundamental purpose is to establish a well-researched, impartial and carefully documented opinion of market value, thereby protecting the interests of buyers, sellers, mortgage lenders and other involved parties.
Because the appraisal is the essential component in determining loan limits for a property, homebuyers seeking financing as well as homeowners who are refinancing their mortgage are required by their mortgage lender to underwrite the cost of an appraisal, which typically ranges from $200 and $500. Mortgage lenders typically select appraisers from “approved” lists they compile and maintain. Consumers can request that an appraiser be selected with specific credentials or formal professional designations.
To be confident of getting an accurate and impartial appraisal, consumers should encourage their lender to select an appraiser who has demonstrated the advanced levels of education and experience required for the MAI, SRPA and SRA designations of the Appraisal Institute. Cost considerations are likely to be negligible.
To obtain an Appraisal Institute designation, members must:
• Demonstrate knowledge of the fundamental principles of real property appraising by passing a series of rigorous examinations
• Demonstrate ability to produce concise, well-reasoned valuations and reports that conform to the Appraisal Institute’s strict Code of Ethics and Standards of Professional Practice.
• Complete substantial experience requirements
• Hold an undergraduate degree from a four-year accredited college or equivalent.
• Fulfill continuing-education requirements to maintain their designation.
This commitment to professionalism makes Appraisal Institute members the preferred choice for real estate appraisal services.
Consumers pay for their home/property appraisals. But their lending institution legally owns the appraisal report document. Unless the lender “releases its interest” in the document, it remains the lending institution’s property.
Under the Equal Credit Opportunity Act consumers who make a request in writing must be given a copy of the appraisal report. It is in their best financial interest to make this request and to take the time to carefully review the report.
The written appraisal contains valuable and often-revealing information, including the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, a neighborhood description, and a narrative of current real-estate activity and/or market trends in the vicinity.
Consumers and other users of appraisal services can learn more about what is involved in an appraisal from a series of brochures posted on the Appraisal Institute’s national Web site at www.appraisalinstitute.org/resources/brochures.asp.
There are nearly 100 local chapters of the Appraisal Institute throughout the United States and Canada. As the leading organization for professional real estate appraisers, the Appraisal Institute represents more than 18,000 members worldwide. Members benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. Appraisal Institute members adhere to a strictly enforced Code of Professional Ethics and Standards of Professional Appraisal Practice. For more information, visit www.appraisalinstitute.org.
