What makes a good real estate appraiser?
- January 22, 2016
- Posted by: Closeline Settlements
- Category: Uncategorized
With a recovering housing market comes an increase in the demand for real estate Appraisers. An Appraiser gives surety to buyers that they are making a good investment. And lenders can rest assured that they are providing a loan that is secured by a property that would support the debt.
During the housing boom, Appraisers received bit of a bad reputation and were accused of tweaking their numbers so that mortgage lenders could approve loans for buyers who were unqualified. As a reaction to these allegations, the lending environment has produced a layer between the lender and Appraiser to cut off any type of collusions. But this hasn’t stopped Appraisers from continuing to build their business with lenders.
Appraisers will agree that their profession is not tough and often allows flexible hours and produces a good income. However, many feel their profession is often misunderstood when in fact it’s pretty clear-cut, and a lot of appraisal issues happening today are not linked to bad business practices but to the quality of the Appraiser. With so many real estate Reviewers playing a key role in home sales, let’s take a look at what makes a good one.
A high-quality Appraiser will have a good aptitude with math, and technical aspects of property and real estate. Another important trait is not having preconceived notions during a home evaluation and an unbiased, third party, independent opinion of the value for a property. Appraisers should be unemotionally tied to the transaction and not be influenced by homeowner’s opinions. A home seller may try to influence an appraisal by mentioning upgrades to the home such as new heated floors in the bathroom or a $20,000 deck, but a good Appraiser knows that the recoup of that invested money is not realistic since the overall condition of the home isn’t always dollar for dollar.
When it comes to education, Appraisers should have at least three years of schooling and be licensed. A lender wouldn’t want to deal with an unlicensed appraiser nor should the buyer. There’s a debate on whether a college degree should be required for real estate Appraisers, particularly on the residential side. With that said, hundreds of hours of education and training are required in order to receive a state license or certification, although recent regulations issued by several different bureaucracies and committees have made it a challenge for candidates to achieve the correct education.
A respectable Appraiser will have a state certification and recognize that many large mortgage lenders and AMCs require this state qualification. But many assessors go beyond state requirements to receive honors through evaluation from professional organizations like the Appraisal Institute. According to the Appraisal Institute, in order for Appraisers to become designated members of the organization, they must complete rigorous courses. The institute awards several designations including MAI for valuation of commercial, industrial, and residential properties, SRA for experience in analysis and valuation of residential property, and the AI-GRS membership for professionals who provide reviews of various properties including vacant land, agricultural, industrial, commercial, and residential.