The Appraisal Profession

What is an Appraisal?
An appraisal is a professional appraisers opinion of value. The preparation of an appraisal involves
research into appropriate market areas; the assembly and analysis of information pertinent to a property;
and the knowledge, experience, and professional judgment of the appraiser. . Appraisals may be required
for any type of property, including single-family homes, apartment buildings and condominiums, office
buildings, shopping centers, industrial sites, and farms. The reasons for performing a real property
appraisal are just as varied. They are usually required whenever real property is sold, mortgaged, taxed,
insured, or developed. For example, appraisals are prepared for:

Mortgage lending purposes

Tax assessments and appeals of assessments

Negotiation between buyers and sellers

Government acquisition of private property for public use

Business mergers or dissolutions

Lease negotiations

What is the Role of the Appraiser?

The role of the appraiser is to provide objective, impartial, and unbiased opinions about the value of real
propertyproviding assistance to those who own, manage, sell, invest in, and/or lend money on the
security of real estate. Appraisers assemble a series of facts, statistics, and other information regarding
specific properties, analyze this data, and develop opinions of value. Each appraisal assignment
challenges the appraisers ability to put analytical skills into practice, exercise sound judgment, and
communicate effectively.

What Qualifications Must Appraisers Have?

All states require appraisers to be state licensed or certified in order to provide appraisals to federally
regulated lenders. Some states require appraisers to be licensed or certified to provide appraisals for
other parties as well. To become licensed or certified, you must pass an examination that is administered
by your states appraisal board. Because state requirements vary, contact your states regulatory
agency for specific requirements. The Appraiser Qualifications Board (AQB) of The Appraisal Foundation
is authorized by Congress to establish the minimum requirements for Certified General Real Property
Appraiser and Certified Residential Real Property Appraiser classifications, and the AQB provides
recommended minimum requirements for the Licensed Real Property Appraiser and Trainee
classifications. Descriptions for the four categories can be found on The Appraisal Foundation Web site.

Appraisers who become designated members of the Appraisal Institute have gone beyond these
requirements. They have fulfilled rigorous education and experience requirements and must adhere to
strict standards and a code of professional ethics. The Appraisal Institute currently confers the MAI
membership designation on those who are experienced in the valuation of commercial, industrial,
residential, and other types of properties. The SRA membership designation is held by those who are
experienced in the analysis and valuation of residential real property.

Are There Different Categories of Real Estate (Real Property)

Appraisers?
The Appraiser Qualifications Board (AQB) of The Appraisal Foundation is authorized by Congress to
establish the minimum requirements for Certified General Real Property Appraiser and Certified
Residential Real Property Appraiser classifications, and the AQB provides recommended minimum
requirements for the Licensed Real Property Appraiser and Trainee classifications. Descriptions for the
four categories can be found below (more information can be found on The Appraisal Foundation Web
site:

Appraiser Trainee:
Someone who is qualified to appraise those properties, which the supervising certified appraiser is
qualified to appraise.

Licensed Real Property Appraiser:

Someone who is qualified to appraise non-complex one to four units having a transaction value less than
$1,000,000 and complex one to four residential units having a transaction value less than $250,000. This
classification does not include the appraisal of subdivisions.

Certified Residential Real Property Appraiser:

Someone who is qualified to appraise one to four residential units without regard to value or complexity.
This classification does not include the appraisal of subdivisions. To be a state certified residential
appraiser qualified to do appraisals for federally related transactions, a state must have requirements that
meet or exceed this minimum standard.

Certified General Real Property Appraiser:

Someone who is qualified to appraise all types of real property. To be a state certified general appraiser
qualified to do appraisals for federally related transactions, a state must have requirements that meet or
exceed this minimum standard.

For trainee and licensed classifications, this is an AQB recommendation only. States are not
required to utilize this guidance. Some states may have trainee or license programs that have
very different requirements.