Here are some typical questions and key definitions regarding the appraisal business.
What is an appraisal?
According to the Third Edition of the Dictionary of Real Estate Appraisal published by the Appraisal Institute, an appraisal is an analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate (Code of Professional Ethics of the Appraisal Institute). In this usage, appraisal covers a variety of assignments including valuation, consulting and review.
Are there different kinds of appraisals and/or reports available?
Yes, please see our section on Types of Appraisals.
What is the difference between a Broker/Realtor’s opinion of value and an appraisal?
The law allows Brokers/Realtors to provide what is referred to as a Broker’s Price Opinion. These opinions are typically requested to price properties for sale and the analysis and/or reports are typically somewhat lighter in depth than an appraisal. An appraisal by a licensed appraiser must meet the Uniform Standards of Professional Appraisal Practice.
What information is needed to appraise a property?
Click on the link below to access a copy of our general data request form that we typically send to clients before commencing an assignment. Additional information is often requested. Click here to download and print the PDF form.
Do appraisers have to be licensed?
Yes. All 50 states have mandatory appraiser licensing laws.
What does the MAI designation mean?
From the Appraisal Institute - The MAI (Member Appraisal Institute) membership designation is held by appraisers who are experienced in the valuation and evaluation of commercial, industrial, residential and other types of properties, and who advise clients on real estate investment decisions. Only those members who have met the rigorous requirements relating to education, testing, experience and demonstration of knowledge, understanding and ability are given the MAI designation.
Are the results of the appraisal confidential?
Yes. The Uniform Standards of Professional Appraisal Practice incorporate a confidentiality provision. In addition, clients can specifically request higher levels of confidentiality if desired.
If the appraisal is ordered by a bank, but I pay for it, who is the client?
Regardless of who pays for an appraisal, the actual party engaging an appraisal assignment is the client. Additional clients can be included at the request of the engaging party.
Can I order an appraisal and then take it to prospective lenders?
Federally regulated institutions are not allowed to accept appraisals that have not been ordered by federally regulated institutions. However, appraisals are routinely transferred between different institutions as long as they are originally ordered by a federally regulated institution. We suggest further inquiry with your banker.
How do I know if someone is qualified to appraise my property?
A minimum requirement would be that the appraiser is licensed to appraise the property type that you wish to be appraised. Most states have at least a minimum of two levels of licensing: residential and general commercial. A residential license would not typically allow said individual to value commercial property. A higher level of education and experience is demonstrated by those who hold professional designations, such as the MAI designation.