Servicing Arlington, Fairfax, Loudoun and Prince William counties as well as the independent

Virginia cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park


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William G. Hicks, Jr. offers more than 35 years of experience in the unique field of relocation appraising.  The winner of several accuracy awards from some of the major 3rd party relocation companies, Mr. Hicks served as the 2000 President of RAC (Relocation Appraisers and Consultants).   RAC is a nationwide organization of independent professionals (only one of three members practicing in the Commonwealth of Virginia) who have distinguished themselves as leaders in the Employee Relocation Appraisal Industry.  Mr. Hicks is also a designated member (CRP, Certified Relocation Professional) of ERC (Employee Relocation Council), a professional membership association of organizations concerned with domestic and international employee transfer and has served on that organization's Industry Advisory Council. as well as the Certification Review Board.
 
For immediate release
 
Dwellworks, LLC Announces Service Providers of the Year
 
December 15, 2012 (CLEVELAND, OHIO) - Dwellworks, LLC, a network management company providing innovative, efficient and cost-effective relocation and real estate solutions for companies throughout North America, is excited to announce its Supplier of the Year Award winners for 2012.
 
Each supplier is recognized for the exceptional service he or she consistently delivers on behalf of Dwellworks to each valued client. Award winners were selected through a combination of performance statistics and feedback from each of Dwellworks’ operating teams.
 
For the Valuation Services division, the 2012 award winners are Butch Hicks of Hicks Real Estate Services, LLC in Clifton, VA, Dena Knopp of Advantage Valuation Group, Inc. in Calgary, AB and Gary Paluszcyk of Integrity Appraisal of Pewaukee LLC in Pewaukee, WI.
 
Supply Chain Director Tim Evanko states, “We are extremely happy for all of our finalists and award winners. It is truly a challenge to select from such a large and deserving network of partners. We are thankful for the hard work that went into this and we wish these individuals all the best in the New Year.”
 
Vice President Rob Carlson states, “It is always an exciting time for the operations teams at Dwellworks when the Supplier Awards are announced. These partners of ours throughout North America are the key to our continued success and it is great when we get to recognize them publicly.”
 
We are incredibly grateful for all of the hard work and dedication that these suppliers have provided throughout the year,” said Bob Rosing, CEO of Dwellworks. “Their high levels of service are critical as we continue to grow and serve our clients. We look forward to our continued partnership with all of our suppliers who continue to work hard and provide some of the best service in the industry.”
 
Dwellworks works with over 12,000 independent contractors throughout the United States on an annual basis. For information on becoming a part of Dwellworks’ Supplier Network please contact supplychain@dwellworks.com.

 

How the Relocation Appraisal Differs from Other Appraisals

By Alvin "Chip" Wagner III, SCRP, IFA

Wagner describes the essential differences between a relocation appraisal and a mortgage appraisal in areas such as reporting format, intended use, value definition, and comparables, among others. The article is intended for the relocation professional and the transferee.

"I just had an appraisal done a couple of months ago when I refinanced my home. Why do I need to have another done now that I am being transferred?"

Most real estate professionals who specialize in the relocation industry probably have heard a question similar to this from a transferee. Although the answer is very important, it is not always an easy one for the non-appraiser to answer. The relocation appraisal is an essential component of the relocation process, and transferees need to understand the differences in the types of appraisals. 

A professional real estate appraiser is a specialist who follows the same set of steps on every appraisal assignment. This is called the appraisal process. Every appraisal requires the same organized collection and analysis of data. After the research is complete, the appraiser must choose a format for presenting the report. The appraiser can select a narrative-style report or a form-style report, depending on the type of property and the intended use and purpose of the appraisal.

The most common reason for a real estate appraisal of a residential dwelling is mortgage loan underwriting (both purchase and refinancing). A standardized form report called the Uniform Residential Appraisal Report (URAR) is the most common form, although various new abbreviated forms have been introduced and have become popular in the residential loan underwriting market in recent years.

Appraisers may use the URAR for other purposes including, but not limited to, private mortgage insurance (PMI) removal, estate/trust valuation, divorce, estimated market value for buyers or sellers, insurance, tax appeal, and foreclosure appraisals.

The 2001 Employee Relocation Council Summary Appraisal Report is now in its fifth revision since its development and industry standardization in 1984. It is a form-style report that requires substantial narrative components and addenda to adequately address the clients' concerns and needs. It is different from all other types of form appraisal reports. To the non-appraiser, some of these differences are very subtle and others are very obvious but not completely understood.

The "Difference Between Mortgage Versus Relocation Appraisals" outline (See Figure 1) was originally developed by ERC and ERC Appraisal Standards Council members and has been used in many seminars, courses, and training materials for years.

It has been updated for this article to reflect both the changes in the 2001 ERC Summary Appraisal Report and the latest Uniform Standards of Professional Appraisal Practice. The relocation appraisal has a specific set of definitions and guidelines for appraisers. These guidelines for the relocation appraisal differ substantially from other types of appraisals. This article will directly follow and address the updated outline.

Reporting format. The mortgage appraisal uses the URAR, a two-page form that is a comprehensive analysis of the subject property's site and physical characteristics (New abbreviated reporting formats approved by the lending industry allow for even shorter forms and drive-by opinions.). The relocation appraisal is completed on the ERC Summary Appraisal Report, a six-page report, which employs techniques similar to those used for the mortgage appraisal. However, the appraiser must provide a much higher degree of analysis in the narrative portions to complete the form.

Intended use. The mortgage appraisal's intended use is to assist the lender in evaluating a property for purposes of mortgage/bank loan underwriting. The intended user of a mortgage appraisal is the client, generally a bank or mortgage company. The intended use of the relocation appraisal is to help an employer facilitate the employee relocation process. The intended users of the relocation appraisal are the appraiser's client (relocation management company) and the employer. Although the report often is shared with the transferee, he or she is not an intended user.

Purpose. The mortgage appraisal is used to develop an opinion of the market value of a property. The relocation appraisal is used to develop an opinion of the anticipated sales price of a relocating employee's residence.

Value definitions. The two appraisal formats use different value definitions: The mortgage appraisal's definition is called "market value" and the relocation appraisal's definition is called "anticipated sales price."

According to the Uniform Residential Appraisal Report/Freddie Mac Form 439/Fannie Mae form 1004B, the definition of market value is:

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale of a specified date and the passing of title from seller to buyer under conditions whereby:

  • buyer and seller are typically motivated;
  • both parties are well-informed or well-advised, and each acting in what he considers his own best interest;
  • a reasonable time is allowed for exposure to the open market;
  • payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
  • the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

According to the ERC Summary Appraisal Report/ERC Rev. 01/01, the definition of anticipated sales price is:

The price at which a property is anticipated to sell in a competitive and open market, assuming an arms-length transaction whereby:

  • the analysis reflects the subject property "as is" and is based on its present use as a residential dwelling;
  • both buyer and seller are typically motivated: both parties are well-informed or well-advised and acting in what they consider their best interests;
  • payment is made in cash or its equivalent;
  • a reasonable marketing period, not to exceed 120 days and commencing on the date of appraisal (inspection), is allowed for exposure in the open market. The analysis assumes an adequate effort to market the subject property; and
  • forecasting is applied to reflect the anticipated trend of market conditions and prices during the subject property's prospective marketing period.

The primary differences in these two definitions are the marketing period, financing considerations, and the type of analysis (forecasting).

Marketing period. The mortgage appraisal's definition of market value states a "reasonable time is allowed for exposure in the open market." This opinion of value is without limit. For example, the property's marketing time could be under 30 days, or it could be over two years, of which the latter would not affect the property's final opinion of market value. The relocation appraisal's definition of anticipated sales price requires the appraiser to consider a "'reasonable' marketing period, not to exceed 120 days and commencing on the date of appraisal (inspection), is allowed for exposure in the open market. The analysis assumes an adequate effort to market the subject property." This means if a property's neighborhood or marketplace has typical marketing periods exceeding 120 days, the subject will need to be discounted through the forecasting adjustment.

Financing considerations. The mortgage appraisal requires cash equivalency with adjustments to the comparables if there are special or creative financing or sales concessions, but not for costs, which are normally paid by sellers as a result of tradition or law in a market area. The relocation appraisal requires the appraiser to reflect a cash equivalency price with adjustments to the sales prices of the comparables. Dollar adjustments should be made for concessions such as: seller-paid points, buyer's closing costs, interest rate buy downs, seller financing, or any other terms that influence the final sale price. These adjustments are not necessarily dollar for dollar and should reflect the effect on the sales price resulting from the concession.

Type of analysis. The mortgage appraisal considers a retrospective analysis, looking at historical data as of the date of sale (or inspection if the property did not sell) without employing forecasting. The relocation appraisal considers a prospective analysis, which employs a forecasting adjustment. According to the ERC Summary Appraisal Report, the definition of forecasting is: ..."the process of analyzing historical trends and current factors as a basis for anticipating market trends. A forecasting adjustment is then applied to reflect any impact these trends will have on the subject property's marketing time and sales price."

To arrive at a forecasting adjustment, the relocation appraisal provides extensive room for the appraiser to include narrative data on supply and demand and overall market conditions. Furthermore, the appraiser studies other factors such as absorption rates; current inventory levels in the region, immediate area, or price range; and current competition from new construction.

Decision making. The mortgage appraisal uses a long-term decision-making analysis for the life of the mortgage loan, sometimes up to 30 years. The risk generally is lower as lending institutions build a loan default ratio (foreclosure) into their loan portfolios. The relocation appraisal provides short-term decision-making analysis, typically a marketing period of as many as 120 days. The risk is very high because an accurate value in their short-term investment is a must, especially if a home makes it into a company's inventory. A corporate owner of a home typically is the most motivated seller in the marketplace.

Items for consideration. The mortgage appraisal identifies categories for the subject's condition, design, and appeal. These are most commonly considered "average" and "typical" in mortgage appraising assignments unless there are significant concerns about the subject property. The relocation appraisal emphasizes the following as critical items for consideration: condition, design, appeal, interior décor, and repairs/improvements. Condition includes modernization, restoration, repairs, and necessary improvements, whereas appeal includes construction upgrades or deficiencies, as well as custom or personalized decorating. The appraiser is asked to address all of these factors pertaining to the subject property in the relocation appraisal in a narrative format, as well as recommend repairs and improvements to enhance the property's marketability. If there are concerns, the appraiser is asked to estimate a cost to cure and address and approximate the market's reaction in the sales comparison grid section of the report.

Comparables. Perhaps the most obvious difference between the mortgage appraisal and the relocation appraisal is the use of comparables. A "comparable" is a similar property that the appraiser compares to the subject property. The mortgage appraisal requires three closed sales to compare to the subject. A common underwriting guideline is that these sales should have closed within the past six months and cannot have closed more than 12 months prior to the appraisal.

The relocation appraisal asks the appraiser to consider closed sales without limitation. Often, the best sale to compare the subject property to is a home that is the same model, located on the same street, that closed longer than 13 months ago, and that was personally inspected by the appraiser who is using the comparable.

One of the easiest adjustments for an appraiser to make and support is a market change/time adjustment. Furthermore, the relocation appraisal encourages the use of pending sales that are under contract if the information can be verified. Such information often indicates the most current market conditions. Finally, the relocation appraisal compares competing sale properties to the subject property. Appraisers use the competing properties to develop a competitive list price for the subject property and consider such properties when developing the final opinion of the anticipated sales price.

Photographs. The mortgage appraisal requires a front, rear, and street scene of the subject property and front view photos of the comparable sales. The relocation appraisal requires a front, rear, and street scene of the subject property; interior views of all rooms and baths in the subject property; photos depicting any adverse conditions and inspection concerns; photos of factors within view from the subject property that significantly affect marketability either favorably or unfavorably; comparable sales; and competitive listings.

Occasionally, some of the guidelines discussed in this article may be altered at the direction of a client who has supplemental guidelines.

Doing the Job Right
The relocation appraiser is asked to take sufficient time during the inspection to counsel and impart confidence to the transferee and communicate credibility and professionalism. The appraiser is frequently the sole visible representative of the client to the relocating homeowner. The appraiser is asked to accept any information the transferee presents and comment on this information if not used in the report. Because of the sophistication of modern housing and the typical profile of a transferring homeowner's property, the inspection and counseling is more extensive than it has ever been, often requiring more than an hour.

The appraiser who accepts a relocation appraisal assignment must take the time to write a competent report, discuss that report with the client, and respond to questions from the client. The relocation process is unique to other appraisals in that two or more professional reports are completed on the same property. Requests for review of data reported in another report also are part of the relocation appraisal process. During this review, the appraiser may be asked to analyze additional information to determine if it could have an effect on the original value conclusion.

 
Figure 1.

Differences Between Mortgage and Relocation Appraisals
Mortgage Appraisal Relocation Appraisal
Reporting format:
Uniform Residential Appraisal Report
Comprehensive analysis
Reporting format:
ERC Summary Appraisal Report

Expanded analysis of market trends
Intended use:
Facilitate mortgage lending
Intended use:
Facilitate corporate relocation
Purpose:
Develop an opinion of market value
Purpose:
Develop an opinion of anticipated sales price
Value definition: market value
Exposure time precedes date of appraisal
Marketing period:
Normal (without limit)
Financing considerations:
Cash equivalency, no adjustments
for normal seller costs
Type of analysis:
Retrospective analysis: no forecasting
Value definition: anticipated sales price
Marketing time occurs after date of appraisal
Marketing period:
Reasonable (not to exceed 120 days)
Financing considerations:
Cash equivalency, adjustments for sales
and financing concessions
Type of analysis:
Prospective analysis: forecasting
Decision making:
Long term (up to 30 years)
Lower risk
Decision making:
Short term (up to 120 days)
Higher risk
Items for consideration:
Identifies: condition, design, and appeal
Items for consideration:
Emphasizes: condition, design, appeal, interior décor, repairs and improvements
Comparables:
Requires closed sales
Comparables:
Requires closed sales and competing properties and considers pending sales
Photographs:
Subject’s front, rear, and street scene; comparable sales
Photographs:
Front, rear, street scene, and interior views of the subject property; any
adverse conditions and inspection concerns; factors within view from the
subject property that significantly affect marketability either favorably or
unfavorably; comparable sales; competitive listings

 
Alvin "Chip" Wagner III, SCRP, IFA is president of A.L. Wagner Appraisal Group, Naperville, IL. He is 2001 president of the Chicagoland Corporate Relocation Council, member of the Relocation Appraisers and Consultants, and a member of ERC's MOBILITY Editorial Advisory Committee. He can be reached at chip@alwagner.com.
Published on this Website with permission of the Employee Relocation
Council, a non-profit professional membership organization committed to the
effective relocation of employees worldwide. For more information, visit

 

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How to Select a Relocation Appraiser

By Jeffrey M. Barta, CRP
October 1994

 


When presented with this topic, the first thing I asked myself was, "Who is the audience?" In fact, that question confronts relocation appraisers daily. The trend of the industry has been to let transferees select appraisers from a list provided by the relocation management company or corporation. Many times, transferees are allowed to choose "off-list" appraisers.

This development in our industry has left appraisers wondering where their marketing efforts are best spent. I concluded, therefore, that this topic requires a twofold approach. The first will deal with the selection process from the transferee's viewpoint, while the second will deal with the relocation management company's or corporation's viewpoint.

Transferees have been afforded the opportunity to choose appraisers because it is thought to give them an opportunity to be "involved" in the process. ERC's 1992 "Relocation Assistance: Transferred Employees" report indicated that 98 percent of relocation management companies and 86 percent of in-house programs supply a list of appraisers to transferees. Some transferees take this portion of the process lightly and simply choose two names from the list; most others perform varying degrees of research.

One of the primary sources of information for the transferee is the real estate brokerage community. Transferees often ask brokers for appraisal referrals. Appraisers spend time cultivating broker relationships for this reason. Appraisers know that future referrals depend, in part, on their standing with the relocation brokers in their markets. The transferee, however, should take the process a step further by asking the broker to discuss the reasons behind the recommendation. If the broker's explanations make sense, then that should suffice; if not, further probing may be necessary.

Asking the broker about previous encounters can be an effective method of obtaining more relevant information. Appropriate questions may include: How often does this appraiser call you to verify information on your sales? What appraisers bother you most for information? Is this appraiser proficient in this marketplace? Who else is? Does this appraiser specialize in relocation?

Transferees also ask other recently relocated employees for appraiser recommendations. It is not uncommon for a prospective transferee to consult with other recently transferred employees to determine the most "favorable" appraiser or to eliminate a "low" appraiser. This phenomenon has created a problem in the quest for controlling escalating costs in the relocation process. By using this network of former transferees, the employee increases the probability of a higher buy-out figure by culling the "low" appraisers.

This development in the process has not been overlooked among appraisers, and it can influence their behavior in an undesirable manner. While most appraisers attempt to maintain their independence, this phenomenon is in conflict with the premise that the appraiser is an unbiased third party.

The easy way out for the appraiser is to avoid "low" appraisals if they want future business. The alternative is to offer better service. Unfortunately, human nature generally follows the path of least resistance.

The third avenue for the transferee is to "interview" the appraisers. Transferees are using this approach more and more. The problem with this approach is that the transferee rarely has the expertise required to make an informed decision concerning the selection of the appraiser. Very often, transferees stumble through this process with no idea of what they should be asking. Instead of offering an opportunity to be involved in the process, it can offer the opportunity to be frustrated by the process. If the proper questions are asked, however, the interview process can be an extremely useful tool in appraiser selection.

Transferees should be comfortable with the appraiser they choose. There are several ways to build this comfort level by asking the right questions. The transferee should ask the appraiser how long he or she has been involved in relocation appraisals and what percentage of time he or she devotes to relocation. The experience levels and time devoted to relocation provide a good unit of comparison between appraisers. Possession of credible designations also should be a selection criterion explored by the transferee. Designations demonstrate the appraiser's commitment to the industry and ability to perform well above minimum standards. State certifications and licenses denote minimum competency and, therefore, are of limited use in selecting a relocation appraiser. ERC's CRPTM designation indicates that the appraiser has a solid foundation of knowledge concerning the relocation industry.

Other pertinent information includes the appraiser's familiarity with the employee's neighborhood. Questions regarding the subdivision, school system, and community may offer insight into the appraiser's familiarity with the area. It certainly is appropriate for transferees to ask, "How many appraisals have you conducted in this subdivision (or community) in the past six months (or year)?

Another reasonable question is, "Who will actually do the appraisal, the appraiser being interviewed or an associate?" If an associate is performing the appraisal, an interview with the associate may be worthwhile.

A common question concerns timing. The time constraints place on the transferee are great. The transferee should ask about typical turnaround times. A longer turnaround should not be an automatic reason for elimination; however, if most appraisers are indicating longer turnaround times, then how realistic is the shorter estimate? Good appraisers generally are in high demand and, therefore, may have a larger workload. It might be worth the wait to get the more qualified appraiser.

Another pertinent questions would be, "When was your last relocation seminar?" A serious and responsible relocation appraiser keeps up on the ever-changing industry and should have attendance of recent seminars to his or her credit. The fact that an appraiser devotes time to ERC or to relocation management company panels indicates a commitment to the field that is necessary for excellence and should be rewarded.

The problems facing relocation management companies or corporations are not totally different from those of transferees, although their ultimate goals may differ. The transferee is predisposed toward obtaining the highest buy-out amount while the relocation management company seeks accurate appraisals that will result in a fair buy-out figure.

Relocation management companies and corporations generally attempt to include only qualified appraisers on the lists they provide to the transferee. One problem relocation management companies and corporations face is that once they give the list to the employee, they lose control of the selection process. Appraisers on the lists usually have varying degrees of experience, education, and expertise, but when the list is presented to the transferee, each appraiser appears equal.

One of the quandaries of the industry lies in this process. Appraisers are encouraged to educate themselves and strive for excellence, but the process counteracts that goal by not distinguishing individual professional backgrounds.

A major problem facing corporations in the battle to control costs is the selection of off-list appraisers. ERC's 1992 "Relocation Assistance: Transferred Employees" report noted that 47 percent of relocation management companies and 53 percent of in-house programs allow the selection of off-list appraisers.

The problems with this arrangement are obvious. Approximately 50 percent of the companies allow their quality control of the appraisal function to be circumvented by the transferee. The off-list appraiser may not be experienced in relocation, may not be familiar with the area, or may be a friend of the transferee. In any event, the relocation management company or corporation loses control of an integral portion of the process. The selection of off-list appraisers must stop if meaningful control of the appraisal process is to be achieved by the relocation industry.

The relocation management company or corporation examines designations, involvement in ERC, and past performance in selecting appraisers for their appraisal lists. The reward for an appraiser is repeat business. If the lists provided to transferees are too long, then the appraisers in that area will tend to be less motivated to keep up with relocation appraising because the economics simply are not there. By paring the lists, the relocation portion of an appraiser's business will become more important to the appraiser, who, in turn, will devote more time and resources to maintaining that business.

Some would argue that timing will suffer due to a decrease in the size of the appraisal pool. This is not necessarily so. If the appraiser can obtain a consistent flow of appraisal assignments from any source, he or she will adapt to ensure that source will continue. One of the problems facing relocation appraisers is that in most markets they must rely on other appraisal assignments to make a living. If the inflow of relocation assignments increases, most relocation appraisers can divert their other less demanding appraisal assignments to their associates.

By providing a higher volume of relocation appraisal work more consistently, the relocation management company or corporation forces the appraiser to devote more time and resources to that portion of his or her business. The market is competitive enough that is should be relatively east to maintain, if not improve, appraisal turnaround times by rewarding highly qualified relocation appraisers with more work.

The reduction of the number of "on-list" appraisers also would increase the quality control of the relocation management company or corporation. While it is likely that transferees will continue to be allowed to choose appraisers, the shorter list will provide the reassurance that the best appraisal talent is being used. By providing a more consistent workload to the appraiser, the relocation management company or corporation also will command more attention from the appraiser, out of the need to maintain that business relationship.

A lot of attention has been paid lately to statistical variances of appraisers. While statistics can be useful tools in selecting an appraiser, they need to be used as a tool and not as an absolute measurement of the appraiser's performance. Since marketing the property is out of the appraiser's hands, the variances can be skewed.

The transfer situation does not involve a typical seller in the marketplace. As a result, many scenarios can occur that will affect the appraiser's statistics, which must then be properly interpreted by the relocation management company or corporation. These scenarios include overpriced homes, underpriced homes, uncooperative showings, recommended improvements not performed, poorly marketed properties, and changes in market conditions.

As with most professions, not all appraisers are operating on the same level. The selection of the appraiser can make or break the appraisal process for a relocation transaction. It is imperative that those selecting the appraiser be willing to do their "homework" to maintain quality and control costs. Observations and suggestions discussed in this article could make the process more efficient and effective.

Published on this Web site with permission of the Employee Relocation
Council, a non-profit professional membership organization committed to the
effective relocation of employees worldwide. For more information, visit
 
 

By Alvin "Chip Wagner III, CRP, IFA

Many users of appraisals do not realize the education and training that a real estate appraiser must undergo just to become licensed or certified. Earning a professional designation exhibits a higher level of professionalism...but all designations are not equal.


One month before Mobility published an article last year written on real estate industry designations by Rob Selleck, CRP, RE/MAX International Relocation Services, Denver, CO, I was asked by a client to explain the many designations associated with the real estate appraisal industry. I spent nearly 30 minutes explaining the various designations that I knew of, but in researching appraiser designations for this article, I found that my knowledge was only the tip of the iceberg. Some designations are very easy to attain. Others take years of education, exams, experience, and comprehensive demonstration reports.

State Licensing
Federal law requires appraisers to be state-licensed or state-certified for federally-related transactions. These are minimum standards and guidelines that appraisers adhere to. It should be noted that relocation appraisals are not considered a federally-related transaction, therefore, one does not need to be licensed to complete a relocation appraisal. To satisfy the requirements of most relocation management companies, the majority of appraisers practicing relocation appraising most likely are licensed or certified appraisers.

A state-licensed real estate appraiser is the minimum licensing that an appraiser must attain. The criteria for licensing are the successful completion of three appraisal courses (totaling 75 classroom hours) with topics in appraisal principles, procedures, and standards of professional appraisal practice and ethics. On completion, the appraiser must pass a comprehensive examination. In some states, this is considered a trainee level. If this is the case, an appraiser with a higher level of licensing must directly supervise the trainee.

The criteria for a certified residential appraiser are the same as basic licensing. Also required are additional appraisal courses (totaling 120 hours), proof of experience, and a comprehensive examination. Typically, this is the highest level the appraiser specializing in residential appraisal can achieve.

The next level is the certified general appraiser license. It requires additional course work (totaling 165 hours) and experience specializing in income-producing properties such as commercial or industrial.

Professional Designations
There are dozens of professional organizations that appraisers may choose to join or associate with, all of which differ in membership requirements. Some are local or regional groups and others have a national or international membership. However, they all have something in common: continuing education requirements and admonishment procedures for violating ethics and standards.

The credible organizations offer professional designations that are awarded on successful completion of appraisal courses with comprehensive examinations, proof of experience through personal interviews with admissions committees that verify the candidate's experience, and a demonstration appraisal report that could be compared to a master's thesis. Once designated, an appraiser typically must participate in mandatory continuing education programs.

These organizations adhere to the Uniform Standards of Professional Appraisal Practice, established by the Appraisal Foundation and adopted by various federal agencies. These standards must be adhered to by all state licensed or certified appraisers.

Designated members of many of the professional organizations have fulfilled rigorous educational and experience requirements, obtained a college degree or its equivalent, and must adhere to strict industry standards and a professional code of ethics. There are other appraisal organizations that require limited or no education or practical experience, no re-certification, and no ethical expulsion provisions. One organization's requirements are so loose that an individual's cat was once awarded a designation.

Membership in a professional group and a designation earned is not in and of itself evidence of professionalism and quality. There are many highly professional appraisers who choose not to affiliate with a professional association.

ERC and the Appraisal Standards Council have approved the organizations featured below. Included are the designations offered. A description of ERC's criteria for acknowledgement of these appraisal designations is in The Directory of Real Estate Appraisers and Real Estate Brokers and Staff.

American Society of Appraisers, www.appraisers.org 703/478-2228
Based in the metropolitan Washington, DC area, the American Society of Appraisers (ASA) has more than 5,500 members. It was formed in 1952 through the merger of the American Society of Technical Appraisers and the Technical Valuation Society founded in 1936 and 1939, respectively. Three designations are recognized, the AM, ASA, and FASA. The ASA is the only major appraisal organization representing all of the disciplines of appraisal specialists, including business valuation, gems and jewelry, machinery and technical specialties, personal property, and real property.

Designations are earned based on engagement in the appraisal profession and experience, a college degree or its equivalent, intensive written and oral examinations, submission of acceptable appraisal reports, and two to five years of full-time appraisal experience. Continuing education is required to maintain the designation.

AM—Accredited Member. To qualify for the AM designation, an individual must have at least two years of full-time equivalent appraisal experience and a college degree or its equivalent.

ASA—Senior Member. To qualify for the ASA designation, an individual must have a minimum of five years of full-time equivalent appraisal experience and a college degree or its equivalent.

FASA—Fellow of the Society. To achieve the FASA designation, an Accredited Senior Appraiser must be recognized by ASA's International Board of Governors for outstanding services to the appraisal profession and/or the society.

Appraisal Institute, www.appraisal-institute.org 312/335-4100
The Appraisal Institute is based in Chicago, IL. With more than 15,000 members, it is the nation's largest trade organization for appraisers. There are five designations recognized, the MAI, SRPA, SREA, SRA and RM. Currently, the Appraisal Institute offers only two membership designations, MAI and SRA. The other designations are the result of a 1991 unification of two organizations that merged into the Appraisal Institute. These organizations were the American Institute of Real Estate Appraisers, (founded in 1932) and the Society of Real Estate Appraisers (founded in 1935).Designations are earned based on approved education that includes passing a series of examinations, passing a comprehensive examination, obtaining a college degree or complying with specified alternatives, writing a narrative demonstration report, and maintaining the designation through continuing education.

MAI—Member Appraisal Institute. The MAI designation is earned by appraisers with experience in the valuation and evaluation of commercial, industrial, residential, and other types of properties, and to those who advise clients on real estate investment decisions.

SRPA—Senior Real Property Appraiser. The SRPA designation is held by appraisers who are experienced in the valuation of commercial, industrial, residential, and other types of properties.

SREA—Senior Real Estate Analyst. The SREA designation is held by appraisers who are experienced in real estate appraising and analysis, and advise clients on real estate investment decisions. To receive the SREA designation, an appraiser already must have received the SRPA or SRA designation.

SRA—Senior Residential Appraiser. The SRA designation is earned by appraisers who are experienced in the valuation of single-family homes, townhomes, and residential income properties of up to and including four units.

RM—Residential Member. The RM designation is held by appraisers who are experienced in the valuation of single-family dwellings and two-, three-, and four-unit residential properties.

Appraisal Institute of Canada, www.aicanada.org 204/783-2224
Founded in 1938, the Appraisal Institute of Canada is based in Winnipeg and has 4,500 members across Canada. The two designations offered are the CRA and the AACI. Their requirements include tested education, demonstration appraisal report, appraisal experience, and submission of work product, and oral interview before an admissions committee.

CRA—Canadian Residential Appraiser. The CRA designation denotes members qualified in the appraisal and valuation of individual, undeveloped residential dwelling sites, and dwellings containing not more than four self-contained family housing units.

AACI—Accredited Appraiser, Canadian Institute. The AACI designation denotes fully accredited membership in the Institute and may be used by the holder for the appraisal of a full range of real property.

National Association of Independent Fee Appraisers, www.naifa.com 314/781-6688
The National Association of Independent Fee Appraisers, founded in 1961, is based in St. Louis, MO, and has more than 3,800 members. Four designations are recognized, the IFA, IFAA, IFAC, and IFAS. The designations are earned by passing four to six courses, passing the comprehensive member examination (waived if state certification is passed), meeting experience requirements of at least two years, completing at least two years of college or its equivalent, and submitting demonstration appraisal reports. The designations are maintained through continuing education.

IFA—Member. The IFA designation is conferred to the residential appraisal specialist.

IFAA—Appraiser-Agricultural. The IFAA designation is awarded to the appraiser specializing in agricultural, farm, and rural appraisals.

IFAC—Appraiser-Counselor. The IFAC designation is conferred to the appraiser experienced in counseling.

IFAS—Senior Member. The IFAS designation is awarded to the income-producing property specialist.

National Association of Master Appraisers, www.masterappraisers.com 800/229-6262
Founded in 1982, the National Association of Master Appraisers is based in San Antonio, TX, and has more than 2,250 members. Three designations are offered, MFLA, MRA, and MSA. Those showing evidence of having a valid appraiser's license or certification (based on designation), shall be deemed to have completed the experience, education, examination, and demonstration appraisal report requirements for the respective designations. The designation is maintained through continuing education.

MFLA—Master Farm and Land Appraiser. The MFLA designation indicates that the person holding it specializes in appraising agricultural properties and land.

MRA—Master Residential Appraiser. The MRA designation indicates that the person holding it specializes in residential appraisal.

MSA—Master Senior Appraiser. The MSA designation is earned by appraisers doing both residential and/or commercial appraisals.

National Association of Realtors®, Appraisal Section, www.narappraisalsource.com 800/874-6500
In 1991, the National Association of Realtors® established "The Appraisal Section" after the former American Institute of Real Estate Appraisers voted to disaffiliate with NAR and merge with the Society of Real Estate Appraisers to form the Appraisal Institute.

Today, there are approximately 3,500 members of the Appraisal Section. In 1994, the section created two designations, GAA and RAA, for Appraisal Section members who meet tested education and experience requirements that exceed the requirements for state licensing. Appraisal Section members also are Realtor® members or hold an Institute Affiliate membership in the National Association of Realtors®.

GAA—General Accredited Appraiser. The GAA designation is awarded to appraisers specializing in commercial, industrial, and income producing properties.

RAA—Residential Accredited Appraiser. The RAA designation is awarded to appraisers specializing in residential real estate appraising.

National Association of Real Estate Appraisers, www.iami.org/narea.cfm 320/763-7626
With more than 4,000 members, the National Association of Real Estate Appraisers was founded in 1966 and is based in Alexandria, MN. The CCRA and CREA designations are earned by meeting two years of real estate experience, submitting two residential or commercial appraisal reports, and passing a residential or commercial exam. All members must be state-licensed.

CCRA—Certified Commercial Real Estate Appraiser. The CCRA requires two years of experience in commercial valuation, and is conferred to the appraiser who performs assignments including commercial, industrial, vacant land, and residential.

CREA—Certified Real Estate Appraiser. The CREA requires two years of experience in residential appraising, and is conferred to the appraiser who performs assignments on residential, condominiums, vacant land, and small commercial properties.

Related Organizations
Appraisers who specialize in relocation appraising may be members of two industry-related organizations.

Employee Relocation Council (ERC), www.erc.org 202/857-0857
Founded in 1964, ERC currently has about 3,600 real estate appraisers on its rolls. With more than 4,600 Senior Certified Relocation Professional/Certified Relocation Professional (SCRP™/CRP™) members in its employer, real estate, appraiser, relocation service, and relocation management company categories, ERC has awarded the SCRP™ to 14 appraisers and the CRP™ to 305 appraisers.

The CRP™ designation is awarded through industry experience and by passing a comprehensive examination. The SCRP is awarded to CRPs who have earned ERC's Distinguished Service Award by giving back to the relocation industry through involvement on committees, speaking at ERC's national conventions, authorship in their publications, and other service-oriented activities.

Although the CRP™ does not signify ERC endorsement of an appraiser, it is more likely that the appraiser who has taken the time to earn the CRP™ will understand the industry's needs and respond to them.

Relocation Appraisers and Consultants (RAC), www.rac.net 800/368-7717
RAC is the only professional organization consisting of real estate appraisers specializing in relocation appraisals. RAC was founded in 1989 by some of the nation's premier relocation appraisal specialists. Today, there are more than 125 appraiser members who are acknowledged by the users of relocation appraisals. Although a designation is not awarded, each member meets stringent standards to be considered for membership.

RAC members must show proof of recent relocation-related education and references from management level relocation clients. Furthermore, RAC members must demonstrate their understanding and ability to apply ERC appraisal guidelines, including forecasting, by providing demonstration reports that are reviewed by an admissions committee.

Published on this Web site with permission of the Employee Relocation
Council, a non-profit professional membership organization committed to the
effective relocation of employees worldwide. For more information, visit

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Hicks Real Estate Services, Inc.
PO Box 245, Clifton, VA  20124-0245
Phone: 703-631-5222 · Fax: 703-815-0942 · E-mail: info@bhicks.com