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    The basics Who, What, and Why of Real Estate Appraisers and Appraisals!

Licensed appraisers are hired to provide an estimate of fair market value of real estate.  Licensed Appraisers inspect and make an approximate or tentative judgment regarding the condition and quality of the real estate and report their findings in the form of a real estate appraisal, whether it be oral, written, on a standerdized form or narative report.  Licensed Appraisers  possess good analytical and mathematical skills, and Appraisers also determine the properties authenticity and structural integrity. Licensed real estate appraisers may be the most important professional involved in a real estate transaction. Licensed Appraisers estimate the value of real estate for a variety of purposes, typically  appraisers work primarily for lending institutions as independent fee appraisers, though some appraisers in New Jersey and New York work directly for mortgage lenders, most licensed appraisers are self employed independent contractors as opposed to being staff appraisers. Licensed appraisers  perform appraisal assignments necessary to determine property value, a vital component in calculating the loan to value formula associated with the debt investor’s risk.  Investors tend to hold NJ appraisers work in high regards. Lenders request New Jersey and New York appraisers to value the real estate being considered for a loan application.  Regardless of  property type , purpose, or whom the client / lender is, licensed appraisers in New York and New Jersey are expected to perform  valuations that are impartial, independent and objective.  In the real estate appraisal profession, real estate appraisers may specialize in appraising only  certain types of real estate such as a residential or commercial properties.  FHA appraisers must be approved to perform an appraisal for the Federal Housing Administration. Appraisers tend to work in geographic areas that they are familiar with because of their knowledge of local market areas and how it affects property values. Licensed Appraisers in New York and New Jersey will determine the market value of a property by taking into consideration local market activity including comparable sales, active and pending listings, construction costs, income potential, proximity to schools, shopping, employment, houses of worship, recreation, transportation, present position in its life cyle growth,stability, decline, regentrification.Real estate appraisals are services performed by licensed or certified real estate appraisers that develop an opinion of value based upon the highest and best use of real estate.Highest and best use is what use produces the highest value for the land, as if it were vacant.  Also  the purpose and type of value being developed and this must be noted in the appraisal report. Valuations of real estate for lending purposes is most often reported on a standardized Uniform Residential Appraisal Report forms.Appraisals are performed for a specific client / lender, who must be noted in the appraisal, and to whom the appraisers have a fiduciary responsibility, regardless of who pays for the appraisal, most cases, the homeowner or buyer will pay for the appraisal.  Appraisal fees are typically due when the appraisers arrive at the property being appraised.   

In the United States of America, there are minimum real estate appraisal standards, and real estate appraisers qualifications, these are the province of The Appraisal Foundation which is chartered by Congress.  Through one of its boards, The Appraisal Standards Board (ASB) periodically publishes the Uniform Standard of Professional Appraisal Practice (USPAP).  USPAP provides the minimum development and reporting standards NJ & NY appraisers must meet.  The Appraisal Foundation is also responsible for setting the minimum qualifications for an appraiser in NY and NJ and appraisers nationwide that seek licensure or certification. Through its other board, The Appraisal Qualifications Board (AQB).  The AQB is responsible for establishing the minimum education, examination, and experience requirements for licensed or certified real estate appraisers.  Effective January 1, 2008, the requirements to a become state licensed or certified real estate appraisers in New Jersey and New York have significantly increased.  State licensing was established in the early 1990s in the wake of the Savings and Loan "crisis". 

A Federal law requires that a real estate appraiser in New Jersey or New York involved in a Federally-related transaction with a loan amount of $250,000 or more must have a state-issued license or certification.  All 50 States  are required to conform to the licensing and certification requirements established by The Appraisal Foundation.  The Appraisal Foundation requires that appraisers in New Jersey and New York pass an Appraisal Foundation approved state examination, as well as meet education and experience requirements.  The education requirements include a course and examination on the Uniform Standards of Professional Appraisal Practice (USPAP) set forth by The Appraisal Foundation.  Although Federal standards do not require an appraisal license for those appraisers  valuing real property with loan amounts of less than $250,000, many states require any practicing appraisers to obtain a license or certification, regardless of transaction value.  The state issued real estate appraisers licenses currently available are the State Certified General Real Estate Appraisers license, which allows appraisers to value any type of real estate regardless of value or type,  state certified residential real estate appraisers license,which allows NJ & NY appraisers to value any residential unit of 1 to 4 families regardless of value, licensed which can appraise residential properties (1 to 4 units) up to $1,000,000.   New Jersey and New York appraisers must pursue continuing education which is necessary to maintaining license or certification. The minimum continuing education requirement for appraisers in NJ and NY is set by the Appraisal Foundation.

 The implementation of licensure and enforcement are state functions.  In addition, there are appraisal organizations, private not for profits, some of which date back to the Great Depression of the 1930s, such as the American Society of Farm Managers and Rural Appraisers, founded in 1929.  Others were founded as needed and opportunities that arose in specialized fields, such as the Appraisal Institute and the American Society of Appraisers (founded in the 1930s) and the International Right of Way Association and the National Association of Realtors (after World War II).  These organizations all existed to establish and enforce standards, but their influence has waned as the government increases appraisal regulation.  There are several professional organizations for an appraiser in NJ and appraisers nationwide.  They include the American Society of Appraisers (ASA), the American Society of Farm Managers and Rural Appraisers, and the largest, the Appraisal Insitute (AI). In addition to state licensing and certification, a New Jersey appraiser can earn professional designations from any of the above organizations.

    Possible reasons to get an appraisal

  • Purchase a Home
    Presale Consultation - For Sale By Owner
    Presale Consultation - Prior to Hiring a Realtor
    Mortgage Refinancing
    Primary and Secondary Mortgages
    Home Line of Credit
    Private Mortgage Insurance Removal
    Employee Relocation
    Real Estate Owned REO
    Investment Properties
    Estate Planning
    Divorce Settlement
    Death Settlement
    Tax Appeal
    FHA appraisers / FHA Appraisal
    Expert Witness Court Testimony
    Construction Loan 203K
    Hard Money Lenders
    Bail Bonds
    Desk Review
    Field Review
    Review Appraisal
    Ride-By Appraisal / Drive-By Appraisal
    Land Appraisal




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