ALT-15 Nonprofit Service Sector
As real estate buying and selling continues along the path as one of the most popular financial investment vehicles, a professional real estate appraisal will likely continue to underpin much of the initial decision making.
In terms of residential real estate, a real estate appraisal is actually a more refined analysis or (Market Value Estimate) than the well known (CMA) or Competitive Market Analysis that is generally offered free of charge to clients of Real Estate Brokers and Realtors.
Prior to the mandated Federal and State Licensing Laws, the art of real estate appraising was acquired (mom and pop style) passed down to the next generation and served as an offshoot of Real estate brokerage. For example, if an Estate Appraisal was needed to establish the value of real estate within an estate, the lawyer handling the estate would generally commission a real estate broker to render an estimate of "Fair Market Value," as it was previously referred to. A lender such as a bank, considering granting a mortgage to a customer, would often call upon an outside appraiser such as a broker to render an appraisal, or as volume increased, begin to hire a staff of "in-house" appraisers.
As real estate buying and selling continually became more popular, and with more lenient lending standards paving the way for more Americans to become homeowners, so did the need for real estate appraisers to become identified as an independent body of professionals.
This recognition gave rise to the establishment of National Appraisal Organizations that charged membership fees for enrollment and created a "brotherhood" of like-minded individuals striving to become educated in the discipline of real estate appraising. While there are many appraisal organizations throughout the country,in particular, The Society Of Real Estate Appraisers and The American Institute of Real Estate Appraisers who later merged, are often thought of as the founders of the profession. These organizations sponsored course work, seminars, conventions and monthly meetings, and ultimately designated appraisers upon satisfactory completion of their many stringent, qualifying requirements.
In order to monitor and legitimize this growing profession, the Federal Government in the 1980's mandated that each state establish licensing for real estate appraisers. The appraisal organizations that sponsored the initial coursework and designations for appraisers, remain in existence today and continue to foster a spirit of camaraderie among appraisers and lend integrity to the profession as a whole.
Through all the years of accumulated field and technical knowledge, and relevant appraisal theory, the essence of an appraisal remains an art rather than a science. It is the judgment and integrity of the individual appraiser that is relied upon to accurately report the facts in an unbiased manner.
One dilemma especially facing practicing appraisers of late, is the need to balance fairness with accuracy as it affects all parties in any given transaction. It is certainly evident that an overly critical appraisal may not serve the interests of the lender, loan officer, broker, and buyer and seller of a property. However, conversely, liberal appraisals can ultimately affect these same parties in a more negative way when real estate market trends are on the decline, and many of these parties now become holders of a losing position. As foreclosure rates increase, economists and others often search back to uncover the core reasons for it's occurrence. Insofar as the housing sector of the economy is concerned,(previous)overly optimistic appraisals are known to be one contributor to a sector downturn.
For these reasons, the states continue to mandate more stringent licensing and continuing education requirements for appraisers, as an effort to ensure that the public is well served.
The appraisal of real estate which is based on the study of "Urban Land Economics" is certainly one profession that recent college graduates might like to consider as a career option.
