Anyone who has bought or sold a house knows the importance of real estate appraisers. Appraisers are needed for many property transactions. For example, a lender concerned whether the property being sold will serve as sufficient collateral for purchase financing will often engage an appraiser to provide an opinion of the property’s value. Having an experienced, knowledgeable, and ethical appraiser involved in the process increases the probability of a smooth transaction.
When the savings and loan market collapsed in the 1980s, real estate appraisers were not officially regulated by government agencies and appraisal standards had not been promulgated in law. Nine professional appraisal organizations in the United States and Canada wrote appraisal standards known as the Uniform Standards of Professional Appraisal Practice (USPAP), which were copyrighted in 1987 by the Appraisal Foundation.
Congress adopted Title XI of the Federal Financial Institutions Reform, Recovery and Enforcement Act in 1989. It mandated states to license and certify real estate appraisers who appraise property for federally related transactions. Title XI authorized the Appraisal Foundation to establish uniform appraisal standards, which they did in 1989 by adopting the original USPAP.
In response to the federal law, California created the Office of Real Estate Appraisers (OREA) under the Business, Transportation and Housing Agency. The agency implemented appraiser licensing and certification programs in compliance with the federal mandate.
Today, OREA’s name has changed to the Bureau of Real Estate Appraisers (BREA) and it operates under the Department of Consumer Affairs. BREA is entirely funded by license, course provider, and Appraisal Management Company (AMC) fees. The highest priority of BREA is public protection. It accomplishes this with its Licensing and Enforcement Units as well as approving initial and continuing education courses.
The licensing unit sets the minimum requirements for education and experience in compliance with the minimum criteria outlined by the federal government and California law, to ensure that only qualified persons are licensed. Applicants must meet minimum education and experience requirements as well as successfully complete a nationally approved examination.
The enforcement unit investigates the background of applicants, licensees, and registrants to ensure they are fit for licensure. The enforcement unit also investigates violations of laws and regulations by appraisers and appraisal management companies, and the violation of appraisal standards by appraisers.
BREA is also responsible for the accreditation of educational courses for real estate appraisers. BREA has reviewed and approved over 1,800 pre-licensing and continuing education courses.
Along with the real estate appraisal-related courses offered by California’s community colleges and universities, more than 90 proprietary schools provide appraiser education.
There are many assignment opportunities for appraisers in the areas of:
- Financial planning
- Nonconforming residential
- Joint/corporate asset
- Raw land
- Special-use properties
- Business transactions
- Lease/rental rate
- Private lending
- Development analysis
- Family transactions
- Assessment appeals
- Expert testimony
- Surplus/excess land
- Purchase negotiations
- Estate planning
- Investment decisions
- Small commercial
- Highest and best use
Some of the most frequently asked questions regarding real estate appraisers include the following:
How are real estate appraisers hired?
- Depending on the intended use of the appraisal, an appraiser may be engaged by anyone seeking a property valuation including, but not limited to, property owners, lenders, real estate agents, appraisal management companies, attorneys, and accountants. The appraiser may be an employee or an independent contractor. Licensed appraisers must not perform an assignment with bias toward any party or assignment result.
What type of information is included in a real estate appraisal?
- Most real estate appraisals contain detailed information about the property and comparisons of it to other properties in the area. A real estate appraiser should document and analyze red flag issues that are discovered or otherwise brought to the appraiser’s attention such as foundation cracks, leaking pipes and other items that are observable.
What if I don’t agree with the appraiser? Do I have options?
- Yes. If you disagree with how the appraiser developed and reported their appraisal, you may ask your real estate agent or lender to talk to the appraiser about your concerns. If information was missed or reported incorrectly, the appraiser may issue a new report. However, competent, and ethical appraisers are highly skilled and will work to ensure they provide the most accurate opinion of value for the property appraised.
To learn more about the Bureau of Real Estate Appraisers (BREA) visit http://brea.ca.gov/ or to check on employment opportunities at BREA, visit https://brea.ca.gov/html/Employment.html. To find out the status of licenses of real estate appraisers or other licensed California professionals, visit https://search.dca.ca.gov/.