Appraising the rules of the real estate appraisal process
Certified Real Estate Appraisers are regulated by State of Alaska Statutes and Regulations.
Under these regulations, an appraiser who holds a valid certificate or license from a state whose requirements for certification or licensing meet, or exceed Alaska’s certification standards may be engaged to appraise property in Alaska.
So what just happened to the old real estate adage “location, location, location”? Whether commercial or residential, the idea that an appraiser from Georgia, California, or Vermont (assuming they have the same or higher standards) can be issued a courtesy license to appraise a single family home or commercial property in Alaska, begs the question of how true market value can be determined without local knowledge.
In some residential situations, real value is determined not only by city and district, but by subdivision and cul-de-sac. Without local knowledge, or access to it through the statewide MLS, it is impossible to give current value to a property.
Another regulation allows a person who is not certified to appraise real estate for compensation if the person does not hold out to be a certified appraiser and if appraisal by a certified appraiser is not required by federal law.
This regulation allows licensed real estate brokers and licensees to provide an opinion of value with a market analysis prior to listing a property for sale. It also allows a real estate professional to provide letters of opinion for sellers seeking market value for private purposes such as divorce or estate planning. This “opinion of value” is not for the purposes of either commercial or residential mortgage financing.
Over the past decade, the requirements to become an appraiser in Alaska have been strengthened. An applicant for a general real estate appraiser must have 3,000 hours of appraisal work obtained continuously over a period of not less than 30 months.
At least 1,500 hours of the appraisal work must be in non-residential. (Residential property is defined as one to four units.) Applicants must also pass an exam administered by the state. Applicants are under the supervision of supervisory appraisers who may not supervise more than three trainees at one time.
The supervisory appraiser must sign each report and certify it meets uniform practice. What is questionable, however, is the requirement that the supervisor must personally inspect each property with the trainee appraiser until the supervisory appraiser determines that the trainee appraiser is competent and notifies the state in writing.
There is no written standard other than the vague language of “competent.”
At what point does the supervisory appraiser stop accompanying the trainee? The physical inspection of the property is a key factor in determining value. A well-kept and maintained property can contribute tens of thousands of dollars in value. First impressions do matter.
For a property in poor condition, the opposite is true, although it may look the same on paper in terms of square footage and lot size. And what happened to the good old-fashioned idea of actually measuring the property to accurately determine its square footage?
Tax records taken from building permits are less accurate than you might surmise. According to state regulations, public employees are not required to have an appraiser certification when determining permit values or tax assessments. Builders also sometimes take it upon themselves to add decks and square footage in the field.
For the best real market value, ask the appraiser if they are residents of Alaska and are a member of the Multiple Listing Service. Ask them, also, whether or not they are a trainee and if so, if they have been registered “competent” with the state or if they are going to be accompanied by their supervisory appraiser.
Connie Yoshimura is the broker/owner of Dwell Realty. Contact her at 907-646-3670 or [email protected].