Ohio Division of Real Estate clarifies new appraiser requirements

By Anne M. Petit, Superintendent, Ohio Division of Real Estate & Professional Licensing

All Ohio licensed or certified real estate appraisers or registered real estate appraiser assistants who plan to UPGRADE their credential prior to the new requirements effective Jan. 1, 2015 MUST submit a complete application with all required education, a complete experience log with samples submitted for review, have state and federal background check results received by the Ohio Division of Real Estate and take and pass the exam before the Jan. 1 deadline.

The Division is aware that some licensed residential appraisers are under the mistaken belief that if they do not upgrade by the Jan. 1, 2015 deadline that they will lose their license. This is not the case and the Division encouraged any credential holder with questions regarding the 2015 criteria to call our office at (614) 466-4100 or via email: WebReal@com.state.oh.us.

Changes to College Level Education Requirements

Residential Appraiser Assistant
Current Requirements:
1/1/2015 Requirements:

Licensed Residential Appraiser
Current Requirements:
1/1/2015 Requirements:
30 semester hours of college level education from an accredited college, junior college, community college, or university OR an Associate’s degree or higher (in any field).

Certified Residential Appraiser
Current Requirements:
21 semester credit hours in specific collegiate subject matter courses from an accredited college or university OR an Associate’s degree or higher (in any field).
1/1/2015 Requirements: Bachelor’s degree or higher (in any field) from an accredited college or university.

Certified General Appraiser
Current Requirements:
30 semester credit hours in specific collegiate subject matter courses from an accredited college or university OR a Bachelor’s degree or higher (in any field).
1/1/2015 Requirements: Bachelor’s degree or higher (in any field) from an accredited college or university.


The Division’s website includes more information on the requirements.

Tags: Appraisal

Anatomy of an appraisal

Reprinted from the Summer/Fall 2014 Ohio REALTOR magazine

By Melanie McLane, ABR, CRB, ePro, Green, GRI, RAA, RSPS, SRES, SRS

If you were going to dissect an appraisal, where should you start? What would you look for? How do you tell if an appraisal is “good” or “bad?” Why do appraisers look at the sales contract, anyway?

These are the questions I get from students whenever I teach and they discover I’m bi-lingual—I speak both appraiser and agent. And, because I still both sell and appraise real estate, I understand the frustration both sides have with the process. Many well intentioned regulations have had a negative effect on the entire appraisal process, resulting in the “traveling appraiser” (also known as the geographically incompetent appraiser) and the untrained underwriter with bizarre requests and questions. None of this is positive for the real estate industry. Agents need to know how to look at an appraisal and determine if it has been competently prepared, and meets the Uniform Standards of Professional Appraisal Practice (USPAP) requirement that it be “credible,” which is defined as USPAP as being “worthy of belief.”

There are several things an agent can look at when reviewing an appraisal. But, having just used the word “review,” let’s talk about some of the language associated with appraisers and appraising. The first word is client. The appraiser’s client is the person or entity who orders the appraisal. In the case of an appraisal being done for a lender, the client is the lender. They are also the intended user. In fact, when you look at a Fannie Mae appraisal report, this is printed on the form and cannot be changed by the appraiser. So, the audience the report is being prepared for is the lender not the borrower, and certainly not the agent. Borrowers get copies of appraisals because a federal law requires this. That fact still does not make the borrower an intended user. If an appraisal is confusing, or thought to be faulty, or just as part of the quality control process, an appraisal may be reviewed. But, a review appraisal is performed by another appraisal. So, you are “reviewing” the appraisal (as an agent) but the appraiser not only will not discuss the report with you, he or she may not discuss it with you unless permission is obtained from their client (the lender). However, after you review the appraisal, you may be urging the lender to get a formal review, done by a review appraiser.

The first thing you should look at is page one. This describes the property, including age, style, condition, site, and amenities; the neighborhood, the ranges of value for the neighborhood, and the overall marketing conditions in the neighborhood. Start with the facts by checking the following items for accuracy: address, parcel number, legal description, census tract number, flood plain map number, name of neighborhood, type of house, description of the house and the site. Many times, when reviewing an appraisal, I first discover numerous errors in these areas which leads me to a fuller review — and a lot more problems in the appraisal report. (more…)

Tags: Appraisal

Legally speaking: Does contact with an appraiser cross the line?

By Lorie Garland, Assistant Vice President of Legal Services

The OAR Legal Assistance Hotline receives an array of real estate-related legal questions — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work within the law, “Legally Speaking” spotlights some of the timely questions that are being asked by REALTORS. This week involves a question of what constitutes improperly influencing an appraisal…

Q: I have a listing that just went under contract. The contract reflects a very fair price. However, due to some unique features of the property and the limited number of comparables, I am concerned the property will not appraise. Am I permitted to supply property information and comparables to the appraiser or would this be viewed as attempting to improperly influence the appraisal?

An appraiser is required to independently, objectively and impartially determine the value of a property. Federal law prohibits coercion, bribery and other similar actions designed to cause an appraiser to base the appraised value of a property on factors other than the appraiser’s independent judgment. The law, however, does not prohibit an agent from providing factual information to an appraiser or answering an appraiser’s questions regarding the property or the market. This information may include a survey of the property, the Residential Property Disclosure Form, green building components or energy efficiency features of the property, neighborhood information and recent comparables.

The more detailed the information and the earlier it is provided ensures a smoother appraisal process. The information can be provided through the MLS or directly to the appraiser at the time of the site inspection. An agent should make every effort to promptly and completely respond to any appraiser follow-up phone calls.

Once the appraiser has completed the appraisal assignment and the appraisal report has been sent to the lender, an appraiser is prohibited from discussing the results of the report with anyone other than the lender. If an agent finds an error in the report (i.e., square footage, age of the home, etc.) the agent should bring the error to the lender’s attention. The lender may choose to provide additional data to the appraiser for consideration.

Tags: Appraisal, legal, Legally Speaking

Understanding appraisals — communication is vital

By Durk Reese, Certified Residential Appraiser, Metro Appraisal Group, Columbus

Typically, for every home sale, requiring a mortgage, an appraisal is needed. REALTORS and appraisers are then brought together in the process. This relationship should never be adversarial since both really need each other.

It is important that agents understand the role of the appraiser. It is that of an unbiased third party usually offering an “opinion” of market value based on current market data. The appraiser is required to analyze market trends, as they relate to declining or improving markets, values and sales.

This process has become more comprehensive with the advent of Dodd-Frank, and the use of Appraisal Management Companies. Each appraisal report is reviewed by the AMC, (if used by lender), the lender and the investor. Each one is seemingly trying to find flaws in the reports, with each having different “hoops” for the appraiser to jump through. The worst is probably the dreaded review appraisal. Many times, it seems that no professional group is more willing to find fault with each other’s work, than appraisers themselves. Therefore, it becomes even more important for REALTORS and appraisers to work together to ascertain the correct data.

Agents can help in several ways. Responding to an appraiser’s inquiry regarding a listing promptly, insures a quicker turn time of the appraisal report. The appraiser has to indicate and analyze any seller concessions in each comparable sale used. Typically, that is why an appraiser calls an agent. Additionally an appraiser needs to know any unusual circumstances relating to the sale (i.e. distressed, divorce, etc.) These are all relative to the sale price of the comparable, and must be factored in by the appraiser to see if it truly is a “comparable sale.”

In this current market with not only more sales, but refinances, most appraisers are extremely busy. When an appraiser calls to set up a time for the inspection, it is crucial to inform the seller at once and make every possible effort to accommodate the appraiser’s time frame. It is also vital that the sellers prepare the property, as if it were a showing. Although cleanliness is not a condition of the appraisal, it is hard to overlook filthy kitchens and baths.

It is always a good idea to offer the comparables used to price the subject to the appraiser. Keeping in mind that a “comparable” is defined as a property, should the subject become unavailable, be a suitable substitute. Appraisers will always pull their own comparables, however, a really good comparable may be inadvertently overlooked.

It is important for the appraiser to know what updates and upgrades have been made to the property. Make sure the appraiser has a comprehensive list to put in his/her file. It is also important for the appraiser to know what the market activity for the subject was. Were there allot of showings, or multiple offers?

Today’s lending standards require appraisal reports to use comparable sales that “bracket” the appraiser’s opinion of value. That is, a comparable higher priced, and a comparable lower priced. When the subject property’s sale price is at the high of the neighborhood range, lenders may take issue.

Remember, an appraiser has to “prove” the opinion of value, based on market data. If an appraiser’s opinion of value is below contract price, it is typically because there is no market date available to support the property’s contract price. No appraiser intends to “kill a sale,” however appraisers are bound by the lender and investor guidelines and the subject’s neighborhood. Subject neighborhood is defined as a group of similar uses and market influences, i.e., same tax base, school district, etc. The neighborhood is typically bound in 4 directions by main streets, freeways, rivers and railroad tracks.

From within the neighborhood, the appraiser chooses only those comparable sales and listings, which demonstrate the most similar in condition, style, and quality. Rarely does an appraiser select comparable sales just by square footage, as that is only one component of the overall value of the property.

The exchange of information between agents and appraisers is vital to both. The more information the appraiser has, the more accurate the report. The more accurate the report, the less time the appraiser spends responding to questions from lenders regarding the report. That equates to quicker closings.

Agents should also not hesitate to contact an appraiser for their guidance on matters pertaining to appraisal type questions. Most are glad to help.

Tags: Appraisal

View More Articles »