Real Estate Appraiser Tips - TN.Gov

Real Estate Appraiser Tips

Consumer Tips

Real Estate Appraiser: Intro to Profession

A real estate appraiser is a qualified professional with the education, experience and the independence necessary to arrive at an objective value opinion of real estate. There are many purposes for an appraisal some of these are: sale or list price decisions, estate planning, tax or divorce settlement, tax assessment, refinance and mortgage lending purposes.  When an appraisal is used for loan purposes, federal regulation requires the lender or its agent to place the appraisal order, thereby establishing the lender as the appraiser’s client.

The lender, or their agent, and the appraiser will communicate to determine the scope of work necessary to develop and communicate a credible opinion of value so that the lender’s underwriters can make a decision on the security of the loan.  This can include whether or not an interior inspection of the property is necessary, what approaches to value are required, and any lender specific requirement such as photographs, maps, or building sketches.

How does an appraiser develop the value opinion?

There is no single appraisal report form, format, or style required, but lenders have developed specific forms they use for loans that will be purchase by the secondary market participants, such as FHA, Fannie Mae (FNMA), and Freddie Mac (FHMLC).  These forms come with preprinted language that set up minimum expectations for appraisals communicated on these forms.   The appraiser may need to inspect the property, but sometimes an appraisal can be developed without an interior inspection.  The appraiser researches market data, public records, and talks with buyers, sellers, and real estate agents active in the market area. Research includes analyzing and comparing sales, leases, new construction, and current listings of similar properties and locations. After all factors that would affect a property’s value are considered, the appraiser develops an appraisal report.

What should I do if I believe a correction is needed in the appraisal?

Contact the lender, using written communication whenever possible. Clearly describe the problem and provide evidence that will support your position. For example, if you believe the appraiser selected comparable sales that were not the most comparable, submit your own list you’d like them to consider.   Remember, that you are the lender’s customer and they should be able to answer your questions and concerns directly.  The appraiser is working for the lender and is bound by confidentiality to communicate directly with their client.  Even if a consumer pays for the appraisal, in the mortgage lending transaction the lender is the appraiser’s client so communications about the value should go through the lender or the lender’s agent.

Applicant Tips

Real Estate Appraiser: How to Become an Appraiser

Real estate appraisals require business and economic skills, real estate knowledge, and even a little detective work. Most appraisers are their own bosses, which means you can schedule your own day and your income potential is directly related to your ability to develop a client base and consistently deliver high quality, well supported appraisal reports.

Becoming an appraiser requires a training period that lasts a minimum of two years. To become a trainee, you’ll need a certified appraiser to serve as your supervisor and you’ll need to complete 82 hours of required coursework. Check the approved course listing on the Commission’s website for a list of schools that offer approved qualifying education.

Once you find a supervisor and complete the qualifying education you’ll submit your application to become a registered trainee. After approval, you can begin working on appraisals under the guidance of your supervisor. It is important to note that trainees are not independent and cannot work without direct supervision. Keep a careful log of each hour of experience you receive as it will be important when you apply for your full credential later. The experience you log is audited to ensure the reports submitted comply with professional appraiser standards.

Exactly how much experience a trainee needs will depend on which credential they’ll apply for. Tennessee has three types of appraisers: state licensed, certified residential, and certified general. Each has different limits on the property types and value amounts they’re allowed to appraise.

Once applicants have completed the coursework specific to their credential type, met the academic and legal requirements, and finished their experience log, they will then apply to take the national appraiser exam. Passing the exam is the last step towards full licensure.

Becoming licensed or certified in real property appraisal takes years of dedication, hard work, and for those who choose to be their own bosses – a good business sense.  The experience and education required to become an appraiser ensures you’re prepared to meet the challenges ahead. Visit our website for more information: www.tn.gov/commerce/section/real-estate-appraisers