Nearly all people who have owned or thought about owning real estate have heard of a real estate appraisal. Here is a quick breakdown on terminology and a description of times when ordering a real estate appraisal might be helpful.

Before diving into the basics, note that this discussion applies to appraisal laws in the United States, which has established standards and licensing for appraisers and brokers. The adherence to such standards in other countries around the world is a fascinating subject and is discussed in another post.

What is an Appraisal?

In the most general sense, an appraisal is a type of opinion of value. Value opinions can be done by anyone. People give their value opinions about real estate all of the time. That doesn’t mean that we would always trust any opinion. For the opinion to be a credible, we must have confidence that the person has competence in the subject matter being appraised as well as familiarity with the market of buyers, sellers, and other participants for that property.

Value Opinions can be split into two kinds: those performed by a state licensed appraiser professional (which we can call “Appraisals”) and those performed by someone not in the appraisal profession or functioning as a licensed appraiser. A discussion about non-licensed appraisal products can be found in a different post.

How to Become an Appraiser

A national entity known as The Appraisal Foundation (TAF) takes the lead on defining the minimum standards and qualifications that individuals must obtain to become licensed appraisers and perform appraisal in an official capacity. Based on these standards and qualifications, each state has responsibility to track, issue, and review appraiser licenses. It is illegal for an appraiser to perform appraisal work in an official capacity without being licensed.

Thanks to electronic records, and efforts of the states to get more in sync with their licensing processes and tracking, it is now possible to look up the licensing status of any appraiser on a national registry of appraisers, which is maintained by Appraisal Subcommittee (ASC).