When Do I Need an Appraisal?
In the United States, there are many situations when only a state licensed appraiser may provide an appraisal. The most common are the mortgage lending affordable housing environments (which are both federally regulated). A complete list of federal agencies who insist on appraisals being performed in compliance with Title IX of FIRREA include:
- CFPB (Consumer Finance Protection Bureau)
- FDIC (Federal Deposit Insurance Corporation)
- FHFA (Federal Housing Finance Authority)
- FRB (Board of
- Governors of the Federal Reserve)
- HUD (U.S. Department of Housing and administration)
- NCUA (National Credit Union Administration)
- OCC (Office of the Comptroller of Currency)
The requirements for appraisers in FIRREA work in hand with the appraisal standards in USPAP (see previous post). These are intended to assure that consumers of financial products, and investors of financial products can have confidence that the collateral or real estate security has been adequately valued by an independent and unbiased source.
In What Other Situations is an Appraisal Helpful?
While not always legally required, the engagement of appraisers, or unbiased appraisers trained and obligated to meet well defined standards, is advantageous in many other circumstances. We regularly perform appraisal work for the following situations.
- Buying/selling
- Estate planning
- Conservation easements
- Donations for tax purposes
- Easement negotiation
- Lease negotiation
- Lending purposes
- Account reporting requirements
- Partnership or marital dissolutions
- Government condemnation
- Bankruptcy
- Feasibility testing
- Highest and best use testing
- Strategy and decision making
Thanks to well defined standards and qualifications, as well as other organizations offering a designation, many other professions such as attorneys, accountants, and realtors, lean on the appraisal profession as a source for independent and qualified value advice.