Real Estate Appraiser

A real estate appraiser inspects housing, land, commercial structures or other real property to establish an estimated market value. Appraisers are most frequently hired by lenders, since any bank loan or refinancing of a property requires a recent appraisal by a state-licensed appraiser.

A good appraiser requires knowledge of building methods and flaws, local geography and history, and the principles of economics. Many appraisers are self-employed; others work for specialized appraiser firms or larger appraisal management companies; still others may work for lenders, brokers, mortgage companies or other corporations, or government agencies. In addition, other real estate industry professionals (salespeople, brokers, home inspectors, etc.) may find it useful to add appraising as a skill.

While appraisers are licensed by each state in which they operate, they are subject to uniform minimum standards and professional practices established by the Appraisal Foundation. These national standards were instituted as part of a 1989 package of reforms (the the Financial Institutions Reform, Recovery, and Enforcement Act, or "FIRREA") in the wake of the Savings & Loan Crisis. In addition, state appraiser licensing and the Appraisal Foundation are overseen by the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (or "ASC"), which maintains a national registry of all state-licensed appraisers. Title XI of FIRREA also requires that any federally regulated financial institution, for example FDIC-insured banks, thrifts or credit unions, must use state-certified or licensed appraisers for any federally related transaction.

To some extent, human appraisers compete with automated appraisals, known as Automated Valuation Models, or AVMs. One well-known public example is Zillow.com, which produces "Zestimates" of the approximate value of a given property, although Zillow cautions that these are not to be taken as appraisals. There are other AVM tools that lenders have come to rely on to some extent, at least in cases where the LTV (loan-to-value ratio) is low enough that the risk of AVM inaccuracy is acceptable. Since AVMs are largely based on historical pricing data in the area, they can miss differences in apparently comparable properties -- recent renovations or lack of renovation, different views, proximity to external factors like smelly factories or increased freeway noise.