The Student Handbook toTHE APPRAISAL OF REAL ESTATE

1

The Appraisal Profession

Introduction

Student Handbook to THE APPRAISAL OF REAL ESTATEIntroduction 2

How to Use this Book

Covers a portion of the Body of Knowledge Expands on The Appraisal of Real Estate, 13th

Edition Complemented by The Dictionary of Real Estate

Appraisal, 4th Edition Practice problems Examples The chapters in the handbook are the same as

the textbook.

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How to Use this Book

Wide margins for taking notes in the book Solutions to the questions are in the rear of the

handbook.

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Suggested Study Habits

To obtain the maximum benefit from the material, read the chapter in the textbook first and then the associated chapter in the student handbook.

Highlight the text in the handbook as you read it. Use different color highlighters to indicate

different levels of importance. Scan the material first and decide on a goal for

each study session.

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Suggested Study Habits, continued

After reading the section, review the material and think about what was presented.

Try to answer the questions at the back of each chapter.

Review the terms at the beginning of each chapter.

Have a dictionary at hand. An appraisal dictionary is best, but a real estate dictionary is fine.

Have a calculator at hand at all times.

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The Appraisal Business

A profession or a business? Regulation of appraisers Society of Real Estate Appraisers and American

Institute of Real Estate Appraisers merged in 1991.

Savings and loan crisis Federal Financial Institutions Reform, Recovery

and Enforcement Act (FIRREA) Federally related transactions

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The Appraisal Business, continued

The Appraisal Foundation The Appraiser Qualifications Board (AQB) The Appraisal Standards Board (ASB)

The Appraisal Subcommittee of the Federal Financial Institutions Examination Council (ASC)

Four Licenses (depends on the state law) Trainee, Registered, Limited, or Associate

Appraisers Licensed Residential (LR) Certified Residential (CR) Certified General (CG)

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About the Appraisal Institute, continued

The Appraisal Institute is the Premier professional association for real

estate appraisers with more than 25,000 members; it is the largest real estate valuation organization in the United States.

Acknowledged leader in real property appraisal education (classroom and online).

World's largest publisher of real estate valuation literature.

Sponsor of the prestigious MAI (commercial) and SRA (residential) designations.

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Ethics for Appraisers

Advocate or disinterested third party? Attorneys Real estate brokers Accountants Appraisers Real estate consultants

Conflicts of interest Bias toward property or parties involved Incentives for a predetermined value

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Worksheet 1—State Licensing and Certification Requirements

Trainee, registered, or associate appraiser Educational requirements Experience requirements – none Testing Fees Other requirements

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Worksheet 1—State Licensing and Certification Requirements

Licensed residential appraisers Educational requirements Experience requirements Testing Fees Other requirements

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Worksheet 1—State Licensing and Certification Requirements

Certified residential appraisers Educational requirements Experience requirements Testing Fees Other requirements

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Worksheet 1—State Licensing and Certification Requirements

Certified general appraisers Educational requirements Experience requirements Testing Fees Other requirements

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Types of Properties Being Appraised

Residential (1-4 units) Agricultural (farm and related) Industrial (uses involving industry) Commercial (uses involving commerce) Special-purpose properties (special designs) Terms are not interchangeable.

The term commercial appraiser suggests the appraiser only deals with properties that have commercial uses. More correct terms are general appraiser or non-residential appraiser.

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Clients Served

Attorneys Lenders Corporate relocation companies Government agencies Private individuals

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Types of Work Requested

Appraisal – The act or process of developing an opinion of value

Appraisal review – The act or process of developing an opinion of another appraiser’s work

Appraisal consulting – A broad category of appraisal-related services that may involve developing an opinion of value but the opinion of value is not the focus of the assignment

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Basic Mathematics and Analytical Skills for Appraisers

Order of operations Exponents Percentage of change

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Problems

Suggested solutions begin on page 415.