The Appraisal Institute is a global membership association of professional real estate appraisers, with more than 25,000 members and 91 chapters throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. Learn more at www.appraisalinstitute.org.
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The Appraisal Institute is the acknowledged worldwide leader in residential and commercial real estate appraisal education. Its extensive curriculum of courses and specialty seminars provides a well-rounded education in valuation methodology for both the novice and seasoned practitioner.
As the world’s largest publisher of real estate appraisal literature, the Appraisal Institute offers a wide range of books and other materials on subjects ranging from basic valuation theory and techniques to advanced applications. It also publishes two quarterly periodicals, The Appraisal Journal and Valuation magazine, and a weekly e-newsletter, Appraiser News Online.
The majority of Appraisal Institute members are practicing real estate appraisers and property analysts who provide valuation-related services to such clients as mortgage lenders, financial institutions, government agencies, attorneys and financial planners as well as homeowners and other individual consumers. Appraisal Institute designated members have met rigorous requirements relating to education, testing, experience and demonstration of knowledge, understanding and ability. Those members holding the Appraisal Institute’s MAI and SRPA designations are experienced in commercial valuation, including industrial, retail and multifamily properties. Those holding the SRA designation are experienced in residential valuation. All Appraisal Institute members adhere to a strictly enforced Code of Professional Ethics and Standards of Professional Appraisal Practice.
Members have access to a variety of benefits, including insurance programs, data resources and tools, and related business materials. The Appraisal Institute also houses the Lum Library, which provides support for the research needs of members as well as the profession at large.
The Appraisal Institute is active in advocacy efforts on behalf of its members and the industry at large. Primarily through its Government and External Affairs office in Washington, D.C., the organization communicates regularly with legislators and regulators to encourage the adoption of appraisal policies that best serve the public interest. appraisal institute, mai, ai. . . IN CYA MODE
For years we have advocated that Appraisers should not use non-armslength (reo, short sales, listings, and probate) sales transactions to determine "Market Value." This practice has devastated the Real Estate Market. For the same amount of time this practice has been promoted by the appraisal institute, mai, ai, and it's members. The following Guide Note 11 was published in November of this year. It is an obvious attempt to cover their posterior. We encourage Realtors, Bankers, Mortgage Brokers, and HOME OWNERS to up the pressure and proceed with any and all civil actions against the ai, appraisal institute and its members. This "organization" has proven year after year, that their only objective is make their members and clients part of the 1% club.
The Harris Company, REA/C vows to provide our assistants to defeat these frauds and incompetents at the ai, appraisal institute, mai, and its members.
"Comparable Selection Appraisers must consider all relevant transactions that have occurred in the market area and then determine which of those transactions should be used in the sales comparison analysis to arrive at a credible value opinion for the subject property. The best comps are those that are most similar to the subject property in terms of location, size, condition and other features that buyers and sellers believe make a difference to price. After selecting the best comps, the appraiser adjusts for material differences between each comp and the subject property. The appraiser must analyze each comp to GUIDE NOTE 11 48 Appraisal Institute Guide Notes ascertain what adjustments are needed. Factors that may require adjustment include atypical buyer/seller motivations and sales concessions. When the objective of the assignment is market value, ideally each comp selected for use in the sales comparison approach should have sold under the conditions specified in the definition of market value being used. For example, the buyer and seller should have been typically motivated. The seller should not have been under any compulsion to sell, nor the buyer under any compulsion to buy. The marketing effort and exposure time on the market should have been typical for that property type in that market. Payment should have been in cash or terms equivalent to cash; i.e., the seller should not have granted cash or non-cash concessions to bring a sale at the stated price. When the conditions of the sale do not reflect the conditions outlined in the market value definition, either (1) the appraiser must consider making adjustments for such differences if it is to be used as a comp, or (2) the sale must not be used as a comp. Distressed Sales as Comparables Distressed sales such as foreclosure sales and short sales are common in a declining market. Depending on the severity of the local market downturn, some, many, or even all sales that occur do so under distressed conditions. Appraisers cannot categorically discount foreclosures and short sales as potential comps in the sales comparison approach. However, due to differences between their conditions of sale and the conditions outlined in the market value definition they might not be usable as comps. Foreclosures and short sales usually do not meet the conditions outlined in the definition of market value. A short sale or a sale of a property that occurred prior to a foreclosure might have involved atypical seller motivations (e.g., a highly motivated seller.) A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp. However, if the foreclosed property was sold without a typical marketing program, or if it had become stigmatized as a foreclosure, it might need to be adjusted if used as a comp. Further, some foreclosed properties are in inferior condition, so adjustments for physical condition may be needed As is always the case in selecting sales to use as comparables, appraisers must investigate the circumstances of each transaction, including whether atypical motivations were involved, sales concessions were involved, the property was exposed on the market for a typical amount of time, the marketing program was typical, or the property condition was compromised. Adjustments might need to be made for these circumstances. When it is necessary to use a distressed sale as a comp, the appraiser must carefully analyze the current local market to determine if an adjustment for conditions of sale is needed. If no adjustment is warranted, the lack of adjustment should be explained. Physical condition and conditions of sale are two distinctly different factors that must be considered separately. They may be related to some degree in a distressed market, but not necessarily. An appraiser must not assume, for example, that a property was in inferior condition simply because it was a foreclosure. The level of investigation needed to meet the requirement for sufficient diligence is generally more than is needed in non-distressed market situations. Further, supporting such adjustments can be particularly challenging when there are few current transactions to analyze. Competency in performing such investigation and analysis are required."
Thanks! Curtis D. Harris, BS, CGREA, REB Bachelor of Science in Real Estate, CSULA State Certified General Appraiser Real Estate Broker ASTM E-2018 Commercial Real Estate Inspector HUD 203k Consultant HUD/FHA Real Estate Appraiser/Reviewer FannieMae REO Consultant CTAC LEED Certification
The Harris Company, Forensic Appraisers and Real Estate Consultants
1910 East Mariposa Avenue, Suite 115 El Segundo, CA. 90245 310-337-1973 Office 310-251-3959 Cell WebSite: http://www.harriscompanyrec.com Resume: http://www.harriscompanyrec.com/CURRICULUMVITAENAME2011a.pdf Commercial Appraiser Blog: http://harriscompanyrec.com/blog/
We Make a Simple Pledge to
Communicate, in a timely fashion, each appraisal, analysis, and opinion without bias or partiality
Abstain from behavior that is deleterious to our clients, the appraisal profession, and the public
Hold paramount the confidential nature of the appraiser/consultant - client relationship
and
Comply with the requirements of the Uniform Standards of Professional Appraisal Practice and the Code of Professional Ethics of the National Society of Real Estate Appraisers