Real estate appraisal

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Real estate valuation , property valuation or land valuation is the process of developing a value opinion, for real property (usually market value). Real estate transactions often require valuation because it is rare and each property is unique (especially their condition, a key factor in the assessment), unlike company stocks, which are traded daily and identical (thus centralized Walrasian auctions like unrealistic stock exchanges). Location also plays a key role in the assessment. However, since property can not change location, there is often an increase or increase in the home that can change its value. The assessment report forms the basis for mortgage lending, legalizing plantations and divorce, taxation, and so on. Sometimes assessment reports are used to set the selling price for a property.

In addition to the compulsory education scores, which may vary from Finance to Construction Technology, most, but not all, countries require that appraisers have licenses for such practices. Typically, real estate appraisers have the opportunity to achieve 3 certification levels: Appraisal Trainee, Licensed Assessor and Certified Appraiser. The second and third license levels require no less than 2000 hours of experience in 12 months and 2500 hours of experience in no less than 24 months. Valuers are often known as "property appraisers" or "land appraisers"; in English English they are "assessment surveyors". If the appraisal opinion is based on market value, then it should also be based on the use of the highest and best real property. In the United States, mortgage valuations of improved residential property are generally reported in standard forms such as the Uniform Residential Appraisal Report. More commercial property valuations (e.g., revenue generators, raw land) are often reported in narrative formats and completed by Certified General Assessors.

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Value type

There are several types and definitions of value sought by real estate valuations. Some of the most common are:

• Market value - The price at which an asset will trade in a competitive Walrasian auction setting. Market value is usually redeemable with open market value or fair value . International Valuation Standards (IVS) define:

Market value - an estimate of the amounts that assets or liabilities are required to redeem on the assessment date between willing buyers and willing sellers within one arm. transaction, after proper marketing and in which the parties have each acted with knowledge, caution and without coercion.

• Value of use , or value in use - The current net value (NPV) of the cash flows generated by the asset for the particular owner below special use. Value-wear is a value for one particular user, and may be above or below the market value of the property.
• Investment value - is the value for a particular investor, and may or may not be higher than the market value of the property. The difference between an investment's an asset and its market value provides motivation for the buyer or seller to enter the market. International Valuation Standards (IVS) define:

Investment value - the value of the asset to the owner or prospective owner for individual investment or operational purposes.

• Insurable value - is the value of the real property covered by the insurance policy. Generally, it does not include site value.
• Liquidation value - can be analyzed as forced liquidation or regular liquidation and is a commonly sought-after value standard in bankruptcy proceedings. This assumes that sellers are forced to sell after a period of exposure that is less than the normal time frame of the market.

Price vs value

There may be a difference between what is really worth (market value) and how much it costs to buy it (price). The price paid may not represent the market value of the property. Sometimes special considerations may exist, such as the special relationship between a buyer and a seller in which one party has control or significant influence over the other. In other cases, the transaction may be just one of several properties that are sold or traded between two parties. In such a case, the price paid for each particular section is not the "value" of the market (with the usual idea being that all deductions and prices add up to market value of all parts) but the market price.

Other times, the buyer may be willing to pay the premium price, above the generally accepted market value, if his subjective valuation of the property (the investment value for him) is higher than the market value. One particular example of this is the owner of a neighboring property which, by combining its own property with the subject property, can obtain economies of scale. A similar situation sometimes occurs in a company's finances. For example, this can happen when a merger or acquisition occurs at a price higher than the value represented by the underlying share price. The general explanation for these types of mergers and acquisitions is that "the amount is greater than the parts", because the full ownership of a company gives full control over it. This is something that is sometimes costly to buyers. This situation can occur in the purchase of real estate as well.

But the most common reason for different values ​​of prices is that buyers or sellers do not know what the market value of the property is but agree on a contract with a certain price that is too expensive or too cheap. This is unfortunate for one of the two parties. This is the obligation of a real property appraiser to estimate the true market value of a property rather than its market price.

Definition of market value in the United States

In the United States, the assessment is for a particular type of value (eg, foreclosure value, fair market value, depressed selling value, investment value). The most commonly used value definition is Market Value. While the Uniform Professional Practice Assessment Standards (USPAP) does not define Market Value, it provides a general guide on how Market Value should be defined:

A type of value, expressed as opinion, which presupposes the transfer of a property (that is, the right of ownership or bundle of such rights), on a certain date, under certain conditions specified in the definition of the term identified. by appraisers as applicable in the assessment.

Thus, the definition of the value used in the analysis or the current Market Analysis report (CMA) and the report is a set of assumptions about the market in which the subject property can transact. It affects the choice of comparable data for use in the analysis. It can also affect the methods used to assess the property. For example, the value of a tree can contribute up to 27% of property value.

Maps Real estate appraisal

Three approaches to

value

There are three groups of traditional methodologies for determining value. These are usually referred to as "three approaches to values" that are generally independent of each other:

• Sales comparison approach (compare characteristics of properties with comparable properties recently sold in similar deals).
• The cost approach (buyers will not pay more for a property than the cost to build an equivalent).
• The income approach (similar to the method used for financial valuation, securities analysis or bond pricing).

However, current business trends tend to lead to the use of scientific valuation methodologies that depend on the foundations of quantitative data, risk, and geographic-based approaches. Pagourtzi et al. has provided a review of the methods used in this industry by comparison between conventional and advanced approaches.

As mentioned earlier, an assessor can generally choose from three approaches to determine the value. One or two of these approaches are usually most applicable, with other approaches or approaches usually less useful. The Valuer should consider the "scope of work", the type of value, the property itself, and the quality and quantity of data available for each approach. There is no comprehensive statement that can be made that one approach or the other is always better than any of the other approaches.

Valuers should think about how most buyers usually buy certain types of property. What assessment methods do buyers use most for the types of properties assessed? This generally guides the thinking of the evaluator on the best valuation method, along with the available data. For example, property valuations normally purchased by an investor (for example, a skyscraper, an office building) can give greater weight to the Income Approach. Buyers interested in buying single-family residential properties prefer to compare prices, in which case, the Sales Comparison Approach (market analysis approach) will be more applicable. The third and final approach to value is the Cost Approach to value. The cost-to-value approach is most useful in determining insurable value, and the cost of building new structures or buildings.

For example, single apartment buildings of a certain quality tend to sell at a certain price per apartment. In many cases, the sales comparison approach may be more applicable. On the other hand, multi-building apartment complexes will usually be judged by the income approach, as it will follow how most buyers will appreciate it. For another example, single-family homes are most often rewarded with the greatest weighting by comparison sales approach. However, if one family lives in an environment where all or most of the dwellings are rental units, then some variants of the income approach may be more useful. So the choice of assessment method may change depending on the circumstances, even if the property assessed has not changed much.

Sales comparison approach

The sales comparison approach is based primarily on the principle of substitution. This approach assumes a wise (or rational) individual will not pay more for a property than the cost of buying a comparable surrogate property. This approach recognizes that ordinary buyers will compare the asking price and seek to buy the property that meets their wants and needs at the lowest cost. In developing a sales comparison approach, assessors try to interpret and measure the actions of parties involved in the market, including buyers, sellers, and investors.

Data collection and assessment methods

Data collected on the sale of current properties similar to the subjects assessed, called "comparable." Only SOLD properties can be used in the valuation and determination of property values, as they are the amount actually paid or approved for the property. Comparable sources of data include real estate publications, public records, buyers, sellers, brokers and/or real estate agents, appraisers, and so on. Important details of each comparable sale are described in the appraisal report. Because comparable sales are not identical to the subject property, adjustments may be made to sales date, location, style, facility, size, site size, etc. The main idea is to simulate the price to be paid if each sales equivalent is identical to the subject property. If the comparable is superior to the subject in a factor or aspect, then a downward adjustment is required for that factor. Similarly, if the comparable lower than the subject in an aspect, then an upward adjustment for that aspect is required. Adjustments are somewhat subjective and depend on the training and experience of the assessor. From an adjusted sales price group analysis of comparable sales, the assessor selects a value indicator that represents the subject property. It is possible for various assessors to select different value indicators that will ultimately provide different property values.

Steps in the sales comparison approach

1. Research the market for information related to sales, and wait for sales that are similar to the subject property
2. Investigate market data to determine if they are really true and accurate
3. Define the relevant comparison unit (eg, sale price per square foot), and develop a comparative analysis for each
4. Compare comparable subjects and sales according to the comparison element and adjust as necessary
5. Reconcile some indication of the value resulting from adjustments (upward or downward) from a comparable sale into an indication of a single value

Cost approach

The cost approach was once called the addition approach. The theory is that property values ​​can be estimated by summing the value of the land and the depreciation value of each improvement. The value of the improvement is often referred to by the acronym RCNLD (for "the cost of reproduction/replacement of new shrinkage is less"). Reproduction refers to the exact replica reproduction; replacement cost refers to the cost of building a house or other repairs that have the same utility, but using modern design, workmanship and materials. In practice, appraisers almost always use replacement costs and then bypass the factors for any dis-functional utility associated with the age of the subject property. An exception to common rules using replacement costs is for some insurance value scores. In those cases, proper reproduction of assets after a destructive event such as fire is the goal.

In many cases when the cost approach is involved, the whole methodology is a combination of cost and sales comparison approach (representing supplier cost and customer's searched price). For example, replacement costs for building a building can be determined by adding labor costs, materials, and other costs. On the other hand, the value of land and depreciation must come from a comparable sales data analysis.

The cost approach is considered to be most reliable when used on newer structures, but this method tends to be less reliable for older properties. The cost approach is often the only reliable approach when dealing with special use properties (eg, public meetings, marinas).

Income approach

The income capitalization approach (often referred to simply as the "revenue approach") is used to assess commercial property and investment. Because it is intended to directly reflect or model the expectations and behaviors of the typical market participants, this approach is generally considered the most appraisable assessment technique for income-generating properties, in which sufficient market data exists.

In a property that generates a commercial income, this approach capitalizes the revenue stream into an indication of value. This can be done using an income multiplier or capitalization rate applied to Net Operating Income (NOI). Typically, NOI has been stabilized so as not to overload too much on very recent events. An example of this is an unimpeded building that, technically, does not have NOI. A stable NOI will assume that the building is leased at normal rates, and the occupancy rate is normal. Net Operating Income (NOI) is gross potential revenue (GPI), fewer vacancies and loss of collection (= Effective Gross Income) minus operating costs (but not including debt services, income taxes and/or depreciation fees applied by accountants).

Alternatively, several years of net operating income can be assessed by a discounted cash flow analysis model (DCF). DCF models are widely used to assess larger and more expensive revenue generating properties, such as large office towers or large shopping centers. This technique implements market-backed yields (or discount rates) to project future cash flows (such as annual income figures and usually the return of a bump from recent property sales) to arrive at an indication of current value.

When a home is purchased for personal use a buyer can validate the asking price by using an income approach in the opposite direction. The expected rate of return can be estimated by comparing the expected net cost with the asking price. This return can be compared to other homeowner investment opportunities.

English rating method

In the UK, the valuation methodology has traditionally been classified into five methods:

1. Comparative method . Used for most property types where there is good evidence of previous sales. This is analogous to the sales comparison approach described above.

2. Investment methods . Used for most commercial (and residential) properties that generate future cash flows through the release of property. If the estimated current lease (ERV) and passing income are known, as well as the market-specified equivalent yield, then property values ​​can be determined using a simple model. Note that this method is really a comparison method, since the main variable is determined in the market. However, in US standard practice, NOI capitalization is closely linked to the DCF method under the general classification of the income capitalization approach (see above).

3. The remaining method . Used for properties that are ripe for development or rebuilding or only for vacant land.

4. Profit method . Used for commercial properties where price evidence is minimal, such as hotels, restaurants and nursing homes. The average three-year operating income (derived from profit or loss or profit or loss) is capitalized using the appropriate results. Note that since the variable used is attached to the property and not from the market, unless the appropriate adjustment is made, the resulting value will be the value of use or investment value, not the market value.

5. Cost method . Used for land and buildings with special characters that can not be gained profit figures or land and buildings that do not have a market because of their public services or heritage characteristics. Both the residual method and the cost method will be grouped in the United States under a cost approach (see above).

Based on the current RICS Rating Standards, the following value bases are recognized:

• Market value (see PS 3.2);
• Market rent (see PS 3.3);
• Value (investment value) (see PS 3.4); and
• Fair value (see PS 3.5)

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Further consideration

Work scope

While the Standard of Practice Professional Practice Assessment (USPAP) always requires an assessor to identify the scope of work required to produce credible results, it becomes clear in recent years that the assessor does not fully understand the process for developing this adequately. In defining the scope of work for a credible assessment, the concept of appraisal is limited versus complete and the use of the Departure Rules leads to confusion for clients, assessors, and assessment reviewers. To counter this, USPAP was updated in 2006 with what came to be known as Project Scope of Work. After this, USPAP removes the Rules of Departure and the concept of limited judgment, and new Scope rules have been created. In this case, the assessor should identify six key parts of the assessment problem at the start of each assignment:

• Clients and other users meant
• Purpose of the assessment and appraisal report
• Value definition (e.g., market, foreclosure, investment)
• Any hypothetical condition or extraordinary assumption
• Effective date of assessment analysis
• Prominent features of the subject property

Based on these factors, the assessor should identify the scope of work required, including the methodology to be used, the level of inquiry, and the applicable approach to assessing. At present, the minimum standards for the scope of work are:

• Expectations of clients and other users
• Assessor associative actions that perform similar tasks

The scope of work is the first step in any assessment process. Without a clearly defined scope of work, the conclusions of the assessment may not be feasible. By defining the scope of work, an assessor can actually develop a value for a given property for the intended user, and for the purpose of using the appraisal. The whole idea of ​​a "scope of work" is to provide clear expectations and guidance to all parties about what the assessment report does, and not include; and how much work has been done.

Ownership type

The type of "interest" real estate being assessed, should also be known and stated in the report. Typically, for most sales, or mortgage financing, a modest interest cost is being assessed. Simple interest charges are the most complete bundle of available rights. However, in many situations, and in many societies that do not follow the English General Law or the Napoleonic Code, some other interests may be more common. While there are many possible interests in real estate, the three most common ones are:

• Simple value Fee - known in the UK as freehold ) - The most complete possession in real estate, subject in common law state with the power provided to the state ( taxation, escheat, leading domains, and police forces)
• Value of rental fee - This is just a simple interest cost burdened by the lease. If the lease is in a market lease, then the value of the rental fee and the cost of simple value is the same. However, if the lessee pays more or less from the market, the remainder owned by the leased fee holder, plus the market value of the lease, may be more or less than the cost of a simple value.
• Rental value - Interest held by the lessee. If the lessee pays the market rent, then the infrastructure has no market value. However, if the lessee pays less than the market, the difference between the present value of what is paid and the present value of the market rent will be a positive lease value. For example, a large chain retailer may be able to negotiate under-market leases to serve as a major tenant for a shopping center. The value of this infrastructure can be transferred to another anchor tenant, and if so the retail tenant has a positive interest in real estate.

House check

If home inspection is performed before the assessment and the report is given to the appraiser, a more useful assessment will be generated. This is because the appraiser, who is not a home inspector expert, will be notified if there is major construction damage or major repairs required. This information may cause the assessor to arrive at a different value opinion, possibly lower. This information can be helpful if one or both parties requesting an assessment may end up in property ownership. This sometimes happens with property in the settlement of a divorce or legal consideration.

Real estate assessment and data entry

The Valuer provides all the data necessary to include in the appraisal report. The data entry team does the rest; it searches, consolidates, and types data into reports, such as subject data and previous sales history equivalent to the grid. Most data entry organizations work 24 hours a day, 7 days a week, 365 days a year. Valuers send blank reports, and data entry teams work all day and night, even when the appraiser is sleeping. This process improves the efficiency of the appraiser, and frees the time.

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Bulk ratings and automated scoring models

Auto-rating model (AVM) grows in acceptance. It relies on statistical models such as multiple regression analysis, machine learning algorithms or geographic information systems (GIS). While AVMs can be very accurate, especially when used in highly homogeneous areas, there is also evidence that AVMs are not accurate in other respects such as when they are used in rural areas, or when property is judged to be incompatible with the environment.

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Authorized government and professional organizations

International

Various US assessment groups and international professional assessment organizations have begun collaborating in recent years towards the development of the International Assessment Standards. This will facilitate global real estate assessment standards, an indispensable addition to real estate investment portfolios that cross national boundaries. Some assessment groups have become international organizations and thus, to some extent, have incorporated several levels of global standards.

The International Valuation Standards Council (IVSC) is a non-governmental organization (NGO) member of the United Nations with membership that includes all national standard assessors and professional associations from 41 different countries (including Appraisal Institute, American Society of Appraisers, RICS, [Appraisers Association Indian Practitioner] and the Canadian Appraisal Institute). IVSC publishes International Assessment Standards (IVS), now in its 8th edition.

German

In Germany, real estate valuations are known as real estate valuations ( Immobilienbewertung ). The real estate appraiser ( Immobilienbewerter or Gutachter ) can qualify to become ÃÆ' â € "ffentlich bestellter und vereidigter SachverstÃÆ'¤ndiger (expertly appointed official and sworn). However, this very important previous title has lost much of its importance over the past few years, but there is still some value in court proceedings. Titles are generally not required for assessment.

Authorized authorities

Assessment of real estate in Germany is partly codified by law. The federal Baugesetzbuch (abbr. BauGB, "German law code on buildings and constructions'") contains guidance on the governing authority, defining the term market value and referring to the continuum rules (Chapter 3, article 192ff). Each municipality (municipality or administrative district) must establish a Gutachterausschuss (judgment committee), consisting of a chairman and honorary member. The committee collects information about all real estate transactions (required to send a copy of every notary purchase contract to Gutachterausschuss ) and include it on Kaufpreissammlung (purchase price database). Most committees publish official real estate market reports every two years, where in addition to other information about comparators, the value of land is determined. The Committee also conducts assessments on behalf of public authorities.

Federal regulations

The BauGB defines the Verkehrswert or Marktwert (market value, the two terms with identical meanings) as follows: "Market value is determined by the price that can be realized on the date of valuation, in a reasonable transaction , taking into account the legal situation and the effective characteristics, the nature and location of the place or other subject of the assessment "(unofficial translation). The goal, as in other countries, is to incorporate all objective influences and to exclude all the effects resulting from the subjective circumstances of the parties involved.

This federal law is supported by Wertermittlungsverordnung (abbr. WertV, "rules on determining value"). The Wertv defines a codified appraisal approach and a common valuation technique. The German-coded appraisal approach (other approaches such as DCF or residual approach are also allowed, but not codified) are:

• Vergleichswertverfahren (sales comparison approach) - used when there is good evidence of previous sales and for owner-occupied assets, especially condominiums and single-family homes;
• Ertragswertverfahren (German income approach) - standard procedure for properties that generate future cash flows from property exemptions;
• Sachwertverfahren (German cost approach) - used for special properties in which none of the above approaches apply, e. g. public buildings.

WertV's general rule is further supported by Wertermittlungsrichtlinie (abbr. WertR, "referrals to the assignment"). The WertR provides templates for calculations, tables (for example, economic depreciation) and guidelines for consideration of different effects. WertV and WertR are not binding for assessments for non-official use, however, they should be considered best practices or Generally Accepted Assessment Practices (GAVP).

Comments on German GAVP

In general, Generally Accepted Assessment Principles are consistent with international practice. The investment market strongly presses the income approach. However, there are some important differences:

• Land and repairs are treated separately. Germany GAVP assumes that land can be used indefinitely, but buildings have a limited lifespan; This coincides with asset balancing. The value of land is determined by the sales comparison approach in both the revenue and cost approach, using data accumulated by Gutachterausschuss which is then added to the value of the building.
• To take into account land use, net operating income is reduced by Liegenschaftszins (interest is paid to landowner by the owner of the building, that is, ground rent). The Liegenschaftszins is a product of the value of land and Liegenschaftszinssatz (interest rate for land use). The Liegenschaftszinssatz is equivalent to the result - with some important differences - and also determined by Gutachterausschuss .
• Unlike the All Risks Yield (ARY) in practice in the UK, Liegenschaftszinssatz (abbr. LZ) excludes the default allowance (not to be confused with structural vacancies), therefore this needs to be deducted from income gross operations. As a result, Liegenschaftszinssatz will usually be lower than All Risk Yield.
• Based on the assumption that the economic life of the increase is limited, yield and residual economic life determine the building value of net operating income.
• Contracts in Germany generally specify that owners have higher maintenance and operational costs than their counterparts in the United States and United Kingdom.

Criticism

Mathematically the difference between land and improvement in the income approach will have no impact on the overall value when the remaining economic life is over thirty years. For this reason, it has become very common to use Vereinfachtes Ertragswertverfahren (simplified revenue approach), removing the value of land and Liegenschaftszins . However, separate land and building treatment leads to more appropriate results for older buildings, especially for commercial buildings, which typically have shorter economic life than residential buildings.

The advantage of the relatively high level of standardization performed by professional appraisers is greater ability to examine an assessment for inconsistency, accuracy and transparency.

Professional organization

The Federal German Organization of Appointed and Sworn Experts (Bundesverband Deutscher SachverstÃÆ'¤ndiger und Fachgutachter , abbr.BDSF) is the premier professional organization covering the majority of licensed appraisers in Germany. In recent years, by moving towards a more global outlook in the assessment profession, the RICS has gained a foothold in Germany, somewhat at the expense of BDSF. The other German Designated and Pledged Experts Organization (Deutsche SachverstÃÆ'¤ndigen Gesellschaft , abbr DESAG) The organization also includes a large number of licensed appraisers in Germany.

With a particular focus on hypothetical value, in 1996, German banks with real estate financing activities formed HypZert GmbH , an associate for certification of real estate appraisers. The HypZert qualification is considered mandatory by many German banks.

Israel

In Israel, the real estate valuation profession is governed by the Land Assessment Board, the organ of the Department of Justice; the largest professional organization, which covers the majority of land assessors/assessors is the Land Assessment Association. Valuers must be registered with the Council, which is a legal entity established by law, and who oversees training and administers the national professional examinations which are a prerequisite for obtaining registration. In 2005 the Board established the Values ​​Standard Committee with the aim of developing and disseminating standards that would reflect best practice; this tends to follow a rule-based approach.

Historically, most valuations in Israel are legal judgments (such as assessments made for the purpose of Tax Improvement, the taxes administered on each property gain by means of changes to local planning) as well as assessments made for bank lending purposes. Since Israel implemented the International Financial Reporting Standards (IFRS) in 2008, the profession has been involved in conducting assessments for financial reporting purposes.

United Kingdom

In the UK, real estate appraisals are known as property valuation and real estate appraiser is a land appraiser or property appraiser (usually hires a qualified surveyor who specializes in property ratings). The assessment of property in the UK is governed by the Royal Institution of Chartered Surveyors (RICS), a professional body covering all property-related buildings and professions. The RICS professional guidelines for appraisers are published in what is commonly known as Red Book . The 2011 version is RICS Valuation Standards 7th Edition (2 May 2011), replacing the issue published in 2007 with subsequent amendments. The RICS Assessment Standard contains mandatory rules, best practice guidelines and related comments. Changes to the standards are approved by the RICS Valuation Professional Group Council, and Red Books are updated regularly. While based in the UK, RICS is a global organization and has become very active in the United States in recent years through its affiliates with Real Estate Counselors, a division of the National Association of Realtors.

United States

The practice of appraisal in the United States is governed by the state. The Appraisal Foundation (TAF) is the main standard body; The Appraisal Standards Board (ASB) announces and updates best practices as codified in the Professional Practice Assessment Standards (USPAP), while the Establishment Qualification Board (AQB) announces minimum standards for certification of appraisers and licensing.

The federal government regulates appraisers indirectly because if the Subcommittee Appraisal (ASC) of the Federal Financial Institution Inspection Agency (FFIEC) finds that certain state certification and certification programs are inadequate, then under federal regulation all state appraisers will no longer meet a requirement to conduct an assessment for a federal bank charter. ASC oversees TAF. Banks are widely using mortgage loans and mortgage-backed securities, and will not be able to do so without judgment.

The Reform of Financial Institutions, Recovery and Enforcement Act of 1989 (FIRREA) requires all states to develop systems for licensing and certifying real estate appraisers. To achieve this, the Appraisal Subcommittee (ASC) was established within the Federal Financial Institutions Examining Council (FFIEC), with representatives from various Federal mortgage regulatory agencies. Accordingly, at present all real estate appraisers must be licensed and certified state. But before the 1990s, there was no generally accepted standard either for the quality of the assessment or for the appraisal licenses. In the 1980s, an ad-hoc committee representing various assessment professional organizations in the United States and Canada met to codify best practices into what is known as the Professional Practice Assessment Standards (USPAP). US Crisis Savings and Loans resulted in improved federal regulations through the Financial Institution Reform, Recovery and Enforcement Act of 1989, which required federal loan regulators to adopt assessment standards. The nonprofit organization, The Appraisal Foundation (TAF), is formed by the same organization that has developed USPAP, and copyright to USPAP is signed to TAF. The Federal Supervision TAF is provided by the Appraisal Subcommittee, comprising representatives of various federal loan regulators. TAF does its work through two boards: the Appraisal Standards Board announces and updates the USPAP; The Appraisal Qualification Board (AQB) announced the minimum standards recommended for certification of appraisers and licenses. During the 1990s, all states adopted USPAP as the governing standard in their country and developed licensing standards that met or exceeded TAF recommendations. Also, various states and federal courts have adopted USPAP for real estate litigation and all federal loan regulators adopted USPAP for mortgage finance assessments.

Professional organizations

In addition, there are professional assessment organizations, held as private non-profit organizations dating the Great Depression of the 1930s. One of the oldest in the United States is the American Society of Farm Managers and Rural Appraisers (ASFMRA), established in 1929. Others are established as needed and opportunities appear in specialized fields, such as the Appraisal Institute (AI) and the American Society of Appraisers (ASA ) founded in the 1930s, the International Right of Way Association and the National Association of Realtors founded after World War II. These organizations are all there to set and enforce standards, but their influence is diminished by increasing government regulation. In March 2007, three of these organizations (ASFMRA, ASA, and AI) announced an agreement in principle to join. NAIFA (National Association of Independent Appraisers), a charter member of The Appraisal Foundation, helped write Title XI, Real Estate Appraisal Reform Amendment. Founded in 1961.

One of the most recognized professional organizations of American real estate appraisers is the Appraisal Institute (AI). It was formed from the merger of the American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers. Founded in the 1930s, the two organizations merged in the 1990s to form AI. This group provides two professional titles: SRA , for housing appraisers, and MAI , for commercial valuers. The Institute has enacted strict rules regarding the use and appearance of this designation. For example, contrary to popular belief, "MAI" does not not mean "Member, Appraisal Institute". According to the agency, the letters "do not represent specific words", and MAI should not use the words "Member, Assessment Institution" in lieu of of the MAI mark. The main motive for this rule is to prevent trademark dilution.

The National Association of Appraisers (NAA) was formed with the aim of bringing together persons involved in the assessment profession for the purpose of exerting profitable influence on the profession and for advocating the interests of the appraiser. NAA has formed an advisory group consisting of leadership in state organizations and coalitions called Board of Governors in which countries can help guide NAA in acting in the best interests of all assessors. The NAA also has a designated membership, MNAA (Member of the National Appraisal Association, who is an individual holding a similar assessment, certification or credential assessment certificate issued by a government agency and who accepts the membership requirements and purposes of the National Association of Appraisers). Appraisal Association.

Other leading assessment organizations include the Independent National Association of Independent Assessors and the National Masters Appraisers Association, which also established sponsorship members from the Appraisers Foundation. The Massachusetts Board of Real Estate Appraisers (MBREA), founded in 1934, is the only state appraisal association that has been named a sponsor of the Appraisal Foundation. In recent years, the Royal Institution of Chartered Surveyors (RICS) has become highly regarded in the United States, and has formed a collaboration with the Real Estate Counselor, a division of the National Association of Realtors. RICS, headquartered in London, operates on a global scale and rewards the designations of MRICS and FRICS to Members and Fellows of RICS. The American Real Estate Counseling Group is a small group of leading US real estate appraisers and analysts who have jointly written a highly proportional appraisal methodology and the National Association of Real Estate Appraisers (NAREA), established in 1966, with the aim of improving professionalism and the success of the Appraisal Industry.

The leading assessment organization for personal property appraisal is the American Society of Appraisers who is a sponsor member of the Appraisal Foundation and the ASA (Accredited Senior Appraiser) award for candidates who complete five years of documented assessment experience, pass a comprehensive exam together with required commercial valuation courses and/or settlement, and submit two assessment reports for review.

Russian

In Russia, equivalent to many other former Soviet countries, this profession emerged in the first half of 1990, and represented a clean break with the practices of former specialist industry price specialists and with the activities of pricing authorities based on Soviet legislation. Unity. Currently, property appraisal, as it is called, is a specialization in the general purpose "profession of assessment," which functions in a self-regulated mode overseen by a self-governing professional organization of the appraiser (SRO), the public inspection body that was formed. under the provisions of special law (which is very loosely comparable to unions). The main one among them is the Russian Society of Appraisers, founded in 1993 and currently oversees about half of the membership of the assessment profession. Among more than 6000 members, a sizable majority is a real property appraiser, rubbing shoulders with a business asset and intangible valuer. The final rating category is also permitted to assess the property, although assessment professionals tend to specialize. By the end of 2016, it has been mandated that assessors must pass the state-required ratification process to verify their competence, details of details in specialties or otherwise agreed upon.

By mid 2016, Appraisers in Russia, including real property appraisers, are regarded as educated individuals for the purpose of retaining their SRO Rating membership and assuming unlimited property liability for the results of their services, ie their professional status is modeled on a notary public organization. Regardless of the fact, more than 80% of assessors tend to be employed by valuation companies or consultants, and thus exclude independent self-employment practices. The high-end valuation services are essentially represented by the hands of assessments of the international "Big-four" consultants in the country, but there are also reputable national corporate valuation brands.

Most assessments in this country tend to be conducted for legal purposes envisaged by the Federal Values ​​Act (recent amendment in 2016) and other related laws, such as the Corporate Combine Law. Such pieces of law provide more than 20 so-called "compulsory assessments", including assessments for purposes of privatization, lending purposes, bankruptcy and liquidation etc. The valuation for corporate accounts used was much more pronounced before 2000, when national accounting regulators ceased to provide incentives for fair value accounting options. Currently, the mass valuation of property for tax purposes also begins to be outsourced by the Government to professional appraisers.

Adjudication of the appraised value of the assessor in the event of a dispute is made through the Appraiser SRO Board of Experts. Official courts tend to agree with the Council's resolution. In some rare cases, the SRO Expert imprimature Council is also required for assessments made by certain assessors to apply.

The technical details of real estate appraisal practices in Russia are in line with international patterns. Members of the Russian Appraisal Society were previously bound by adherence to the International Assessment Standards. There is also a set of 14 "Federal Evaluation Standards" developed by the government for general purposes (FSO 1,2,3 - the general assessment standard first adopted in 2007 (and revision 2015) and includes the Engagement Requirements and the content of the requirements assessment report, FSO 7-11 is an asset-specific standard adopted by 2015, while FSO 9 is currently the only specific standard for purposes in the set related to property valuation for loan security purposes, the last two FSO standards adopted in the closing of 2016 investment value and liquidation, however, they do not touch on the methodology for determining these values, just scraping the reporting requirements). Given the wishes of international conformity in the latest round of FSO standard setting, the general requirements in the new FSO standard are close to international assessment standards, but they can be more specific on occasions and mandatory mandatory uncertainty disclosures in report appraisal using the interval/range format.

With effect from 1 August 2017, a new amendment to the Federal Values ​​Act came to impose mandatory certification from assessors by state-affiliated testing centers. Consequently, this measure of a 2-hour certified written exam, aimed at countering the widespread malpractice perception among members of the national appraisal profession, provides for 3 specialist-valuers: real estate appraisers, factories and assessment machines, and business and intanglble asset assessors, with exam content requirements vary greatly for each specialization. Valuers will lose the right to practice unless they are eligible for this mandatory certification exam or before March 31, 2018. A common assessment of this measure is that the number of certified appraisers in Russia is set to decrease to some 2000-3000 national assessors (in all specializations mentioned), which is cutting about 80% of the current SRO Assessor membership, due to the complexity of the certification exam.

Hong Kong

Hong Kong Institute of Surveyors (HKIS) arrange a property surveyor in Hong Kong. Founded in 1984, the Institute is the only professional organization representing the survey profession in Hong Kong. HKIS was formally incorporated under the Ordinance of the Hong Kong Surveyor Institute in January 1990 (Cap 1148). In July 1991, the Surveyor Registration Ordinance (Cap 417) was adopted to establish a Registration Board to administer surveyor registration. In May 2006, the number of members has reached 6,723. A general practice surveyor suggests the best use of the land, assessing the viability and viability of the proposed development project as well as assessment, marketing, sales, leasing and management of completed developments. It also has a website to provide real-time property value estimates across Hong Kong.

Australia

The Australian Property Institute (API) was formed in 1926 as the Commonwealth Institute of Valuers. The Institute has undergone several name changes over the last century as an array of services offered by its expanded members. It serves to regulate the property appraisal profession across Australia.

Today the API represents the interests of over 8,600 property professionals across Australia. API members include residential, commercial and factory appraisers and machinery, property advisors, property analysts, property funds and asset managers, property facility managers, property attorneys and property researchers and academics. The Institute's main role is to establish and maintain the highest standards of professional practice, education, ethics and professional conduct for its members and the broader property profession.

New Zealand

New Zealand's real estate assessments are governed by the New Zealand Institute of Valuers ('NZIV') and the New Zealand Appraisal Appraisal Council ('VRB'), both legal entities established under the 1948 (NZ) Appraisal Act. The NZIV remains the legal professional body for appraisers in New Zealand, with continuous success under the Act (which is being reviewed in 2015). NZIV may make the Rules a lower level rule and have a Code of Conduct. The last NZIV rule was changed in 2012 and remains current. The VRB has jurisdiction in relation to serious matters affecting the appraisal of an appraiser including the discipline in which the appraiser has acted in such a way as to meet the threshold. The Valuers Act of 1948 sets a threshold under S31 as things in which an appraiser can be struck from the appraisal list. The NZIV has the power to discipline for a relatively smaller problem. NZIV organizes NZIV members and has the power to discipline members and refine them up to $ 500, reprimand members or terminate their membership. The appointment of "Registered Valuers" and "Public Valuers" is legally protected, provided for Registered Valuers by law. The NZIV, under the Act, may accept non-appraisal members (such as non-valuer landowners).

There are also professional voluntary bodies for real estate assessments such as the Royal Institute of Chartered Surveyors ('RICS') and the New Zealand Property Institute ('PINZ'). These two bodies have a wider membership, outside the real estate appraiser. PINZ has more than 2,500 members in New Zealand and abroad (such as former pats in the UK, Asia and Australia). PINZ has a service level agreement with NZIV, where PINZ contracts to perform duties for legal professional bodies, NZIV. PINZ was formed in 2000 to act as the sound of the property profession. There is a 'political division' in the assessment profession in New Zealand, expressed at the GMS and through 'proxy wars' for the past 20 years or so. Many assessors support the incorporation of the NZIV function under the multi-disciplinary body PINZ, while many others wish to retain a separate legal professional body for appraiser (NZIV). There are various reasons in the debate and the laws governing being reviewed and amendments or revocations are being considered. Currently, the Act remains in force and NZIV is legally a body different from functions, power and duties under the law.

PINZ combines most of the NZIV membership, Factory Institute & amp; Assessment Machine (IPMV) and Property & amp; Land Economy Institute of New Zealand (PLEINZ). PINZ now represents the interests of assessors, property and facility managers, property advisors and factory and machinery appraisers. PINZ has grown to become one of the largest professional bodies for standards, qualifications, and ethics in all aspects of the property profession in New Zealand. He works with government, industry and other professional associations, education stakeholders and the media to promote his standards and views.

In New Zealand, the terms "judgment" and "assessor" usually relate to a person performing a professional role in terms of the requirements of the Actors Act 1948 or that are not regulated or voluntarily self-regulated (if PINZ members) plant and machine, sea or art assessors. Whereas, the term "valuation" is usually associated with an estimate by a real estate seller or agent licensed under the Real Estate Agent Act 2008. New Zealand's Real Estate Institution includes many members of the appraiser, but the laws governing the sale and agency (Disposal interests of land on behalf of others) does not include provision for such roles by an appraiser regardless of membership of NZIV, RICS or PINZ.

There is a key difference between the role of the real estate agent and the appraiser, as the agent can advocate for its principal interests, while the assessor must impartially and independently give opinion as value. Lawyers, Conveyancers, and Real Estate Agents are allowed to act in the sale of real estate under a law very different from that of regulating the appraiser. Allowance for roles in relation to Lawyers and Permits is Lawyers and Advisors 2006.

Source of the article : Wikipedia