The appraiser, by reason of professional training, experience, and ethics is responsible for furnishing clients with an objective third party opinion of value, arrived at without pressures or prejudices from the parties involved with the property, such as an owner or lender.

The appraiser has a heavy personal and professional responsibility to be correct and accurate in opinions of value. Otherwise, the appraiser's clients may easily suffer loss and the appraiser's professional reputation may also suffer.

There has been considerable controversy in recent years concerning the appraiser's potential for influencing declining neighborhoods and discrimination in housing. The main thrust of the controversy charges that appraisers have tended to view declining neighborhoods as reducing in value without regard for individual home upgrading and homogeneous neighborhoods as being more stable in value than mixed neighborhoods. It has been claimed that loan appraisals in these declining or mixed areas have been unduly pessimistic and conservative because of these purported appraiser attitudes. This supposed conservatism, it has been declared, leads to further decline because favorable loans are not made.

Appraisers respond that the professional appraiser will only consider the factors actually affecting value, and lenders policies for granting loans are beyond the appraiser's control. Lenders reply that the appraiser's opinion of value is the main basis for the loan and prudent lending practices must be followed.

In the making of thousands of daily appraisal decisions, there is probably some truth on all sides.

A proper appraisal does not contribute to either problem mentioned above. An accurate appraisal, resulting from the competency of a skilled appraiser, will reflect only the forces affecting value.

  • True forces affecting value. It is necessary that appraisers be exceptionally sensitive to their roles in accurately assessing the true forces affecting value. In accomplishing this, the appraiser cannot allow the general neighborhood composite of ethnic, religious, or minority populations or the general condition of neighborhood improvement to detract from a clear and objective evaluation of the property appraised on its own merits.

It is also the appraiser's responsibility to keep the appraisals timely in a changing market.

It is no longer prudent to rely solely on past sales of comparable property. The appraiser must use all pertinent data and appraisal methods to insure the appraised value is, in fact, the closest estimate of the price the property would bring if freely offered on the open market.

World events of the late 70's resulted in interest rate and property appreciation spirals to historic highs, dramatic decline in construction, creative financing approaches to generate sales, and extraordinary levels of foreclosure and bankruptcy. Such times required exceptional appraiser sensitivity to the true market forces.

Occasionally appraisers have contributed to individual property problems by failing to understand or recognize contrary market trends.

The professional appraisal associations have responded with increased emphasis on education in current appraisal and financial techniques. The dynamics of such a volatile market require the appraiser to keep abreast of new techniques and market forces. Recognizing this, State statutes enforced by the Office Of Real Estate Appraisers (OREA) require continuing education for licensed and certified appraisers. Those requirements are set forth in the OREA portion at the end of this chapter.

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