A real estate appraisal is an opinion of market value formed by a professional appraiser. The process involves specific market area research, analysis of significant information relevant to the property, specialized expertise and impartial judgment regarding the value of the property.
To begin your search, ask for referrals from an accountant, attorney, real estate agent or lender. These professionals commonly use appraisal services and can likely refer you to competent appraisers. It is recommended that you interview two or three appraisers.
When choosing an appraiser, the following types of questions are appropriate:
- Are you licensed or certified by the State of Arizona and what type of license do you carry?
Ask for a copy of the license/certification, which will be willingly provided by an ethical appraiser. There are three types of licenses in Arizona; Standard, Certified Residential and Certified General. Contact the Arizona Board of Appraisal to confirm that the appraiser’s license/certification is active and in good standing. State licensing and/or certification does not ensure the quality of an appraisal, but it is verification that certain standards have been met and authorization to perform property appraisals has been granted.
- What professional designations do you have?
In addition to a state license and/or certification, an ambitious appraiser will carry a professional designation from an appraisal organization. The Appraisal Institute, regarded as the worldwide leader in appraisal education, grants two of the most prestigious member designations:
- The SRA membership designation is held by appraisers who are experienced in the analysis and valuation of residential real property
- The MAI membership designation is held by appraisers experienced in the analysis and valuation of all types of properties and are also capable of providing advice to clients regarding real estate investment decisions
- What level of experience do you have in this specific market and with this type of property?
Ask the candidate to provide a resume and a list of two or three current and previous clients located in the community of the property you want appraised. After reviewing the resume, interview the appraiser carefully to determine the level of experience she has in your market area and with your specific type of property and its use.
- Are you familiar with the properties in this community?
Determine the appraiser’s knowledge of the specific community by asking questions regarding rezoning, redevelopment, schools, parks, shopping centers, property types, recent residential or commercial sales and prices. Verify the information provided by contacting the City Planning department and/or or the County Assessor’s office.
- What is the appraisal fee and timeframe for delivery of the report?
Appraisers usually quote a fixed fee for the engagement and payment is typically 50 percent in advance as a retainer and the remaining 50 percent due upon delivery of the report. Request a letter of engagement which sets forth the scope of services to be performed including an accurate description of the property, the effective date of valuation, the purpose of the appraisal, the anticipated delivery date, the fee and terms of payment. Review the engagement letter carefully to ensure that all of the information is correct, complete and applicable before signing.
In this unpredictable market, the experience and competence of the appraiser is especially important. There are many well-qualified professional appraisers in the Phoenix area and taking the time to interview two or three of them will allow you to determine which one is the right appraiser for you.