The Student Handbook to T HE A PPRAISAL OF R EAL E STATE 1 The Appraisal Profession Introduction

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 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.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 3 How to Use this Book Wide margins for taking notes in the book Solutions to the questions are in the rear of the handbook.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 4 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.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 5 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.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 6 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 Savings and loan crisis Federal Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) Federally related transactions

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 7 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)

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 8 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.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 9 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

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 10 Worksheet 1—State Licensing and Certification Requirements Trainee, registered, or associate appraiser  Educational requirements  Experience requirements – none  Testing  Fees  Other requirements

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 11 Worksheet 1—State Licensing and Certification Requirements Licensed residential appraisers  Educational requirements  Experience requirements  Testing  Fees  Other requirements

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 12 Worksheet 1—State Licensing and Certification Requirements Certified residential appraisers  Educational requirements  Experience requirements  Testing  Fees  Other requirements

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 13 Worksheet 1—State Licensing and Certification Requirements Certified general appraisers  Educational requirements  Experience requirements  Testing  Fees  Other requirements

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 14 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.

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 15 Clients Served Attorneys Lenders Corporate relocation companies Government agencies Private individuals

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 16 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

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 17 Basic Mathematics and Analytical Skills for Appraisers Order of operations Exponents Percentage of change

Student Handbook to T HE A PPRAISAL OF R EAL E STATE Introduction 18 Problems Suggested solutions begin on page 415.