Best Real Estate Appraisal Practices and the U.S. Experience

appraisal profession has a long history of regulation and standardization. The Roaring 1920s saw the establishment of the National Association of Real Estate Boards (NABRE) in 1928, which laid the groundwork for the development of appraisal standards. The Great Depression in 1929 led to a significant increase in the need for accurate property valuations, prompting the creation of the Appraisal Institute in 1932. The University of Chicago played a crucial role in shaping the appraisal profession in 1935, with the publication of a seminal text on appraisal theory. The 1950s saw the introduction of the Woodworth Tables, which were later replaced by the Akerson Tables in 1959. Charles Akerson's work on appraisal theory in 1960 further solidified the profession's foundation. The 1980s brought significant changes to the appraisal profession, with the introduction of discounted cash flow (DCF) in 1983 and the regulation of appraisers through the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) in 1989. FIRREA established the Appraisal Subcommittee, which oversees the licensing of appraisers, and created the Appraisal Foundation, which is responsible for developing and enforcing appraisal standards. The Appraisal Foundation is composed of three boards: the Appraisal Standards Board (USPAP), the Appraisal Qualifications Board, and the Appraisal Practices Board. The Appraisal Standards Board is responsible for developing and enforcing the Uniform Standards of Professional Appraisal Practice (USPAP), which sets the standards for appraisal practice in the United States. The Appraisal Qualifications Board is responsible for setting the qualifications for appraisers, including the requirement for a bachelor's degree, 300 hours of appraisal training, and 3,000 hours of experience. The Appraisal Institute also has its own set of qualifications for its members, including the MAI designation. To become an MAI, an appraiser must complete 4,500 hours of experience, pass a comprehensive examination, and submit a thesis, known as a demonstration report. MAIs must also complete 20 hours of continuing education each year and adhere to the Uniform Standards of Professional Appraisal Practice (USPAP). Today, there are over 104,873 state-licensed and certified appraisers in the United States, with 38,064 certified appraisers and 7,500 MAIs. The primary sources of business for appraisers include lending institutions, government agencies, REITs and pension funds, corporations, and litigation support services.