Frequently Asked Questions
There are multiple types of appraisers, including real property appraisers, furniture, fixtures and equipment ("FF&E") appraisers and jewelry appraisers, just to name a few.
As it pertains to Real Property Appraisers, in Georgia, the Real Estate Appraisers Board classifies appraisers as either:
- "Registered" (effectively trainees, able to do only ministerial work with abundant oversight),
- "Licensed" (able to appraise any one- to four-unit property with a value under $1M), or
- "Certified General"/"Certified Residential" (able to appraise any property type, with the USPAP caveats of having competency in the property type and market area).
Each partner at Pritchett, Ball & Wise, Inc. holds the esteemed MAI designation, and George Petkovich also holds the CCIM designation. Each staff appraiser at Pritchett, Ball & Wise, Inc. is either a Certified General Real Property Appraiser (the state's highest classification) or working toward this classification.
The MAI Designation is conferred by the Appraisal Institute, the largest provider of appraiser education in the U.S., to appraisers who satisfy rigorous educational requirements, peer review of final-level experience, as well as an all-inclusive demonstration report. The "MAI" and "SRA" Designations correspond to Commercial (MAI) and Residential (SRA) appraisers.
The MAI Designation reflects a significant increase to the minimum number of initial training hours and continuing education hours required by the state, as well as peer review of prior work product, an all-inclusive demonstration report and an extensive 16-hour examination - all of which are not required by Georgia's standards for its highest classifications.
The MAI designation is held by a relative few appraisers. In Georgia, and as of July 2013 statistics, there were 3,850 (1,400 Resident Certified General and 510 Resident Certified Residential) appraisers in Georgia, including only 261 Non-Retired Designated (MAI and SRA) appraisers and 156 "Candidates" for the Designation.
In effect, engaging an MAI appraiser helps ensure that the most experienced and educated person is solving your appraisal problem.
Engaging an MAI appraiser means that you are getting the most trained and experienced professional available. Not all situations require an MAI; however, knowing the "rules of the road" can prevent expert witness testimony from being excluded, having the IRS deny your estate's tax return, etc.
An analogy would be a tax preparer at the mall versus a Certified Public Accountant - A 1040EZ Form likely does not rise to the need of a CPA. It is simply a case of using the right tool for the right job.
We primarily appraise commercial properties; however, there have been instances (i.e., Estates; Condemnation; Contamination; Historical Preservation; etc.) where we've appraised or contracted a competent SRA appraiser to assist with that component of the assignment.
Our "bible," the Uniform Standards of Professional Appraisal Practices ("USPAP") requires us to have geographic competency as well as familiarity with the property type before accepting an assignment. USPAP allows appraisers to gain competency, which is especially helpful for atypical properties and/or situations, so long as the appraiser notifies the client prior to the engagement and takes the necessary steps to gain competency with respect to the appraisal problem.
Intially, the process starts with a phone call or email from the client. This is followed by our internal research for any potential conflicts with the intended users. It is important to note that appraisals for lending purposes generally have to originate from the bank to maintain impartiality; similarly, clients requiring an appraisal for litigation purposes are best served to have their attorney contact and engage the appraiser.
We provide clients with the option of a traditional proposal (a flat fee) or a proposal based on a multi-phased assignment with an allocation of expected fees for each phase.
In the initial phase of a multi-phased assignment, we provide the same level of research needed to write the physical report, but we provide the client with an oral reporting of our conclusions and a summary of the data considered. If our conclusions are consistent with the client's needs, we can write the physical report and ultimately stand ready to provide expert witness testimony as the final phase to the assignment.
Breaking the assignment up into phases is most beneficial for discovery purposes or where only the opinion (a point estimate or a range of values) is all that is needed.
Our fee schedule reflects the complexity of the appraisal problem, the property type and issues involved, any time constraints imposed by the assignment, and/or any discounts for multiple properties and potential time savings; as such, it is most appropriate to contact one of the partners in the firm for a formal proposal.
A schedule of our Standard Charges and hourly rate for billable hours as part of the second or third phase of an assignment (for work performed following delivery of the report) is available upon request.
We try to deliver the report or verbal opinion as quickly as possible; however, we are frequently finishing other appraisals (or backlogged with assignments) or randomly called upon to provide testimony or further consultation. The estimated delivery time includes an assumption of some gap between the proposal and the engagement, as well as our availability and the breadth of the appraisal problem to be solved. In most cases, a 30-day turn time is typical and consistent with market norms for appraisers; however, the scope of the assignment and other factors can shorten or lengthen the turn time.
A specific list of required documents, as well as a brief questionaire covering items required by USPAP, will be provided as part of the formal proposal and tailored to the client's specific appraisal problem and property type; however, a generic list of documents includes:
Vacant Land / Proposed Properties
Significant delays in receiving required/requested materials may affect our abiity to complete the assignment in a timely/agreed-upon manner.
What is Meant by "Inspection," and How Much Time Should I Budget for the Inspection?
The inspection serves as the basis for comparison.
Contrary to the service performed by an engineer, home inspector, etc., the inspection (or "viewing") of a vacant or improved property is effectively a means of understanding the characteristics of a property relative to competing and sold properties in the submarket. For example, an apartment inspection verifies each unit type's size, layout and typical finishes, also noting the relative condition of the interior, exterior, roof and mechanical items.
An apartment property could have, for example, atypically small bedrooms with no closet and low-grade bathroom fixtures, but the only recent sales are for newer units with larger bedrooms and walk-in closets. In this scenario, it is critical to understand how these factors dictate differences in rental rates, occupancy levels, investment risk and other factors that are not apparent without the inspection.
We inspect the common areas and a representative number of office suites, apartment units, retail units, etc. to understand the property in relation to its competition, as well as any areas requiring immediate or short-term repairs. Depending on the property, the inspection can take from 10 to 45+ minutes. Clients and appraisers should discuss the level of inspection as part of the proposal process.
Beginning 1/1/2014, the Uniform Standards of Professional Appraisal Practice ("USPAP") revised the available reporting options down from "Self-Contained," "Summary," and "Restricted Use" to simply "Appraisal Report" and "Restricted Report." The change was intended to address clients' concerns regarding misuse or misinterpretation of prior report formats. "Use" was omitted from Restricted Use, aligning the report with a single user as opposed to a single use; as such, this format is only applicable in rare instances where only the client (not a bank, tax assessor, etc.) may rely on the report.
The current "Appraisal Report" format includes USPAP's minimum standards - similar to the former "Summary" level appraisal report. The appraiser and client should explictly negotiate a Scope of Work that adequately reflects the level of detail required/warranted for the appraisal assignment. Each proposal prepared by Pritchett, Ball & Wise, Inc. addresses the appraisal problem and the steps necessary to solve the appraisal problem.
The current Interagency Appraisal and Evaluation Guidelines also describes an "Evaluation" report, which is ostensibly a revision to an existing Appraisal Report and not a stand-alone reporting format.