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Appraising Flood Plains

Appraising flood plains or FEMA designated flood areas can be a bit challenging. In the wake of the many storms that produced “rising water” of various types, consumers have come to realize the significant damage that a storm can cause. Tropical storms and hurricanes can cause water to rise in the form of tidal surges, rainfall, waterways and other tributaries that are overcome with a surplus of water. These situations can lead to significant damage and associated costs to restore property to it’s desired condition. The risk of these circumstances is particularly of concern in certain flood zones and therefore there is likely an effect on value. Not to mention the increased cost of insurance in these areas which is also likely to effect value.

Establish the Flood Zone

One part of the lending procedure is to establish the flood zone of the property. Many times the elevation is also necessary in order to adjust and in some cases reduce the cost of flood insurance. The reduction in the cost of flood insurance often occurs when a structure is located in a flood hazard area but is elevated thereby reducing or eliminating the need for flood insurance. The flood zone is provided in the appraisal and additional flood documents are ordered through the lender. In certain conditions a survey may be necessary. The governmental organization FEMA is responsible for issuing and maintaining flood maps. These maps are available through the FEMA website.

The appraiser is responsible for reporting the flood zone of the subject property and analyzing what impact the flood zone may have on value. In some situations consumers will not want incur the additional costs associated with properties located in a flood zone. This is particularly true when the property isn’t located on the waterfront but is subject to the necessity of a flood insurance policy based solely on the close proximity of the water the subject in fact enjoys no access to. In this scenario it is possible that the consumer can purchase and alternative property that is outside of the flood zone or elevated thereby reducing the flood insurance premiums to a preferred rate that is not required by the lender. Some consumers will pay more for a property outside of a flood hazard zone due to the reduced cost of insuring the property.

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Appraising in Flood Plains

Appraisal Form 1004

FNMA 1004 (Owner Occupied)

URAR – FNMA 1004 Uniform Residential Appraisal Report (Owner Occupied Properties)

The FNMA 1004 appraisal report consists of a visual interior and exterior observation of the subject property and a visual observation from street of all comparable sales used to support the value conclusion. Photographs include front, rear and street scene photographs of the subject property and front photographs of all comparable sales. Also included: an interior floor plan sketch, interior photographs of the subject property, Market Condition Addendum, Zip Code Statistics, aerial view of subject property, aerial assessor map, assessor map, a location map (indicating location of the subject and comparables) and plat/survey if available

Priority Appraisal and Mortgage Services Inc. is a residential appraisal firm experience in all areas of residential appraising in the Tampa Bay area. Focused in the Pasco, Pinellas and Hillsborough counties for the past 14 years. At Priority Appraisal and Mortgage Services, Inc. our customers are our priority. We provide fast accurate appraisals in a timely manner. We go above and beyond to fulfill your needs with any and all additional market information to serve your requirements. For more appraisal info visit: http://PriorityAppraisalandMortgageServicesInc.appraiserxsites.com or call Shari Peterman directly at 727-505-6706. I look forward to hearing from you.

Appraiser Certification

How to Become an Appraiser or Assessor of Real Estate About this section

Assessors and appraisers tend to take the same courses for certification.

The requirements to become a fully qualified appraiser or assessor of real estate are complex and vary by state and, sometimes, by the value or type of property. Currently, most appraisers of residential real property must have at least an associate’s degree to obtain the entry-level state license category. Appraisers of more complex residential and commercial real property must have at least a bachelor’s degree to obtain licensure. In some localities, appraisers may qualify with a high school diploma. Employers generally require these candidates to take basic appraisal courses, complete on-the-job training through an apprenticeship, and work enough hours to meet the requirements for appraisal licenses or certificates. Beginning January 1, 2015, all certified appraisers will be required to have a bachelor’s degree prior to obtaining their appraisal license.

In addition, all assessors must be licensed or certified, but requirements vary by state. Check with your state’s licensing board for specific requirements for both assessors and appraisers.

Education

Although requirements vary by state, appraisers of residential real property usually must have at least an associate’s degree, and appraisers of more complex residential or commercial property usually must have at least a bachelor’s degree. In practice, however, most have a bachelor’s degree.

Courses in subjects such as economics, finance, mathematics, computer science, English, and business or real estate law can be useful for prospective appraisers and assessors.

For assessors, most states set education and experience requirements that an assessor must meet in order to practice. A few states have no statewide requirements; instead, each locality sets the standards. In some localities, candidates may qualify with a high school diploma.

Training

Employers generally require candidates to take basic appraisal courses, complete on-the-job training through long-term on-the-job training, and work enough hours to meet the requirements for licenses or certificates.

Licenses, Certifications, and Registrations

Federal law requires that most appraisers performing appraisals in federally related transactions (federally insured banks and financial institutions) have a state license or certification. There is no such federal requirement for assessors, although some states require certification.

Real property appraisers usually value one property at a time, while assessors value many at once, but both occupations use similar methods and techniques. As a result, assessors and appraisers tend to take the same courses for certification. In addition to passing a statewide examination, candidates must usually complete a set number of on-the-job hours.

The level of certification determines what type of property a person may appraise. The two federally required certifications are:

• Certified Residential Real Property Appraiser

• Certified General Real Property Appraiser

Being a Certified Residential Real Property Appraiser is the minimum requirement to appraise a residential property with a loan amount over $250,000 or any other type of property even if the loan amount is less than $250,000. Obtaining this certification requires:

• Associate’s degree or 21 units of continuing education (as of 2015, a bachelor’s degree)

• 200 hours of appraiser-specific classroom training

• 2,500 hours of work experience over at least 2 years

Being a Certified General Real Property Appraiser permits a person to appraise any property of any type and any value. Obtaining this certification requires:

• Bachelor’s degree or 30 units of specific college-level education

• 300 hours of appraiser-specific classroom training

• 3,000 hours of work experience over at least 2½ years

Most states offer a third certification: the Licensed Residential Real Property Appraiser. With this certification, appraisers may appraise noncomplex one-to-four unit residences with a value of less than $1,000,000 and complex one-to-four unit residences with a value of less than $250,000. Obtaining this certification requires:

• 150 qualifying education hours (as of January 2015, 30 semester hours of college-level education)

• 2,000 hours of on-the-job training over at least 1 year

For all of these certifications, candidates must:

• Have 15 hours of classroom instruction on the Uniform Standards of Professional Appraisal Practice

• Pass an exam

In most states, candidates working toward licensure or certification as an appraiser are considered to be trainees. Training programs vary by state, but they usually require candidates to take at least 75 hours of specified appraiser education before applying for a job as a trainee.

Unlike appraisers, assessors have no federal requirement for certification. In states that mandate certification for assessors, the requirements are usually similar to those for appraisers. Some states also have more than one level of certification. For example, the International Association of Assessing Officers (IAAO) offers the Certified Assessment Evaluator (CAE). This designation covers topics that include property valuation for tax purposes, property tax administration, and property tax policy. As of January 1, 2014, applicants are required to have a bachelor’s degree prior to obtaining the designation.

For those states that do not require certification for assessors, the hiring office usually requires the candidate to take basic appraisal courses, complete on-the-job training, and work enough hours to meet the requirements for appraisal licenses or certificates. Many assessors also have a state appraisal license.

Assessors tend to start working in an assessor’s office that provides on-the-job training; smaller municipalities are often unable to provide this work experience. An alternate source of experience for aspiring assessors is through a revaluation firm.

Both appraisers and assessors must take continuing education courses to keep the license or certification. Requirements vary by state.