2013 IRWA Conference By: Larry Disney, Executive Director Kentucky Real Estate Appraisers Board

Question - Is appraiser regulation working? To make the system work, we must all begin to work together and make it happen. “Everyone thinks of changing the world, but no one thinks of changing himself.” – Leo Tolstoy

State Licensing of Real Property Appraisers Title XI granted the authority for state licensing of real property appraisers. Authority granted the ASC oversight of the state agencies and monitoring of TAF. Title XI recognized TAF as the source for criteria and appraisal standards.

The state appraiser regulatory agencies vary in the type of licensing program established: Mandatory – 37 Mandatory/FRT – 12 Voluntary - 6

Does licensing/certification impact your work as an appraiser? If you are credentialed in a state, the answer will depend upon the specificity of the state law and regulations. Each state credential appraiser must understand laws and regulations. One requirement exists in each type. Upon being credentialed, you cannot decide when to opt in or out.

Does the licensing program impact your practice as a R/W appraiser? Prior to appraiser regulation what was the recognized standard for an appraisal?

The statutory authority to determine USPAP compliance. The regulatory hearing may be the only trial a state credentialed appraiser will receive. At the hearing, board members decide if violations exist.

Is the current system of enforcement effective? Residential – 90% General KREAB appraiser complaint findings: Competency – 95% Negligence or Gross Negligence Ethics

Approximately 100 complaints logged each year in KY. 42% Complaints dismissed since 1990 Mandatory Complaint Hotline R/W assignments are filed by consumers.

The majority of complaints presented to the KREAB include URAR appraisal report forms. Some education providers have used the URAR as the primary teaching tool for appraisal report writing. URAR form as published is not USPAP compliant.

Review appraisal assignment and a regulatory agency complaint investigation. Other assignment conditions, including:  Uniform Appraisal Standards for Federal Land Acquisition  International Valuation Standards  Interagency Appraisal Evaluation Guidelines Jurisdictional Exception

A state credentialed appraiser is asked to appraise a minor acquisition, develop a value opinion for only the portion of land impacted, and report the opinion using what is described as a short form without a before and after value being developed. Does the above present a problem for a state certified appraiser?

How is Experience gained? The one part of the current criteria that must be examined is how credible experience is gained: Experience is the one part of the criteria that is lacking in acceptance. R/W appraisal assignments.

Future Issues State registration and regulation of Appraisal Management Companies will continue and likely expand. There will be a continual revision of appraisal management services.

AMCs have been a part of the appraisal landscape for many years. The future will depend upon the continued demand by the client users of AMCs.

Message to professional appraisers Get busy, this is your profession. Never let anyone cause you to do something you know is not correct. Become an advocate for the appraisal profession. Get involved, join other professionals, make your voice heard.

Appraiser Demographics It is said appraisers will not be needed in the next 5 years. It is said technology will negate the need for an appraiser. Is there merit in the above views?

Fiscal YearNumber of Appraisers , , , , , , , , , , , ,544 May 6, 20131,580 Kentucky Appraiser numbers through the Years

Certified General: 558 Certified Residential: 776 Licensed Residential Real Property: 17 Associate:214 TOTAL:1565 Kentucky Licensed / Certified Appraisers (as of 4/02/13):

“Effectively, change is almost impossible without industry-wide collaboration, cooperation and consensus.” - Simon MainwaringSimon Mainwaring

Larry Disney Office – Cell