Appraisal
An appraisal is an analysis, opinion or conclusion about the nature, quality, value or utility of specified interests in identified real estate, and in Virginia only a person licensed or certified by the Real Estate Appraiser Board may use that name for it.
A word reserved to the Real Estate Appraiser Board's licensees
In Virginia the word appraisal is not free for anyone to use. The Code sets it aside, along with the word appraiser, for people the Real Estate Appraiser Board has licensed or certified.
The term "appraiser" or "appraisal" may be used only by a person licensed or certified by the Board.
Va. Code 54.1-2009
The same section defines the work broadly. An appraisal is an analysis, opinion or conclusion relating to the nature, quality, value or utility of specified interests in, or aspects of, identified real estate or identified real property. Value is one of four things it can address, and the property has to be identified: an appraisal is about a particular place, not a market.
Unlawful for pay without a license, with the exceptions written in
Va. Code 54.1-2011 turns the reserved word into a license requirement. Its subsection A makes it unlawful to engage in the appraisal of real estate for compensation or valuable consideration in Virginia without first obtaining a real estate appraiser's license, and it names the exceptions in the same breath:
- Subsection C. An individual who is not a licensed or certified appraiser may assist in preparing and sign an appraisal, if that person works under the direct supervision of a licensed or certified appraiser who reviews it, attests that it is accurate and complete, and signs it.
- Subsection E. A corporation, partnership or other business entity may provide appraisal services if each appraisal is prepared and signed by a licensed individual and the entity has registered with the Board.
- Va. Code 54.1-2010. A list of exemptions from the appraiser chapter, one of which reaches a licensed real estate broker or salesperson who provides a valuation or analysis of real estate in the ordinary course of business for a fee, on condition that the licensee does not hold himself out as an appraiser and the valuation is not called an appraisal or used in place of one.
Subsection B adds a separate line for federally related transactions: except as 54.1-2010 provides, a person not licensed under the appraiser chapter may not perform an appraisal in connection with one. The supervised-assistant rule in subsection C applies notwithstanding subsection B.
The appraiser answers to a different board from the agents in the same sale. Brokerage arrangements such as designated agency are set by the Code's brokerage chapter, with the Real Estate Board's regulations fixing when their written consents are due, while the appraiser's license comes from the Real Estate Appraiser Board.
Developed under the Uniform Standards of Professional Appraisal Practice
The Appraiser Board's regulations tie every appraisal a Virginia licensee develops to one set of standards, known as USPAP.
In developing a real property appraisal, all licensees must comply with the provisions of the Uniform Standards of Professional Appraisal Practice.
18VAC130-20, Real Estate Appraiser Board regulations
That is the practical difference a reader can hold onto. An appraisal is not simply a well-informed number; it is work developed under standards the Appraiser Board requires of its licensees. A real estate licensee's valuation may not borrow the name or stand in for an appraisal, a line drawn in detail in whether your valuation is an appraisal.
Where a buyer's lender brings an appraisal into the deal
In a sale, an appraisal can come in through the buyer's lender once there is a contract. The Consumer Financial Protection Bureau describes an appraisal as a written document that shows an opinion of how much a property is worth, and says that when you borrow to buy or refinance a home, your lender may need to get a new appraisal and may require you to pay for it.
Whether a given loan needs one is the lender's call, and the answer is not always yes. When the lender's appraised value lands under the contract price, the difference has a name, the appraisal gap, and what happens next is taken up in what happens if the buyer's appraisal comes in low.
How a detached building on a house lot figures into the price is its own question, covered in whether a shop or barn adds to a home's price.
Weighing your price before a buyer's lender orders an appraisal?
Ask Lowell for an opinion of value first. It is not an appraisal, but it puts the reasoning behind a price in your hands before any appraiser walks the property. No cost, no obligation.
Got it. Thank you.
We'll be in touch shortly with an honest read.
Questions about this term
Is an appraisal given out loud still an appraisal report?
Yes. Va. Code 54.1-2009 defines an appraisal report as any communication of an appraisal, written or oral. The CFPB describes an appraisal as a written document that shows an opinion of how much a property is worth, and whether a particular lender needs the report in writing is a question for that lender.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- Va. Code 54.1-2009: definitions for Real Estate Appraisers Code of Virginia
- Va. Code 54.1-2010: exemptions from the appraiser chapter Code of Virginia
- Va. Code 54.1-2011: necessity for an appraiser's license Code of Virginia
- 18VAC130-20, Real Estate Appraiser Board Rules and Regulations Real Estate Appraiser Board
- What are appraisals and why do I need to look at them? Consumer Financial Protection Bureau