|Services Offered this Issue|
Editor’s Note: The current edition of Working RE is in the mail. OREP insureds enjoy it free!
Big Changes to College Degree, Experience Requirements
By Isaac Peck & Laura Mazzenga, Working RE Magazine
Effective May 1, 2018, the Appraiser Qualifications Board (AQB) adopted revisions to the Real Property Appraiser Qualification Criteria (Criteria) that substantially reduce the requirements to become a Licensed or Certified appraiser. Specifically, the AQB decided to adopt sections one, two, and four of its most recent 4th Exposure Draft, issued November 1, 2017.
After over two years of deliberation and four Exposure Drafts, the hotly debated Bachelor’s degree requirement for the Certified Residential credential has finally been decisively neutralized. The new Criteria allows for several alternative tracks, including a grandfather clause, which will allow candidates to obtain the Certified Residential credential in lieu of earning a Bachelor’s degree. The number of experience hours required for each credential and the timeframes for obtaining that experience have also been reduced.
In lieu of a bachelor’s degree, the AQB will now allow the following alternatives to meet the requirements for the Certified Residential credential:
1. An associate’s degree in business, finance, accounting, economics, or similar programs, or
2. Successful completion of 30 college semester credit hours in specified topics, or
3. Successful completion of College-Level Examination Program (CLEP) exams equivalent to a minimum of 30 semester credit hours in specified subject matter areas; and/or
4. Any combination of #2 and #3 that includes all of the topics identified.
The topics to be covered in the 30 college semester credit hours and/or CLEP tests include English Composition, Micro-Economics, Macro- Economics, Finance, Algebra, Geometry, Statistics, Computer Science, Business or Real Estate Law, and other closely related topics.
In addition to allowing for alternatives to the bachelor’s degree for the Certified Residential credential, the AQB has also completely eliminated all college-level education requirements for the Licensed Residential credential.
In addition to the alternative educational tracks outlined above, the AQB has also included a grandfather clause for Licensed Residential appraisers to receive the Certified Residential credential.
As an alternative to the Bachelor’s Degree requirement, individuals who have held a Licensed Residential credential for a minimum of five years may qualify for a Certified Residential credential by satisfying all of the following:
1. No finally adjudicated disciplinary action affecting the Licensed Residential appraiser’s legal eligibility to engage in appraisal practice within the five years immediately preceding the date of application for a Certified Residential credential;
2. Successful completion of the additional required qualifying education;
3. Successful completion of the required experience;
4. Successful completion of the Certified Residential Real Property Appraiser examination.
(story continues below)
In addition to changing the educational requirements to be an appraiser, the AQB has also decreased the experience hours required (and the timeframes) for the Licensed Residential and Certified Residential credentials. This is in large part due to the enhanced requirements for education and examination. Updated experience requirements are as follows:
•1,000 hours of experience for Licensed Residential (six month minimum)
•1,500 hours of experience for Certified Residential (12 months minimum)
•3,000 hours of experience for the Certified General* (18 months minimum)
*Note: although hours have stayed the same, timeframe has decreased from 30 months.
In explaining why these changes are sensible, the AQB emphasizes the difference between being qualified and competent, writing that the AQB Criteria “must ensure that an individual is qualified to appraise, even though that individual may not necessarily be competent yet. Competency is gained over time based on an appraiser’s practice. Regardless of the amount of experience required to obtain a credential, there will always be assignments appraisers are not competent to perform at the time they initially receive a credential.”
Mark Lewis, Chair of the Appraiser Qualifications Board, said, “The importance of qualified appraisers performing solid valuations on residential and non-residential real property cannot be understated.” He continued, “The Real Property Appraiser Qualification Criteria is a living document that needs to fully reflect ongoing changes in the marketplace. These changes were adopted with the ultimate goal of protecting the public trust.”
What Happens Now
While many trainee Licensed Residential appraisers welcome this move by the AQB, it will ultimately be up to each state to determine if and when it will lower their own requirements for appraisers.
The AQB writes that because states are legally permitted to possess requirements that are greater than, but not less than the AQB Criteria, there will be no future effective date that states must meet to adopt the new AQB Criteria. In essence, states could choose to maintain higher requirements that the AQB has set. The AQB writes that “state appraiser regulatory agencies could then elect to implement the revised Criteria whenever they deem appropriate.”
Appraisers curious about when and if their state will adopt these new changes should contact their state appraisal board.
(story continues below)
The bachelor’s degree requirement for the Certified Residential credential was originally adopted by the AQB on January 1, 2015. However, it didn’t take long for the AQB and the industry to begin debating the merits of such a requirement. By July 2015, the AQB had already written a “concept paper” exploring alternatives to the bachelor’s degree requirement and in early 2016 the first Discussion Draft was published citing a “a perceived shortage of real estate appraisers” as a key reason the industry should evaluate alternatives to a traditional four year degree.
A very passionate debate among appraisers quickly followed. Over the last two years, Working RE has received hundreds of comments on this issue, some in favor and others against the degree requirement. The AQB writes that it received over 1,300 comments on the issue, indicating there has been “an unprecedented level of feedback…and a great divergence of opinion.”
Those appraisers in favor of alternatives to the bachelor’s degree requirement argued that it unfairly penalized Licensed appraisers from advancing in their careers, while those who argued against the alternative said that lowering the requirements to be an appraiser waters down the profession and devalues the important work that appraisers do. (See Training the Next Generation and Dispelling Myth of Appraisal Shortage.)
While the AQB writes that it has long considered a Bachelor’s Degree to be appropriate for the Certified Residential credential, it also “recognizes that shifts occur in the marketplace for appraisal services” and that the public trust can be served “without requiring college-level education for the Licensed Residential credential, and by allowing alternatives to the Bachelor’s Degree requirement for the Certified Residential credential.”
> CE Online – 7 Hours (approved in 40 states)
How To Support and Prove Your Adjustments
Presented by: Richard Hagar, SRA
Must-know business practices for all appraisers working today. Ensure proper support for your adjustments. Making defensible adjustments is the first step in becoming a “Tier One” appraiser, who earns more, enjoys the best assignments and suffers fewer snags and callbacks. Up your game, avoid time-consuming callbacks and earn approved CE today! Sign Up Now! $119 (7 Hrs)
OREP Insured’s Price: $99
About the Authors
Isaac Peck is the Editor of Working RE magazine and the Director of Marketing at OREP, a leading provider of E&O insurance for home inspectors, appraisers, and other real estate professionals in all 50 states and D.C. He received his master’s degree in accounting at San Diego State University. He can be contacted firstname.lastname@example.org. Laura Mazzenga is the new Marketing and Operations Coordinator at OREP, and has a bachelor’s degree in journalism from Indiana University of Pennsylvania. She can be contacted at email@example.com.
Send your story submission/idea to the Editor: firstname.lastname@example.org