What is an Appraisal?
The Uniform Standard of Professional Appraisal Practice (USPAP),
published by the Appraisal Foundation in 2003, defines an
appraisal as “the act or process of developing an opinion
of value; an opinion of value.”
LandSafe Appraisal Services orders market value appraisal
reports on residential properties in order to assist underwriters
in the lending process. The reports contain a detailed description
of the property being appraised and provide the reader with
an estimated market value (what the property is worth). The
appraised value is determined by comparing the property with
other houses that have recently sold in the area. Comparisons
are made based on property size and amenities, and adjustments
are made as necessary to obtain a market value estimate.
Appraisals are used by mortgage lenders to ensure that the
property value is adequate to support the requested loan.
The property may be required to be worth more than the loan
amount depending upon the lender's own criteria. Typically,
the property value will be required to exceed the loan amount
by 5% - 20%, depending upon the type of loan. The amount by
which the property value exceeds the loan amount is called
the amount of equity. The lower the equity, the higher the
lender's risk in the event of foreclosure or when the property
must be taken back by the lender due to buyer default on payments.
The appraisal not only serves to provide an estimate of value
for the lender; but, depending on the type of appraisal report
being completed, may provide information regarding the property
condition and other physical features, such as size, location,
and amenities. The home loan is graded by the amount of risk,
or exposure, that exists to the lender. Generally, the interest
rate charged will mirror the amount of perceived risk that
the lender anticipates.
Once a home loan is made, it can be sold as part of a package
to the "Secondary Market." This replaces the originating lender's
capital, or money loaned, so it can be loaned again. The appraisal
is a permanent part of the loan package, which serves to justify
the anticipated risk and relative value to the future owners
of the loan. Home loans are sometimes sold more than once.
Each time the loan is sold, the appraisal is part of the documentation
that is reviewed to determine the loan risk and value.
The lending industry consists of many different players,
each having different requirements for loan origination. Appraisal
products therefore differ in order to conform to the requirements
of any given lender, or loan, and these differences are typically
in the type of property inspection and the format of the appraisal
report.
What it Takes To Become a LandSafe Appraiser 
To become a member of the LandSafe network, an appraiser
must meet the following minimum requirements:
Level I Approval – Assignments may be completed
by Level I appraisers on single-family and condominium properties.
The applicant must be a full-time residential real estate
appraiser with a minimum of two (2) years of residential appraisal
experience.
Level II Approval – Assignments may be completed
by Level II appraisers on single-family, multi-family, cooperative
and condominium properties. The applicant must be a full-time
residential real estate appraiser with a minimum of three
(3) years of residential appraisal experience. This level
of approval requires residential or general certification.
Applicants will be approved based on their level of licensing
or certification attained, the responses of the listed references,
their demonstrated level of professional experience, the need
for additional appraiser coverage in the marketplace, and
their acceptance of the policies, procedures and guidelines
of LandSafe Appraisal Services, Inc.
Appraisers wanting to learn more about joining LandSafe's
team of appraisers, please call the Appraiser Hotline at 1-800-924-3633
or send an e-mail to appraisal@landsafe.com
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