James R. Park
Director of Research and Technical Issues
www.appraisalfoundation.org
This past August I had
the privilege of traveling to Thailand
at the request of the Keenan Institute
Asia (KIAsia), which is part of the US
Agency for International Development's
Acceler-ating Economic Recovery Program
(AERP). The purpose of the trip was two-fold.
First, establish contact with appraisal
professionals and users of appraisal services
in Thailand and secondly to provide advice
as Thailand recovers from a difficult economic
crisis and considers regulating the appraisal
profession.
The Appraisal Foundation
is the congressionally authorized purveyor
of appraisal standards and qualifications
in the United States. The Foundation accomplishes
its mission through the work of its two
independent boards, The Appraisal Standards
Board (ASB) and the Appraiser Qualifications
Board (AQB). Its congressional authority
was established in 1989 as a result of
a banking crisis in the United States,
commonly referred to as the Savings and
Loan Crisis. This calamity, in which thousands
of American savings and loans failed, exposed
a need for closer scrutiny of the appraisal
profession. It is a widely held theory
that, while appraisers were not to blame
for the bank failures, overvaluations of
commercial property certainly exacerbated
an already difficult situation.
As Thailand recovers from
its own banking crisis it appears that
some form of appraisal regulation is on
the horizon. If Thailand opts for regulation,
numerous issues will confront those writing
the law as well as the practitioners and
users of appraisal services. The purpose
of this article is to focus on one aspect
of appraiser regulation that Thailand certainly
will have to address, education.
Education is the cornerstone
of most professions in the world. Professions
such as accounting, law, and medicine have
relatively well defined educational curricula
that provide users of these services with
a certain degree of confidence that a practicing
attorney, accountant or doctor has taken
classes and passed exams that qualify them
within their profession. Unfortunately,
for the appraisal profession, neither the
profession itself nor most countries have
a well-defined educational path for professional
appraisers.
The appraisal profession
in the United States is engaging in an
ongoing debate about education. No one
questions the fact that meaningful educational
requirements are fundamental to any successful
appraiser regulatory system. However, many
people question and disagree over the level
of education required of appraisers. In
the US, there are three levels of licensure;
• licensed residential appraiser
• certified residential appraiser
• certified general appraiser.
The AQB currently requires
a minimum of 90 classroom hours of education
to qualify for the lowest level of licensure,
licensed residential, and 180 classroom
hours to qualify for the highest credential,
certified general. The AQB minimum criteria
also require appraisers to take at least
28 hours of continuing education every
two years. Many appraisers and users of
appraisal services in the US feel that
these requirements are too low. These criteria
were established at the outset of the licensing
era in the US and were purposely kept somewhat
low due to fears in the marketplace that
a strenuous educational requirement could
lead to a shortage of licensed appraisers
in the country. Now that these requirements
have been in place for several years, it
appears that it may be time to raise the
educational requirements for qualifying
and continuing education.
In 2001, the AQB will be taking the first steps toward rewriting the
current qualification and continuing education criteria. Many of the
issues the AQB will consider have direct parallels with issues that Thailand
must also confront.
• How much qualifying
education do appraisers need?
• How much continuing education do appraisers need?
• Who teaches the appraisers?
• Who teaches the teachers?
• Should a college degree be required?
• Will classes for qualifying and continuing education include exams?
• Is the purpose of licensing to get people into the profession or keep
people out?
When the AQB originally
wrote the education criteria, significant
concerns existed in the regulatory community
about possible shortages of appraisers.
Therefore, the educational criteria were
designed to allow the majority of appraisers
to qualify. Now, many appraisers and users
of appraisal services feel that the educational
requirements were (and continue to be)
too low and defeat the initial intent of
licensing.
Thailand is now faced
with the same questions and likely the
same possible answers. Should Thailand
make appraisal education onerous to the
degree that many appraisers are unable
to attain a license? Will appraisers and
regulators fear that this will cause an
undersupply of appraisers? Should Thailand
make the educational requirements easily
attainable so that most appraisers currently
practicing will remain in practice? Who
will determine the criteria, appraisers,
regulators, the public, or a combination
of these groups? These questions may appear
to be rather broad and indeterminate. However,
in order for a regulatory system to work
effectively these questions and others
must be considered at the outset. It will
be up to the Thai people to decide where
they want the appraisal profession to exist.
Do they expect appraisers
to be professionals and therefore undergo
rigorous educational and experience requirements
that are in line with these expectations?
Alternatively, do they expect the appraisal
business to be more of a vocation where
education and experience are less important?
Once the answers to these questions are
satisfied then a meaningful and successful
regulatory system for appraisers can be
established.
As stated earlier, the
AQB will begin the process of re-writing
our criteria next year. I hope that as
we examine some of these fundamental questions
articulated here, appraisers in Thailand
and the US can share thoughts and opinions
on the possible answers for appraisers
in both countries. Although our countries
are literally on opposite sides of the
globe, during my visit to Thailand I was
struck by how similar our appraisal professions
are. I heard many of the same issues discussed,
complaints made, and dreams for the appraisal
profession articulated in Thailand that
I hear on a daily basis in the US. The
Appraisal Foundation looks forward to working
with appraisers in Thailand and sharing
our mutual experiences in order to benefit
appraisers around the world. |
