Real estate appraisers estimate the value of real property.  Under the Washington Certified Real Estate Appraiser Act (Act), the Department of Licensing (DOL) certifies and licenses real estate appraisers.  The Real Estate Appraiser Commission serves as a liaison between appraisers, the public, and the DOL.  The Act prohibits a person from receiving compensation for appraisal services unless certified or licensed by the state.  The Act authorizes four types of credentials issued to real estate appraisers, from highest to lowest credentialing requirements:

• state-licensed real estate appraiser;
• state-certified residential real estate appraiser;
• state-certified general real estate appraiser; and
• state-registered appraiser trainee.

An appraisal is a written statement prepared by a state-licensed or state-certified real estate appraiser that states the appraiser's opinion of the market value of the property.  An appraisal must conform with the Uniform Standards of Professional Appraisal Practice (USPAP).  The USPAP was established in 1989 and is the generally recognized ethical and performance standard for appraisers.  State-licensed and state-certified appraisers must comply with the USPAP when involved in federally-related real estate transactions. 

An evaluation is also an opinion of the market value of the property, but it does not have to be completed by a state-licensed or state-certified appraiser or comply with the USPAP.  An evaluation can be used by lenders in some situations where an appraisal is not required by law.  Per federal regulation, the following types of transactions do not require an appraisal, but require an evaluation:

• residential real estate transactions in which the transaction value is $400,000 or less;
• certain renewals, refinances, or other transactions involving extensions of credit; 
• real estate-secured business loans with a transaction value of $1 million or less when the sale of, or rental income derived from, the real estate is not the primary source of repayment for the loan; 
• commercial real estate transactions in which the transaction value is $500,000 or less; and
• a transaction that is exempted from the appraisal requirement pursuant to the federal rural residential exemption.

A state-licensed appraiser or state-certified appraiser may perform evaluations for financial institutions.  An appraiser performing evaluations is not engaged in real estate appraisal activity when the appraiser includes a disclaimer, and is therefore not subject to the jurisdiction of the DOL or the Real Estate Appraiser Commission.  The disclaimer must be located immediately above the appraiser's signature and include the following in at least 10-point boldface type:  "I am a state-licensed appraiser or a state-certified appraiser.  This evaluation was not prepared in my capacity as a real estate appraiser and might not comply with the Uniform Standards of Professional Appraisal Practice."

Evaluation is defined as an opinion of the market value of real property or real estate provided to a financial institution in conformance with the interagency appraisal and evaluation guidelines adopted jointly by the federal financial institution's regulatory agencies for use in real estate-related financial transactions that do not require an appraisal.