Federal Oversight of Real Estate Appraisers. 
In 1989 Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which established the Appraisal Subcommittee to monitor:  (1) state and federal certification and licensing of appraisers involved in federally related transactions; and (2) the procedures and activities of the Appraisal Foundation.  The Appraisal Foundation is authorized by Congress to uphold appraisal standards and qualifications.  The FIRREA established under the Appraisal Foundation, two entities:  (1) the Appraiser Qualifications Board, which establishes minimum education, experience, and examination requirements for real property appraisers to obtain state certification; and (2) the Appraisal Standards Board, which is the entity responsible for writing, amending, and interpreting the Uniform Standards of Professional Appraisal Practice (USPAP).  The USPAP is the generally recognized ethical and performance standard for appraisers that was established under the FIRREA.  State-licensed and state-certified appraisers must comply with the USPAP when involved in federally related real estate transactions.

State Oversight of Real Estate Appraisers.

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 appraiser:

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

Evaluations.

An evaluation is an opinion of the market value of the property similar to an appraisal, 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 at least an evaluation:

• residential real estate transactions of $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 of $500,000 or less; and
• a transaction exempted from the appraisal requirement pursuant to the federal rural residential exemption.

The DOL must adopt rules to require appraisers and appraiser trainees to adhere to:

• the nondiscrimination and fair housing provisions as provided in the ethics rule in accordance with the Appraisal Standards Board and the USPAP; and
• all education criteria in accordance with the Appraiser Qualifications Board as provided in the Real Property Appraiser Qualifications Criteria.

Once the DOL adopts the aforementioned rules, 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 requiring compliance with the USPAP when the appraiser includes a disclaimer.  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."  A state-licensed appraiser or state-certified appraiser engaging in an evaluation remains under the regulatory authority of DOL.

Evaluation is defined as an estimate 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.