Section 36.11. Qualifications for certification as residential real estate appraiser

(a) Overview. An applicant for certification as a residential real estate appraiser shall be of good moral character, meet the following education and experience requirements prior to examination, and pass an examination for certification as a residential real estate appraiser. Neither a real estate salesperson’s license nor a real estate broker’s license issued under the Real Estate Licensing and Registration Act (63 P. S. § 455.101—455.902) is a prerequisite to certification as a residential real estate appraiser.

(b) Appraisal classroom hours. Effective January 1, 2008, an applicant shall submit evidence to the Board of having completed 200 classroom hours in the appraisal curriculum set forth in subsection (c)(2). This requirement does not apply to an applicant who submits an otherwise qualifying application before January 1, 2013, that shows evidence of the applicant’s having completed 120 classroom hours of courses related to real estate appraisal, including the 15-hour National USPAP Course or equivalent course approved by the AQB, together with coverage of the topics listed in subsection (c)(1), before January 1, 2008.

(1) Length of classroom hour requirement. Credit toward the classroom hour requirement will only be granted when the length of the course is at least 15 hours, and the applicant successfully completes an examination pertinent to the course. A classroom hour is defined as 50 minutes out of each 60 minute segment.

(2) Providers of appraisal courses. Credit for the classroom hour requirement may be obtained from accredited colleges or universities and community or junior colleges. Subject to Board approval under § 36.31 (relating to provider registration/appraisal courses), credit for the classroom hour requirement may also be obtained from real estate appraisal or real estate related organizations, State or Federal agencies or commissions, proprietary schools and other providers.

(3) Distance education. A distance education course is acceptable to meet the classroom hour requirement if the course is approved by the Board and meets the following conditions:

(i) The course is presented by one of the following:

(A) An accredited (Commission on Colleges or a regional accreditation association) college or university that offers distance education programs in other disciplines.

(B) A course provider that has received approval for course design and delivery mechanism from the IDECC and approval for course content from the Board or from the AQB through its Course Approval Program.

(ii) The applicant successfully completes a written examination proctored by an official approved by the college, university or other course provider.

(iii) The length and content of the course meet the requirements of paragraph (1) and subsection (c), respectively.

(c) Content of appraisal education. The content of an applicant’s appraisal education must be as follows:

(1) An applicant who is subject to the 120-classroom hour requirement in subsection (b) shall demonstrate that the classroom hours included coverage of the following topics, with particular emphasis on the appraisal of one-to-four unit residential properties:

(i) Influences in real estate value.

(A) Physical and environmental.

(B) Economic.

(C) Governmental and legal.

(D) Social.

(ii) Legal considerations in appraisal.

(A) Real estate versus real property.

(B) Real property versus personal property.

(C) Limitations on real estate ownership.

(D) Legal rights and interests.

(E) Forms of property ownership.

(F) Legal descriptions.

(G) Transfer of title.

(iii) Type of values.

(A) Market value or value in exchange.

(B) Price.

(C) Cost.

(D) Investment value.

(E) Value in use.

(F) Assessed value.

(G) Insurable value.

(iv) Economic principles.

(A) Anticipation.

(B) Balance.

(C) Change.

(D) Competition.

(E) Conformity.

(F) Contribution.

(G) Increasing and decreasing returns.

(H) Opportunity cost.

(I) Substitution.

(J) Supply and demand.

(K) Surplus productivity.

(v) Real estate markets and analysis.

(A) Characteristics of real estate markets.

(B) Absorption analysis.

(C) Role of money and capital markets.

(D) Real estate financing.

(vi) Valuation process.

(A) Definition of the problem.

(B) Collection and analysis of data.

(C) Analysis of highest and best use.

(D) Application and limitations of each approach to value.

(E) Reconciliation and final value estimate.

(F) The appraisal report.

(vii) Property description.

(A) Site description.

(B) Improvement description.

(C) Basic construction and design.

(viii) Highest and best use analysis.

(A) Four tests.

(B) Vacant site or as if vacant.

(C) As improved.

(D) Interim use.

(ix) Appraisal math and statistics.

(A) Compound interest concepts.

(B) Statistical concepts used in appraisal.

(x) Sales comparison approach.

(A) Research and selection of comparables.

(B) Elements of comparison.

(C) Adjustment process.

(D) Application of sales comparison approach.

(xi) Site value.

(A) Sales comparison.

(B) Land residual.

(C) Allocation.

(D) Extraction.

(E) Plottage and assemblage.

(xii) Cost approach.

(A) Steps in cost approach.

(B) Application of the cost approach.

(xiii) Income approach.

(A) Gross rent multiplier analysis.

(B) Estimation of income and expenses.

(C) Operating expense ratios.

(D) Direct capitalization.

(xiv) Valuation of partial interests.

(A) Life estates.

(B) Undivided interest in commonly held property

(C) Easements.

(D) Timeshares.

(E) Cooperatives.

(F) Leased fee estate.

(G) Leasehold estate.

(xv) Appraisal standards and ethics.

(xvi) Narrative report writing.

(2) An applicant who is subject to the 200-classroom hour requirement in subsection (b) shall demonstrate that the classroom hours satisfy the following curriculum requirements:

(i) Basic appraisal principles (30 hours).

(A) Real property concepts and characteristics.

(I) Basic real property concepts.

(II) Real property characteristics.

(III) Legal description.

(B) Legal considerations.

(I) Forms of ownership.

(II) Public and private controls.

(III) Real estate contracts.

(IV) Leases.

(C) Influences on real estate.

(I) Governmental.

(II) Economic.

(III) Social.

(IV) Environmental, geographic and physical.

(D) Types of value.

(I) Market value.

(II) Other value types.

(E) Economic principles.

(I) Classical economic principles.

(II) Application and illustrations of the economic principles.

(F) Overview of real estate markets and analysis.

(I) Market fundamentals, characteristics and definitions.

(II) Supply analysis.

(III) Demand analysis.

(IV) Use of market analysis.

(G) Ethics and how they apply in appraisal theory and practice.

(ii) Basic appraisal procedures (30 hours).

(A) Overview of approaches to value.

(B) Valuation procedure.

(I) Defining the problem.

(II) Collecting and selecting the data.

(III) Analyzing.

(IV) Reconciling and final value opinion.

(V) Communicating the appraisal.

(C) Property description.

(I) Geographic characteristics of the land/site.

(II) Geologic characteristics of the land/site.

(III) Location and neighborhood characteristics.

(IV) Land/site considerations for highest and best use.

(V) Improvements—architectural styles and types of construction.

(D) Residential applications.

(iii) National USPAP Course or equivalent (15 hours).

(A) Preamble and ethics rules.

(B) Standard 1.

(C) Standard 2.

(D) Standards 3 to 10.

(E) Statements and advisory opinions.

(iv) Residential market analysis and highest and best use (15 hours).

(A) Residential markets and analysis.

(I) Market fundamentals, characteristics and definitions.

(II) Supply analysis.

(III) Demand analysis.

(IV) Use of market analysis.

(B) Highest and best use.

(I) Test constraints.

(II) Application of highest and best use.

(III) Special considerations.

(IV) Market analysis.

(V) Case studies.

(v) Residential appraiser site valuation and cost approach (15 hours).

(A) Site valuation.

(I) Methods.

(II) Case studies.

(B) Cost approach.

(I) Concepts and definitions.

(II) Replacement/reproduction cost new.

(III) Accrued depreciation.

(IV) Methods of estimating accrued depreciation.

(V) Case studies.

(vi) Residential sales comparison and income approaches (30 hours).

(A) Valuation principles and procedures—sales comparison approach.

(B) Valuation principles and procedures—income approach.

(C) Finance and cash equivalency.

(D) Financial calculator introduction.

(E) Identification, derivation and measurement of adjustments.

(F) Gross rent multipliers.

(G) Partial interests.

(H) Reconciliation.

(I) Case studies and applications.

(vii) Residential report writing and case studies (15 hours).

(A) Writing and reasoning skills.

(B) Common writing problems.

(C) Form reports.

(D) Report options and USPAP compliance.

(E) Case studies.

(viii) Statistics, modeling and finance (15 hours).

(A) Statistics.

(B) Valuation models (AVMs and mass appraisal).

(C) Real estate finance.

(ix) Advanced residential applications and case studies (15 hours).

(A) Complex property, ownership and market conditions.

(B) Deriving and supporting adjustments.

(C) Residential market analysis.

(D) Advanced case studies.

(x) Appraisal subject matter electives (20 hours).

(d) Postsecondary education.

(1) Effective January 1, 2008, an applicant shall submit evidence to the Board of having satisfied one of the following requirements:

(i) Possession of an associate’s degree, or higher, from an accredited college or university.

(ii) Completion of 21 semester credit hours in the following college-level subjects at an accredited college or university:

(A) English composition.

(B) Principles of economics (micro or macro).

(C) Finance.

(D) Algebra, geometry or higher mathematics.

(E) Statistics.

(F) Computer science.

(G) Business or real estate law.

(2) This requirement does not apply to an applicant who submits an otherwise qualifying application before January 1, 2012, that shows evidence of the applicant’s having completed 120 classroom hours of courses related to real estate appraisal, including the 15-hour National USPAP Course or equivalent course approved by the AQB, together with coverage of the topics listed in subsection (c)(1), before January 1, 2008.

(e) Experience.

(1) In addition to meeting the education requirements, an applicant shall submit evidence to the Board of having acquired 2,500 hours of acceptable appraisal experience during a period of at least 24 months. At least 1,250 hours of the experience acquired by an applicant must be in the actual preparation of real estate appraisal reports, which includes physical inspections of the interior and exterior of the subject properties, in accordance with § 36.13 (relating to experience options regarding preparation of appraisal reports). Hours may be treated as cumulative to achieve the necessary 2,500 hours of appraisal experience. Cumulative is defined to mean that experience may be acquired over any time period in excess of 24 months. There is no minimum number of hours which must be acquired in any 12 months. The following will serve as an example:

Year 1	400 Hours
Year 2	800 Hours
Year 3	200 Hours
Year 4	500 Hours
Year 5	600 Hours
Total	2,500 Hours

(2) Effective January 1, 2008, experience must be acquired after January 30, 1989, and must comply with USPAP. Experience acquired after August 2, 1993, will not be accepted unless the applicant has first completed 45 classroom hours of appraisal education, including 15 hours on USPAP. Acceptable categories of appraisal experience include:

(i) Fee and staff appraisals.

(ii) Ad valorem tax appraisals, if the appraiser can demonstrate that the appraiser used techniques to value properties similar to those used by other appraisers and that the appraiser effectively used the appraisal process.

(iii) Review appraisals.

(iv) Appraisal analysis (synonymous with an appraisal).

(v) Real estate counseling, if the counselor can satisfactorily demonstrate that:

(A) The client clearly asked for counseling services.

(B) The client was informed that the counselor’s time would be devoted to counseling services, which are separate from other real estate functions such as appraising, sales management and mortgage lending.

(C) A file memorandum was prepared on each assignment indicating the nature of the assignment, recommendations and disposition.

(D) Compensation for the counseling services was separate from other real estate services rendered.

(vi) Highest and best use analysis.

(vii) Feasibility analysis/study.

(viii) Real estate related experience such as that of an officer of a lending institution, if the experience consists of the actual performance or professional review of real estate appraisals.

(ix) Evaluations under FIRREA in accordance with requirements of Federal financial institution regulatory agencies.

(x) Case studies or practicum courses that are approved by the AQB Course Approval Program.

The provisions of this § 36.11 adopted July 24, 1992, effective July 25, 1992, 22 Pa.B. 3864; amended December 3, 1993, effective December 4, 1993, 23 Pa.B. 5713; amended March 18, 1994, effective upon publication and apply retroactively to January 1, 1994, 24 Pa.B. 1486; amended December 23, 1994, effective December 24, 1994, 24 Pa.B. 6421; amended August 4, 2000, effective August 5, 2000, 30 Pa.B. 3934; amended July 20, 2007, effective July 21, 2007, 37 Pa.B. 3367; amended July 16, 2010, effective July 17, 2010, 40 Pa.B. 3956; amended October 12, 2012, effective October 13, 2012, 42 Pa.B. 6541. Immediately preceding text appears at serial pages (351303) to (351304), (328741) to (328744) and (351305) to (351307).

Notation

Authority

The provisions of this § 36.11 issued under sections 5(2), 6(h) and 10(b) of the Real Estate Appraisers Certification Act (63 P. S. § § 457.5(2), 457.6(h) and 457.10(b)); amended under the Real Estate Appraisers Certification Act (63 P. S. § § 457.1—457.19); and sections 3, 4(d) and 12 of the Assessors Certification Act (63 P. S. § § 458.3, 458.4(d) and 458.12).

Cross References

This section cited in 49 Pa. Code § 36.1 (relating to definitions); 49 Pa. Code § 36.2 (relating to application process); and 49 Pa. Code § 36.13 (relating to experience options for preparation of appraisal reports).