Appraising MN MLS Listings

In our current market, there is a lot of talk about “appraised value” for various types of real estate. I thought it would be best to first go to an expert who could advise us on the basics of appraising mls listings in Minnesota. Kevin Curtis, The 2007 Agent of the Year for The Minnesota Real Estate Team, has his background in appraising. He has been a licensed appraiser since May of 2001. I asked him to share some thoughts on what it takes to become a real estate appraiser and real estate appraising in general.

He wrote:

“Appraisal 101 – An appraisal is defined as the act or process of estimating value. Sounds easy enough, right?! Well, given that the annual gross billings of the appraisal industry are estimated at $6.5 billion per year, who wouldn’t want a piece of this pie? So what does it take to be an appraiser? Some may just say, “Call Prosource and take a class.” To become a real property appraiser in Minnesota, a person must start by obtaining a trainee license from the Minnesota Department of Commerce. You will be required to complete 75 hours of appraisal education and pass an examination before applying to become a Trainee Real Property Appraiser. Once you are a “Trainee,” you need to work for someone that is willing to train you in the real world versus classroom world. To obtain the next level of licensing, you will need an additional 75 hours of classroom hours and obtain 2000 hours of appraisal experience in no less than 12 months. This translates to 2 or 3 years of very fulltime solid appraisal work to get 2000 hours of experience. Check out this link to the Minnesota Commerce web site to find out more information “

Over the last number of years, appraisers have felt a real “pull” to appraise MN MLS listings for certain values. This most certainly has caused problems for our market. In a refinance situation, overinflating values can obviously hurt sellers (who want to try to sell in a year or two) as well as the banks that may be loaning more money than the home may be worth.

For example, a seller may say to his or her agent, “My home appraised last year for $230,000, so why are you saying that it now is worth only $210,000?”

Market value and appraised value have been two separate numbers over the last few years. And really, this should not be the case. If a homeowner wants to know the value of her home, she should be able to get an appraisal and know that that number, is the approximate number her home would sell at.

Thankfully, in our current market, appraised value and market value are coming closer together (as they should be!)