What is a real estate evaluation?
For purposes of these questions and answers, “evaluation” means an “evaluation of the value of real estate serving as collateral for a loan made by a federally regulated financial institution or to any evaluation of the value of the assets of a trust held by the institution; provided, that:
(A) The applicable federal regulator does not require an appraisal by a state-licensed or state-certified appraiser for the loan or trust;
(B) The evaluation is used solely by the financial institutions in their records to document the collateral or asset value;
(C) The evaluation shall be labeled on its face “this is not an appraisal”; and
(D) Individuals performing these evaluations may be compensated for their services.” Tenn. Code Ann. § 62-39-104(d)
Interagency Appraisal and Evaluation Guidelines - https://www.fdic.gov/regulations/laws/rules/5000-4800.html
Are evaluations regulated by the Tennessee Real Estate Appraiser Commission?
As long as the evaluation meets the requirements set forth in T.C.A. § 62-39-104(d), it is exempt from regulation. If it does not meet all requirements in T.C.A. § 62-39-104(d) and otherwise meets the definition of an appraisal, it is an appraisal and must follow all statutes and rules.
As a Tennessee licensed or certified appraiser, can I perform an evaluation?
Yes.
Does an evaluation, performed by a licensed or certified appraiser, have to meet USPAP requirements?
No, as long as the evaluation meets the requirements set forth in T.C.A. § 62-39-104(d). If the evaluation does not meet those requirements and otherwise meets the definition of an appraisal, it is an appraisal and must follow USPAP pursuant to Tenn. Comp. R. & Regs § 1255-05-.01(2).
Are there specific guidelines set forth by the Tennessee Real Estate Appraiser Commission, as to what must be included in an evaluation?
No, because evaluations are not regulated by the Commission there are no specific guidelines set forth or enforced by the Commission. Evaluation guidelines are set forth by the Interagency Appraisal and Evaluation Guidelines (IAEG). IAEG guidelines can be found at https://www.fdic.gov/regulations/laws/rules/5000-4800.html.
Does placing a Tennessee appraiser license number on an evaluation make it an appraisal (assuming the report meets the evaluation requirements set forth in T.C.A. § 62-39-104(d))?
No. An appraiser is permitted to place their license number on the evaluation.
Does using a professional designation on an evaluation make it an appraisal (assuming the report meets the evaluation requirements set forth in T.C.A. § 62-39-104(d))?
No. An appraiser is permitted to place their professional designation on the evaluation.
Does attaching your qualifications to an evaluation make it an appraisal (assuming the report meets the evaluation requirements set forth in T.C.A. § 62-39-104(d))?
No.
If an exhibit in an evaluation has the word “appraisal” on it and the balance of the report meets the evaluation requirements set forth in T.C.A. § 62-39-104(d), does it become an appraisal?
No.
Can an appraiser perform an evaluation for another use or user that is not a part of a Federal Related Transaction (FRT)?
No. The definition of an evaluation requires that the evaluation be of the value of real estate serving as collateral for a loan made by a federally regulated financial institution or to any evaluation of the value of the assets of a trust held by the institution.
Can I include a certification with an evaluation that is required by a professional organization of which I am a member?
Yes. As long as the requirements are met for the report to be considered as an evaluation and a person not registered as an appraiser does not represent themselves as so registered.