Assessors and Appraisers

Until the 1930s, most assessors and appraisers were lay-people using unscientific, informal methods to estimate the value of property. People who were not trained specifically in the field performed appraisals as a part-time adjunct to a general real estate business. As a result, the "boom" period of the 1920s saw many abuses of appraisals, such as approving loans in excess of the property's real value based on inaccurate estimates. The events of the Great Depression in the 1930s further highlighted the need for professionalism in appraising. Real estate owners defaulted on their mortgages, real estate bond issues stopped paying interest, and real estate corporations went into receivership.

In 1922 the National Association of Real Estate Boards (NAREB) defined specializations of its real estate functions to encourage professionalism in the industry. They did not organize an independent appraisal division, however, because there were few appraisers and the industry at large did not appreciate the importance of sound appraisals.

The NAREB recognized appraising as a significant branch of specialization in 1928 but did not formulate clearly defined appraisal standards and appraisal treatises until the 1930s.

Since then, appraising has emerged as a complex profession offering many responsibilities and opportunities. With the advent of computers, assessing and appraising have become more scientific. Today, assessments are based on a combination of economic and statistical analysis and common sense.

People need reliable appraisals when selling, mortgaging, taxing, insuring, or developing real estate. Buyers and sellers of property want to know the property's market value as a guide in their negotiations and may need economic feasibility studies or advice about other investment considerations for a proposed or existing development. Mortgage lenders require appraisals before issuing loans, and insurance companies often need an estimate of value before underwriting a property.