Certified Residential vs Certified General

[J Grant]

The way I see it, professions that have one license, such as MD or Law, where specialists go to competence and more experience, have much tougher entry bars to the profession than appraisal does. College and then law school and med school and then residencies or resumes etc.

Professions that are more niche skill-oriented, like a pilot license or a truck driver license, can have different levels due to safety concerns. Other trades and professions have one license but perhaps a designation or standards or reputation to do higher-end $ and complex work.

I think from day one if appraisals had just one umbrella license including a certain level of commercial, it would have helped- then higher $ or more complex on both commercial or the residential side would need a certain number of demo reports to qualify ( as an example) SRA and MAI were and is available as a qualification as well. The problem is that while Commercial upheld its standards and kept college as a barrier, residential kept dropping the barrier to entry - college, then jr college, now just HS with a small # of college elective credits. The result of that, combined with limitations on the types or property one can appraise with a res license, combined with the leverage AMC's have on fees and conditions, has made the res end into a lower-paid and less respected segment of practice, which is unfortunate.

Licenses exist to protect the public with a means to file complaints and a punitive system in place for non-compliance or fraud as well as mandatory continuing ed to uphold standards. Other than that, a license alone does not convey competency.

 

[Artemis Fowl]

On the assessing side, in my state, we have 4 levels of licensure. 1st level allows you to touch stuff and answer the phone. 2nd & 3rd allow for signing a roll up to certain value thresholds. 4th allows you to handle anything. The classes have some issues, like all of them do, and could benefit from more practical problem solving but generally teach the techniques required to be competent. Some can spend an entire career without valuing a single property if they specialize more on the administrative side of things. My supervisor specializes in the numerous and complicated abatement programs and works closely with the political and planning side of things. He rarely values stuff but knows how to do it. I'm more value oriented and we make for a good team.

Nothing replaces experience and mentorship IMO. My other boss is pretty brilliant with the valuation stuff and I would not have ever come close to what I do now without his mentorship. Like George said...solo learning on the job is not the best path...especially when it affects people's taxes. Most start out with very minimal valuation experience. Not all communities are the same but my company will increase those responsibilities as that experience and mentorship is gained which generally tracks with the license levels. I just started the level 4 master program after 11 years here. Year-long class with a MAI type demo report. It's intense and unforgiving. I am one of the few in my class that's actually been valuing commercial properties regularly and I shudder to think of how some of them are going to struggle with this.

I guess the point of all this is that our education should encourage more of mentorship path. Things don't seem to be heading in that direction tho. From listening to pre-licensure folks talk about it...it's the way it used to be.

 

[George Hatch]

CRs working beyond their scope of practice don't bother me from a business perspective. They can't compete with me for what I do outside of the 1-4 markets just like I'm not competing with them for what they do. I just dislike having to explain to a client or borrower why the previous appraisal report they're holding doesn't have a reasonable value conclusion. I hate to see people pay for more than one appraisal.

Here's a recent example which involves a matter of technical competency: I was appraising a 2ac parcel in one of the suburban towns where the property owner has been in process on an 8un SFR subdivision. The appraisal report was for a construction lender. In this region and in that situation the proposed map doesn't add value until it approaches the RTI (Ready to Issue) status just prior to being recorded. The "as is" condition amounts to a splittable lot in unmapped condition, with the most similar comps being other parcels with split potential and some of the preliminaries completed. That's what I did and then I threw in a couple sales where the map had been recorded but none of the physical improvements (street, sidewalks, utility mains and laterals, etc) existed. So called "paper map" status, which is obviously worth more that unmapped status. So those sales demonstrated the MV of the assemblage "subject to" recording the subdivision map.

Prior to the recording of the map, none of those parcels actually exist as an individual property interest. Their "as is" will be as a fraction of the larger original parcel.

Now the QE for the CGs actually includes modules on appraising subdivision development including selling off the individual units over time to individual buyers. Part of that training is in making the distinction between the MV of the assemblage in a single transaction to a single buyer, and the emphasis that the MV of that project IS NOT the aggregate sum of the individual values (SP x 8 in this case). Bulk sales will generally (but not always) include an additional discount.

Anyway, this borrower wanted to hassle me after the fact over my valuation of the unmapped condition, telling me the value was actually sales price for the individual lot x 8 lots. They got pretty mad at me over it. One reason they were mad was because a CR had previously done exactly that - performed 8 individual SFR lot appraisals and tied them together with a simple aggregate value . "As Is" value, no less.

As I say, the property interest of 8 individual parcels does not exist and won't exist until the map is recorded. Secondly, the MV of the project is its value to a single buyer in a single transaction. We might call that the Bulk Sale value but really it's just the MV of the assemblage. Thirdly, the reason the CR didn't know any of this is because they never took the QE courses the CGs take which address this and they had no experience with the lenders who make such loans or the requirements those lenders have to meet on their end. No QE in such and no experience in such.

So yeah, the CRs scope of practice includes valuing individual lots good for up to 4 units but it doesn't include subdivision analysis or parcels that are good for more than 4 lots. Now we can say those limitations are arbitrary like the difference between 4un properties that qualify for 1-4un financing programs vs 5+un properties which are not qualified for 1-4 financing programs and where the appraiser has to understand how cap rates work. But the point remains that these particular limitations exist for a reason; they're not accidental or arbitrary in origin.

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BTW, the sales I had of mapped assemblages starkly demonstrated that the CRs approach of SP*8 = MV would have been wrong even if those individual lots did exist as such. He literally missed the MV of the mapped condition of the project by over 25%. Partly because he didn't take into account the cost of having to add project streets and other improvements, and partly because he didn't know to consider the discounting factor for bulk sale conditions. These are not minor errors.

And his failures caused problems for me because I had to explain to that borrower why none of this was discretionary or simply a matter of opinion on my part. The data speaks, which apparently the CR didn't see because they didn't look for those assemblage transactions. And my other problem was because I had to explain why they had wasted money on an appraisal that was unusable by anyone for any reason.

Now don't get me wrong. I'm not saying this CR is a dummy or that they're incompetent at what they are licensed to do. I'm just saying that they were never required to accrue the same QE and experience that the CG licensees are required to take. Mostly because they didn't need the additional in order to do what they do.

 

[George Hatch]

The last thing I'll mention here is to reiterate the purpose of licensing criteria. Part of the reason we have to show our CE and passing the test is to acquire the competency, but another part of the reason is to *demonstrate* to the users that we have been exposed to the material and the experience and have passed the test. It's not enough to just know; we also have to demonstrate that we know. That way the "nobody ever told me" doesn't exist. If someone passed the course but did differently then ignorance isn't the reason they acted differently from how they had been instructed.

The same applies to the difference between an SL/CR vs unlicensed "valuer". Even if the unlicensed valuer is competent in an assignment that doesn't do many of these users any good when it comes to an assignment where the user needs to engage a licensee because the unlicensed cannot demonstrate their qualifications to the satisfaction of the users. It's true that these clients and users don't have to justify using a non-licensee for certain assignments but even now that isn't the majority of assignments.

 

[George Hatch]

Licenses exist to protect the public with a means to file complaints and a punitive system in place for non-compliance or fraud as well as mandatory continuing ed to uphold standards. Other than that, a license alone does not convey competency.

The way I would frame that is that licensing demonstrates prior exposure to the material but does not guarantee performance.

Nobody would say an MAI lacks the education and experience to competently appraise the majority of property types. They've been trained to specs and have demonstrated competency WRT those specs. But merely holding the designation isn't a warranty of actual performance. The reason everyone has an MAI story (and a CG story) is attributable to the perception that one or more of them didn't work to their competency in a particular assignment. Not that they didn't know how to appraise the property.

 

[Gobears81]

One of the worst appraisals that I've seen lately was a proposed commercial property done on a form by a residential appraiser. He appraised it to the nearest dollar of what the project costs were and it was nonsensical from start to finish. Charged $4,000, but might as well have charged $40.

There are plenty of CGs that stay in their lane and are entirely competent in what they appraise or know the local market like the back of their hand. Quite a few MAIs like to come down from Chicago and as skilled as they might be in fundamentals, there is often a lack of nuance of the individual locations. There is garbage work out there from all license types.

 

[Terrel L. Shields]

The HBU of all residential properties in Sevier County (Pigeon Forge, Gatlinburg, etc) is likely AirBNB

Really? "As is" or do you assume all of them are full at all times? If all houses are STR, then there are no residents for miles around, no economy other than out of area STR landlords, and as a consequence, occupancy will be well below a cheap hotel in a town that lost its racetrack.

 

[Fernando]

Nobody in our state was grandfathered. I know a veteran commercial appraiser who was actually doing the work, and he failed the state exam 3 times.

Technically they wouldn't just grandfathered in.
Back then some old geezards couldn't get their college transcripts back in prehistoric times so the experience was given a pass. Honor system that they had the experience.
Just had to take the test.

 

[George Hatch]

The failure rate on the Income Cap courses are in excess of 50%, and the failure rate on the CG courses (AFTER they pass the income courses) is also in excess of 50%. Some of those applicants are upgrades, not raw recruits to appraising.

Do the math: 100 aspiring CGs take the income cap course; 55 of them fail. Of the 45 who survive, some of them (maybe most of them) won't ever accrue the experience. Lets say 25 of them do rack up the experience. 12 of them will fail the test. 13 out of the original 100 who started the income cap course.

I think the numbers on the CR are even lower due to the experience requirements. My point being that not everyone who aspires to either of those licenses has what it takes to clear the course requirements, the experience requirements or the test that comes after being instructed on the material and exposed to the experience. .

 

[Dale Floyd]

Really? "As is" or do you assume all of them are full at all times? If all houses are STR, then there are no residents for miles around, no economy other than out of area STR landlords, and as a consequence, occupancy will be well below a cheap hotel in a town that lost its racetrack.

Average Airbnb Revenue in Pigeon Forge​

A typical short-term rental in Pigeon Forge is booked for 234 nights per year, generating a medium Airbnb occupancy rate of 64% and an average daily rate (ADR) of $227 . In September, 2024 - August, 2025, the average annual short-term rental revenue in Pigeon Forge was $54K . As of 3rd October, 2025, there are 1,754 active Airbnb listings in Pigeon Forge.

…….and that’s only AirBNB…..

One of the mobile home parks just vacated all their monthly rental tenants, turning them into STR. I’m glad that’s not in my coverage area. There’s not enough CGs to appraise all the STRs out there.