THE OFFICE OF REAL ESTATE APPRAISERS

THE OFFICE OF REAL ESTATE APPRAISERS

Background

In 1989, Congress passed the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA),
commonly known as the “Savings and Loan Bailout Bill.” Title XI of FIRREA contains the Real Estate
Appraisal Reform Amendments which require each state to establish a program to license and certify real estate
appraisers who perform appraisals for federally related transactions. Title XI additionally requires states to
adhere to real estate appraiser qualifications criteria set by the Appraiser Qualifications Board (AQB) of The
Appraisal Foundation.

Office of Real Estate Appraisers

In response to FIRREA, in 1990 the California Legislature enacted the Real Estate Appraisers’ Licensing and
Certification Law (Business and Professions Code Section 11300, et seq.) This law created the Office of Real
Estate Appraisers (OREA), which was organized in early 1991. OREA regulates real estate appraisers by
issuing licenses and investigating complaints of illegal or unethical activity by licensed appraisers.

Real Estate Appraiser Licenses

There are four levels of licensing for real estate appraisers in California. Listed below are the requirements for
each of the four levels.

1. Certified General Real Estate Appraiser — Certified general appraisers may appraise any type of real
property.

Education — At least 300 hours of appraisal related education covering these specific required core
curriculum modules which are required by AQB:

Basic Appraisal Principles 30 hrs

Basic Appraisal Procedures 30 hrs

The 15-Hour National USPAP Course or its Equivalent 15 hrs

General Appraiser Market Analysis and Highest and Best Use 30 hrs

Statistics, Modeling and Finance 15 hrs

General Appraiser Sales Comparison Approach 30 hrs

General Appraiser Site Valuation and Cost Approach 30 hrs

General Appraiser Income Approach 60 hrs

General Appraiser Report Writing and Case Studies 30 hrs

Appraisal Subject Matter Electives 30 hrs

(May include hours over minimum shown above in other modules)

and

a Bachelors Degree from a Regionally Accredited College or University. In lieu of the Bachelors Degree,
an applicant can complete 30 college semester credits in courses covering the following specific subject
matters:

English Composition; Micro Economics; Macro Economics; Finance; Algebra, Geometry or higher
mathematics; Statistics; Introduction to Computers; and Business or Real Estate Law; and two elective
courses in accounting, geography, ag-economics, business management, or real estate.

Experience — At least 3,000 hours of acceptable appraisal experience, of which at least 1,500 hours must
be in appraising non-residential properties. The experience must have been obtained over a minimum of 30
months. Experience may be obtained in any of the following categories:

• Fee and staff appraisal

• Ad valorem tax appraisal

• Review of an appraisal (400 hours maximum.)

• Appraisal analysis

• Real estate counseling

• Highest and best use analysis

• Feasibility analysis/study

• Setting forth opinions of value of real property for tax purposes

• Assisting in the preparation of appraisals (400 hours maximum.)

• Real estate valuation experience as a real estate lending officer or real estate broker.

Examination — Successful completion of the AQB endorsed Uniform State Certified General Real
Property Appraiser Examination.

2. Certified Residential Real Estate Appraiser — Certified residential appraisers may appraise any one-to-
four unit residential property, and non-residential property with transaction value up to $250,000.

Education — At least 200 hours of appraisal related education covering these specific required core
curriculum modules which are required by AQB:

Basic Appraisal Principles 30 hrs

Basic Appraisal Procedures 30 hrs

The 15-Hour National USPAP Course or its Equivalent 15 hrs

Residential Market Analysis and Highest and Best Use 15 hrs

Residential Appraiser Site Valuation and Cost Approach 15 hrs

Residential Sales Comparison and Income Approaches 30 hrs

Residential Report Writing and Case Studies 15 hrs

Statistics, Modeling and Finance 15 hrs

Advanced Residential Applications and Case Studies 15 hrs

Appraisal Subject Matter Electives 20 hrs

(May include hours over minimum shown above in other modules)

and

an Associate Degree from a Regionally Accredited College. In lieu of the Associate Degree, an applicant
can complete 21 college semester credits in courses covering the following specific subject matters:

English Composition; Principles of Economics (Micro or Macro); Finance; Algebra, Geometry or higher
mathematics; Statistics; Introduction to Computers; and Business or Real Estate Law.

Experience — At least 2,500 hours of acceptable appraisal experience. The experience must have been
obtained over a minimum of 30 months. Experience may be obtained in any of the following categories:

• Fee and staff appraisal

• Ad valorem tax appraisal

• Review of an appraisal (400 hours maximum.)

• Appraisal analysis

• Real estate counseling

• Highest and best use analysis

• Feasibility analysis/study

• Setting forth opinions of value of real property for tax purposes

• Assisting in the preparation of appraisals (400 hours maximum.)

• Real estate valuation experience as a real estate lending officer or real estate broker.

Examination — Successful completion of AQB endorsed Uniform State Certified Residential Real
Property Appraiser Examination.

3. Residential License — Residential licensed appraisers may appraise any non-complex one-to-four unit
residential property with a transaction value up to $1 million, and non-residential property with a
transaction value up to $250,000.)

Education — At least 150 hours of appraisal related education covering these specific required core
curriculum modules which are required by AQB:

Basic Appraisal Principles 30 hrs
Basic Appraisal Procedures 30 hrs
The 15-Hour National USPAP Course or its Equivalent 15 hrs
Residential Market Analysis and Highest and Best Use 15 hrs
Residential Appraiser Site valuation and Cost Approach 15 hrs
Residential Sales Comparison and Income Approaches 30 hrs
Residential Report Writing and Case Studies 15 hrs

Experience — At least 2,000 hours of acceptable appraisal experience. The experience must have been
obtained over a minimum of 12 months. (Note that the holder of a valid California real estate broker license
can qualify with 1,000 hours of acceptable appraisal experience. The Appraisers Qualification Board
(AQB) has determined that a broker obtaining a license in this manner does not meet the minimum
licensing criteria. AQB will identify the licensee on the National Registry as “Not AQB Compliant” until
such time that the licensee has provided OREA with substantiation of having met the minimum
requirement of 2,000 hours of acceptable experience.) Experience may be obtained in any of the following
categories:

• Fee and staff appraisal

• Ad valorem tax appraisal

• Review appraisal

• Appraisal analysis (400 hours maximum.)

• Real estate counseling

• Highest and best use analysis

• Feasibility analysis and study

• Setting forth opinions of value of real property for tax purposes

• Assisting in the preparation of appraisals (400 hours maximum.)

• Real estate valuation experience as a real estate lending officer or real estate broker.

Examination — Successful completion of AQB endorsed Uniform State Residential Licensed Real
Property Appraiser Examination.

4. Trainee License — (Trainee licensed appraisers must work under the technical supervision of a state
Certified Residential or Certified General appraiser. They may assist on any appraisal which falls under the
scope authorized for the supervising appraiser. NOTE: No supervising appraiser may supervise more than
three trainees at any time.)

Education —Same as Residential License

Experience — No experience is required for the Trainee License. To accumulate appraisal experience,
trainees must work under the technical supervision of a state licensed appraiser.

Examination — Successful completion of AQB endorsed Uniform State Residential Licensed Real
Property Appraiser Examination.

Terms of Licenses

Real estate appraiser licenses are valid for two years; however, proof of the required 56 hours of continuing
education is submitted every four years.

Renewal Requirements

All licensed appraisers must complete an average of 14 hours of continuing education per year of the license
term for license renewal, including the following specific continuing education requirements:

USPAP — Each licensee must complete the 7-hour National USPAP Update Course (or its equivalent as
determined by the AQB) every two years, and must submit proof of completion every two years. The course
must be taught by an AQB Certified USPAP Instructor who is a Certified Residential or Certified General
appraiser in good standing.

Laws and Regulations — Each licensee must complete the 4-hour course entitled Federal and State Laws and
Regulations during the four-year cycle, or licensees may certify that they have read and understand all
applicable federal and state laws and regulations. Such certification does not provide a 4-hour “credit” towards
the required hours of continuing education .

Proof of completion of the remaining continuing education courses is required every four years. Applicants for
license renewal must complete a total of 56 hours of continuing education during the four-year cycle .

OREA’s Enforcement Division

The Enforcement Division is OREA’s investigative and enforcement arm. It promotes professionalism in the
industry by providing consumers and businesses with protection against unlawful and fraudulent conduct by
appraisers. This is accomplished through the examination of past conduct of applicants for licensure, the
investigation of complaints and, where appropriate, the initiation of proceedings to deny licenses or impose
disciplinary sanctions. Subject to various administrative safeguards and the review and approval of the Chief
Deputy Director and the Director, the Division may seek to deny, restrict or revoke a license and/or impose a
fine of up to $10,000 for each violation of state law applicable to licensed appraisers.

Additional Information

For additional information, write or call OREA at:

Office of Real Estate Appraisers

1102 Q Street, Suite 4100

Sacramento, CA 95811

(916) 552-9000

Web site address: www.orea.ca.gov