The Real Estate Commission continues study the issue of possible regulation of real estate appraisers in North Carolina. As reported in previous issues of the Bulletin, the Commission has met with representatives of leading appraisal organizations, governmental administrators and representatives of the banking and thrift industries for their suggestions regarding the formulation of plans for regulating this currently unregulated industry. Also, the Commission in April held a forum attended by more than 200 persons who were afforded the opportunity to express their opinions regarding this issue.
The Commission is now in the process of compiling a list of persons engaged in real estate appraising in North Carolina and identifying those appraisers who hold real estate (broker or salesman) licenses. Based upon preliminary estimates, it appears that the list will contain approximately 2,000 names and addresses, of which 90% are licensed real estate agents. In addition to projecting the number of persons who might be affected by any appraiser regulation (which is necessary in order to estimate staffing needs and the amount of any fees which must be charged to persons applying for and renewing appraiser licenses or certificates), the listing will also enable the Commission to survey and communicate with those persons who would be most affected by any appraiser regulation.
During the past year, the Commission has considered two different approaches to appraiser regulation: "voluntary certification'' where persons who satisfy prescribed,, educational, experience and examination qualifications would be permitted to use the title ''certified appraiser" or ''certified appraisal" in connection with their appraisals; and "mandatory licensing" requiring persons to qualify for an "appraiser license" in order to perform real estate appraisals. The Commission has expressed serious concern over the effectiveness of voluntary certification because it would not enable the Commission to prevent persons who perform incompetent or fraudulent appraisals from continuing to appraise real estate; i.e., the Commission could only revoke the appraiser's privilege of using the term ''certified.'' On the other hand, certain appraisal organizations have expressed a desire for a state-regulated system for identifying to the public those appraisers who possess superior appraisal education and experience and which would not result in the wholesale "grandfathering" of less experienced and less knowledgeable appraisers.
Out of the Commission's efforts and the efforts of other real estate licensing agencies across the country to address and balance these competing interests and concerns, yet another approach to appraiser regulation has emerged which is gaining popularity in both appraisal and legislative circles—the so-called "two tiered" approach. As applied in our state, this bi-level regulatory plan would (1) require all persons who appraise real estate to be licensed as either real estate brokers or salesmen; and (2) establish a voluntary certification program for those licensed real estate brokers and salesmen who wish to further their real estate education.
The Commission has not yet solved nor even contemplated all of the problems which would be involved in integrating appraiser licensing requirements with the current license law and rules; for example, should salesmen who are state-certified appraisers be supervised by Brokers-ln-Charge who are not certified? And the Commission anticipates that other changes in the Real Estate License Law and Rules may be necessary or, at least desirable, if this two-tiered approach is proposed; for example, an increase in the amount of pre-license education required for broker and salesman licenses to accommodate additional appraisal instruction, and a requirement that at least one member of the Real Estate Commission be an experienced appraiser.
However, the Commission does feel that this new approach to appraiser regulation deserves serious consideration, and it will, therefore, receive the Commission's special attention in the months preceding the 1989 Session of the North Carolina General Assembly.
Stay tuned to your Bulletin for further developments.