RICS has recently published Practical considerations for RICS valuers operating in the USA.
This practice information offers an overview of the measures that chartered valuation surveyors relocating to the US from other parts of the world need to take to provide real-estate valuations there.
As the author of the document, I collaborated with a working group comprising US-based members with expertise of national and global valuation standards to summarise the practical considerations and differences that RICS members should be aware of when undertaking work there.
Real-estate valuations in the US are governed by individual states, who license those carrying out these valuations.
The practice information outlines the measures valuers must take to obtain such a licence and become certified, and also sets out the education and experience requirements for the four different licence categories: trainee appraiser, licensed residential appraiser, certified residential appraiser and certified general appraiser.
In the US, both licensed and certified appraisers can conduct real estate appraisals, but there are key differences between the two.
- Qualifications: to become certified, appraisers generally need more education, experience and must pass a more rigorous exam compared to becoming licensed. This translates to a higher level of expertise.
- Scope of practice: licensed appraisers can handle simpler appraisals, often limited to residential properties with a certain value threshold. Certified appraisers, often holding a certified residential or certified general designation, can handle more complex valuations, including high-value properties and various property types.
- Federal involvement: for appraisals tied to federally backed loans, lenders may require a certified appraiser. Licensed appraisers may be restricted in handling such appraisals.
Practitioners must meet dedicated US standards
Members should remember they still need to operate in accordance with RICS Valuation – Global Standards (Red Book Global Standards) when working outside their country of origin.
However, there are additional practical and reporting requirements when operating in the US. These ensure compliance with the Uniform Standards of Professional Appraisal Practice (USPAP), which is, for instance, required for state-licensed and state-certified appraisers involved in federally related real-estate transactions.
USPAP are the recognised ethical and performance standards for appraisers in the US, the equivalent of the valuation profession in the UK, and are implemented and overseen by the Appraisal Foundation.
They aim to promote and maintain public trust in appraisal practice by establishing requirements for the profession and contain standards for all types of service, including real estate, personal property, business and mass appraisal.
Practical considerations for RICS valuers operating in the USA therefore provides a high-level comparison of some of the differences between USPAP and Red Book Global Standards.
As well as detailing the mandatory requirements when providing valuations in the US, the document also provides practical information on other issues RICS members working in the country can encounter, such as the conditions for obtaining professional indemnity insurance.
Ultimately, because both standards share the same core valuation principles, valuers already accustomed to providing Red Book Global Standards-compliant appraisals should have no difficulty conforming with the requirements of USPAP.
