GREC REnews, Vol. 10, Issue 9 (Sept. 2014)

September 2014 Volume 10 Issue 9

GREC RENews Monthly Newsletter
of the Georgia Real Estate Commission

2014 Calendar
UGREC Brokerage Course & Trust Accounts Class DatesUH: December 3-4, 2014
GAMLS www.GeorgiaRealE stateSchool.com
Common Violations Class DatesU: October 9, 2014
Blairsville, GA 706-781-3030 October 21, 2014 Brunswick, GA 912-264-2915
GREC Annual School Meeting DateU: November 21, 2014
Athens, GA
Link to the Georgia Real
Estate License Law,
Rules, and Regulations
Link to GREC Disciplinary Sanctions View Current Suspensions and Revocations
Click Here

This Issue: Sources for License Law Updates Instructor CE Source Focus on Terminology Proposed Rule Changes The Appraisers Page

P. 1-2 P. 1 P. 2 P. 3 P. 4-5

Sources to Review Recent Updates of the
License Law, Rules, and Regulations
The GREC Online Courses have been updated to contain the recent changes to the Georgia License Law, Rules, and Regulations.
If you have not yet taken, or have already completed the 3 GREC online courses over 1 year ago, you can register again for the GREC online courses and stay current with the License Law, Rules, and Regulations. A licensee can take the same course again one year after completing the course, either online or in class.
In 2014, significant changes were made to the advertising rules and the requirements for continuing education hours. In addition to the Online Courses, GREC offers several resources to assist the licensee in maintaining his/her license and keeping current with changes in laws and regulations. See page 2 for a list of methods to keep current ...

See Page 3 for Proposed Rules Changes regarding unlicensed support personnel and changes to Appraiser rules....

The Georgia Real Estate Commission Annual
School Meeting is November 21, 2014.
The GREC Annual School Meeting has been approved by the GREC for six (6) hours of continuing education credit for real estate licensees and instructors and seven (7) hours of continuing education credit by the Georgia Real Estate Appraisers Board (GREAB) for appraisal instructors and real estate appraisers. Registration Link
The Annual School meeting will be only one day this year. Instructors should plan to attend the full day to obtain the hours of instructor continuing educat ion. Real Estate Instructors licensed in Georgia must have 24 hours of continuing education credits to renew their instructor license. Hours may be obtained by attending the Annual School meeting each year OR by attending at least two Annual School meetings and completing 12 hours of continuing education approved for Instructors.
A 6-hour Instructor training course will be offered on October 17, 2014 in Auburn, Alabama through the Alabama Real Estate Commission. Georgia Instructors can earn six (6) hours of instructor continuing education by taking this training. Registration for this instructor training is available with the Auburn University Office of Professional and Continuing Education. Instructor Training Registration

Clipart from Microsoft Office

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Comments or Suggestions Click Here.
Updated!
GREC Online Courses
Click Here

GREC RENews September 2014, Volume 10 Issue 9
Sources......continued from page 1
In addition to the monthly issue and the archived issues of The GREC RENewsletter, the Georgia Real Estate Commission provides several tools to inform licensees of changes to the License Law, Rules, and Regulations as well as proposed changes. Below is a list of current resources.
Regularly Scheduled Live Classes o UGREC Brokerage Course & Trust Accounts Class Dates o UCommon Violations Class Dates
o Adopted legislative or rule changes affecting real estate licensees are posted on the GREC web site at http://www.grec.state.ga.us/about/readopted.html
Recent Law Updates at http://www.jmre.com/GREC/RecentLawUpdates.pdf The GREC Real Estate School web site www.jmre.com/grec has 5 tabs for quick
reference. See a screen shot below.











Link to the Georgia Real
Estate License Law,
Rules, and Regulations
Link to GREC Disciplinary Sanctions View Current Suspensions and Revocations
Click Here

Focus on Terminology: "Topic of License Law"
Beginning July 1, 2016, in order to renew any real estate license, required continuing education must include 3 hours of material on the "topic of license law", which is further defined as follows:
520-2-.04 Real Estate Courses. (6)(f) Any course developed to qualify as a continuing education course on the topic of license law under Rule 520-1-.05 (1)(e) shall have a minimum of three credit hours and shall contain a review of material that covers all the following areas of license law to wit: (1) The effects on license status by a licensee of prohibited conduct found in O.C.G.A. 43-40-15 (c), (d), (e), (f), (g), (h), (i), (j), (k), and (m); (2) Requirements of a qualifying broker and an affiliated licensee upon transfer of a license from one firm to another under O.C.G.A. 43-40-19 and Rule 520-1-.07 (5); (3) Requirements of a qualifying broker and affiliate licensee concerning trust or escrow accounts under O.C.G.A. 43-40-20 and under Rule 520-1-.08; (4) Unfair trade practices prohibited by O.C.G.A. 43-40-25 (b); (5) Brokerage relationships under Rule 520-1-.06; (6) Management responsibilities of real estate firms under Rule 520-1-.07 (4), (5) and (6); (7) Advertising under O.C.G.A. 43-40-25 (b)(1), (2), (11), (12) and (21) and Rule 520-1-.09; (8) Handling real estate transactions under Rule 520-1-.10; and (9) Licensees acting as principals under Rule 520-1-.11.
Beginning July 1, 2015, a licensee must have 36 hours of continuing education to renew a real estate license.
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Updated!
GREC Online Courses
Click Here
To sign up to
HU
receive the GREC RENewsletter Click Here
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Link to the Georgia Real
Estate License Laws,
Rules, and Regulations

GREC RENews September 2014, Volume 10 Issue 9
Proposed Rule Changes
NOTICE TO REAL ESTATE LICENSEES OF RULE CHANGES
At its August 13, 2014 meeting, The Georgia Real Estate Commission voted to propose changes to the "Management Responsibilities of Real Estate Firms" Rule addressing the use of support personnel. It allows active licensees affiliated with one firm to be support personnel at another firm. You may view this Rules by clicking here:
https://www.grec.state.ga.us/about/reproposed.html
NOTICE TO REAL ESTATE APPRAISERS OF RULE CHANGES
At its September 15, 2014 meeting, The Georgia Real Estate Appraisers Board voted to propose major changes to the "Appraiser Classifications and Their Education, Examination, and Experience Requirements" Rule and the "Courses" rule. These Rules will implement the Real Property Appraiser Qualification Criteria required as of January 1, 2015 as established by the Appraiser Qualifications Board (AQB) of The Appraisal Foundation. You may view these proposed Rules by clicking here:
https://www.grec.state.ga.us/about/apprproposed.html

Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605 Phone 404-656-3916
Clipart from Microsoft Office
Click Here

Links to other recently adopted changes to the Georgia License Law, Rules, and Regulations are shown below:
520-2-.04 Real Estate Courses - Effective September 1, 2014 520-1-.05 Maintaining a License - Effective September 1, 2014

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The Appraisers Page

Georgia Real Estate Appraisers Board

September 2014

Useful Links:

Different Appraisal Types

GREAB Web Site

Appraisal Act

GREAB Disciplinary Sanctions


By: D. Scott Murphy, SRA
One of the most common questions I am asked when I speak to groups or teach a class is what is the difference in a refinance appraisal and a purchase appraisal? Or do you appraise a property differently for an individual that you would for a bank? Or clients will call and request an appraisal be done like we would for a refinance or a purchase. The bottom line is that most appraisals are more alike than you might think. With only a few exceptions, the vast majority of appraisals are to estimate market value of the subject property as of the day the appraiser inspects the property. That is, what would the property sell for on that date? The definition of market value is "the most probable price which a property should bring

in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each

acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in

this definition is the consummation of a sale as of a specified date and the passing of title from seller to

buyer under conditions whereby:

(1) Buyer and seller are typically motivated;

(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;

(3) A reasonable time is allowed for exposure in the open market;

(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable

thereto; and

(5) The price represents the normal consideration for the property sold unaffected by special or creative

financing or sales concessions granted by anyone associated with the sale." (FIRREA - SOURCE: The

provisions of this Part 323 appear at 55 Fed. Reg. 33888, August 20, 1990, effective September 19, 1990,

except as otherwise noted)

Unless the appraiser is asked for another type of value, every appraisal should be based on this common

definition. Examples of other types of value are retrospective the client wants to know the value of the property as of a previous date, this is common in tax appeal work where the value would be January 1st of a

given year. Quick sale or liquidation value the client wants to know what the property would be worth if the

marketing time were to be reduced. Another valuation which often gets confused is the value of a property

for relocation purposes. In a standard relocation appraisal, the appraiser completes an ERC appraisal

report which does not ask the appraiser to arrive at a market value as of the date of inspection but an

anticipated net sales price so many days in the future (typically 90 or 120 days). There are a number of

other specialty valuations which are done based on the agreed scope of the appraisal but these are not

common and certainly are not done for typical mortgage appraisal purposes.

The other question that comes up is why are refinance appraisals always higher than other types of

appraisals? I can understand why this is a common misconception because there may have been some

truth to it in the past. I hate to say it but we saw many appraisers, pressured by lenders and homeowners,

tend to stretch the value when completing a refinance appraisal.

... continued on page 4

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800-633-3583

The Appraisers GREC RENews November 2012, Volume 8 Issue 11 Page

Georgia Real Estate Appraisers Board

September 2014

Useful Links:
GREAB Web Site

Different Appraisal Types
By: D. Scott Murphy, SRA


Appraisal Act

GREAB
Disciplinary
Sanctions


continued from page 4...
This caused many people to be upside down with regards to the relationship between their mortgage balance and true market value. The fact of the matter is that regardless of whether an appraisal is done for a divorce, a refinance, a purchase, prelisting, or any other matter where the objective is to arrive at the current market value the outcome or resulting value should be the same. It does not matter if it is a desktop appraisal, a drive-by appraisal, a full appraisal completed on a standard form or a full blown narrative report, the resulting value should be the same.

Appraisers are licensed and bound by the rules of the state for which the property is located. They are

also governed by a set of national standards called USPAP (Uniform Standards of Professional Practice). There are certain instances when the appraiser can deviate from the USPAP rules but for simplicity the point is all appraisers must follow the same rules and standards. This applies to how the

property is measured to how the comparables are located. It applies to which approaches to value are to be used and when certain approaches can be eliminated. As a very generalized statement, the appraiser goes through the exact same process with every single appraisal assignment and should arrive at the same value regardless of the intended use of the

appraisal. The difference is in the appraisal assignment type. If it is a driveby the fee might be lower because the appraiser does not inspect the interior of the property and does not have to measure the property. That time savings translates to a lower fee. However, the appraiser still researches the

comparables the same way, makes the same adjustments, and arrives at the same value. He has to make certain assumptions about condition, quality, and amenities and relies on public data for physical information such as square footage and room count. The client is aware that a driveby might be less reliable than a full appraisal and the appraiser outlines any assumptions he has made in his report.

If you were to have a prelisting appraisal done one day, a refinance appraisal done the next day and a purchase appraisal done the following day all should arrive at a similar value. The reason I did not say "the same value", is that an appraisal is an estimate of market value. Appraising is not a perfect science.

There is an element of art was well as the fact that the market is not perfect. Homes do not sell for a specified price or X% of the list price. However, these three appraisals should be within a reasonable range which is generally thought to be 5-8%+/- of each other. So while there are a variety of uses for an appraisal and there are a variety of forms and formats the appraisals are presented in, for the most part, the appraiser is striving to report the true market value of the subject property as of the date of the inspection. I am sure I have said this in previous articles, but appraisers need to remember that they do not determine market value they interpret market value. I see

more variance in appraised values on the same property due to appraisers who do not understand this fact and who do not accurately research the market, then and the type of appraisal or the purpose of the appraisal.

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