CHICAGO -- Two major real estate appraisal organizations have agreed to merge starting Jan. 1.
Last weekend, 76 percent of the members of the American Institute of Real Estate Appraisers, once an affiliate of the National Association of Realtors, voted to merge with the Society of Real Estate Appraisers. Eighty-five percent of SREA members voted in favor of a merger last January. Three previous attempts by the two groups to merge had failed.
A. Scruggs Love, president of the Chicago-based AIREA, said confusion over the numerous designations used to identify real estate appraisers will be reduced and the quality of home appraisals will improve as a result of the merger.
"There have been so many appraiser designations issued that it's caused a lot of confusion for home buyers and for lenders who need to get professionally prepared real estate appraisals," he said. He noted that some of these titles have been issued by "paper mills without any professional requirements."
AIREA now uses two designations and the SREA uses three designations. Only two designations, one for residential property and one for commercial property, will be used by the new organization, the Appraisal Institute, said Love, a San Antonio appraiser. He said the merger will create a strong voice that will ensure the integrity of the appraisal process and a new state appraiser regulatory system mandated by federal law.
Inflated appraisals have been linked by regulators to some of the widespread failures of savings and loan institutions, especially in Texas.
The merger of the AIREA and the SREA, also headquartered in Chicago, will combine the two largest and oldest appraisal groups into the 35,000-member Appraisal Institute when it takes effect, said SREA President Ritch LeGrand, a Sioux City, Iowa, appraiser, who predicted that the great majority of appraisers not now affiliated with any appraisal organization will join the Appraisal Institute.
But he and Love said that there are no plans to attempt to merge with any other appraisal organizations, including the 2,500-member, Scottsdale, Ariz.-based National Association of Real Estate Appraisers.
LeGrand said that with all states required to have a system for certifying appraisers in place by July 1, 1991, there will be an increased need for the educational programs of the AIREA and the SREA that the new organization will continue and expand.
Love noted that the National Association of Realtors, with whom AIREA has been affiliated, has been seeking to delay the federal requirement by at least a full year while AIREA has supported the July 1, 1991, deadline.
"The time has come to create a strong, unified appraisal organization that is not affiliated with the National Association of Realtors," he said. "There will be some issues on which the Appraisal Institute and the NAR will have different opinions."
Love noted that the NAR, which has many Realtor members who also do appraising, has formed a 75-member appraisal committee to provide appraisal industry views to the real estate broker trade organization. But he said it had not been decided whether the NAR would create a new affiliated appraisal group.
The Appraisal Institute will push to make sure that the federal appraiser certification requirement results in good state appraisal laws, he said.
Love said that the two appraisal organizations, under the merger, will "intensify our efforts to assist the Resolution Trust Corp. in the appraisal and disposition" of the thousands of properties the RTC has acquired as it has taken over hundreds of bankrupt savings and loans institutions.
"The RTC wants our involvement," LeGrand said. "We'll spend a lot of time with the RTC, I am sure."
With the merger, the AIREA staff will leave its offices in NAR'S Chicago headquarters and move into SREA's Chicago offices, where additional space will be leased for the headquarters of the new organization, he said.
SREA also has an office in Washington that will be maintained as an independent legislative office for the Appraisal Institute, he said.
Love and LeGrand end their presidential terms at the two organizations late this year. Their successors, AIREA president-elect Patricia J. Marshall of Mineola, N.Y., and SREA president-elect Richard G. Pietrowitz of Sparta, N.J., will flip a coin to determine who will be the Appraisal Institute's first president. The winner will be succeeded in 1992 by the loser.