The AI-GRS Designation: Review Theory – General Course in Hawaii

The Hawaii Chapter of the Appraisal Institute is hosting the Review Theory – General course in Honolulu in November 2014!  Register here:

Diamond Head Hawaii

AI-GRS Designation

According to the AI website:

The AI-GRS membership designation is held by appraisers who are experienced in general appraisal review.

To become an AI-GRS member of the Appraisal Institute, an individual must:

  • Have good moral character;
  • Meet standards and ethics requirements;
  • Hold a bachelor’s degree or higher;
  • Meet special education requirements;
  • Pass a comprehensive examination; and
  • Possess experience in general appraisal review that meets specific standards.

These review appraisers possess special experience and knowledge that give them the tools to address the issues unique to general and commercial real property review appraisals. AI-GRS Designated members agree to adhere to the Appraisal Institute code of professional ethics and standards of professional appraisal practice, underscoring their commitment to sound and ethical professional practice.

These review appraisers must stay informed of developments pertaining to review of general and commercial real property appraisals, enabling them to provide review appraisals reflecting the latest in professional practice.

The Review Theory – General class is required coursework for the AI-GRS review designation and will be taught in Honolulu by Joseph C. Magdziarz, MAI, SRA (“Joe Magz”) on November 3, 2014 through November 7, 2014.  More information is here:


The following course description is taken from the AI website:

Review Theory—General is the fundamental review course that all reviewers should have in their education background. It is a required course for individuals pursuing the Appraisal Institute General Review Designation.  Participants embark on an in-depth journey of the seven steps that are outlined through the review process, which is at the core of this course. To be a reviewer, an appraiser must learn how to develop opinions of completeness, accuracy, adequacy, relevance, and reasonableness relative to the work under review. These opinions must be refined through tests of reasonableness in order to develop opinions of appropriateness and credibility. By taking this course, participants may gain invaluable confidence on the fundamentals of review.

Upon completion of the course, participants should be able to:

      • Define review.
      • Distinguish between appraisal and review.
      • Evaluate the necessary knowledge and skills required to complete reviews.
      • Distinguish between trivial and material errors.
      • Identify types of review assignments and the process employed in the reviewer’s scope of work.
      • Recognize regulatory compliance issues for review appraisers
      • Identify the steps necessary to effectively communicate the review.

The Review Theory – General course is required for individuals pursuing the Appraisal Institute General Review Designation (AI-GRS – Appraisal Institute General Review Specialist ). For more information regarding the requirements for the review designation, please click here.

If you are currently designated, click here for more information on the alternative path.

If you are currently a candidate for designation, or wish to become a candidate, click here for the specific designation requirements.

Please read my disclaimer.

AI-GRS and AI-RRS – New Appraisal Institute Review Designations

Many appraisers have been curious about the Appraisal Institute’s plan for its new review designations.  Today we learned the acronyms that will be awarded:

  • AI-GRS (Appraisal Institute – General Review Specialist)
  • AI-RRS (Appraisal Institute – Residential Review Specialist)

AI Logo

The complete story can be found at this link:

Questions or comments?  Please leave them in the comment box below, I would be happy to clarify and/or expand.

Aloha, Chris


Appraisal Institute Launches First New Designations
In More than 20 Years

CHICAGO (Nov 19, 2013) – The nation’s largest professional association of real estate appraisers today announced it will begin issuing two review designations in 2014. The AI-GRS, (Appraisal Institute – General Review Specialist) and AI-RRS (Appraisal Institute – Residential Review Specialist) designations will be the Appraisal Institute’s first new designations in more than 20 years.

“Research shows that individuals who hold professional designations have enhanced earning potential compared to non-designated individuals,” said Appraisal Institute President Richard L. Borges II, MAI, SRA. “This is especially true for individuals in the real estate valuation profession who hold a designation from a recognized professional association such as the Appraisal Institute.”

The Appraisal Institute Board of Directors adopted the review designation program after years of research, responding in part to the growing and important role that appraisal review plays in risk management and mitigation for many clients and users of appraisal services. According to Appraisal Institute research, there were about 12,500 review appraisers in the United States in 2012. As June 30, 2013, the total U.S. appraiser population stood at 82,250 individuals, reflecting all active state-licensed and -certified appraisers.

Beginning in 2014, the Appraisal Institute will offer four new courses to address review designations: Review Theory — Residential; and Review Theory — General are scheduled to be released in first quarter 2014. Review Case Studies — Residential and Review Case Studies — General, are scheduled to premiere in July 2014.

Appraisal Institute Designated members soon will be able to fulfill the requirements for the review designations. Those who are not already AI Designated members can become candidates for the review designations and begin the journey to designation, although some of the requirements that those individuals must fulfill are not yet available.

Learn more about the review designations.

The Appraisal Institute also confers the MAI designation on commercial and general appraisers, and the SRA designation on residential appraisers, who meet certain standards. The Appraisal Institute also recognizes the SRPA, SREA and RM designations conferred by its predecessor organizations.

“The Appraisal Institute confers designated membership on real estate appraisal professionals demonstrating the highest standards of education, expertise and ethics,” Borges said. “In its continuing mission to elevate the real estate valuation profession, the Appraisal Institute specifies rigorous requirements for designated membership regarding experience, education and moral character.”

He added: “Brokers, bankers, lenders, buyers and sellers working with appraisers who are Appraisal Institute designated members can know that Appraisal Institute designated members agree to adhere to the organization’s strict code of professional ethics.”

The Appraisal of Real Estate, 14th Edition – New AI Video

The Appraisal Institute recently published the 14th edition of The Appraisal of Real Estate, the premiere textbook in the real estate valuation field.

The Appraisal of Real Estate - 14th Edition

2013 Appraisal Institute President Rick Borges, MAI, SRA discusses the new book in this video:

Appraisal research and reference are now much more efficient when using the PDF version of the book.  Words and phrases are easily searchable and citations from the text are straightforward.

Thank You Rick!

The Hawaii Chapter of The Appraisal Institute was honored to host Mr. Borges and Fred Grubbe, MBA, CAE (CEO of The Appraisal Institute) in Honolulu earlier this year–it was a wonderful event that will be talked about for years to come.   A shameless photo-op with the 2013 President and yours truly:

Richard L. Borges, II, MAI, SRA and Chris Ponsar, MAI

Richard L. Borges, II, MAI, SRA and Chris Ponsar, MAI, SRA

Sales Comparison, Adjustments, and Paired Sales

This video looks at the sales comparison approach that appraisers use as the primary method to value real estate.

A few appraisal terms that are used in the video are:

Sales Comparison Approach
A comparative approach to value that considers the sales of similar or substitute properties and related market data and establishes a value estimate by processes involving comparison. In general, a property being valued (a subject property) is compared with sales of similar properties that have been transacted in the open market. Listings and offerings may also be considered. A general way of estimating a value indication for personal property or an ownership interest in personal property, using one or more methods that compare the subject to similar properties or to ownership interests in similar properties. This approach to the valuation of personal property is dependent upon the Valuer’s market knowledge and experience as well as recorded data on comparable items.

Mathematical changes made to basic data to facilitate comparison or understanding. When dollar adjustments are used, individual differences between comparables and the subject property are expressed in terms of plus or minus dollar amounts; with percentage adjustments, individual differences are reflected in plus or minus percentage differentials.

Paired Data Analysis
A quantitative technique used to identify and measure adjustments to the sale prices or rents of comparable properties; to apply this technique, sales or rental data on nearly identical properties is analyzed to isolate and estimate a single characteristic’s effect on value or rent. Often referred to as paired sales analysis.

Adjustment Grid
A table used to display comparable data and facilitate adjustment of differences in elements of comparison.

A shortened term for similar property sales, rentals, or operating expenses used for comparison in the valuation process. In best usage, the thing being compared should be specified, e.g., comparable sales, comparable properties, comparable rents.

All Definitions Sourced From: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).

If you have any questions or comments, please leave them in the comments box below.

Aloha, Chris

New Book – The Appraisal of Real Estate, 14th Edition

The newest edition of the appraisal bible, “The Appraisal of Real Estate, 14th Edition” is being released in mid-September 2013.  It’s a book that will act as the Gold Standard for real estate appraisers worldwide.

According to the Appraisal Institute, it will be available for the first time in digital formats: as a PDF in September 2013 and in E-pub and Kindle formats in January 2014!

It is an essential text if you are in the appraisal field, or engage appraisers in your practice:

The Appraisal of Real Estate - 14th Edition

UPDATE: The Appraisal Institute just released the table of contents for the 14th Edition.

You can download the PDF here: The Appraisal of Real Estate 14th Edition – Table of Contents

I’m looking forward to Chapter 14, “Statistical Analysis in Appraisal”–it appears to be new in this edition.

Table of Contents
Foreword – ix
Acknowledgments – xi

PART I Real Estate and Its Appraisal
Chapter 1 Introduction to Appraisal – 1
Chapter 2 Land, Real Estate, and Ownership of Real Property – 11
Chapter 3 The Nature of Value – 19
Chapter 4 The Valuation Process – 35

PART II Identification of the Problem
Chapter 5 Elements of the Assignment – 49
Chapter 6 Identifying the Type of Value and Its Definition – 57
Chapter 7 Identifying the Rights to Be Appraised – 69

PART III Scope of Work Determination
Chapter 8 Scope of Work – 87

PART IV Data Collection and Property Description
Chapter 9 Data Collection – 95
Chapter 10 Economic Trends in Real Estate Markets and Capital Markets – 129
Chapter 11 Neighborhoods, Districts, and Market Areas – 163
Chapter 12 Land and Site Description – 189
Chapter 13 Building Description – 219

PART V Data Analysis
Chapter 14 Statistical Analysis in Appraisal – 275
Chapter 15 Market Analysis – 299
Chapter 16 Highest and Best Use Analysis – 331

PART VI Land Value Opinion
Chapter 17 Land and Site Valuation – 359

PART VII Application of the Approaches to Value
Chapter 18 The Sales Comparison Approach – 377
Chapter 19 Comparative Analysis – 397
Chapter 20 Applications of the Sales Comparison Approach – 427
Chapter 21 The Income Capitalization Approach – 439
Chapter 22 Income and Expense Analysis – 463
Chapter 23 Direct Capitalization – 491
Chapter 24 Yield Capitalization – 509
Chapter 25 Discounted Cash Flow Analysis and Investment Analysis – 529
Chapter 26 Applications of the Income Capitalization Approach – 541
Chapter 27 The Cost Approach – 561
Chapter 28 Building Cost Estimates – 581
Chapter 29 Depreciation Estimates – 597

PART VIII Reconciliation of the Value Indications and Final Opinion of Value
Chapter 30 Reconciling Value Indications – 641

PART IX Report of Defined Value
Chapter 31 The Appraisal Report – 649

PART X Appraisal Practice Specialties
Chapter 32 Appraisal Review – 671
Chapter 33 Consulting – 683
Chapter 34 Valuation for Financial Reporting – 689
Chapter 35 Valuation of Real Property with Related Personal
Property or Intangible Property – 703

Appendix A Professional Practice and Law – 717
Appendix B Regression Analysis and Statistical Applications – 733
Appendix C Financial Formulas – 753
Bibliography – 797
Index – 819