Appraiser Designations Required by Commercial Lenders

The highest and the one designation that is most coveted by commercial appraisers is the M.A.I. designation.  M.A.I. stands for Member, American Institute Real Estate Appraisers.  Virtually all commercial lenders will require this designation for doing their commercial loans.   This designation requires years of study and hundreds and even thousands of supervised appraisals.  The M.A.I. designation is somewhat equivalent to that of a C.P.A. designations in accounting.

Because of the demand for their services by commercial lenders and others, M.A.I.’s can command higher fees for their work.  Most M.A.I.’s have backlogs of work of at least three weeks.  At One-For-The-Money this is the most time consuming part of the commercial lending process.

Our average time to work through the appraisal process is between 3 and 4 weeks, but the rest of the underwriting process takes place with our commercial lending partners at the same time we are waiting on the appraisal to be completed.  This is call parallel or tandem underwriting which speeds up our process considerably.

One can feel rest assured that in virtually all cases that an M.A.I. will risk their designation by conspiring with a borrower to place a value on the property that is prudent and correct.  The prestige of the M.A.I. designation justifies the higher fees and assures both the commercial lender and the borrower the appraisers report of an accurate valuation on the commercial property.  Just about all commercial lenders will accept an appraisal form an M.A.I. certified appraiser even if they do not know the appraiser personally.

In commercial lending there is also another very respected designation for appraisers which is the SREA designation.  The acronym stands for Senior Real Estate Appraiser.  This designation is issued by the Society of Real Estate Appraisers.  The SREA designation is supposed to be directly comparable to an M.A.I. designation with the only difference being that it is issued by a different trade group.  However, the reality is that the SREA designation never has risen to the same universal acceptance with commercial lenders.

Then there is the SRPA designation and it is a step below an SREA designation.  SREA stands for Senior Real Property Appraiser.  The type of designation signifies that the appraiser is well qualified to appraise income property.  Using an SRPA appraiser is often a good an acceptable compromise to using an M.A.I. appraiser if it is discussed in advance with the commercial lender.

The advantage of using an SRPA appraiser is that the appraisal fee is less.  But all of the large commercial lenders usually insist on an M.A.I. certified appraiser.  The SRPA generally signifies expertise in residential and small residential income properties such as apartments.