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Section 2: Appraiser Qualifications & Evaluations

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Selecting Appraisers

Regulation requires that qualified appraisers perform appraisal functions.

By regulation, anyone preforming an appraisal, or appraisal related services in determining an opinion of value, or the act or process of developing an opinion of value, shall be competent and qualified to perform these functions per 49 CFR 24.103(d); 43 TAC Chapter 9 Subchapter F.

All real estate appraisers performing appraisals for TxDOT must be licensed by the Texas Appraiser Licensing and Certification Board, as provided in the Texas Appraiser Licensing and Certification Act (Chapter 1103 of the Texas Occupations Code). Title 7, Sec. 1103.03, defines appraisal "as an opinion of value; or the act or process of developing an opinion of value, regardless of whether prepared for a federally related transaction."

49 CFR 24.103(d)(2) requires an agency to utilize a state licensed or certified real estate appraiser when an appraisal is prepared by a fee contractor. TxDOT requires individuals to be department- certified before they can perform any appraisal or appraisal related function.

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Types of Appraisers

The types of appraisers are:

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Assignment Type by Appraiser Classification

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Assignment Type

Department-Certified Appraiser

PREAS Contract Appraiser

TxDOT Staff Appraiser

ROWAPS- Appraisal functions: Appraisal, Review Appraisal, Consulting, and Prep & Testimony

X

X

 

LPA * Appraisal functions: Appraisal, Review Appraisal, Consulting, and Prep & Testimony **

X

X

 

ROW Acquisitions- Appraisal functions: Appraisal, Review Appraisal, Consulting, and Prep & Testimony

 

X

X

Real Property Disposition- Appraisal functions: Appraisal, Review Appraisal

X

X

X



*If on-system the LPA will select an appraiser from TxDOT's Department-Certified Appraiser list. If off-system the LPA will select an appraiser according to their approved process. On-system means on TxDOT's designated highway system. Off-system means off TxDOT's designated highway system.**LPAs may use staff appraisers to perform all appraisal functions as long as they are licensed as certified residential or certified general appraisers by the Texas Appraiser Licensing and Certification Board.

TxDOT appraisal assignments are prepared by department-certified appraisers, PREAS contract appraisers, and TxDOT staff appraisers. The chart above illustrates the type of assignment each classification of appraiser is authorized to perform.

Department-certified appraisers are eligible to perform appraisal functions for ROWAPS providers, LPAs, and real property disposition on behalf of the property owner, but cannot be the signing appraiser for any appraisal assignment under a PREAS contract.

PREAS Contract appraisers are eligible to perform appraisal functions for ROWAPS providers, LPAs, ROW acquisitions, and real property dispositions.

TxDOT staff appraisers may perform all ROW acquisition and real property disposition appraisal functions, and there is no limitation placed on the value or type of parcel on which the staff appraiser may be used, except for the restrictions placed on the appraiser by their state appraisal credential.

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Fee Appraiser Qualification Process

TxDOT certifies all real estate appraisers before they can perform any appraisal or appraisal related function.

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Becoming a TxDOT department-certified appraiser

Access www.txdot.gov:

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  • Select the “Business” link,
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  • Under “Opportunities” select the link titled “Department Certification for Professional Real Estate Appraisers”,
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  • Select the “Application for Department Certification as a Professional Real Estate Appraiser (form ROW-A-1)”,
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  • Return the completed application to: TxDOT, ROW Division - Appraiser Application, PO Box 5075, Austin, TX 78763-5075.
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Becoming a TxDOT PREAS Contract Appraiser

Follow the instructions above to become a department-certified appraiser.

Once confirmation is received that department certification has been accomplished, access www.txdot.gov:

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  • Select the “Business” link,
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  • Under “Opportunities” select the link titled “Department Certification for Professional Real Estate Appraisers”,
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  • Select the “Current Requests for Proposal (RFPs)” link.

If there is an active RFP process, an RFP may be submitted as instructed on the link. If all qualifications and experience is met the appraiser will be contacted for contract opportunities.

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PREAS Appraiser Qualification Process

As outlined above, PREAS contract appraisers are qualified by answering an RFP for Statewide Professional Real Estate Appraisal Services (PREAS), which has been posted to TxDOT's website. Senior TxDOT appraisal staff grade the RFP submissions and qualify contract appraisers based on a scoring system.

Evaluation criteria include:

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  • department certification by TxDOT;
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  • experience of the individual real estate appraiser and demonstrated understanding of the scope of services to be provided; and,
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  • references demonstrating the ability to meet deadlines over the past three years and the ability to meet department scheduling requirements.

If an appraiser applicant is successful in scoring the minimum threshold points for the RFP and a contract is executed for appraisal services, standard general contract terms and conditions will be used. The terms of the contract are not negotiable.

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PREAS Contract Terms

Contract fee appraisers that have an executed Right of Way Real Estate Appraisal Services Contract with TxDOT may be asked to provide:

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Appraiser’s Compensation

The state will reimburse the appraiser for actual work performed and authorized by a specific work authorization Attachment E, and the rates set forth in Attachment D-1. Payment is authorized on a per work authorization basis, and for listed expense items as specified in the appraiser's fee schedule. The appraiser's fee schedule Attachment D-1, is broken down into five assignment categories (vacant land, residential, commercial, industrial, other) and twenty four subcategories.

Vacant Land: Rural Land; Farm Land; Ranch Land; Residential Lot (1to 4 family); Residential Subdivision; Commercial or Industrial Tract

Residential: Single Family (1 to 4 family); Residential Condominium; Apartments

Commercial: Single Tenant Retail (up to 25,000 sq.ft.); Discount Chain Store; Department Store; Retail Center (up to 300,000 sq.ft.); Retail Center (300k to 1.5m sq.ft.); Convenience Store; Service Station; Office Building; Medical Office Building; Other Commercial Uses

Industrial: Manufacturing; Engineering Research and Development; Storage; Showroom; Flex Building; Distribution and Transit Warehouses; Mini-warehouse; Auto Showroom; Auto Service Center; Other Industrial Uses

Other: Review of Appraisal; Appraisal Consulting; Prep and Testimony for Eminent Domain

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Work Authorizations

As provided in the contract, all appraisal assignments will be authorized by individual work authorizations. A work authorization is a written authorization to begin work, issued to an individual appraiser by ROW Division. The work authorization includes a detailed scope of work, as well as a contract period and maximum amount payable that does not exceed the time or money restrictions specified in the appraiser's contract. Note: It is the appraiser's responsibility to deliver completed appraisal assignments to ROW Division prior to the expiration of the work authorization. ROW Division does not have the authority to pay for work that is worked on after the expiration of a work authorization.

Where an easement and a fee parcel are out of the same parent tract, they will be included in the same work authorization.

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Additional Work

If the appraiser believes that any work he/she has been directed to perform is beyond the scope of the contract or individual work authorization and constitutes extra work, the appraiser shall notify TxDOT in writing. If TxDOT finds that such work does constitute extra work and the cost of such increase in work would cause the maximum amount payable under the contract to be exceeded, TxDOT shall advise the appraiser. A written supplemental authorization will be executed between the parties, so long as the cumulative total of all work authorizations combined does not exceed the contract cap. The appraiser shall not perform any proposed additional work or incur any additional costs prior to both parties executing a supplemental work authorization.

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Changes in Work Due to Errors

The appraiser shall be responsible for the accuracy of his or her work, and shall promptly make necessary revisions or corrections resulting from any errors, omissions, or negligent acts without compensation.

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Supplemental Agreements / Work Authorizations

The terms of a contract or any work authorization may be modified with a supplemental agreement/work authorization if ROW Division determines that there has been a significant change in (1) the scope, complexity or character of the service to be performed; or (2) the duration of the work. Additional compensation, if appropriate, shall be paid as specified in Attachment D. The cumulative total of all work authorizations combined shall not exceed the contract's maximum amount total, which will vary based upon ROW Division requirements at the time the contract is awarded. Any supplemental agreement must be executed by both parties within the work authorization and contract periods.

The appraiser may not modify the scope of work or extend the expiration date on a work authorization without the execution of a supplemental agreement and authorization to proceed by ROW Division.

All work authorizations must be issued within two years of the date of final execution of the work authorization, unless modified by a supplemental work authorization. No work authorization may extend beyond the contract period.

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Suspension of a a Work Authorization

Should TxDOT desire to suspend a work authorization, but not terminate the contract, this may be done by 30 calendar days' verbal notification followed by written confirmation from ROW Division to that effect. The 30 day notice may be waived in writing by both parties. The work may be reinstated and resumed in full force and effect within 60 days of receipt of written notice from the state to resume the work. The 60 day notice may be waived in writing by both parties.

If ROW Division suspends the work, the contract period is not affected, and the contract will terminate on the date specified unless the contract is otherwise amended.

TxDOT assumes no liability for work performed or costs incurred prior to the date authorized by ROW Division to begin work, during periods when work is suspended, or subsequent to the contract completion date.

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Subcontracting

The appraiser shall not assign, subcontract or transfer any portion of the work under his or her contract without written approval of ROW Division. However, this does not prevent the contract appraiser from using other qualified appraisers to provide appraisal assistance. The PREAS contract appraiser's signature will be sole signature on the report. By signing the certification, the contract appraiser accepts responsibility for the entirety of the analyses and conclusion in the appraisal report. Other appraisers providing significant assistance must be named in the certification, and the nature of their assistance must be reported, but this does not have to appear in the certification.

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Fee Appraiser Contract Termination

If it is determined that an appraiser's contract should be terminated, R/W-PD shall report and provide documentation to ROW Division HQ for investigation and possible termination of the contract. Termination of the appraiser's contract may be based on, but not limited to, the following situations:

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  • by mutual agreement and consent, evidenced in writing by both parties;
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  • by ROW Division, with notice in writing to the appraiser, as a consequence of failure by the appraiser to perform the services set forth in the contract;
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  • by either party, upon the failure of the other party to fulfill its obligations as set forth in the contract;
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  • by ROW Division for reasons of its own, and not subject to the mutual consent of the appraiser, upon not less than 30 days' notice to the appraiser; or,
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  • by satisfactory completion of all services and obligations described within the appraiser's contract.
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Evaluation of PREAS Contract Appraisers

ROW Division HQ will establish procedures for the continuing evaluation of PREAS contract appraisers' qualifications and performance. A closeout evaluation will be used as a minimum guide for evaluating the appraiser's work product at the end of each work authorization. The closeout evaluation is not parcel specific, but for the work authorization in its entirety. Aside from the closeout evaluation, an interim evaluation of appraiser's work product is required with every supplement to a work authorization. R/W-PD may expand these forms in more detail if necessary. R/W-PD should maintain sufficient information to ensure adequate qualifications of the assigned appraiser and the appraiser's capability to perform the proposed services efficiently without overload.

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Staff Appraiser Qualifications

Staff appraisers performing valuation services for TxDOT that involve an opinion of value must be credentialed as a certified residential or certified general appraiser by the Texas Appraiser Licensing and Certification Board, as provided by the Texas Appraiser Licensing and Certification Act. Though state licensing and certification is recommended for all staff appraisers, currently it is not a requirement for those that hold Right of Way Appraiser I and Right of Way Appraiser II positions. But, the activities of those staff members are limited to appraisal functions that do not require a state appraisal credential.

Qualifications and training for non-credentialed ROW staff appraisers that are primarily involved with administrative functions and appraisal reviews that do not involve the development of an opinion of value, should include, but are not limited to:

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  • Basic Appraisal Principles (30 hours), Basis Appraisal Procedures (30 hours), 15-hour National USPAP or Equivalent (15 Hours), General Appraiser Market Analysis and Highest and Best Use (30 hours), General Appraiser Site Valuation and Cost Approach (30 hours), General Appraiser Sales Comparison Approach (30 hours);
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  • Course 421 (The Valuations of Partial Acquisitions), 403 (Easement Valuation), 417 (The Valuation of Environmentally Contaminated Real Estate), 804 (Skills of Expert Testimony), 803 (Eminent Domain Law Basics for Right of Way Professionals) and 409 and 410 (Reviewing Appraisals in Eminent Domain) of the International Right of Way Association.

Completion of Basic Appraisal Principles (30 hours), IRWA course 421, and National USPAP or Equivalent (15 hours) are the minimum requirements for all staff appraisers performing appraisal reviews for the agency for the first time.

ROW Division HQ will establish procedures for the evaluation of the R/W-PD's review appraisers. It will also recommend continuing education, training, and other assistance for R/W-PD staff and review appraisers.

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