Appraiser Group Quits NAR, Votes on Merger

The American Institute of Real Estate Appraisers (AIREA) has severed its 58-year relationship with the National Assn. of Realtors (NAR) and is voting on whether to merge with the rival Society of Real Estate Appraisers (SREA).

The 22,000-member Chicago-based AIREA voted by 83.4% April 30 to break away from NAR over two issues, according to AIREA President A. Scruggs Love Jr. The results of the mail-in vote on the merger will be announced June 10, he added.

“We disagreed with the changes in NAR’s constitution that declared NAR to be the sole, rather than the primary, spokesman on all real estate issues,” Love said in a telephone interview from Chicago.

“Secondly, we believe that government regulation of the appraisal profession has created a conflict of interest that is too great to ignore,” the San Antonio, Tex., appraiser added. Love said that he will remain a member of NAR and he expects that “many” AIREA members will do the same.

Last year, in the wake of the $164-billion S & L crisis--caused in part by bad loans resulting from faulty or fraudulent appraisals--the federal government passed a bailout law with a provision requiring that anyone completing a real estate appraisal used to justify a loan funded or insured by certain agencies of the federal government must conform to standards set by the Appraisal Foundation. Created in 1987, the foundation is composed of eight major U.S. appraisal organizations and the Appraisal Institute of Canada.

SREA is also based in Chicago and has about 20,000 members and candidate members, according to spokeswoman Anne Inouye.

SREA President Ritch LeGrand said in a telephone interview from his office in Sioux City, Iowa, that his organization has already voted by 85% of those casting ballots to “unify” with AIREA, whose voting members approved the merger by 66%, 38 votes short of the required two-thirds vote of those casting ballots in both associations, LeGrand said.

If the two organizations vote to merge, the combined appraisal group will be called the Appraisal Institute, Love said. The highest commercial rated members of SREA will get the prestigious MAI (Member, Appraisal Institute) designation, while the top residential members of AIREA will adopt the Senior Residential Appraiser (SRA) designation of the SREA.

NAR President Norman D. Flynn said that he expected the departure of AIREA, adding that the 800,000-member real estate trade group has organized a new appraisal committee that will attempt to provide a home for many of the nation’s 70,000 to 100,000 full-time appraisers who are not affiliated with either major appraisal organization.

“These unaffiliated appraisers would benefit from instant access to the multiple listing services operated by local realty board,” Flynn said in a telephone interview from his home near Madison, Wis.