Sopon Pornchokchai, Ph.D.,
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Appraisal Foundation’s International Roles in the Profession Sopon Pornchokchai, Ph.D., MRICS, Cert. Appraisal, LRTI-Lincoln Institute of Land Policy
Dr.Pornchokchai was invited to be a member of the International Advisory Board of the US Appraisal Foundation. He wrote this article to present to the Board in October 2006.
Worldwide Appraisal Organizations There are many appraisal organizations at the local, regional and international levels. This implies to organizations such as associations, councils, foundations, boards and the like. Individual organizations such as business firms and education institutions are not considered. There is some interaction among organizations at all levels. However, their relationship is loosely structured. Some constructive efforts are need in order to bring together related organizations to work together to create worldwide appraisal standards and to be practically enforced for organizations at the local level. According to the Figure above, organizations are divided into three levels (local, regional and international levels) and play/have three major roles (as regulators, professionals and educators). At the local level, there are such organizations as the Securities and Exchange Commission of Thailand and the Board of Valuers, Appraisers and Estate Agents of Malaysia as examples of regulators. In the case of professional organizations, there are the Australian Property Institute, the Appraisal Institute (USA) and the Thai Appraisal Foundation. So far as I know, there is no organization of educators at the local level; however, there are numerous local education institutions worldwide. At the regional level, there is no organization of regulators. However, there are quite a few organizations of professionals such as the ASEAN Valuers Association (AVA) in Southeast Asia and the European Group of Valuers Associations (TEGoVA). The Pan Pacific Congress of Appraisers, Valuers and Counselors is another entity (committee) which should be mentioned. It runs conferences every two years in the pacific rim countries. In the case of educators, there are so many active organizations on each continent, namely, the African Real Estate Society, the American Real Estate Society, the Asian Real Estate Society, the European Real Estate Society and the Pacific Rim Real Estate Society. At the international level, the Association of Real Estate License Law Officials (ARELLO) may be considered as a worldwide organization of regulators. However, its major role is in North America, like the Appraisal Foundation and the Appraisal Institute. Therefore, on the other hand, ARELLO can also be considered as an organization at either the regional or local levels. For professionals, there are a few organizations such as the World Organization of Valuation Association, the FIG (a French abbreviation for the International Federation of Surveyors) and the International Valuation Standards Committee. In terms of worldwide education organizations, there are the International Real Estate Society (IRES) and the World Valuation Congress (WVC).
Observations on the Development It should be especially mentioned that the Royal Institution of Chartered Surveyors (RICS) is active at all three levels (United Kingdom, Europe and the world). Actually, it tries to be involved in regulating appraisal practices, in being the world’s largest professional association and in sponsoring education events and activities worldwide (including “certifying” real estate educational institutions). I believe that the RICS has certain roles and influence in WAVO, IVSC, TEGoVA and the like. Actually, its full name still implies the local entities but its practices and influence can potentially become a world standard in the near future. In terms of its members, the RICS has 120,000 worldwide (107,000 in Europe). However, most of them are not appraisers. The number of appraisers is 30,000 worldwide (25,000 in Europe) <1> which is similar to the number of members of the Appraisal Institute based in Chicago Actually, there are so many organizations in the United States of America which possess a potential similar to the RICS. However, they centre their roles in North America with certain members around the world. These organizations are the Appraisal Institute, the International Association of Assessing Officers, the American Society of Appraisers and so forth. The Australian Property Institute, which is very strong, can play the same role as the RICS, particularly in the Pacific Region; however, it seems to have no willingness to be a leader. It tends to play a role in assisting local professional associations. The Appraisal Foundation can be considered the only association which has a strong influence and potential like the RICS. There is also a certain willingness on its part to expand worldwide, like the RICS. However, I believe that there is still no clear agenda to accomplish this goal. A privilege for the RICS is that there is a large number of non-appraiser members who help promote the RICS worldwide. It also has “chapters” at the local level as well. I also believe that the RICS has many more employees to run activities worldwide compared with the Appraisal Institute.
Worldwide Appraisal Profession Loosely Structured To the best of my knowledge, FIG is the largest appraisal professional organization. Like the RICS, its members are not only appraisers but also other surveyors. The appraisal professional is under one of its sub-committees. RICS is also a member of FIG; however, FIG does not play the role of regulator or educator. Although the 2002 FIG Congress in Washington DC was an event with the largest number of surveyors from around the world <2>, it is not so effective and its efforts carried out at 4-year intervals. In the case of the IVSC, although there are associations of some 50 countries as members, the majority of the countries are still not members. Their members are mainly professional organizations, not regulators or educators. However, it also plays a role in the standardization of practices through its published standards. It should also be mentioned that the largest professional organizations in quite a few countries are not members of the IVSC. For example, the Thai Valuers Association, which is a smaller professional appraisal association in Thailand, is a IVSC member instead of being a member of the Valuers Association of Thailand, which represents 90% of the valuers in Thailand. Similarly, the China Society of Appraisal (CAS), which is smaller in terms of size of members but is very active and also linked to accountants, is an IVSC member instead of being a member of the China Real Estate Appraisers Association, which has members of several tens of thousands. Considering the WAVO, it was organized later in 2002. On the whole, it seems to duplicate the IVSC. Until now, there are fewer members in it than in the IVSC. I was at a meeting of the WAVO in Hong Kong in 2002 as well. Its first tangible activity was the first WAVO conference, which will take place in Singapore in November 2006. This might be a role similar to the IVSC and the WVC. Perhaps, due to active annual conference of the regional association of appraisal and real estate educators, such as these continental real estate societies and other professional regional professional associations, the education roles of WAVO, as well as IRES and IVSC, are quite limited.
Need a UN-like International Setting Definitely, there is a need to have international appraisal standards accepted and practiced around the world. The three major components, namely, regulators, professionals and educators, need to come together to work this out. They also need to meet to exchange knowledge, experience and business opportunities. Most importantly, meetings are needed to produce new and higher standards, and to promote enforcement of standards worldwide. In the future, sub-professional groups could be established, such as business valuation, plant and machinery, mass appraisal, and farm and rural appraisal groups, to name a few. Therefore, an organization like the United Nations (of the appraisal profession) needs to be established. It will be a venue for regulators around the world to meet and construct new standards and regulations for the sake of consumers--who are the most important beneficiaries. We all realize that consumers and the (business) society at large are our major professional concern, not our own carrier directly. A UN-like organization implies that every country will have an equal vote so that no domination will appear. Representatives from different countries should really represent the majority of appraisers. This will promote a democratic environment as a strong and transparent basis of this global UN-like organization. There should be some promotion to attract most (if not all) countries to become involved via the channel of the United Nations, regional committees, and local governments, as well as local chambers of commerce. In addition, there should be some linkage and discussion among regulators, professionals and educators. Therefore, every year a symposium should be organized for meeting within and among these three groups. The role of this UN-like organization should be firstly to construct and apply world valuation standards; secondly, to certify valuation education institutions worldwide; thirdly, to settle disputes among national and regional appraisal organizations; fourthly, to provide a platform for the exchange of ideas, knowledge and experience among appraisal professionals; and fifthly, to organize an annual exhibition as a marketplace for all parties, including suppliers and other beneficiaries. I think that we all remember that there was a superb event, namely, the Valuation 2000 in Las Vegas in July 2000. I was an exhibitor there as well. Large numbers of appraisal organizations around the world were gathered at a large exhibition there because booths were offered at affordable prices (not commercialized). Education sessions of the Appraisal Institute and a few other associations were organized there as well. Later, there were some efforts to conduct a similar event; however, they were not so successful. This sort of event should be promoted to create an equal networking opportunity for all.
Constructive Roles of the Appraisal Foundation The active contribution of the Appraisal Foundation is expected to help standardize appraisal practices around the world. At the beginning, the effort to help establish this/a? UN-like appraisal organization is a doable / possible / realizable task. Possible tasks are as follows:
1. Sponsoring and co-hosting the meeting for the pre-establishment of the UN-like appraisal organization. Quite a few meetings may take place around the world to pave the way for its? establishment eventually. 1.1 Forums for worldwide regulators 1.2 Forums for worldwide professional organizations 1.3 Forums for worldwide educators 2. Taking a strong part in the drafting, applying and enforcing of the international appraisal standards. 3. Coordinating with universities in the USA and others to construct a standardized appraisal curriculum. 4. Organizing meetings of education institutions around the world to set up a committee to certify institutions that teach appraisal courses around the world.
It
should be mentioned that these proposed roles of the Appraisal Foundation need
definite willingness, strong commitment and continuing support in order to
materialize the international role of the Appraisal Foundation for the sake of
worldwide appraisal practices. The benefit would be for all. It is expected
that the United States of America may be a major beneficiary because of the
dominant size of its economy and its? prevailing investment around the world,
which requires standardized appraisal practices. Post with permission of the Thai Appraisal Foundation |
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