Getting a property appraisal on the cheap could become more difficult in Wisconsin if state appraisers have their way, although the quality of the work done could be better.

A debate over who should be able to provide value opinions - real estate agents or professionally trained appraisers - is pitting questions of consumer choice against consumer protection, with future service to state residents who buy and sell property or need price estimates for other reasons at stake.

The Wisconsin Realtors Association last month managed to beat back a legislative attempt by appraisers to drastically restrict the ability of agents to provide opinions about property values for clients.

But the battle over who can or should do appraisals and for what purposes is only half over. Professional appraisers, who have far more required education and training in property valuation than agents under state and federal law, are expected to raise the issue again in the spring.

Chetek-area resident Sara Olson already knows where she stands on it. Olson recently had agent John Flor do an informal appraisal - for free - of her and her husband's house outside Chetek. The couple recently deeded the house to their son and they "just wanted to see what it would be worth in today's market," Olson said.

"It was a real fast thing," she said. "I know Flor just because we live in a small town and we knew his dad and they've been doing business here for years."

Olson said she "surely would not" be pleased if state law were changed to require her to use a certified or licensed appraiser for that kind of job.

"Why should I have to pay $200 to get a formal appraisal if all I need is a market value?" she said.

Appraisers favor restrictions

But saving a few hundred dollars shouldn't be the priority when it comes to determining property values, appraisers and their supporters say.

"For most people, decisions involving real estate are the biggest financial decisions that they will make," said Jennifer Gonda, a senior legislative manager with the city of Milwaukee, which joined a state appraisers group in seeking to restrict agents last month. "Basic consumer protection should require that a Wisconsin licensed or certified appraiser perform real estate valuations within the state of Wisconsin."

Real estate agents and their backers, meanwhile, see the dispute as a turf battle over business, with appraisers just trying to muscle out agents.

If that happens, they say, the consumer will suffer because many agents provide informal appraisals in different situations - such as for divorce negotiations when a house is at stake, for property tax appeals, for home insurance purposes, for easements, or for estate settlements involving property - at little or no cost compared to licensed appraisers, who also are in short supply in the northern and more rural parts of the state.

"Many times attorneys and clients don't need a full-blown appraisal," said Bub Zwygart, an agent in the Monroe area. "I can understand the appraisers just wanting everybody out of their business. But there haven't been problems (with agents doing this work). I don't know of an estate appraisal I've done in 30 years that has been contested."

Being able to do price opinions also is a marketing tool for agents, they said.

"It's a way of making connections with people," Chetek-area agent Flor said. "I do those things for free, and hopefully they'll call you down the road for something."

Agents fighting proposal

The original proposed measure to limit agents, known as AB 472, was effectively neutered on Oct. 27 in the Assembly after 1,700 agents in two days called or e-mailed their legislators at the WRA's request. But the polarizing issue is likely to resurface in the Senate when lawmakers come back for the spring session.

"Watch for the next call to action," WRA chief lobbyist Mike Theo told agents in a victory video posted on the group's Web site after the measure was approved by the Assembly on Oct. 27 with a crucial amendment protecting agents' rights supported by the WRA.

The Senate sponsor, Sen. Jeff Plale, D-South Milwaukee, already has agreed to include the WRA amendment when he introduces the measure as SB 339.

The original measure was advanced by the Wisconsin Chapter of the Appraisal Institute and the city of Milwaukee, which Gonda says became involved because of "pretty consistent problems" with people using "very faulty" appraisals done by agents and others to challenge property tax assessments. Going through the required process of rejecting these "outlandish" valuations winds up wasting everyone's time and money, she said.

City of Madison Assessor Mark Hanson said that kind of problem hasn't been an issue in Madison, where most people already used certified appraisals in challenges.

"We put our appraisal up against theirs and critique each other's," Hanson said. "If it's done by someone who's not licensed, and if it's a poor job, that will come out."

Determining value

The original measure would have limited agents to providing value opinions only to help clients establish a listing price for a property or make a purchase offer - the two most basic things agents do for buyers and sellers.

Value opinions by agents in all those other situations - involving the divorces, estates, tax appeals and insurance issues - would have been banned by the original measure.

But the sweeping nature of that proposed prohibition, coupled with little evidence that agent opinions in those situations caused any serious problems, turned off lawmakers, WRA officials said.

"It wasn't just because our members called," said Tom Larson, WRA's director of regulatory and legislative affairs. "This looked like 'fence me out'-type of legislation. They wanted everybody to hire an appraiser."

Real estate agents also maintain that they understand how to price and use comparable properties to intelligently provide such estimates, especially for residential property.

"You can debate as to who has a better feel for local market conditions," Larson said. "We could debate that all day long. But that's what Realtors do - they determine what things are worth."

But appraisers say their advanced training makes them a better and safer choice for consumers for all kinds of property valuations.

"We have a set of regulations as thick as a phone book we have to follow, strictly relating to property valuation," said licensed and certified appraiser Andrew Kessenich, who is president of D.L. Evans Co. in Madison. "An appraiser is subject to all of these regulations that the real estate agent is not because the intent is to protect the public interest and the consumer."

"It's not really about taking somebody's business," added Steve Stiloski, president of the Wisconsin Chapter of the Appraisal Institute.

Anything but mortgages

The amendment, introduced by state Reps. Josh Zepnick, D-Milwaukee, and Leon Young, D-Milwaukee, allows agents to continue doing value opinions for their clients in all situations except when it involves a mortgage transaction.

In that respect, the amendment and the original measure both reflect federal law that prohibits agents from providing property values for most mortgage transactions - specifically, those that are deemed "federally related," meaning those that are backed by a government agency such as the FHA or VA and any mortgage loans sold on the secondary market to Fannie Mae and Freddie Mac.

In those cases, even under current law, a certified or licensed appraiser - who by law is a neutral party in the real estate transaction, while agents by definition are not - must be used. The amendment takes that federal prohibition even further and requires licensed appraisers for any type of mortgage application or refinancing or short sale, even the few such transactions that are not federally related, to hopefully help prevent the kind of over-valuations that helped lead to the housing collapse.

"The bill was always intended to be making sure (banks and other lenders) are using certified appraisers to do those mortgage transactions," Zepnick said.

Zepnick downplayed the amendment's other main effect of letting agents continue to do informal appraisals in most other situations.

"Frankly, the appraisers are just doing what they ought to do - looking out for their own interests," he said. "They're trying to expand their corner of the market and they see (agent involvement) as problematic or as a conflict. I don't see that, but nothing we do is final. If you miss something or there's unintended consequences, you can change it or modify it (in a future legislative session)."

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