161-020-0061 Criteria for Acceptance of Practical Applications of Real Estate Appraisal (PAREA) Program In order to be accepted by the Board as satisfying the experience requirements for licensure or certification, the Program must be AQB-approved and satisfy all criteria described in this rule concerning the respective credential level to be sought. (1) Minimum Content Requirements – Licensed Residential Classification: (a) Introduction: (A) General Considerations and Responsibilities: (i) Discuss respecting the public trust; and (ii) Review and comment on appraiser independence; and (iii) Review and comment on the responsibilities to clients regarding reconsideration of value requests and other communication. (B) Appraisal Software and Tools: (i) Overview of software options (vendors) and common forms; and (ii) Overview of Common tools: measuring devices, cameras, etc. (b) Problem Identification: (A) Understanding Assignment Parameters: (i) Perform initial review of order/engagement letter; and (ii) Determine authoritative lines of communication; and (iii) Provide interactive exercises in extracting key information from engagement letter. (B) Understanding Assignment Elements and Competency Issues: (i) Examine appraisal request and other documents provided (e.g. title reports, surveys, purchase contract) to determine key assignment elements and/or contractual obligations; and (ii) Determine relevant appraisal assignment conditions; and (iii) Understand common client, intended use, intended users, engagement letter terms, various assignment types, basis for assignment conditions, extraordinary assumptions, and hypothetical conditions; and (iv) Provide exercises for defining the problem. The goal is for participant to establish appropriate steps in appraisal process. (v) Exercises should contain overlays introducing key engagement items that could affect scope of work; and (vi) Exercises must demonstrate impact on both assignment conditions and elements; and (vii) Include exercises where an appraiser can identify, during problem definition process, the existence of possible extraordinary assumptions and/or hypothetical conditions. (viii) Demonstrate how competency issues are identified and will be resolved. (C) Market, Neighborhood, and Subject Property Research: (i) Utilize preliminary online/archival research to gain basic market area and subject property information; and (ii) Develop the general area and neighborhood market analysis including an overview of available data sources for market area information; and (iii) Retrieval/analysis of preliminary information necessary for understanding subject site and improvements; and (iv) Review of public record information including site and improvement information; and (v) Utilization of MLS/online sites as verification source; and (vi) Based on information gathered in (C)(i) through (C)(v), develop and explain key relevant property characteristics. (D) Obtaining Preliminary Subject Property Information: (i) Simulate setting the inspection appointment with related requests/requirements; and (ii) Determine how you will verify individual providing access; and (iii) Review inspections and reports provided by others and discuss their application and disclosure in the assignment. (c) Review Sections (a) and (b) with Mentor: (A) Ensure the problem identification process was performed properly leading to an appropriate scope of work; and (B) Review research performed to evaluate suitability and that the quantity of information will be satisfactory for later development and analysis. (d) Property Identification and Inspection, and Initial Site Identification: (A) Research available information sources including public records. (B) Zoning, general plan information: (i) Identifying where to locate all sources of information; and (ii) Verification of revisions to zoning/general plan; and (iii) Identifying variances and use restrictions. (C) Environmental issues, flood zone/earthquake information. Identifying and explaining unusual issues: (i) Locate relevant research information; and (ii) Communicate any unusual findings to the client to confirm whether assignment is to be completed. (e) Verification of Neighborhood and Market Area: (A) Conduct virtual inspection/review of subject’s market area; and (B) Explain various influences; and (C) Identify and explain trends/characteristics in the defined neighborhood and market area. (f) Subject Site Inspection: (A) Verify similarity to plat, observe site utility, its surrounding influences, and possible conditions that could impact value or marketability; and (B) Analyze site improvements and useable site area. Determine and explain how useable site area relates to surrounding properties; and (C) Identify and discuss various site amenities. Include exercises that include various levels of impact on value. (g) Subject Property Improvements Inspection: (A) Overview: (i) Types/quality of construction; and (ii) Floor plan issues, determination of room counts; and (iii) Observable condition factors and description of upgrades; and (iv) Recognition of potential/existing adverse influences. (B) Conduct a virtual physical inspection to determine relevant physical characteristics; and (C) Provide a thorough description of improvements. (h) Measuring the Subject Property Improvements: (A) Exercises to include methods and ultimately determination of: (i) Basements; and (ii) Stairways and vaulted ceiling areas; and (iii) Below grade living area (split level); and (iv) Accessory dwelling units, outbuildings, etc.; and (v) Awareness of special assignment conditions; and (vi) Common rounding practices. (B) Include virtual exercises in measuring subject properties. (C) Other sources for obtaining Gross Living Area (GLA). (i) Sketch Completion: (A) Include sketch completion exercises. (B) Exercises must include final GLA determination (what areas should be extracted from GLA). (j) Review Sections (d) through (i) with Mentor. Ensure all elements of inspection process have been performed properly, including neighborhood, site, and improvements. (k) Market Analysis and Highest and Best Use: (A) Highest and Best Use: Overview of pertinent data, including current/proposed/potential alternative use and communication of highest and best use. (B) Performing Neighborhood and Market Research: (i) Identify the market area boundaries, physical characteristics, and specific property location relevant to the analysis of the subject property; and (ii) Identify the trends and characteristics in the defined neighborhood and market area. (l) Review Section (k) with mentor. Ensure key analytical issues related to market conditions and highest and best use are effectively addressed. (m) Process of Sales Analysis: (A) Identify the best sources of sales data for use in case studies including: (i) Multiple Listing Services/Systems (MLS); and (ii) City/County (public) transfer records and how to verify; and (iii) Data providers; and (iv) Appraiser office files and associated confidentiality concerns; and (v) Real estate agents/brokers and how to verify. (B) Select the same or similar property types, uses and characteristics: (i) Identify elements of comparison; and (ii) develop exercises for various property types. (C) Identify all relevant current listings, expired listings, withdrawn listings, offers, For Sale By Owner (FSBO) properties if available, closed sales and pending sales. (n) Review Section (m) with Mentor: (A) Ensure all necessary steps in highest and best use analysis and market analysis were performed properly; and (B) Review data source material to assure sufficient information has been identified for further application. (o) Valuation Approaches and Techniques: (A) Consider each approach to value: (i) Explain the appropriateness of each approach based on the intended use of the assignment; and (ii) select the data considered most meaningful and relevant. (B) Sales Comparison Approach: (i) Analyze the quality and quantity of data; and (ii) Identify relevant units of comparison. (iii) Data and information collected must be analyzed for comparability and consistency. (iv) Select the sales that are considered most appropriate for subject property comparability and demonstrate the process; and (v) Identify and apply appropriate adjustments to comparable transactions based on differences to the subject property; and (vi) Demonstrate applicable tools and methods, including paired sales analysis, statistical and other geographic analysis; and (vii) Trend analysis; and (viii) Qualitative differences, including relative comparison analysis and ranking analysis; and (ix) Discuss and reconcile key elements developed in the sales comparison approach. (C) Cost Approach: (i) Develop site value of the subject as vacant using recognized methods or techniques and include contributory value of site improvement; and (ii) Discuss use of replacement or reproduction cost; and (iii) Develop supportive data for the cost calculations; and (iv) Calculate cost new for the improvements; and (v) Demonstrate types of depreciation and their application, including consideration of market trends; and (vi) Calculate depreciation; and (vii) Discuss and reconcile key elements developed in the cost approach. (D) Income Approach: (i) Collection and verification of pertinent rental data, including actual rent versus contract rent. (ii) Determine an appropriate Gross Rent Multiplier (GRM); and (iii) Discuss and reconcile key elements developed in the income approach. (p) Review Section (o) with Mentor. Ensure all approaches to value were adequately considered and completed in supportable fashion, including cost and/or income approaches if performed. (q) Final Reconciliation: (A) Analyze and discuss accuracy and sufficiency of data; and (B) Analyze and discuss strengths and weaknesses of each approach to value, and their applicability to the subject property; and (C) Analyze and discuss consistency of data and development; and (D) Analyze and discuss the quality and quantity of data; and (E) Review calculations; and (F) Develop the final opinion of value, along with the rationale for all conclusions. (r) Review section (q) with Mentor. Ensure final reconciliation was performed properly and determine appropriate reporting. (s) Appraisal Report Development/Delivery: (A) Report Development: (i) Standards Rule 2-1 requires report to not be misleading, contain sufficient information, identify assumptions, etc. (ii) Describe the subject property and comparable properties used in the analysis in compliance with USPAP Standard 2. (iii) Identify and discuss technical terms; and (iv) Common industry phrases and descriptors; and (v) Fair lending do’s and don’ts; and (vi) Identify relevant information using industry typical approaches and technologies. (vii) Describe a market area and a neighborhood in compliance with USPAP Standard 2. (viii) Identify and discuss technical terms; and (ix) Common industry phrases and descriptors; and (x) Fair lending do’s and don’ts; and (xi) Identify relevant information using industry typical approaches and technologies. (B) Report Format: (i) Comply with all applicable assignment elements and conditions; and (ii) Be aware of and comply with state regulatory requirements; and (iii) Describe the scope of work; and (iv) Ensure applicable appropriate addenda, exhibits, photos, etc. are included; and (v) Understand adequacy, relevance, and integrity of photos, maps and exhibits, including how and where to include in a report. (C) Certification: (i) Ensure familiarity with pre-printed content and its applicability; and (ii) Develop exercises on completion of workfile documents; and (iii) Demonstrate an ability to store and compile documents. (t) Review Section (s) with Mentor. Ensure that the key components of an appraisal report and report format are appropriate for the assignment(s). (u) Communication of Assignment Results: (A) Adequacy and relevance of information: (i) USPAP compliance; and (ii) Assignment conditions. (B) Understand common Client-specific requirements including additional comparable sales, inclusion of active listings in the report, supplemental exhibits, etc. (i) Demonstrate ability to meet client expectations conveyed through the engagement letter or other instruction methods; and (ii) Demonstrate adequate support for analysis. (C) Explain and support rationale for excluding any approach to value: (i) Explain and support reconciliation; and (ii) Explain all assumptions. (D) Explain and support all extraordinary assumptions and hypothetical conditions, and state that their use may have an effect on assignment results. (v) Review Section (u) with Mentor: (A) Ensure understanding of effective appraisal report presentation and required content; and (B) Ensure compliance with Standards Rule 2-2. (2) Minimum Content Requirements – Certified Residential Classification: (a) Problem Identification: Relevant Scope of Work and Competency Issues Involved: (A) Develop exercises on how competency issues will be resolved; and (B) Conduct a preliminary analysis to ensure an appropriate Scope of Work. (b) Review Section (a) with Mentor: (A) Ensure understanding of how issues uncovered during property identification process relate to complexity. (B) Address/identify complex ownership issues. (c) Positive or Negative Locational Influences: (A) Recognize Population and Employment trends. (B) Determine and discuss relationships between employment, population and residential units (Single Unit Residential versus 2-4 Unit Residential) over time. (d) Residential Market Analysis and Highest and Best Use: (A) Market Analysis issues related to Highest and Best Use for complex properties. (B) Special Assessments. (e) Review Sections (c) and (d) with Mentor. Ensure key analytical issues related to market conditions and highest and best use are effectively addressed. (f) Physical Characteristics of Complex Properties. Identify and discuss: (A) Unique design features; and (B) High quality/amenity properties; and (C) Over-improvements; and (D) Physical deficiencies of improvements; and (E) Functional Inadequate and Super Adequate impact. (g) Vacant Sites (Including View Amenities and Surplus Land): Develop exercises that contain issues covered under Site Valuation and Cost Approaches. (h) Use of Key Statistical Concepts: (A) Develop appropriate statistical tools to be used in developing an opinion of value; and (B) Explain and support their application. (i) Key Market Driving Influences: (A) Determine the most appropriate units of comparison (market drivers); and (B) Identify market preferences for characteristics and amenities (for example parking, number of bedrooms, number of bathrooms, and GLA, etc.). (j) Review Sections (f) through (i) with Mentor: (A) Ensure key analytical issues related to market conditions and highest and best use are effectively addressed; and (B) Confirm appropriate items have been identified and analyzed for proper application in determination of value opinion. (k) Site Valuation and Cost Approaches: (A) Site Valuation: Extract comparable land/site sales data that will adequately support adjustments for contributing value of unique attributes associated with complex vacant sites (such as view, entitlements, surplus and excess land). (B) Develop a supportable Land/Site Valuation using the following methods: (i) Allocation; and (ii) Market extraction; and (iii) Ground rent capitalization; and (iv) Land residual method; and (v) Sales comparison. (C) Construction Costs: (i) Develop exercises related to high amenity structures; and (ii) Discuss local cost influences. (D) Functional Obsolescense: (i) Distinguish between curable and incurable forms; and (ii) Analyze and support conclusions on obsolescence for complex properties, including lack thereof. (E) External Obsolescence: Analyze and support conclusions on obsolescence for complex properties, including lack thereof. (l) Review Section (k) with Mentor. Ensure the Cost Approach has been performed properly. (m) Sales Comparison Approach: (A) Sales Concessions: (i) Determine whether the subject property is subject to sales concessions; and (ii) Identify and discuss application of any sales concessions in comparable data, based on market norms; and (iii) Address cash equivalency related to financing terms. (B) Identifying and Applying Atypical Adjustments. Develop support related to the following: (i) High amenity custom quality adjustments; and (ii) Site adjustments; and (iii) Adjustment support (for example matched pairs, statistical methods, etc.); and (iv) Adjustment support for unique “one-off” property sales including those with Accessory Dwelling Units. (n) Review Section (m) with Mentor. Ensure the sales comparison approach has been performed properly. (o) Income Approach: (A) One (1) to four (4) Unit Appraisals: (i) Perform collection of comparable rent data; and (ii) Address complex rental adjustments; and (iii) Understand and apply impact of complex amenities; and (iv) Factor for expense allocations between comparable transactions. (B) Unique two (2) to four (4) Unit Assignments. Discuss the following: (i) Location premiums within Planned Unit Development (PUD) or Condominiums; and (ii) Impact of rent control on subsidies; and (iii) Student housing; and (iv) Seasonal and short-term rentals. (C) Gross Rent Multiplier (GRM) Analysis. Discuss/address the following: (i) Non-market rent impact on GRM; and (ii) Perform reconciliation of GRM indicators. (p) Review Section (o) with Mentor. Review the Income approach to value and ensure proper analysis and support for conclusions. (q) Writing and Reasoning Skills: (A) Data Presentation: (i) Develop presentation of data in tables, charts and graphs as appropriate; and (ii) Express succinct narrative using active voice, direct statements, and plain language (short words and simple paragraphs); and (iii) Emphasize proper and understandable use of English; and (iv) Proofread communication of assignment results (report), by another authorized individual when possible and appropriate. (B) Discussion of Approaches to Value: Adjust depth of discussion to the intended user(s) and intended use(s). (C) Support for Conclusions: (i) Clearly state any/all conclusions throughout the report; and (ii) Include credible support and logical reconciliation. (D) Summary of Data and Reconciliation of Value Approaches: (i) Summarize the quantity, quality, reliability and relevance of data available for application in each approach performed; and (ii) Ensure the reconciliation and final value opinion are consistent with stated conclusions regarding the most germane approach to value. (r) Review Section (q) with Mentor: (A) Ensure understanding of effective appraisal report presentation and required content; and (B) Ensure compliance with USPAP Standards Rule 2-2. Statutory/Other Authority: ORS 674.305(8) & 674.310 Statutes/Other Implemented: ORS 674.310 History: ACLB 2-2025, minor correction filed 08/15/2025, effective 08/15/2025 ACLB 1-2025, adopt filed 07/22/2025, effective 07/22/2025