International presence: international ambassadors foster professional relationships around the world.
Dunkin understood that his job as the new committee chairman was to expand the presence of the Appraisal Institute internationally and to cooperate with other international real estate associations. However, in the past, that overarching agenda was never clearly laid out in a formal manner. As he perceived the various tasks associated with his new position, one of Dunkin's first forays was to help the Appraisal Institute develop a cohesive plan for its international efforts in order to improve the visibility and recognition of its designations worldwide.
"As we develop that plan, we have some specific initiatives," says Dunkin. "we want to expand our influence in Europe and South America. We have been fairly active in Asia over the last several years and we will maintain the momentum that we have started there."
The Appraisal Institute's primary means of establishing relationships with foreign organizations has been through "ambassadors." Informally, these were Appraisal Institute members who took interest in particular countries and actively visited those countries appearing at conferences, leading courses and meeting the executives of organizations based outside the United States.
However, because the ambassador was not a formal position, it didn't have specific duties attached to it. In fact, some Appraisal Institute members who were chosen to be ambassadors didn't even know it. "Just the other day, I heard my name associated with the ambassador title for the first time. I didn't know anything about it," says Kern Slucter, MAI, SRA, a principal with the Gannon Group in Lansing, Mich., who is the Appraisal Institute's ambassador to Mexico.
Therefore, another goal high on Dunkin's checklist is to formalize the Appraisal Institute's ambassadorship program sometime before the end of the year.
"The ambassador program started as an informal relationship between the association and its members doing business overseas," says Slucter. "As we become serious about our international efforts, our ambassadors need to have an understanding of what they can do for us--and what they can expect from the Appraisal Institute."
Currently, there are 12 to 14 ambassadors, but once the positions become formalized Dunkin would like to create a couple of dozen more ambassadors by the end of his term as Chairman.
Ambassadors, hopefully, will: provide continuity in the relationships that the Appraisal Institute has with professional associations in various countries; provide liaisons for Appraisal Institute members, both current and prospective, in other countries; identify opportunities for the Appraisal Institute overseas; and work with the Appraisal Institute staff and international relations committee to develop budgets and business plans for each of the individual countries.
"The job will vary from country to country, but we want our ambassadors to help the Appraisal Institute to establish cooperative relationships with the various foreign associations. Also, to share best practices from country to country," says Dunkin. "As an example, one of the things that has been proposed to us through our ambassador to Germany is an exchange program where German appraisers could come here to learn how we do things. In return, we could send some of our appraisers to Germany to learn how they do things."
Ultimately, the Appraisal Institute wants to spread the recognition of its designations, Dunkin says, so that "as U.S. capital crosses borders, the nationals in those various countries come to understand and appreciate the value of using our members to do valuation work in those countries."
Because the ambassadorships were informal, the Appraisal Institute didn't necessarily target a particular country, instead relying on individuals that had life-experience, expertise or often visited a particular country. As a result, a number of the ambassadorships at the moment are to some countries that are relatively new to the fabric of the world economy. For example, the Institute boasts ambassadors to Vietnam and the Ukraine. Many of the current Appraisal Institute ambassadors have long been active overseas on behalf of the organization. And, along with some newcomers, have continued to promote the Appraisal Institute and push its agenda--not at all waiting for a formal program to begin.
For example, in 2008, Slucter was in Mexico in May teaching 47 local appraisers about international valuation standards, business practices and ethics and again in July teaching the old Course 320, which is now the International Equivalency Exam. In November, the Appraisal Institute is hoping to introduce Course 510 on Advanced Income Capitalization. Slucter won't be teaching that, but he'll be promoting it at the October conference of the Federation of Colleges, Institutes and Societies of Valuation of Mexico, or FECISVAL, in Mexico City. In addition, he says the Appraisal Institute expects to have a delegation from its executive board there. Slucter is also working on creating an international conference with the Appraisal Institute and FECISVAL in Cancun in November 2009.
Another ambassador working very hard on behalf of the Appraisal Institute is Guniz Celen, MAI, who runs Celen Corporate Valuation and Counseling Inc., in Istanbul, Turkey. "We have been working to establish the profession in Turkey since 2001," she says. "We now have a law regarding the appraisal profession and in 2006 Turkey accepted international evaluation standards. We also have accredited companies that can work with the capital markets."
Interest in MAI and SRA accreditation is escalating, she reports. About eight appraisers in Turkey are on the path to become accredited. "We hope we will soon have more MAIs," Celen says optimistically. "I am the only designated member in Turkey at the moment, but we are looking forward to getting more. The awareness is growing."
So, apparently is the need for accredited appraisers. "Turkey passed a mortgage law in February 2007, but it has not been mobilized yet because we do not have a secondary market," Celen explains. "Things will be moving fast next year. As soon as we have a secondary market, the mortgage market will be healthier. We now have more interest in valuation on the bank side. Of course, large transactions need that kind of assistance. It is a slow process as it is a new market."
Associate member acoub "Jack" Hussien, a principal in Area Appraisals Inc. in Chicago, has been representing the Appraisal Institute in the Middle East since November 2005, when he went to a conference as a liaison, on behalf of Dunkin, who then appointed him an ambassador.
Earlier this year, Hussien attended a conference in Doha, Qatar, and could be back in the region by late autumn. "I was a speaker, but I also met with investors and some bankers who were interested in analyses done by Americans," he says. "Since I speak the language, I can help open some doors for the Institute."
There has been a lot of international investment in the Persian Gulf area and it is opening up more to a free market system where non-indigenous people can buy real estate, Hussien says. Hussien sees a lot of opportunity in the Middle East. "It is a really good opportunity for the Institute because we can help establish standards," Hussien says.
For example, the Appraisal Institute has an associate member in Jordan, Mohamed Ali Jallouqa, and Hussien has spoken to people in Saudi Arabia who were interested in establishing some "teaching methodologies."
Associate member Roman Cherwonogrodzky, of Frank J. Lucco & Associates Inc. (and IRR Residential Appraisers & Consultants) in Houston, has been visiting and developing contacts in Ukraine and Eastern Europe since 2002. During that time, he has been a guest speaker at conferences in Ukraine and Russia on the Appraisal Institute's behalf.
"My job is basically to promote development between the Institute and local appraisers and promote its education program," he says. "I'm also helping the Ukraine Society of Appraisers increase its profile and integrate with international appraisal systems."
In 2006, a German bank that was selling its assets asked Cherwonogrodzky's firm and a Ukrainian valuation firm to jointly appraise 500 banks in the Ukraine. For three months he helped appraise the banks. During that time, the Ukraine government learned of the joint project's activities and asked them to appraise another 94 banks.
In September 2007, Cherwonogrodzky brought three appraisers from Ukraine to Chicago for the International Relations Council meeting of the Appraisal Institute. At the time, Cherwonogrodzky proposed launching a certificate program, in other words, a commitment in regards to dollars and education to Ukraine, shooting for a long-term goal of Ukrainian appraisers earning their MAI designation.
In preparation of that program, which looks like it will go forward, a number of steps will follow, says Cherwonogrodzky. "First of all, we need to review the equivalency of their education system and requirements, then start offering courses in Ukraine. We also want to increase Appraisal Institute membership in Eastern Europe. And finally, I am trying to put together some exchange programs and have appraisers from Ukraine come here and we go there to see what the likes and differences are."
Cherwonogrodzky points out that Ukraine is trying to take the lead in the region in appraisal and finance reform so that when it hosts conferences it is usually international in scope. It's a direction Cherwonogrodszky is also looking to take. "Not only am I involved with Ukraine, but I'm also trying to integrate the appraisal programs and development between other former Soviet Union republics like Azerbaijan, Kazakhstan and Georgia," he says. "In other words, I'm trying to promote appraisal reform in Ukraine and I am also trying to integrate that with Russia and the Central Asian republics with the assistance and programs of the Appraisal Institute."
One of the longest standing "ambassadors" is Tae-Sung "Mike" Song, MAI, the Appraisal Institute's representative to South Korea. A principal in Mike T. Song & Associates Inc. in Pasadena, Calif, Song has held the "ambassador" title for seven years. "This was my eighth year teaching Course 540, Report Writing and Valuation Analysis (in South Korea)" says Song. The course usually attracts about 25 to 30 people. "It's been up and down," says Song. "Samsung Life used to send staff to the Appraisal Institute, but the company got into some legal problems so this year I didn't see any Samsung people."
He estimates there are about 50 MAI designated appraisers in Korea, plus a number of associate members. "Korea has been very stable. We work with a small, private company and it has taken care of all our business there including recruiting students and the MAI paperwork."
Additionally, the Appraisal Institute has ongoing efforts taking place in China. In 2007, Dunkin and Pugh visited China and met with the organization's associate membership. This September, the pair will visit China and Korea as part of the Pan Pacific Congress.
Jay Massey, MAI, SRA, a principal in Dallas' The Jay Massey Co., has also been quite busy on behalf the Appraisal Institute. "I was given the title of ambassador to Vietnam when I represented the Appraisal Institute at the ceremony establishing the Vietnamese Valuation Association in 2006," explains Massey. He went back to Ho Chi Minh City in spring 2007 to teach about 60 students about valuation.
"It's an emerging economy and there is an incredible amount of commercial real estate development occurring. In fact, it is almost out of control," says Massey. "One of the reasons we are in Vietnam is that there are few trained, skilled, experienced commercial real estate practitioners in the country. They are somewhat unsophisticated in the appraisal, development and underwriting of major commercial real estate projects. It is freestyle right now, but the government is desperately trying to get their arms around it."
Massey has received several invitations to return to Vietnam. "About half of my students were college professors and the reason they were in the class was because they want to become trainers at the university. The country is in the process of setting up programs for appraisers and brokers all of which will ultimately result in a higher standard of education and a system of licensing and certification so there will be some accountability."
The ultimate goal, Massey notes, is to have MAI designated appraisers working in Vietnam. "That would be," he adds, "the epitome of success."
* While assignments will vary by country, future ambassadors will help the Appraisal Institute establish cooperative relationships and share best practices.
* Recent ambassadorships are to some countries that are relatively new to the global economy,, such as Vietnam and the Ukraine.
* In addition to the ambassadorship programs, the Appraisal Institute sends representatives to international appraisal and valuation groups.
RELATED ARTICLE: Joining Our International Counterparts
The Appraisal Institute's efforts to establish relationships with foreign appraisers not only involve the ambassadorship programs to individual countries, but includes representatives to international appraisal and valuation groups as well.
There are a number of international organizations in this field and the Appraisal Institute tries to maintain a cooperative effort with most of them. For example, the Appraisal Institute boasts representatives to The European Group of Valuer's Association, or TEGoVA; the International Federation of Surveyors, or FIG; and the Union of Pan American Valuation Associations, or UPAV, to name a few.
TEGoVA is an association of associations, explains Mark Bates, MAI, the managing director for the Hartford and Providence (Conn.) offices of Integra Realty Resources Inc., and the Appraisal Institute's representative to the organization. "TEGoVA has 39 association members from 24 countries representing more than 100,000 'valuers' in Europe, including Eastern Europe and Russia."
Because the Appraisal Institute is not a European organization, it holds a seat as an "observer member." As a non-voting observer representative, Bates has served as the organization's Scrutineer, overseeing TEGoVA elections as an unbiased, neutral party. In addition, as the Appraisal Institute's representative, Bates has presented numerous papers and presentations covering issues from the threat of AVMs to the impact of globalization in the appraisal profession.
"The importance of TEGoVA cannot be understated," Bates continues. "Providing a forum for associations representing over 100,000 valuers puts the organization in a unique position to promote appraisal standards based on International Valuation Standards and provide guidance on best practice issues facing the European valuation profession."
Steven Nystrom, MAI, with NewStream Companies in Tampa, Fla., recently attended the Federation of International Surveyors convention in Sweden and got to present an award to the European Real Estate Society. "FIG is an international organization, primarily with surveyors, but under their umbrella is lot of other disciplines like valuation and real estate," explains Nystrom. "It is an NGO (nongovernmental organization) that partners with the United Nations and World Bank."
The conference in Sweden was busy with UN people, which turned out to be a good thing because "the Appraisal Institute is in the limelight with the UN and I was asked to attend three other regional conferences," says Nystrom. "We look to be there."
Nystrom is also heading a working group with FIG to create a tool that could analyze valuation systems around the world.
"On this past trip, I spoke with a number of people from the former Soviet Union states of East Europe, such as Belarussia, and they have shown a lot of interest in the Appraisal Institute and our method of teaching," says Nystrom. "I am trying to find fertile ground for spreading the Appraisal Institute message."
The Appraisal Institute is the host group for Union of Panamerican Associations of Valuation's congress in 2010, which is expected to take place in Miami, says Bruce Wiley, MAI, a principal with Akerson & Wiley Inc. in Wellesley, Mass., and the Appraisal Institute's representative to UPAV. "The 2010 congress is the main thing on our plate right now," says Wiley.
UPAV is a group of leading appraisal associations, and the goal is to enhance professional standards for appraisers throughout the Americas. "The Appraisal Institute has contributed expertise in this area," says Wiley. "And we have also learned some things from UPAV. It's a good place to exchange appraisal concepts used in this hemisphere."
STEVE BERGSMAN is a freelance writer who has covered the real estate industry for Valuation, Barron's, Wall Street Journal Sunday, Urban Land and National Real Estate Investor among others.
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|Publication:||Valuation Insights & Perspectives|
|Date:||Jun 22, 2008|
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