Appraisal Articles 2018 Free Appraisal Articles for Appraisers and the Public
Yes it’s just about time for all of you licensed folk to begin your transition to following the rules as laid out by the new, updated USPAP document. I always wonder around this time of the cycle how many people have even looked at the document, and I think about how well received changes to what is effectively appraisal law, due to its adoption by many states, every two years would go over in any other industry or “profession.” I know attorneys take continuing education but the law governing the practice of law doesn’t change every two years. Nurses take CEU’s but the law governing them doesn’t get revised every two years.
I guess that appraisal law just needs to have constant, two year revisions for 20 or 30 or maybe 50 years before they get it right. Are the changes made so often because appraisers are such an unruly group? Or maybe the entire exercise of revision that includes the selling of new books and the taking of new classes is just too lucrative to ever change. Ask yourself, what might they be changing in 5 more iterations of this same document?
It’s also interesting to note that I just saw advertising that announced to appraisers “Finish your USPAP 2012-2013 course while you still have time!” I think it is ridiculous that appraisers would take an old USPAP course to meet the CEU requirement just before they transition to entirely new rules. If it’s so important to know what’s in the new and supposedly improved USPAP document why isn’t there a requirement that all appraisers take a USPAP course within 90 days of its publication?
So what is the big news in the USPAP update? Doing away with the self-contained appraisal reports was in my opinion a positive but now each appraiser has to wonder whether they have provided sufficient information for each scope of work or intended purpose. I think all of my reports are all going to state that “only summary data was supplied in this report.” Almost no one really wants the kitchen sink report that has paired sales and market conditions adjustments over time detailed in page after page of minutia, not even reports done for litigation. If the adjustments are justified in the work file, and that level of detail is necessary, it can usually reside in your work file unless a specific request for it is made by a client.
Deleting Standards 4 and 5 also seems like a good decision. Maybe the entire document could be revised down to a few pages?
Here are a couple of USPAP provisions that I don’t like:
1. Every time I have come across a restricted use appraisal report, now called a “Restricted Appraisal Report,” it’s been an effort by an appraiser and at times his client to limited detail because the appraiser / client know that the report will end up in court and they don’t want it challenged or it was produced because a client wouldn’t pay the fee to have it done right and then someone starts using the report to marketing the property. I’ve seen commercial reports on retail buildings with only a sales approach!
2. Having to detail the names of people who have provided “significant real property appraisal assistance” in the certification is almost always going to be answered by appraisers with “none.” Don’t you have to consider what happens to the named party or parties if there is a problem with your report? By including in your disclosure that someone provided you with appraisal assistance have you shifted some liability for problems to them? Can the identified party who assisted you now be held responsible for the information that they supplied?
It’s an interesting question. I once had a judge tell me as a broker that I was wrong to have trusted an owner of a motel to report the correct occupancy, he told me that I should have sat in my car and viewed how many motel customers came to the motel each day over time myself. Doesn’t that invite the question “what kind of significant appraisal assistance can you rely upon without verification?” Not much I would say.
3. Detailing research and analyses not performed is in my mind a stretch. Most users of appraisal reports don’t understand the appraisal process to begin with so will providing them with detail regarding what I didn’t do be understood? It also seems like disclosing what I didn’t do in an appraisal report is kind of late, shouldn’t reports that won’t include important research and analyses have been disclosed in an engagement letter before completion? What’s to stop a client from claiming that your disclosure is the first that they heard of your limitations?
This short article is not meant to be anything more that an expression of some of my thoughts regarding the new USPAP provisions. If you have comments of your own, please send them to me and I will supplement this article.
The author, Glenn J. Rigdon, BS, BSCS, MA, MRICS, ASA is a commercial appraiser with 35 years of experience working in the real estate industry. Mr. Rigdon has held the position of Economist with the Arizona State Land Department and Staff Specialist ROW - Legal with the Nevada Department of Transportation. See http://www.horizonvillageappraisal.com for more information.
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