Saturday, September 23, 2017

Uniform Standards of Professional Appraisal Practice


uspapFlorida Real Estate Appraiser Board Rules and Regulations

475.628 Professional standards for appraisers registered, licensed, or certified under this part.The board shall adopt rules establishing standards of professional practice which meet or exceed nationally recognized standards of appraisal practice, including standards adopted by the Appraisal Standards Board of the Appraisal Foundation. Each appraiser registered, licensed, or certified under this part must comply with the rules. Statements on appraisal standards which may be issued for the purpose of clarification, interpretation, explanation, or elaboration through the Appraisal Foundation are binding on any appraiser registered, licensed, or certified under this part, upon adoption by rule of the board.

Comp Checks / Pencil Searches

Among the many restrictions of USPAP is one that prohibits appraisers from accepting an assignment to appraise a property based on a predetermined value or range of value. So for example, if an appraiser does a comp check to find out if a home will appraise for at least a certain amount and it will, he or she cannot then accept the assignment to do the actual appraisal from you. In performing a comp check, he or she by definition has actually already performed a type of appraisal and must maintain complete records showing how and when they arrived at the figures they quoted you in the comp check. The logic of this USPAP rule is to prevent dishonest appraisers from being tempted to over-appraise properties, combat predatory lending practices, and prevent fraud in the market place.  Do you want any documents showing you were asking for a comp floating around? This is construed as Mortgage Fraud. 

Appraisers understand...why a check of a properties value is wanted before proceeding with the appraisal and are not insensitive to your needs, but legal issues and business practicality make free comp checks by an appraiser next to impossible. The  recommendation above should provide you with the answers you need to feel comfortable in ordering an actual appraisal.
 
USPAP Advisory Opinions
 
This communication by the Appraisal Standards Board (ASB) does not establish new standards or interpret existing standards. Advisory Opinions are issued to illustrate the applicability of appraisal standards in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems.

 
USPAP Advisory Opinion 19 (AO-19)
 
SUBJECT: Unacceptable Assignment Conditions in Real Property Appraisal Assignments.
APPLICATION: Real Property
ISSUE:  All real property appraisal assignments involve conditions that affect the appraiser’s scope of work and the type of report. What types of assignment conditions are unacceptable?
 
Background

Many residential property appraisers report requests for service where the caller includes statements or information in the request similar to the following:
 
1.  We need comps for (property description) that will support a loan of $___________, can you provide them?
2.  Sales Price: ___________.
3.  Approximate (or Minimum) value needed: __________.
4.  Amount needed: ______________.
5.  Owner’s estimate of value: ___________.
6.  If this property will not appraise for at least ___________, stop and call us immediately.
7.  Please call and notify if it is NOT possible to support a value at or above ___________, BEFORE YOU PROCEED!!!
 
Appraisers report that the caller usually makes it clear that they do not want the appraiser to do any fieldwork. Some callers refer to the service requested as a "comp check" or a "pencil search", while others refer to it as a "preliminary appraisal" or use some terms other than appraisal (such as preliminary evaluation, study, analysis, etc.). Some callers indicate that if the numbers will not work, the appraiser can send a bill for research services or a "preliminary" inspection. Other callers promise future assignments if the appraiser can make the present deal work.
 
To learn more about USPAP (Uniform Standards of Professional Appraisal Practice) please go to www.appraisalfoundation.org
 
Sites to Conduct a Preliminary Search
  1. Bank of America
  2. EAppraisal
  3. Yahoo
  4. Zillow
  5. ElectronicAppraiser
USPAP Advisory Opinion  21
 
SUBJECT: Consulting Assignments
APPLICATION: Real Property
ISSUE: Advocacy
 
Background
 
Appraisers are not permitted per USPAP to advocate a position when providing Appraisal services. The ETHICS RULE states that an appraiser must not misrepresent his or her role when providing valuation services that are outside of appraisal practice. If a valuation service is premised on advocacy or compensation arrangements that are contrary to the ETHICS RULE, the valuation service is not consistent with the objectives of USPAP and cannot be performed by the individual acting as an appraiser.

An individual who sometimes provides services as an Appraiser, but who is currently acting in another role, must ensure that intended users are not mislead as to the individual's role in providing that Valuation Service. This can be accomplished through such means as disclosure, notification, or careful distinction when providing the Valuation Service as to the individual's role. These services are often performed by professionals with additional skill sets such as an Accountant, Engineer, Construction Manager or Real Estate Broker.