USPAP and Hot Sauce – TAA Podcast 072

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USPAP and hot sauce? Really?! Yes, there is a connection. That connection is the basis of analysis. So, what is analysis? For appraisers, it is really just a side-by-side comparison. Comparison of what? We compare, side-by-side, attributes of properties. Which properties? What attributes? See, that’s the connection. How hot is a hot sauce? There is only one way to tell. You taste a bunch of them. This is that side-by-side comparison. OK, there is the Scoville scale. It tells you how hot a pepper is. But only you can conclude how hot is is for you! And you do that via a side-by-(painful?)-side comparison.

USPAP and hot sauce have other characteristics in common, too. If a sauce you sampled were seriously hot, you’d remember that, right? You’d have that experience stored in a memory bank somewhere. That way, you could access it the next time you tried a new hot sauce. This is also true for our appraisals and reports. We call that memory bank the workfile. There is a workfile for at least two reasons – one practical and one ethical. Both of those reasons are in place to protect us. Really! USPAP exists, in part, to protect us. What’s the practical reason? We can’t remember all the stuff that went into any particular appraisal. We we have a workfile so we do no need to remember. Everything we said, did, say, heard, smelled, etc. goes into the workfile. All those data and all that information are at are fingertips. And the ethical reason?

USPAP and hot sauce have share an element of comparison. We retain those comparisons in the workfile. But we also retain those comparisons to an indication we complied with Standard 1 in developing a credible value conclusion. And the other reason? Well, you make that discovery.