USPAP – What’s Important Now? – TAA Podcast 90

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USPAP – what’s important now?  As usual, in a real estate appraiser’s life, USPAP is always important.  But in this podcast, Tim talks about some of the more important stuff – right now.  For example, i-buyers.  Because of the housing shortage, investors are buying single-family residences. But not one at a time.  Those investors are buying in bulk.  So they are paying investment value, not market value.  How does this affect you?  Please listen to the podcast to find out.

With USPAP, what’s important now is changes in market trends.  So, how does the appraiser adjust for changes in interest rates over time?  Generally, as interest rates increase, the trend is for prices to fall.  This is because higher interest rates mean higher monthly payments in which less of the monthly payment goes to principal, while more goes to interest.  So, does the appraiser adjust the comparable sales for this trend, or just ignore it?  Please listen to the podcast to find out.

When it comes to USPAP, what’s important now is also what will happen in the future.  Chances are, as prices fall from their unsustainable past high rates, there will be some pain among appraisers.  How so?  Thirty-six months from now, will that $500,000 house someone bought in a frenzy of offers and low interest rates be worth more than $500,000?  Who knows?  But ROVs, Tidewater initiatives, upset owners, and those who will play the racist card will be omni-present.  How does the appraiser get through such anti-appraiser gyrations?  Training.  Have a bulletproof workfile is a great way, too.

So, with USPAP, what’s important now?  Remember, what impresses your state appraisal board is not the accuracy of your value opinion.  It is, after all, just an opinion.  What is going to impress that Board is the quality of your research and analyses leading to your value conclusion.  It will also look closely at your report(s) to make sure they are not misleading.