Podcast: Play in new window | Download (Duration: 7:51 — 8.7MB)
“USPAP – It Ain’t Binary” is a phrase you’ve never heard before. Why? Well, it is not binary. Seldom in real estate appraisal is anything purely a one (-1-) or a zero (-0-). We have choices to make. There are ambiguities to unravel. What happens when we get conflicting data from the listing broker and the selling broker? County data say the subject has 3,327 square feet. But our ANSI measurements shows 3,402 square feet. A plumbing contractor says it will cost $5,823 to repair the damage from the flood in the bathroom. But a general contractor says a minimum of $9,000 to repair the flood damage since there may be damage to the sub-floor joists. This is what the title of this podcast means.
“USPAP – It Ain’t Binary” also means the document itself, while the universal standard for real estate appraisers and real estate appraisals, recognizes ambiguity. How? In some states like New York, compliance with USPAP is voluntary on the appraiser’s part (within limits, of course). But in Illinois, if you express a value opinion about real estate or any interest in real estate, you’d better have a state appraisal credential.
This podcast carries the title “USPAP – It Ain’t Binary” to recognize the fact that, despite what appraisers want, real estate appraisal rarely has a simple “YES!” or “NO!” solution. As USPAP instructors like to say, “Well, the answer to that questions depends…”, with some qualification to the response you never thought of before. But really, this is a benefit to us. This allows us to amass, analyze, and interpret sufficient quantities of data to come to a value opinion or an exposure time estimate via critical thinking and synthesis. In other words, there are no mechanical, rote, or pat answers in real estate appraisal.