USPAP, Transformative Appraisals, and the Public Trust – TAA Podcast 113

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We call this one USPAP, Transformative Appraisals, and the Public Trust.  Actually, this podcast is not USPAP oriented at all.  I have to include USPAP for SEO purposes.  However, the issues of transformative appraisals and the public trust are the orientation of this podcast.

Typically, appraisers do not equate USPAP, transformative appraisals, and the public trust.  But that is unfortunate.  By not equating these concepts we have made it very hard for the public to trust us, what we do, and how we do it.  As evidence of this, consider the GSEs’ movement toward not using appraisers in certain very-limited circumstances.  This does not mean we are not necessary.  It does mean, however, we are less necessary than before.  How much of that is due to our failure to court and win the public’s trust in us?

What happens when appraisers equate USPAP, transformative appraisals, and the public trust?  In all candor, I don’t know.  However, until we choose to equate them, via education and/or practical application, how many appraisals will continue to be the result of educated guesses, rules-of-thumb, and boilerplate?  And how many appraisal reports will continue to be merely an agglomeration of facts, providing the client with nothing they did not already know?

So this is what we mean by USPAP, transformative appraisals, and the public trust.  Our appraisals must transform mere facts and data into information the client can use to make decisions.  For example, merely to state the GLA adjustment is $87 per square foot of difference is a fact with no information.  But what market forces made that $87 per square foot a reality?  How does $87 per square foot relate to the subject’s exposure time, highest and best use, marketability, and market value?  Mere facts do not answer those questions, nor do they give the public a reason to believe us.  If they don’t have reason to believe us, why should they trust us?  When we transform appraisals into something they can believe, when appraisal reports are reliable, then we will have transformed real estate appraisal from what it is not into the profession it should be.