USPAP and Adjustments – TAA Podcast 116

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USPAP and adjustments.  Are they facts or just your opinion?  USPAP does not use the word adjust or adjustments in Standard One, the appraisal development standard, nor Standard Two, the appraisal reporting standard.  Further, USPAP does not require appraisers to make them to anything at any time.   They are a function of what the GSE’s want from an appraisal report.

So, when it comes to USPAP and adjustments, are those adjustments facts or just opinions?  There are appraisers who advocate they are opinions.  Why?  Because there are no standard protocols to derive an adjustment.  There are numerous ways to derive individual adjustments.  Because of this lack of standardization, so long as there is market support for the adjustment you make, it is just your opinion, right?

Market support?  USPAP and adjustments means you have market support for them.  Since there is such support, that means you extracted them from the market.  Given that the market revealed to you that swimming pool adjustment, that is a market-derived fact, not your opinion.  Any facts we report must, according to SR2-3, be both true and correct.  This requires verification.  We verify facts.  We confirm opinions.

So, with USPAP and adjustments, are they facts or opinions?  There are classes you can take to help you answer this question.  There are USPAP instructors out there you can contact who will help you navigate your way to an answer to this question.  But the point is (and any state appraisal board member will tell you this) be adjustments facts or opinions, they must have market support.  Without that support, they are nothing more than guesses.

So, gather your data, do your due diligence, and make your decision.  In the end, when it comes to USPAP and adjustments, I think you’ll agree with me:  there are facts to be found.