Tim

There’s something inconsistent about the title of this blog, isn’t there? We’re going to take a look at appraisal reports and the prominent issue of their internal inconsistencies, something from which AVMs do not suffer. As we overcome internal inconsistencies we are better able to compete with those who would put us out of business.

Did you know that issues with highest and best use cause a lot of state charges against appraisers? In this blog, Tim Andersen, the Appraiser’s Advocate takes on the concept of financial feasibility as part of USPAP.

What do dinosaurs, a wizard, Mickey Mouse, Whist, and some old broom have to do with real estate appraisal? Tim Andersen, the Appraiser’s Advocate ties them all together for you.

Some say bifurcated appraisals are the future of real estate appraisal. They’re right. Others say that the traditional appraisal model works just fine and thus not need to be changed. They’re right. This musing discusses why they’re both right.

If this statement is the width, breadth, and depth of your defense against a state board’s charges, you probably should just sign the consent agreement now. In other words, that statement should not be the width, breadth, and depth of your defense, defense strategy, or defense tactics when your state board charges you with a USPAP violation(s). So, what to do? Read on…

Question: “A reviewer just called me. She indicated that USPAP required me to provide verification of the sales data from two different sources. I asked the reviewer to show me where this requirement was in USPAP. The reviewer did not answer my question (or apparently, appreciate my attitude in asking it), but indicated that unless I complied with her “request” in a hurry she would send a report off to the state for review and possible discipline. As you might imagine, that got my attention. Where in USPAP does it say I have to confirm my sales data with two different sources? I don’t want to make this mistake again. Help! Is that reviewer crazy?”

Question: All too often appraisers hear the complaint from the consumer (who, typically is not the client, thus we appraisers really shouldn’t care), “…the damn appraisal came in too low! That idiot appraiser doesn’t know his ass from his elbow! That’s basically why one homeowner filed a complaint against me with the state. Now what do I do?!” Typically, appraisers hear this when the contract sales price is greater than the appraised value, thus it affects the broker, too, as well as the lender, buyer, and seller. What are appraisers supposed to do when this happens?

So, what does the State look for when it asks you to send in your appraisal and workfile? It’s looking for (a) the data in your workfile to support your value conclusion in the report; and (b) it’s looking to see if the appraisal and report are credible (which, according to USPAP means worthy of belief – although USPAP does not make clear at all of whose belief the appraisal should be worthy). In short, what this means is the state looks to see if you followed Standard 1 in developing the appraisal (credibility) and Standard 2 in reporting the appraisal (not misleading).

In residential real estate appraisal, it is common to omit the protocols of the Cost Approach in all but the appraisal of new construction.  That may be common, but is it proper appraisal protocol?  One reviewer does not think so, and nicked an appraiser for this omission.  So, what does USPAP say on the matter?  The Appraiser’s Advocate, Tim Andersen, takes a look at this question and offers his thoughts on it!