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wearing two hats (salesperson/appraiser)

Discussion in 'Commercial/Industrial Appraisals' started by rolco, Nov 30, 2011.

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  1. rolco

    rolco New Member

    May 4, 2011
    Professional Status:
    Certified General Appraiser
    Can an appraiser who is a licensed salesperson provide a potential sales customer with a certified appraisal of their property in an ethical manner so as long as the the appraiser discloses in the certification that he/she may have a future interest in the property?

    It was always my understanding that under no circumstances could an appraiser act as both an appraiser and sales agent for the same property for the same transaction.

    Below are the ethics rules on conduct from USPAP. The two rules in bold seem to contradict each other. The latter of the two seem to suggest that you can do both as long as its disclosed in the certification.

    207 An appraiser must perform assignments with impartiality, objectivity, and independence, and
    208 without accommodation of personal interests.

    209 An appraiser:
    210 must not perform an assignment with bias;
    211 must not advocate the cause or interest of any party or issue;
    212 must not accept an assignment that includes the reporting of predetermined opinions and
    213 conclusions;
    214 must not misrepresent his or her role when providing valuation services that are outside of
    215 appraisal practice;
    216 must not communicate assignment results with the intent to mislead or to defraud;
    217 must not use or communicate a report that is known by the appraiser to be misleading or
    218 fraudulent;
    219 must not knowingly permit an employee or other person to communicate a misleading or
    220 fraudulent report;
    221 must not use or rely on unsupported conclusions relating to characteristics such as race,
    222 color, religion, national origin, gender, marital status, familial status, age, receipt of public
    223 assistance income, handicap, or an unsupported conclusion that homogeneity of such
    224 characteristics is necessary to maximize value;
    225 must not engage in criminal conduct; and
    226 must not perform an assignment in a grossly negligent manner.
    227 Comment: Development standards (1-1, 3-1, 4-1, 6-1, 7-1 and 9-1) address the requirement that
    228 “an appraiser must not render appraisal services in a careless or negligent manner.” The above
    229 requirement deals with an appraiser being grossly negligent in performing an assignment which
    230 would be a violation of the Conduct section of the ETHICS RULE.
    If known prior to accepting an assignment, and/or if discovered at any time during the assignment,
    232 an appraiser must disclose to the client, and in the subsequent report certification:
    233 any current or prospective interest in the subject property or parties involved;
    234 any services regarding the subject property performed by the appraiser within the three
    235 year period immediately preceding acceptance of the assignment, as an appraiser or in any
    236 other capacity.
    237 Comment: Disclosing the fact that the appraiser has previously appraised the property is permitted
    238 except in the case when an appraiser has agreed with the client to keep the mere occurrence of a
    239 prior assignment confidential. If an appraiser has agreed with a client not to disclose that he or she
    240 has appraised a property, the appraiser must decline all subsequent assignments that fall within the
    241 three year period.

  2. stefan olafson

    stefan olafson Senior Member

    Apr 2, 2003
    Professional Status:
    Certified General Appraiser
    North Dakota
  3. David Wimpelberg

    David Wimpelberg Moderator Staff Member Moderator

    Mar 30, 2005
    Professional Status:
    Certified General Appraiser
    New York
    Theoretically, yes. I'm assuming that there is nothing specific in your state's license law that states otherwise.

    Practically, speaking it may not be wise to do so. It is doubtful that the appraiser will be perceived as being unbiased. Also, certain clients, such as a lender, won't accept the appraisal. It could be performed specifically for the potential sales customer, but I wouldn't recommend doing so (misuse of the appraisal, fodder if the relationship with the client goes south, etc.).

    In this specific case, if the broker is asked to give an opinion of value, I recommend the broker provide a BPO. Otherwise, recommend another appraiser.
  4. Michael S

    Michael S Senior Member

    Mar 18, 2009
    Professional Status:
    Certified General Appraiser
    New Mexico
    It may technically be possible to provide both appraisal and brokerage services in an ethical and legal manner. However there is a percieved conflict of interest that can't be overlooked. No matter how impartial you try to be, it's not worth it.

    It seems like the compensation for providing brokerage services would be far higher than any possible appraisal fee.
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