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  #1  
Old 11-26-2003, 02:29 PM
Pamela Crowley (Florida)'s Avatar
Pamela Crowley (Florida) Pamela Crowley (Florida) is offline
 
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NEW! ASB 2nd Concept Paper on The Role of Departure and Scope of Work:

https://www.appraisalfoundation.org/html/PD...per10-14-03.pdf

Please read these and send in your comments.

Or, discuss your opinions here and I'll send the whole thread to them!
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Old 11-26-2003, 08:56 PM
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Does it sound like the ASB is admitting it screwed up? :lol:

I will have to read this concept paper at least 20 times to be comfortable with what they are trying or trying not to say.
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Old 12-01-2003, 07:47 AM
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Have you all read this? What do you think. I have drafted a response, was wondering if we should draft one as a group?
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Old 12-01-2003, 09:15 AM
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Pamela Crowley (Florida) Pamela Crowley (Florida) is offline
 
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Bill,

I moved your post about this to the one on this topic in the General Forum. I would love to see what you've written in response and was hoping we could come up with something that all could go by to send their own response.

Please, let's all let them know what we think!!!
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Old 12-01-2003, 12:08 PM
jeff samolinski jeff samolinski is offline
 
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Looks to me like this is going to be a nightmare. By going to a minimum "scope of work" process we will be always upgrading our reports due to the ineptness of those ordering appraisals. Imagine, they order the minimum appraisal(for $50 by the way) and it does not appraise at what they need- then they order an interior inspection with new value based on inspection-then they want photos of the comps cause someone's nervous about the borrowers credit- then they want an as repaired because you found some repair items oh do not forget they want an estimated cost to cure- then they want some current listings- then they want--------

This is just another way to get those desk top evaluations quick and dirty value estimates out of us with full liability. They want to be able to reduce the scope of work down to barely nothing so our fee will be $50, but they will still want al the assurances that come with a full reports effort.

Watch out for this one!!!! Another example of the Apprasisal Standards Board working in collusion with the innocent "users" ie lenders of our reports. Stupid idiots. Tell me again that uspap was written by appraisers for appraisers and I've got some Florida land I want to sell ya!!! Wake up!!!
  #6  
Old 12-01-2003, 12:26 PM
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Ok, this is what I have drafted, I guess I'll be the idiot that opens this up to shoot holes in, but go for its. would love to know what you all think. I have not yet proof read this, so there may be some grammar problems, etc.



Comments on 2nd Concept Paper on the Role of Departure and Scope of Work


I would like to thank the ASB for considering this issue. I think that there is some confusion on the part or intended users of appraisals concerning the labels used in to describe the level of analysis and the type of reporting options available appraisers and their clients.

To specifically address the questions asked at the end of the request for comments, I will address these below:

1. The concept of minimal standards is a good one. However, I believe that most professional appraisers who strive to maintain compliance with USPAP all ready consider USPAP to be minimal standards. In my opinion, the use of binding and non-binding standards is preferable to what I would view as a weakening of the requirements. I think to establish new, minimal standards then to have standards that one could go above and beyond the minimum with, would cause further confusion.

The key to the current concept that is missing, but has been partially addressed is the labeling of the analysis and reporting options. The labels of Limited and Restricted Use do infer that the appraisal being considered by an intended user is somehow an inferior product. Perhaps this is the area where significant change should take place. In my opinion, a letter of transmittal should be a required section in an appraisal and should be located prominently before any analysis or property descriptions. This letter should indicate the scope of work decision and description. A new Scope of Work Rule would be a positive addition to the standards, providing it sets detailed requirements about what is required in this narrative section the appraisal. The scope should provide the reader of the appraisal with enough information to understand what the appraiser has or has not done to solve the appraisal problem. Many appraisers consider the scope of work as a “boiler plate” section of an appraisal. It needs to be clear that the scope of work is a very important disclosure to the intended user of the appraisal to describe what the appraiser has done to complete the assignment. To me, this includes all aspects of the inspection, the research, the analysis and the reporting components of the appraisal process. If this is done adequately, there would be no need for the labeling of appraisals.

2. The effect on the interested parties would be an improvement, overall. The appraiser would clearly define the process to the intended user, including all of the rationale for the analysis and reporting. It would be clearly set forth as to what was considered and why. This would benefit the user of the appraisal to the extent it would provide a prominent section in the appraisal for the intended user to reference to be sure that the appraiser has complied with the requirements of the client and that the analysis considered is consistent with their needs. Regulators would be able to reference this section of the appraisal to consider if the analysis performed is adequate for the appraisal problem and to establish what were the minimal requirements for the appraisal process.

3 & 4. I don not believe that the elimination of the labels binding and specific would make USPAP more enforceable or understandable. I think it would further confuse what USPAP requires for compliance. The labels that need to be removed, completely, are the analysis and reporting option labels. Personally, I believe Departure to be a useful tool to appraisers, intended users and to regulators. I think it important, for example, to disclose that an approach to value is no being considered, even though it may be relevant, but not necessary to value a property. The intended user should be made aware of this.

If a minimal set of standards is promulgated, it would have to be worded in such a vague way that I do not believe it would be enforceable.

5. Yes. As reasoned above, I believe this to be a good concept that should become part of USPAP.

6. Yes. I think that the removal of the reporting labels and the analysis labels would help appraisers when discussing the scope of work with intended users. The labels now infer that any product less than a Complete Self Contained Appraisal Report is an inferior product.

7. Overall, these concepts would assist in improving the public confidence in the appraisal practice. However, public trust will not be as high as it should be until the profession is able to police itself those who continue act as lap dogs for those wishing to arrive at a predetermined value. This, by far is this biggest issue facing the appraisal profession. There are many hardworking honest appraisers who have curtailed if not eliminated providing appraisals to the largest group of users of appraisals, lenders.

The lending community has needs to have enforcement of requirements similar to USPAP in order to have any effect on public trust. Many public members I speak with, who have no working knowledge of the appraisal process, have told me that their lender told them they would send out an appraiser who “could make this work”. Many have told me that they thought our job was to put on paper the number they needed. To prove a value needed. As long as this is the public image of appraisers, all of the changes to USPAP are for naught. Enforcement agencies are understaffed, perhaps under funded, to police the profession now. Why write new regulations when the old ones can not even be enforced?
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Old 12-01-2003, 07:02 PM
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B) Pamela,

I am for eliminating the labels of Complete or limited Appraisal. I am for eliminating the use of such terms as Self Contained(There ain't no such animal), Summary, or Restricted Use.

I believe the confusion comes from the belief that the Departure Rule drives the appraisal process. It does not. The Scope of Work drives the appraisal process along with identification of intended use and intended users.

I will re-read the draft but that is my opinion at this point, and most likely will be the context of my letter.

Don
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  #8  
Old 12-01-2003, 07:18 PM
John,SRA John,SRA is offline
 
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Jeff,

There is nothing in the paper about a minimum scope of work. It only addresses minimum standards. These are two very different things.

I have found that many appraisers find the current structure of USPAP difficult.

For example, SR 1-4b says that you MUST do a cost approach when it is applicable. However, a few pages earlier we were told that if something is applicable, but not necessary, then departure is allowed. So, even though 1-4 says you have to do the cost approach, you don't really have to.

The labels "Complete" and "Limited" have probably caused more unnecessary confusion than anything else ever has. I would love to see these terms eliminated. Few appraisers and even fewer clients really understand these two labels.

Best Wishes

JC
  #9  
Old 12-01-2003, 07:24 PM
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as long as the Lending Industry has it's hands in the pockets of the ASB or anyone else for that matter, the twisting an turning of screws (ever so slightly) will forever change the rules by which we participate within this business.

the Lenders are now sending out an abundent amount of information in concern to AO's - which are basically "Opinions" that actually are not even in effect, but which may become effective as of 01/01/04; so are we now being pushed into living by the "Non-Active" AO's :question:

back in the day while practicing Real Estate - we were forced into "Plain Language" from so many practioners of "Legal Ease" - just wondering if that may be the way to go here, naaaaa. just kidding - then this business would just be another business witout a "darkside" ; grey area; muddy water; slippery slope; greased gizzmo; whatever

I believe Frank had drafted a great response to the last stab by the ASB for the new educational requirements, anyone know if he ever got a response :question:

  #10  
Old 12-01-2003, 07:50 PM
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A few quick thoughts about Bill's response:

1. Grammar police report: "infer" and "imply" are not interchangeable. Example: I infer from his statement something other than what he intended to imply.

2. I think that the departure provision can take a hike if the scope of work statement accurately details what was done and why. I'm not sure how the New Improved USPAP would deal with how and when an approach should or must be used. But a statement such as the following should do the trick as far as the current Limited vs Complete labels are concerned: "The cost approach was not considered applicable because of the age of the improvements; the sales comparison approach was performed using adjustments derived from the market by paired sales analysis; the income approach was not considered applicable because the area and most typical improvements are owner occupied."

We probably need to try to construct several example scope of work statements here, and fine-tune them in the fires of professional criticism. After which, of course, we could get Wayne to post them in an FAQ for everyone to adapt to his needs.
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