IVS (International Valuation Standard) vs USPAP

[RCA]

...
So as a teacher-type, it's not my fault that the acceptability test in the SOWR doesn't include conforming to your opinion or to some fixed benchmark which exists in isolation of what your peers would do and what the users would expect. It's also not my fault that you never understood that test and how it works until I pointed it out to you. Its' not my fault that when you couldn't contradict the wording of the SOWR that your next step in contradicting the definitions didn't work out for you either.

You are not making a lot of sense with "you couldn't contradict the wording of the SOWR ... ", but let me repeat my argument.

I. Line 385-387 of USPAP 2020-2021 states:

"Comment: The scope of work is acceptable when it meets or exceeds:
o the expectations of parties who are regularly intended uses of similar assignments and
o what an appraiser's peers' actions would be in performing the same or similar assignment."

II. In line 30 we have:
" o Comments are an integral part of USPAP and have the same weight as the component they address. These extensions of the DEFINITIONS, Rules and Standards Rules provide interpretation and establish the context and conditions of the application."

III. Line 79 states:

"APPRAISERS PEERS: other appraisers who have expertise and competency in a similar type of assignment."

Argument

First in the SOW Comment we have a complete statement that you yourself have used to support an opinion that I flatly disagreed with. It fails to state that the SOW must conform to the rest of USPAP, for example the ETHICS RULE. (The IVS does not make this mistake, btw.)

Second, your statement that the requirement that the SOW must meet or exceed the actions of peers (line 387), is fallacious, since, the definition of "APPRAISERS PEERS" is vague and include appraisers who invariably disagree on many important issues. That is a known fact. For example, we have appraiser supervisors, certified, with 20+ years of experience with banks, extended experience as Chief Appraisers who have lost their licenses through egregious violations, such as not properly supervising trainees or giving them credit for experience. Were such appraisers "competent" and "expert" prior to losing their license? I have to literally laugh at the concept of "appraiser peers" so defined. You put this in a standard - but there is no solid standard for "expertise and competency". It is an empty argument.

Conclusion: The USPAP comment lacks an important criteria for the SOW, namely that it must conform to USPAP. It opens up the use of the comment to support fraudulent SOW requirements. Shame on you!


The IVS (2020 version) states in its SOW General Requirements 20.3 :
...
" That the valuation will be prepared in compliance with IVS and that the valuer will assess the appropriateness of all significant inputs: The nature of any departures must be explained, for example, identifying that the valuation was performed in accordance with IVS and local tax regulations. See IVS Framework paras 60.1.60.4 relating to departures."

Nowhere else in IVS is this requirement explicitly or implicitly contradicted.

Final: There should be a standard for writing standards. USPAP fails so miserably in so many respects:

1. There cannot be explicit or even implicit contradictions.
2. You DO NOT REPEAT, you REFERENCE.
3. You define ALL important terms.
4. All assertions and arguments must follow the rules of logic.
5. Rhetoric must be avoided.
6. AND WHOEVER CAME UP WITH THE IDEA OF REFERENCING ADVISORY OPINIONS IN THE STANDARDS? THIS ACTUALLY MAKES THEM DE FACTO PART OF THE STANDARD. GOOD GRIEF.

 

[RCA]

ASB has a process for revising USPAP and one of the provisions of that process is that anyone can submit suggestions and reasoning for revisions. You could apply to sit on the ASB yourself and influence the content and structure of USPAP.

"... and influence the content and structure of USPAP." Apparently not even the Appraisal Institute can make much headway, per their recent comments.

Is someone going to pay me to waste my time?? If so then maybe, ... but no. There are too many cooks in the kitchen.

They should give the LSAT test (which is an IQ test) to all the current people setting on the ASB and fire the bottom 80%, per Pareto's Law: 80% are idiots and 20% have some intelligence. Then they should try to find some of the guys writing accounting and finance standards, a few bright attorneys, a couple of really smart appraisers familiar with all aspects of appraisal - and go from there.

Otherwise, it's a lot easier to bad mouth on the forum - and I probably make just as much headway. The same people on the forum are on the ASB, so what's the difference? Nada. Their is nothing holy about the ASB or the TAF.

 

[George Hatch]

First in the SOW Comment we have a complete statement that you yourself have used to support an opinion that I flatly disagreed with. It fails to state that the SOW must conform to the rest of USPAP, for example the ETHICS RULE. (The IVS does not make this mistake, btw.)​

Compliance with all the RULES are required - all the time. I supposed each RULE could be written to repeat the requirement to adhere to the following list of the other RULES, but what's the point when compliance to them all is always required?

The redundancy that you seem to think is critical doesn't alter the point that compliance with both is already always required.

BTW, the ETHICS RULE relates specifically to the individual's ethical requirements and personal conduct when engaged in appraisal practice, not specifically to the development end of an assignment. It would be more accurate to draw the connection between the COMPETENCY RULE and the SOWR which at least both speak to the technical aspects of the development end of the assignment.

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Second, your statement that the requirement that the SOW must meet or exceed the actions of peers (line 387), is fallacious, since, the definition of "APPRAISERS PEERS" is vague and include appraisers who invariably disagree on many important issues. That is a known fact. For example, we have appraiser supervisors, certified, with 20+ years of experience with banks, extended experience as Chief Appraisers who have lost their licenses through egregious violations, such as not properly supervising trainees or giving them credit for experience. Were such appraisers "competent" and "expert" prior to losing their license? I have to literally laugh at the concept of "appraiser peers" so defined. You put this in a standard - but there is no solid standard for "expertise and competency". It is an empty argument. ​

You seem to be conflating ability with performance. The COMPETENCY RULE requires competent *performance*, even if the individual's abilities at the outset of the assignment are inadequate to the task at hand. This means that the appraiser's peers will be a subset of those appraisers with the requisite *ability*, that subset consisting only of those appraisers who are actually performing competently. Not to mention the added test in the SOWR which also cites the expectations of such users (as a group). Meaning, BOTH are required in all assignments, not just the one.

IMO it is your gross lack of understanding of what these requirements actually mean that lead you to believe that these comprise contradictions.

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Now you may be right that the profession should decide - like the tax code - that there is only one true and correct way to perform a Sales Comparison analysis and that all other methodologies should be banned from appraisal practice. Unfortunately, different market segments and property types involve market participants who use these different methodologies, and after all, our prime directive is to return assignment results that will be both meaningful and not misleading to them. Our prime directive does not consist of returning "accurate" results in isolation of what's meaningful to our users.



Sux to be you.

 

[RCA]

NA has adopted USPAP for the most part. For every IVS appraisal done in America I suspect there is 1000 plus USPAP appraisals. We are talking RE, not personal property or business...

Real Estate is just one area of valuation. Very high-level decision making is based on valuation that covers many kinds of assets, of which real estate is only one. They all get merged together in many cases. For example, the current decision making that occurred with respect to COVID-19, where the costs of construction, PPE, medical equipment, real estate all get merged with other costs such as human life and suffering. In fact, this current crisis will surely become textbook for high-level valuation and decision making.

 

[George Hatch]

USPAP was explicitly written to provide appraisers with the flexibility to respond to the legitimate interests of the users of appraisals. It was not written to restrict that flexibility. Moreover, a document which ends on pg58 (SR5 itself ends on pg 31) is clearly not intended to spell out all the details as would be covered in a 10-volume Tax Code.

And before anyone gets to sniveling about the AOs and FAQs, none of those add any new material or requirements to USPAP itself.

 

[RCA]

First in the SOW Comment we have a complete statement that you yourself have used to support an opinion that I flatly disagreed with. It fails to state that the SOW must conform to the rest of USPAP, for example the ETHICS RULE. (The IVS does not make this mistake, btw.)​

Compliance with all the RULES are required - all the time.

That doesn't work when the rules and statements contradict each other. You are oblivious to logic. A standard cannot be comprised of statements that contradict each other, especially when it states that all rules and comments must be adhered to.

The reason is obvious, no one has time to read the entire USPAP, memorize it and check that every definition, rule and statement is adhered to every time they make a decision. What happens, in reality, is that someone searches for the most relevant rule/statement in the standard, extracts it in isolation, and then verifies that it has been adhered to.

In the SOW Rule we have a Comment statement that can AND IS extracted in isolation, and used in such manner, that is contradictory to the rest of USPAP. Even appraisers such as you have used it in isolation and come to the wrong conclusion; like a fundamentalist who quotes from the Bible that the world was created in 7 days. It must be so, right? Yea, well, many will believe wrt the SOW Acceptability statement.

This is just one of the many failures of USPAP.

You sit on the ASB, you are partially responsible for its failures. It's a shame you can't be more transparent. Hiding mistakes and failure is not the way of Quality Control.

 

[George Hatch]

SR5 ends on page 31. 31 pages. You could have read those passages for content 10x over in the amount of time you've spent mischaracterizing them on this forum.

And for the last time, I've never sat on the ASB. I never applied to sit on the ASB. I'm just a loudmouth on the internet who is USPAP conversant.

 

[George Hatch]

If it's any consolation, I have lots of experience remediating the misunderstandings of people like you. They normally sit on the back row. I *always* pitched my course content hardest to the course participants on the back row; I always aimed at making a convert. That's because I like appraisers in general and I always wanted what was best for them.

 

[RCA]

...The COMPETENCY RULE requires competent *performance*, even if the individual's abilities at the outset of the assignment are inadequate to the task at hand. This means that the appraiser's peers will be a subset of those appraisers with the requisite *ability*, that subset consisting only of those appraisers who are actually performing competently. Not to mention the added test in the SOWR which also cites the expectations of such users (as a group). Meaning, BOTH are required in all assignments, not just the one.

IMO it is your gross lack of understanding of what these requirements actually mean that lead you to believe that these comprise contradictions.

You are reading into the standard, which yes, is poorly worded. But the definition of "Appraisers Peers" is "other appraisers who have expertise and competency in a similar type of assignment." The COMPETENCY RULE you mention does not provide any kind of standard for competency! It provides no standard for "competent performance"!

Here is an example of the IDIOCY:
Line 306: "Competency requires:
1.
2. the knowledge and experience to complete the assignment competently; and ..."

So, to define competency, you first need to understand competency. It is a circular definition.

Where do these idiots come from? Why can't they get it right?

The ASB is a hopeless quagmire of idiots. Dissolve it. Start afresh.

 

[George Hatch]

Back up, homeboi. Read that last sentence (line 300) in the first paragraph of the COMPETENCY RULE. That last line summarizes the operative requirement of the COMPETENCY RULE. Everything else in that RULE is a means toward that end.



What is true about USPAP is that it doesn't function as a recipe book for how to perform every single valuation problem an appraiser might run into. Nor was it ever intended to.