New USPAP Q&As published March 6, 2025

[CGinMN]

My issue with the Q&A is that it narrowly defines “experience” with loaded language including “personal views,” “subjective judgement,” “preconceived notions,” and something that is devoid of “evidence and logic.” I doubt there is any appraiser who would characterize their usage in this way. Experience as appraisers use it, is never personal, always professional. Experience could be viewed as a collective accumulation of professional knowledge, including analyzing evidence, that informs one’s judgement.

The Q&A points out that assignment results by definition cannot be developed from an appraiser’s experience gained outside the assignment. OK. However, when an appraiser has performed multiple data analyses previously, to the extent that they are an expert, and they then draw on that accumulation of knowledge (experience) to inform their professional judgment as it relates their current assignment, that is most certainly appropriate. And of course once they make the decision to incorporate that knowledge into the new report, it becomes an assignment result. Whether the GSEs accept it or not is a user issue that USPAP should not weigh in on.

The problem is that certain users may not like to see “experience” because it is not specific and it is abused by unethical appraisers. But the same could be said of “paired sales” when there are none, so this doesn’t solve any problem. When making professional rules we must start from the assumption that appraisers are acting ethically and professionally, not unethically and personally. When an ethical appraiser says they did not analyze new data for this assignment to determine a park adjustment, and their adjustment is based on an accumulation of knowledge gained by previously analyzing data - or “experience,” in short - that should be acceptable IMO.

 

[Terrel L. Shields]

whomever taught you that adjustments can be qualitative or quantitative was just flat out wrong

What copy of "The Appraisal of Real Estate" do you own? I am in the house and not the office, but the copy in the house is the 10th. I don't think it obsolete yet. And on page 384 clearly states under "IDENTIFICATION AND MEASUREMENT OF ADJUSTMENTS" it lists 6 Quantitative methods and 3 Qualitative measurements.

Certainly, I understand that USPAP is a pointless exercise and complete malarkey in light of FANNIESPEAK being the language of the residential appraiser. But if the authors of USPAP were alive today, and USPAP really ruled the industry and not FNMA, USPAP clearly says we are supposed to be familiar with the document thus, must be aware of, understand, and correctly use recognized methods and techniques to produce a credible appraisal.

For you to say it is "flat wrong" to use qualitative methods smacks of nonsense to me.

 

[Joe Flacco]

Nope, you are simply incorrect about that as you simply do not understand the definition of an adjustment to a comparable sale in an appraisal report. My position on the matter is supported by the definitions in The Dictionary of Real Estate Appraisal and the discussions on the topic in The Appraisal of Real Estate, both of which are generally accepted as credible references in our profession. If you have any support for your position from a credible source (other than Flacco says so) that is generally accepted among practitioners in our profession, please post it.

Nearly all appraisal education regarding the sales comparison approach references qualitative adjustments. Even the licensing exams have a section on qualitative adjustments.

You are simply wrong in your interpretation of adjustment. I don't know why you are even trying to argue this.

 

[George Hatch]

The one thing that we're overlooking here is they qualified their comment by referring to making an adjustment "solely" off experience. Although unstated the implication is that the option of last resort is usually not actually the last resort, but a shortcut that people use in lieu of doing the work.

"I had no choice. This what I had to do" can only be considered applicable when it's true.

 

[Joe Flacco]

I don't have any issues with the Q&A saying referencing experience as support is not credible. I agree with that.

 

[glenn walker]

USPAP was and is really a paper weight because only the appraisers have to be held accountable to it but few to no others in the lending world or GSEs. The appraiser is in a fight with one hand tied up behind his back when a state board or a GSE comes after him.

 

[George Hatch]

"This is what I did" can form a defensible position when its in compliance with an acknowledged standard and in lieu of any other references. That's what inhibits the ability of a reviewer or underwriter to prevail solely by reference to their status instead of the actual merits of the reasoning. (aka "because I said so")

 

[glenn walker]

There is no such thing as a USPAP compliant report. There is only a report that no heavy handed USPAP expert has declared non compliant.

When you get three old USPAP experts in a courtroom they usually will testify that only their interpretation is the most correct one. The Preamble should start with show me the appraser and I will find his errors.

 

[Terrel L. Shields]

experience as support is not credible.

by referring to making an adjustment "solely" off experience.

The question is then, if a property or a feature is so unique as to be unquantifiable or unqualifiable then how does one estimate a value/adjustment? I recall that back in the 1930s, a court case came to the attention of SCOTUS where a factory closed and the small town saw zero sales of property. The plaintiffs argued for zero taxes as they concluded there was no value because there were no sales. In the end, the court ruled that there was a value and the fact it was a frozen market didn't change that. It basically concluded that the absence of evidence was not the evidence of the absence of value.

 

[Joe Flacco]

It is not that difficult to support adjustments with evidence and logic. Adjustments are just mini-appraisals for specific attriutes. There are three accepted methods which are sales comparison, cost, and income. For most significant adjustments, thinking about the difference based on combination of sales comparison and cost will give you credible and reliable adjustments.