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Ao-3 Revision / Anyone Else Get This?

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jtrotta

Senior Member
Joined
Jan 16, 2002
2003 Advisory Opinion & Statement on Appraisal Standards "Updating an Appraisal has been Revised".

Got this the other day off email from one of my off and on again Clients; anyone else :question:

"USPAP does not have different requirements for appraising a property that happened to have been the subject of a prior appraisal assignment. Furthermore, other than complying with the confidentiality section of the Ethics Rule, there are no restrictions on who may appraise the property in such a circumstance, who the Client is, what length of time may have elapsed between the prior and current appraisals, or wether the characteristics of the subject property are unchanged or significantly different from the prior appraisal. All appraisal assignments must be developed in accordance with the requirements of Standards 1,4,6,7, or 9, as applicable, and must be reported in accordance with the requirements of Standards 2,5,6,8, or 10 as applicable. Such reporting requirements can be satisfied by producing a new appraisal report, OR by attaching the prior appraisal report to a new document that adds "sufficient" information so that, in combination. these satisfy the applicable reporting requirement. Please keep in mind no appraisal Form is USPAP compliant, it is the content that makes the report USPAP compliant."

There is more, but ya'll git the drift by now; so whats up wit dat :question:

We no sooner git a raise and they figer a way to git out from payin :unsure:

actually I see it as having the potential fer even mo Benjamins, as I peeks tru the options of fate

B)
 

Julio E. Sune Jr. (FL)

Senior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Florida
USPAP

Talk about going in circles!!!!

Sound like: "A might equal B but C is equal to A but D is equal to A and C"

So, bottom line is up to the appraiser to "invent" a user "satisfying" and USPAP "compliant" format.



:angry: :angry: :angry:
 

Pine Tree

Junior Member
Joined
Aug 19, 2002
Professional Status
Certified Residential Appraiser
State
Maine
I got that same email..
gave it a quick once over .. my first thoughts were this: the appraiser makes the final decision on the reporting format not the client. Something akin to the patient elling the doctor what to write the perscription for...

Who's licence is at stake?

Who is the party responsible to be USPAP compliant?

Surely NOT them that sent that email! I am weary of clients telling we appraisers how much better they know what is an appraiser's responsiblity in developing an appraisal..
Rock On! Wendy
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
The appraiser is responsible for being USPAP compliant! USPAP does not apply to an individual that is not licensed or certified as an appraiser. That is why a client/lender can say anything they want--within their own professional standards.

And that is the gist of Advisory Opinion 03. After the lender/client describes what service they are seeking, it is the appraiser's responsibility to determine if and how they can respond to the request in a manner that is in compliance with USPAP. AO-03 outlines three different procedures as possibilities in responding to a request from a client. Fannie Mae guidelines outlines what they required--and the appraiser determines how to respond in compliance with USPAP and the clients supplemental guidelines (Fannie Mae).

Unless I a missing something--I don't see anything too unusual in the part that you posted from a client.
 

rtubbs

Junior Member
Joined
Jan 15, 2002
Jo Ann, according to the Preamble to USPAP, "These Standards are for appraisers and users of appraisal services." Somehow, I think that all parties involved are required to comply with the requirements; of course, we know that isn't the case.
 
Joined
Jan 16, 2002
Huh ?

AO3 was approved 3/5/91 and revised 5 times since then, the last time being 6/11/02....is this revision #6 ?

I havn't heard anything from anybody which is the way I like it, kind of like being a mushroom, you know kept in the dark and feed BS all day. :blink:
 

jtrotta

Senior Member
Joined
Jan 16, 2002
:rofl: :rofl: I jus re-read what I postedid; why folks even they agree- it's our decesion, we can satisfy this little delema by producing "a new report" OR by attaching the prior appraisal to a new documint :mrgreen: - now people, c'mon, why should we bother going thru all the work of writing up all new information and attaching it to anythin; when we have the choice of jus doin a new repot :question: :question:

I'll gladly collect fer (2) appraisals today to shortin the length of time it will take fer the 2nd one when the Bank screws up (time wise) and can't close yer deal on time; oh ya I know they said they could close it in 10 days; been herein that since the 80's, hasn't happened yet.

mo money / mo money / Benjamin lead the charge B)


:ph34r:
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
An illustration for Option 1 in Advisory Opinion 3 would be Appraiser A completes an appraisal on a URAR of 123 Main Street. A few weeks or months later, Appraiser B is contacted to do a 2055 Exterior on 123 Main Street. Or the client contacts Appraiser A to complete a 2055 Exterior of 123 Main Street. Either way the lender now has an update to a prior assignment report. (new assignment without incorporation of a prior assignment, regardless of whether it is Appraiser A or B for the second assignment)

An illustration for Option 2 in Advisory Opinion would be Appraiser A completes an appraisal on a URAR of 123 Main Street. A few weeks or months later, the client sends Appraiser B the first page of Appraiser A's URAR and requests a 2055 exterior report from Appraiser B. Appraiser B drives by the subject, researches current market data, fills out the 2055 exterior with all the appropriate procedures and methods, staples page one of the original URAR report to the 2055 and sends it with an invoice to the client. Or client sends Appraiser B a complete URAR with all attachments and orders a field review of that report, to be reported on Fannie Mae's form 2000. (new assignment that incorporates by attachment of a prior assignment by Appraiser B).

An illustration for Option 3 in Advisory Opinion would involve the original client/lender and the original appraiser/appraisal firm only. It has been four months since the original effective date and per Section 201 of Fannie Mae guidelines, the client/lender cannot sell the loan to Fannie Mae without the market information being updated to current market conditions. So original client still has the original report in their file. They contact the original appraiser and requests a "recert". Original appraiser responds with an update to a prior assignment. The original appraiser makes the decision of how to respond--either a 2055 interior or a 2055 exterior or only a letter that would be in compliance with USPAP Standards 1 and 2 per guidelines in Section 201 and AO-3 (Fannie Mae guidelines require at least exterior observation of the subject). For the appraisal update letter to be in compliance with Standard 2, seven items are required to be in the letter, everything else is incorporated by reference to the original report.

Regardless of the type of report that is prepared for the client, it is a new assignment with a new work-file, developed in compliance with Standard 1, and a new report written in compliance with Standard 2 that will not be misleading to a reader of the report. And the appraiser decides what the appropriate fee is for the service rendered. Advisory 3, and now Advisory Opinions 25, 26 and 27 are illustrations of how appraisal standards are applicable in specific situations (just like it says at the top of all Advisory Opinions).

Appraisal--the act or process of developing an opinion of value---if you are updating a prior report with current market information, you are developing a current opinion of value regardless of how it is reported (new assignment).

Report--any communication, written or oral, of an appraisal---whether it is a URAR, 2055 interior, 2055 exterior, or a letter, it is a new report, whether it is the original or an updated report.
 
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