Broker/Appraiser

[Pat Butler]

In our state we cannot opt out of USPAP. So any value estimate given by a broker/appraiser has to satisfy USPAP. That would mean modifying the certification (SR2-3) to indicate that you DO have a prospective interest in the subject property. Or else, no one in ILL holding both licenses could ever give value opinions.

AO-21 is convoluted and would appear to exempt ERC appraisals from USPAP because they indicate an anticipated sales price and NOT value. The distinction they appear to make between price and value is a huge stretch that seems to be a work around of this problem after-the-fact.

 

[Mountain Man]

Pat, keep in mind that AO's are not a part of USPAP. They are just clarification letters. As commercial appraisers, we appraise to several different definitions of value. As such, USPAP has to recognize that not all clients need "market value".

 

[Virgil Brown]

Opinion of value

If you have a certification, if it is spoken loud enough to hear, then it is an appraisal. If it is writing it can be used for any purpose chosen. Even if you just give a Brokers Opinion of Value it has the weight of a full appraisal.

 

[Pat Butler]

As such, USPAP has to recognize that not all clients need "market value".

AO-21 appears to say that if it isn't market value then USPAP doesn't apply. That would mean that many types of commercial appraisals don't have to adhere to USPAP.

 

[Mountain Man]

Not in my opinion Virgil, your last statement is wrong. The intended used, the reason the client called, and how the client is engaging you determines if you are wearing the brokers hat, or the appraisers hat. To say that appraisers can't give a BPO or CMA to a listing client is preposterous. There is nothing wrong with having both licenses, and working as both. I just don't do both for the same client.

 

[Mountain Man]

AO-21 appears to say that if it isn't market value then USPAP doesn't apply. That would mean that many types of commercial appraisals don't have to adhere to USPAP.

No, not necessarily. Value in Use and Liquidation Value (a lender's definition of value) are a couple of other values appraised on a regular basis, all under USPAP. I'll appraise to any value a client wants, just give me a definition so that I know how to address it.

 

[The Warrior Monk]

Not in my opinion Virgil, your last statement is wrong. The intended used, the reason the client called, and how the client is engaging you determines if you are wearing the brokers hat, or the appraisers hat. To say that appraisers can't give a BPO or CMA to a listing client is preposterous. There is nothing wrong with having both licenses, and working as both. I just don't do both for the same client.

One of the problems with an appraiser using terms such as BPO and/or CMA is that the general public considers these to be services provided by a licensed real estate broker/salesperson, not an appraiser. That can be a major problem for someone with both licenses. An appraiser provided a BPO is particularly egregious, IMHO, since the first letter stands for Broker.

If I was acting as an appraiser, I'd stick with appraiser terminology, and if acting as a salesperson, I'd stick with salesperson terminology.

 

[PJK03]

It sounds to me like you need to retake a USPAP course....maybe a better USPAP course then you took last time....or maybe you should try reading USPAP.......truthfully, if you cannot see the obvious conflict of interest and violations of USPAP inherent in doing what you have proposed then your license to appraise should be taken away from you.....this is really basic USPAP 100 and the fact that you even asked the question shows that you do not have even a basic grasp of USPAP.
m2: m2: m2:

THanks, but get off your high-horse!

 

[PJK03]

Thank you to the Many very good minds out there who helped with my question. It seems that most of you folks are good natured people who want to make the profession better. A few of you are really full of yourselves. This is a place to ask the questions, even the ones that seem obvious. If you can't handle a question, then you really shouldn't respond.

 

[DWiley]

appear to exempt ERC appraisals from USPAP because they indicate an anticipated sales price and NOT value

Anticipated Sales Price, as defined by ERC, meets the USPAP definition of Market Value. It is a different type of market value than we typically use, but it is a type of market value nonetheless.

If you have a certification, if it is spoken loud enough to hear, then it is an appraisal.

That is not what USPAP and related advice says. If an individual has the opportunity to provide more than one type of service (appraisal or brokerage) the individual is free to choose to provide either service. One cannot, however, provide both at the same time, and one must not misrepresnt his/or role when providing services that are not appraisal practice (e.g. listing and selling).

Most state laws have specific provisions addressing the obligations of a sales person versus the obligations of an appraiser. For example, in my state a BPO or CMA can only refer to things like Recommeded List Price or Recommended Purchase Price; they cannot refer to the value of a property.

It is wise to consult one's specific state law.