Common USPAP Violations

[Mike Kennedy]

FROM THE NEW HAMPSHIRE BOARD............. Wisdom for ALL ........ :icon_idea:

http://www.nh.gov/nhreab/appraisers/violations.html

 

[rcsone]

......thanks.......best to all......rs

 

[PropertyEconomics]

Amazing how many of these are such common sense.

 

[Mr Rex]

From what I can tell, they were looking last my last 3 review assignments.:new_smile-l:

 

[rcsone]

......first casuality thrown in the pursuit of profit is the obstrufication of someone else's common sense............rs

 

[CANative]

I would like the thank New Hampshire for saving me the trouble of typing all that in my review reports.

 

[Terrel L. Shields]

Failure to summarize sufficient information to disclose -- to the client and any intended users of the appraisal -- the scope of work used to develop the appraisal (SR 2-2 b vii))

How can the board determine whether the client understands the scope. How do they get into their shoes?

Inadequate disclosure of extraordinary assumptions or hypothetical conditions, including failure to state that their use might have affected the assignment results (SR 2-1 c and SR 2-2 b x))

And what if they don't? Who's judgment call is it? The appraisers? or the Board after the facts

Unsubstantiated land value or construction costs in the cost approach (SR 1-4 b))

define what is "substantiated"? Reference it in the MPA or comments? The certification? Or demand a grid of all sales??

Selecting comparable sales based upon their ability to support a preconceived notion of value, rather than based upon their similarity to the subject. (ETHICS RULE Management))

again, where is the line between biased and unbiased selection and can the results be duplicated? I mean if you take 10 appraisers and let each pick comps for a house, will all pick the same, will any?

Omitting an approach to value that typical practice and peers would require. (SCOPE OF WORK RULE, SR 1-4 a, b and/or c))

and who defines your "peers"? An MAI? Skippy?

So, if a reviewer finds these flaws, it should go to the board and that person be put to sleep. If the board does not agree...then the reviewer should be put to sleep. In a matter of weeks the glut of appraisers will disappear.

There are too many words which are abstract to suit me.
summarize develop disclose unsubstantiated notion similarity preconcieved . There are no posts to tie your horse to. You just know you don't want him to run off. Who determines the degrees? I mean these are not black and white judgments in many cases. Shades of gray.

 

[Doug Smith SRA]

UW Disconnect

These lists are common and are apparently collected and exchanged by State Boards.

This particular list is a particularly good "hit list" for ratcheting up the USPAP violation score. After all, if the report merely depends on the HBU check mark and does not include " support and rationale for the opinion of highest and best use", push the red violation buzzer button.

No item on this list can be ignored but the prevalence of these items has more to do with the fact that the users of appraisal reports are just not concerned about the import of these violations. Somehow these important items simply did not become universally "best practices." Look at the list. Practically no item is ever mentioned by an underwriter.

While the distribution of these lists by State Boards in laudatory, State Boards need to carefully shoulder some of the responsibility for approving a vast number of clearly incompetent appraisers that clutter the profession today. At the same time, appraisers have to rise above the market forces of the appraisal profession where users of appraisals set the bar so low as to show utter disdain for USPAP.

Appraisers have to view and accept these lists as "best practices." and not some way to prevent some State Reviewer from stomping on the Red USPAP Violation Button.

I agree with others, it is a great list to auto-populate the 2000 review form.

 

[leelansford]

......Who determines the degrees? I mean these are not black and white judgments in many cases. Shades of gray.

Terrel, in my "former life", I was one of a few independent contractor investigators who performed field investigations, and communicated the results, to my state's appraiser regulatory agency.

If NO ONE is to determine what might be "shades of gray" vs. what is "black & white", then why bother with even attempting to regulate appraisers?

Some appraisals are pure garbage (aka, very misleading)...some are not.

Some appraisers are clueless and some are not.

Some appraisers are very careless, and some are not.

You ask what might be "unsubstantiated land value?"; perhaps, the appraiser stating that the site value for the Subject was estimated via the extraction method...but having no support for this in the workfile.

And, to your question regarding the appraiser's disclosure of the inclusion of a HC and/or EA in an appraisal...and the implications of same: would you be surprised that at least some appraisers, IF they even understand what a HC or EA is, provide absolutely NO comment whatsover that "their use might have affected the assignment results"?

Bottom-line, we're discussing things in the abstract here. But, give either one of us a really "bad" report of an appraisal for our review, I'll bet that in the end we'll both be able to say "what a load of garbage!"

Lee

 

[OSU Beavers]

My favourite: "Selecting comparable sales based upon their ability to support a preconceived notion of value, rather than based upon their similarity to the subject".

A skippy special. The target value is $150,000 so Skippy throws three recent sales around $150,000 on the grid, makes minimal GLA adjustments and NO other adjustments for things like lot size, Age, A/C or Garages, then vollla the appraised value = $150,000. Never mind that the houses are nothing like the subject or that Skippy lied and said they were all less than a mile from the subject.