Evaluations & USPAP - Question from a bank staff appraiser

[Mejappz]

Absolutely correct. There are six or seven states that have this exemption law. Note, however, even in those states, most professional appraisal organizations require their designated appraisers to follow USPAP if they provide any opinion of value. Even in exempt states, USPAP requirements as I have outlined and as discussed in AO-21 and AI Guide Note 13 are regardless.

The last time I checked, there were 15 or possibly 16 states—numbers that are still increasing—that have this exemption. If by "appraisal organizations" you are referring to the Appraisal Institute, they have been the strongest advocates for allowing appraisers to complete these evaluations without complying with USPAP.

 

[George Hatch]

"exemption" isn't the same thing as the state requiring appraisers to state "this is not an appraisal" in one of those reports.

 

[bsilver]

The last time I checked, there were 15 or possibly 16 states—numbers that are still increasing—that have this exemption. If by "appraisal organizations" you are referring to the Appraisal Institute, they have been the strongest advocates for allowing appraisers to complete these evaluations without complying with USPAP.

Absolutely.

 

[BRCJR]

"Cannot legally do an eval as an appraiser" is factually incorrect.

May depend upon state law. I think some states still disallow a licensed Appraiser to do Evaluations. If an Appraiser forms an opinion of value, it is an appraisal in some states. Virginia was that way until 3-4 years ago.

 

[Red Flint]

I have found no such jurisdiction which prohibits appraisers from preparing evals as long as the eval is prepared consistent with the Interagency Guidelines, are supplemented with at least the minimum USPAP requirements of a restricted appraisal, and that the SOW appropriately describes any limitations, references, data sources, and so forth maintain compliance with both sets of standards and deliver a credible report which is consistent with the intended use.

Sentence of the Day Award.

In your inimitable way, you have actively described the subject, declared the constraints, clearly defined the relevant boundaries, and induced the reader to ponder, pontificate, and implement the positive elements of the verbiage.

 

[Dale Floyd]

An evaluation is not an appraisal, nor should be written in a manner that would mislead a reader in believing it is the same thing as an appraisal.

A restricted appraisal is NOT an evaluation.

 

[Amy Perkins]

Investors want an appraisal so they can sue if its not worth the purchase price when they do an appraisal waiver. If you do an appraisal that does not comply with USPAP, they dont care as long as your E&O covers it. There are some new players buying loans like insurance companies and m e t a. They also do reviews on appraisals so they are being careful. Unless Fannie Mae wants to be stuck with all these loans that no one can afford soon with AI taking over jobs... and corporate taking all our fees and same in other industries like real estate, construction, attorneys. Do you really think these companies arent going to want real appraisals? I wouldnt do it, but I'm sure they will find someone who will.

 

[George Hatch]

An evaluation is not an appraisal, nor should be written in a manner that would mislead a reader in believing it is the same thing as an appraisal.

A restricted appraisal is NOT an evaluation.

"...Well, since an evaluation must say the words "NOT AN APPRAISAL" on the front page to prevent misleading the public, one must be very careful as to the language and manner in which they are completed...."​

Do you have a reference in your state's laws and regs which explicitly state such a prohibition as a matter of law? Because I looked at your state's appraisal board rules and I didn't see one. Whatever the legal reference is, I'd like to see how they worded it.

 

[BRCJR]

A Cheat Sheet: Evaluations vs Appraisals - DataMaster

Introduction Real estate evaluations have increased substantially in the last decade. As more and more appraisals are replaced by evaluations, the real estate appraisal world has taken a keen notice of this controversial tool. In this post, the difference between appraisals and evaluations will...

datamasterusa.com

 

[Dale Floyd]

"...Well, since an evaluation must say the words "NOT AN APPRAISAL" on the front page to prevent misleading the public, one must be very careful as to the language and manner in which they are completed...."​

Do you have a reference in your state's laws and regs which explicitly state such a prohibition as a matter of law? Because I looked at your state's appraisal board rules and I didn't see one. Whatever the legal reference is, I'd like to see how they worded it.

62-39-104. Applicability.
(a) This chapter does not apply to a real estate broker or salesperson licensed by this state who, in the ordinary course of business, gives an opinion to a potential seller or third party as to the recommended listing price of real estate or an opinion to a potential purchaser or third party as to the recommended purchase price of real estate. This opinion as to the listing price or the purchase price shall not be referred to as an appraisal and no opinion shall be rendered as to the value of the real estate or real property.
(b) This chapter does not apply to a full-time employee who, in the ordinary course of business, gives an opinion of the value of real estate to the employee's employer; provided, that the opinion may not be represented as an appraisal.
(c) This chapter shall in no way affect any person who is registered with the state board of equalization in accordance with § 67-5-1514 while performing any service of any nature for any taxpayer before any tax or assessment authority, agency or board of equalization.
(d)
(1) This chapter does not apply to any evaluation of the value of real estate serving as collateral for a loan made by a federally regulated financial institution or to any evaluation of the value of the assets of a trust held by the institution; provided, that:
(A) The applicable federal regulator does not require an appraisal by a state-licensed or state-certified appraiser for the loan or trust;
(B) The evaluation is used solely by the financial institutions in their records to document the collateral or asset value;
(C) The evaluation shall be labeled on its face “this is not an appraisal”; and
(D) Individuals performing these evaluations may be compensated for their services.
(2) Nothing in this chapter shall prevent a state-licensed or state-certified appraiser from performing the evaluation.