From the Beginning - Who Decides?

[Terrel L. Shields]

Std 1 - 1 a

the appraisal profession is constantly reviewing and revising appraisal methods and techniques and devising new methods and techniques to meet new circumstances.

OK. Who is the "profession"? And is it only one person? Perhaps some old geezer sitting in a glass box with a sign that says "Break in Case of Emergency".

I am not aware of any catholic body of appraisal experts who decide with methods which are in need of revising, which changes are appropriate and which are not, nor any august body of judges who decide when these two undefined reviewing experts disagree.

So tell me. How in Blue Blazes can USPAP impose upon the appraiser a requirement to apply these "new methods and techniques". Who decides?

 

[stefan olafson]

AMEN to that brother!

In North Dakota an 'expert' from out of state, based on his/her education and training, decides if an appraisal is not in compliance. They (the experts), using their built in bias and methodology, decide if your appraisal is or is not similar in nature to theirs. They decide if your income, cost, or sales comparison approach was completed according to how they were taught, not on how you were taught.

It's ironic, in case after case judges have stated that completing an approach to value, if necessary is all that USPAP requires, it's the reviewers that interject that it's not done the way they think it should be done.

Then this 'expert' from 'out of state' transmits his/her findings to the board. The board is made up of three appraisers, one fee, one Farm Credit (quasi governmental that only does UAAR form fill appraisals) and one who is strictly a residential appraiser. There are two other members, a banker who thinks he's smarter than the average appraiser and an attorney who seems to sleep through the meetings or is in a daze or thinking of his next litigation.

If the 'expert' finds an appraisal does not measure up to their understanding of USPAP and their methodology of the approaches to value it is pretty much a given that appraiser is in for a long battle with the board.

That's Who!

 

[Hamlet]

Who is the "profession"?

Good question when the "profession" stays silent and lets everyone else dictate. Silence is always interpreted as impotence or acquiescence.

 

[Terrel L. Shields]

was completed according to how they were taught, not on how you were taught.

and when... and do they do it that way or are they really

continuously improve his or her skills to remain proficient

Do you think a new concept, perhaps one promulgated in Appraisal Journal for instance, is sufficient to justify

the knowledge they possess [USPAP]

How many investigators are on the cutting edge of Appriasal technology- [if such an animal exists.] and

keep abreast of these changes and developments

USPAP proposes an arbitrary but undefinable standard which will vary from appraiser to appraiser, area to area, and / or dictated by what used to be called "supplemental standards". Just because USPAP has dropped "supplemental standards" does not mean you no longer have to comply with fannie mae guidelines when doing the fannie.

 

[Lawrence R.]

Boy, there is a lot.

Of pent up USPAP anger. My observation is this" USPAP is a watershed for appraisers.

Good appraisers are allllll about it, and good appraisers are alllllll against it.

It is hard, as you try to decide how one will feel about the current state of regulation, with admirable appraisers on both sides of this issue.

So, what trait is it that makes you like this or makes you against it?

I am trying to decide which camp is the most like me, but I see myself on both sides of this issue, or perhaps my ambivalence has turned to apathy at this point.

What makes the difference between a lover and a hater of these regulations?

 

[Terrel L. Shields]

What makes the difference between a lover and a hater of these regulations?

Prosac.

I think if you read all the threads that are out there about USPAP, you at least have to come to the conclusion that we are a divided nation. Years ago almost everyone thought USPAP was a great idea, it was "easy" to comply with, and a "minimum" standard that any dote could comply with.

As the complexity of the document increased, it invited a scrutiny that made some folks, like me, alarmed. But 1994 when I took NAIFA's update course on "Limited" appraisals, the instructor kept saying "I don't know how this will play out." Then that same year I attended the first "Day with the Board" in Arkansas. Appraiser 0002, board chair, said from the podum in the presence of over 400 appraisers, "USPAP has become a moving target." That's when I really started studying this document.

This document is the thread by which the Damoclean sword hangs. One misstep and you are hamburger. For those with short memories, there was an effort in 1999 to make RADICAL change to USPAP. It didn't happen. An uproar ensued especially by the original advocates of the "limited" "complete" debate.

The test should be simple. Are appraisals more accurate than they were in 1990 (pre-regulation), or if you believe the roots of USPAP were around in 1987, say 1986? If the answer is not an unequivocal YES...then I must argue that it has not had the intended impact of 'improving the profession'. And that would beg the question. Is it worth it?

Am I angry with USPAP? No. I am afraid of it because I don't know if I or anyone can comply with it. The following quote is from a certification in an appraisal from an appraisal instructor and is in all his sample reports which he used to sell as textbooks. Ask yourself why he would make such a statement.

The determination as to whether or not this, or any, report complies with USPAP cannot be considered to be an objective fact. Compliance is rather a subjective determination which is based upon the perception and interpretation by the client and review appraiser as to what constitutes compliance. This report is our good faith effort to comply with both the letter and intent of USPAP.

 

[SmilingDog]

According to the Appraisal Foundation there were approx. 560 USPAP instructors nationwide as of 2005 (I don't have the current number but I understand it's now lower due to the harder tests and the instructors fail rate - ouch). According to the ASC website there are 121,911 active appraisers nationwide (licensed, certified residential and certified general). Some states, like California also have trainees, so the total number of appraisers could be as much as 150,000.

Now given that an average USPAP course costs $130... just the teaching of the document is a nearly $20 million business in the U.S. That's almost $35,000 per instructor, not a bad salary.

These are sobering facts.

 

[George Hatch]

Inasmuch as appraisers are required to take the course every two years the math actually works out to just under $10m a year. A certain percentage of those students take their instruction via the distance education providers. The books were $30 each, student manuals cost money to print plus the royalties on those that are due to The Appraisal Foundation. Most schools have advertising, and administration costs, and meeting rooms to teach in have rental rates. The student fees aren't all net to the instructors, not even close.

If you want to talk dollars I'll do that. FTR, I've never netted more than about $10,000 in a year from teaching USPAP courses, and I probably teach it more often than about 90% of the other instructors out there. I'd be willing to bet that Don and Lee and Mike and Brad don't even do that much. Rich Heyn probably does better than that, but only because he owns his own school and he's constantly travelling (and more power to him for that).

You can make it sound like its all about the money if you want but the truth is I'd make more money if I devoted that time to doing more appraisals. Come to think of it, the time I spend on this forum sharing what I know about the subject with you guys positively dwarfs the amount of time I spend in a classroom setting and I guarantee you there's no money at all involved here.

I say all this by way of explaining that it really ain't the money, pal. And those are the sobering facts.

 

[Amy Perkins]

Well I have to say, the lack of clarity in USPAP tends to be misleading. My reasoning is that if it were clear and well written it would not need to be changed so often. Also, it would not need so much interpretation.

 

[SmilingDog]

Well said Amy.