NC Appraisal Board Appraiser Report Feb 2024

[J Grant]

Again, if I have 3 similar comps, then the closest those comps are to the same price, at some point, making any adjustment will result in a larger range in value than the range encountered without making an adjustment. The purpose of adjusting is to reduce the spread, not widen it. In that case, ranking the sales makes more sense.

The purpose of an adjustment is to bring the comp into a more similar condition or set of features or defects as the subject. Sometimes, applying adjustments narrows the adjusted value range and sometimes widen the range.

An appraiser can rank comps, but GSE work is adjustments are expected for anything that might significantly affect value or explain why no adjustment is made. And that is what peers do on these assignments. But you don't do GSE 1004 form appraisals, correct?

 

[John Hassler]

The NC Board is not out to get the appraiser as a result of a complaint. below is the actual process.

The North Carolina Appraisal Board welcomes you to its Web site

All complaints must be in writing. The Board will not investigate verbal complaints and does not have the authority to open anonymous complaints. In certain situations, the Board may, on its own motion, open a complaint. See Board Complaints Policy.

Once a written complaint is received, a determination is made as to whether this is an appropriate matter to be investigated by the Board (for example, does the Board have jurisdiction, is it a request for advice). A letter is sent to the Complainant acknowledging the complaint. The Complainant is not a party to the complaint and does not have control over the course of the case, but they may be a witness should a hearing be required. A letter of inquiry and a copy of the complaint is sent to the Respondent requesting a response. Routinely, Board staff requests a copy of the appraisal and the file notes from the Respondent. (aka Workfile) Upon receipt of the response, the complaint is more thoroughly investigated.

If a decision is made not to open a complaint, it will be reviewed by the Board's Predetermination Committee. The committee will decide whether to investigate the matter or close the allegation. So this is Interesting, because the Accused Appraiser may never know about a complaint.


From what I can remember the reasoning behind no revocations and no $fines is the additional CE cost the offending appraiser time and money. Financially Fast Eddy is losing money because of lost time completing other valuations. If I understand it' the extra CE can not be used towards your bi-annual minimums.

My biggest issue with this process is it is very unfair towards the Appraisers who are following the rules and regulations.

CA worked much the same way when I was there. Probably 20-25% of complaints were closed without the licensee even knowing a complaint was filed.

Are you sure NC does not issue fines or revoke licenses?

 

[TerryRohrer]

The purpose of adjustments is not to reduce the range, it is to reflect the market reaction to the differences.

A great point. Many comments I see seem to suggest the focus is entirely on narrowing the range in adjusted prices. I suspect many quit looking for the impact from influential differences early and miss the opportunity to offer a credible, supported, non-misleading conclusion.

 

[chad hampton]

Except I’m not sure the NC appraisal board does care about their rules or regulations at this point. They do investigate anonymous Fannie Mae complaints all the time, and they currently have four members that belong to the same trade organization (AI) where their bylaws state they can’t have more than three.


When I first started my career, the NC appraisal board was one of the most respected in the country.

 

[John Hassler]

The purpose of adjustments is not to reduce the range, it is to reflect the market reaction to the differences.

I agree; however, in theory the market reaction and subsequent adjustments should mathematically narrow the range but that can only be done to the imperfection level of the particular market.

What some call "no adjustment" is actually a numerical adjustment of $0, which has meaning in an appraisal.

 

[Terrel L. Shields]

But you don't do GSE 1004 form appraisals, correct?

I've only done about 5,000 of them, just not recently

 

[CGinMN]

I think it is fine to use 'narrowing the range' as one way to test the reasonableness of an adjustment. But if that's your goal or the only method used for modeling adjustments, then you risk overfitting the sales in your grid using adjustments that, when applied to a larger set of comparable sales, would not fit nearly as well into your model. On the other I agree that if your range widens upon adjustment, the appraisal is not likely reflecting the behavior market participants. And it is always possible that even sales with differences require $0 adjustments.

 

[Terrel L. Shields]

The purpose of adjustments is not to reduce the range, it is to reflect the market reaction to the differences.

And so, we do not reflect upon why the comps are this close pricewise, location wise, and not think we picked the most similar sales as well? But we make adjustments that increase the range, indicating the market is far more nuanced, even more imperfect than the gross sales number? And in doing so, we do not question why this is the case nor, apparently, we do not reflect upon whether the comps are right or not?

If I have chosen the most similar, recent, and least of all, locationally similar (local) sales, then adjustments are minimized in the first place. And, again, is USPAP so precise that it allows a board to question the appraiser's judgment? Doesn't the board have some responsibility to prove that there are better comps? Or, in fact, isn't it the case that an appraiser who justifies the comps used over other available comparables is within the bounds of USPAP. And if they are, the fact the board investigator THINKS they have better comps, does not mean it is anything but an opinion, too. And how does that violate USPAP. Two (or 200) appraisers can pick different comparables, make different adjustments with different metrics and both can be within the bounds of USPAP. We see such in court all the time. And neither one of these 2 or 200 can PROVE one single adjustment. Not one. And USPAP does not require them to. It requires them to support their opinions.

 

[Carnivore]

CA worked much the same way when I was there. Probably 20-25% of complaints were closed without the licensee even knowing a complaint was filed.

Are you sure NC does not issue fines or revoke licenses?

i AM not sure about fines. I do know they have revoked one appraiser license and asked more than one appraiser to voluntarily surrender their license. Which makes that problem go away...but that doesn't preclude a client from taking action in the court system.

 

[John Hassler]

i AM not sure about fines. I do know they have revoked one appraiser license and asked more than one appraiser to voluntarily surrender their license. Which makes that problem go away...but that doesn't preclude a client from taking action in the court system.

Okay, thanks.

Surrender is a fast and efficient way for both the state and licensee to resolve a revocation-level case. In fact, it's hard to imagine a state not attempting to negotiate a surrender.