New USPAP Q&a

[hastalavista]

(I'm surprised I beat Mike Kennedy to the punch!)

This is one of the longer Q&As I've seen.

https://appraisalfoundation.sharefile.com/app/#/share/view/seea70b822d24fa59?

Many issues that we debate here on the forum are discussed.

One thing that I run into a lot as a reviewer:
Unlike Fannie/Freddie, my client requires a prospective value for a proposed residential home. Many times, I get into a detailed discussion with the appraiser on how to appraise it (many don't think they can use an extraordinary assumption but need a hypothetical condition). I'm happy to see that one of the Q&As makes this point clear: an EA is the appropriate method.


Also, many will be happy to see the Q&A that states of a list of items a client might request, turn-time in the engagement-agreement is not an assignment condition and therefore not a USPAP issue.

 

[reviewbe]

Interesting twist about 'adding an intended user', usually comes up after the assignment is complete, i.e., pretty hard to add an intended user after completion. The new user by definition couldn't have been an intended user. But DURING, I hadn't thought of that wrinkle.

 

[hastalavista]

Interesting twist about 'adding an intended user', usually comes up after the assignment is complete, i.e., pretty hard to add an intended user after completion. The new user by definition couldn't have been an intended user. But DURING, I hadn't thought of that wrinkle.

Here's another wrinkle: Assume a report was completed and delivered, but the report did not follow the assignment conditions correctly and failed to identify the intended users that were listed in the engagement. The report was delivered but contains that omission. The assignment was accepted (presumably) with the intended users clearly identified.
Can the appraiser correct that error or does that trigger a new assignment?

I can think of an example where that happens a lot: SBA and FHA. They are intended users for some assignments, but some reports fail to identify them in their first delivery of the report.

Seems to me that correction of an error or omission (failing to name an intended user identified at the time of engagement) wouldn't trigger a "new assignment" flag.

 

[Terrel L. Shields]

Covered these in USPAP Update class today.

 

[residentialguy]

Waiting for "Q&A isn't USPAP"

 

[Mike Kennedy]

Actually you beat me by 30 seconds Denis

 

[Mike Kennedy]

Waiting for "Q&A isn't USPAP"

Wouldn't want you waiting too long........

The Uniform Standards of Professional Appraisal Practice (USPAP) Q&A’s are issued by the Appraisal Standards Board (ASB) to provide guidance on USPAP questions raised by state regulators and the public. They illustrate the applicability of USPAP in specific situations and provide advice from the ASB for the resolution of appraisal issues and problems. USPAP Q&As do not establish new standards or interpret existing standards and do not constitute a legal opinion of the ASB.

 

[George Hatch]

In lieu of indications to the contrary and based on what we actually can see within our SOW we assume things are so all the time. I have reason to assume title is clear, so I did assumed it.

Some proposed construction projects never get built at all, or aren't completed per plans and specs, and MANY of them are not completed on time. That's not an abstract and argumentative possibility, it's a fact, and we've all seen it happen.

Not that it really matters what label you use to describe your actions WRT an uncertainty in an appraisal report, but.....

How can you call it an assumption when you cannot even come close to knowing which projects will and won't be completed per plans and specs? Same with remodels, lot splits, condo maps, specific leases being signed, etc. All you have IRL is something you know doesn't currently exist and the two possibilities that maybe it will be completed per spec and on time and maybe it won't.

Those prospective values also include other "known" variables that detract from how reasonable it can be to believe something is actually true as of that future prospective date, such as dates of completion and the future market conditions that you can only guess at. They're all based on an "if", not a "I think it actually is".

Now if you had a prospective value on a subject that has no anticipated changes or construction that existing condition might provide you with the basis of assuming that - in lieu of indications to the contrary - it will not have changed as of that effective date. You'd still be making projections about future market conditions that you can only guess at but at least with those you have less reason to suspect they might not occur.

Call me cra-cra, but I think there's a big distinction to be made in terms of what you're telling your readers between "I think its true" vs "I know it's not true now but it may or may not be true in the future".