Reconciliation of Approaches

[CANative]

Would you feel better about three sentences?

 

[PropertyEconomics]

Actually Id feel better by the OP answering the question instead of you .... sorry its just how it is in this thread. So please .. lets wait for the OP.

 

[CANative]

Your question has nothing to do with the original post. The OP wants to know if the state agency can make up rules.

 

[PropertyEconomics]

Your question has nothing to do with the original post. The OP wants to know if the state agency can make up rules.

Well it is not up to you to determine whether my question has anything to do with the original post or not ... if you wanna be a moderator please by all means ask Wayne if you can ... otherwise ... let me ask my questions and see if there are answers.

 

[CANative]

All right already! Sheesh.

 

[Kathleen Hayes]

I think the state is using scare tactics. If the appraiser feels within the stated scope of work, intended use, user/s (that has already been stated) that an approach can be recon. in a sentenance or two it is up to the appraiser. The reason I bring this up is that the NHREAB is killing appraisers on this issue constantly while many apply the standard and feel as though it has been exhausted. The SC appr. has been used for decades w/ no real questioning and has been accepted by users of the reports as being reliable when applied correctly....why does an appriaser have to state over and over again something in a report that has been customary for decades? A form appraisal is a form appraisal, I understand the underlying issue of the appraisal process, but the form is a pared down "version" of what the secondary market wants to see, while the state wants the full monty to be in compliance....in NH are we preparing the report for the client under secondary mtg mtk guidelines or are we preparing the report according to how the state of NH wants it done? Get my drift....the NHREAB is over stepping boundaries and the intrepretation of one party is the way it must be done.....in this case the party is a complex commercial appraiser that does little residential work...he is making the res. appraiser miserable in NH...basically a summary report 1004 has turned into a self contained....he needs to check into reality....USPAP is for appraisers to follow and is somewhat vague due to interpretation. Not sure this is best for the res. appraiser in NH. I would like to hear from some NH appraisers in how they feel about the current board, especially the new chairperson.
Thanks,
kathleen

 

[Terrel L. Shields]

Brian Underwood from the NH Real Estate Appraiser Board states that, "These requirements in USPAP cannot be accomplished in one or two sentences".

Brian Underwood is full of himself....

It's difficult to think of a scenario in which the IA and CA are "not applicable."

I agree. It is rare circumstance that an approach cannot be applied but it may and frequently isn't NECESSARY....

Standar 1-4 is plain, "When a [insert approach] is NECESSARY for credible assignment results... (lines 556, 560, 566)

If it has improvements, then a cost approach CAN be applied [in fact, FSA insists that bare land "summation" techniques using different soil types, is a "cost" approach]

If anything similar has been rented or is rentable, then an INCOME approach can be applied.

The fact these approaches may be weak and UNNECESSARY do not mean they are not "applicable"...

In fact, I aver that the income approach is very applicable to SFR considering the increased number of renters and the number of vacant homes available for lease.

Again, beating my pet dead horse, the Cost Approach, Std 1-4 is also plain.
develop an opinion of the site value (why that seems so difficult is beyond me)
analyze such comparable cost data as are available to estimate the cost new(simple enough)
analyze such comparable data ....ditto...to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation.)

It is too simple to say it isn't "applicable".... whether necessary or not.

As to the question posed in the OP....I fear the state boards tend to suffer the same problem as the general population of appraisers. They operate not on the basis of facts, nor of the actual words written in USPAP, nor even the epistles written over the ages about appraising, but rather, have a biased, convoluted, hearsay driven interpretation of USPAP and the "science" [whatever that is] of appraising.

Appraising and the interpretation of what is USPAP complliant work is completely at odds with a reality we do not have. We are blind people looking for a black cat in a dark room and the cat isn't even there.

The "summarize" "state" and "describe" verbiage is so bad that it is impossible to separate one from the other and the whole document is badly flawed as a result. Fannie mae is the de facto "USPAP" in that they dictate certain procedures and so far, TAF has stood idling by and let them... We cannot separate the average regulator's fanniespeak from their USPAPspeak except to know that it is way too often wrong.

 

[Don Clark]

I will revise my statement to say...."Not applicable based on the scope of work:. If you go to a doctor for a cold or the flu, would you expect the doctor to put in your file a statement of what it would cost to remove a lung? Or, you take yor car in to have the brakes fixed. Would you expect the mechanic to put a statement in your file on what it would cost to rebuild an engine? The answe to both should be.....hell no. Then why would you expect an appraiser to put a cost analysis in a residential appraisal when none is required by the scope of work, clients requirements, or USPAP? Or, put in an income approach when the property is not for rent, will not be rented, is not required by the scope of work, client requirements, or USPAP? Even USPAP addresses these issues in the scope of work rule, standards of practice, and makes it clear that this sort of "one size fits all" mentality is not current appraisal practice.

 

[CANative]

My point is: Why even use the phrase "not applicable?" It leaves room for argument.

 

[Delta85]

Those are all applicable (capable of being applied).

And yes. I always do all three approaches. I just don't present them.

I find it hard to believe that you complete the income approach on every appraisal no matter what the subject is, where it is located, or what the scope of work is.