RIP AQB and ASC, to be replaced with "Federal Valuation Agency"

[George Hatch]

Sometimes I will exclude data points that only confirm other identical data points. If I don’t include them in the sales comparison analysis, but summarize them in the narrative, have they been “selected?”

I almost always mention the point that my research and analysis includes more datapoints than I present as direct comparables, and comment that I use those sales to provide additional context for my analyses of the direct comps. I think every appraiser should acknowledge that what they're presenting in the report is just a fraction of what they looked at during their research and analysis. Except of course when that's a lie because the appraiser is only looking at the high sales resulting from the one MLS query.

It is the message that many appraiser imply (and which some probably mean) that this appraisal hinges solely on the appraiser's analyses of these 5 or 6 sales which prompts some of these agents to believe that all it takes to change the appraisal is swapping out a couple of the lower prices for a couple higher prices.

 

[CGinMN]

Me too. Nevertheless, I don't think that contradicts a comment about reducing the amount of discretion/subjectivity in comp selection. I have done 100% (I'm sure you have, too) when the data was that good. I try to limit my use of subjective to the purpose of closing the gap when objective is coming up short, which is most of the time in my work.

How do you remove discretion on those 80% of cases without hampering the 20% where it’s needed?

 

[Mejappz]

No matter how much wordsmithing you try and do, they will eat you up alive unless you have mathematical evidence to support your comp selection and adjustments. Anyone here telling you the contrary is doing you no favors.

 

[George Hatch]

I think the cert is actually is saying time can’t part of the equation. Once it’s introduced as a variable, you change the criteria of what is functionally, locationally, and physically most similar. So I think it is a bad certification.

I never really considered it that way before. In any case the users have their own expectations which will sometimes exceed the bare bones minimums.

For example, I learned just today something new-to-me about appraisal reports. Prior to the implementation of ANSI the GSEs apparently have never had a requirement for diagrams. It's just something we've always done and which the lenders themselves have been enforcing. Or not.

And sure, most 2055s have never had measurements or diagrams.

 

[George Hatch]

How do you remove discretion on those 80% of cases without hampering the 20% where it’s needed?

Again, IMO "discretion" was an poor choice of words if he was really referring to personal subjectivity and bias. And as far as subjectivity goes, if he used the term "reduce" then that isn't a synonym for "eliminate".

But okay, lets go with this worst case scenario that appraisers are fretting. The govt limits which search criteria they can use for comps and anything that falls outside the box is prohibited. If everyone is tied by the same chain to the same tree then how does that become a problem for any of them? The individual requirements of our professional standards *always* yields to applicable law, rule or regulation. (If/when there's a conflict) That's hardwired; there's no discretion for the appraiser to even consider. It's not an opt-in or opt-out situation.

TLDR; if the feds enact the law or regulation then the entire SFR trade follows suit as they are required to do. Where's the liability for the individual for obeying the law? There is none. The complainant's problem isn't with the appraiser's conduct because that conduct is within specs.

I keep saying it; the primary utility of USPAP isn't the last "P" in the acronym, but rather the "U" at the beginning. Consistency is arguably more important to what we do than ideological purity. An appraisal that means the same thing in California as it does in Michigan is at least consistent, even if it can be said they're both wrong due to the standards being wrong.

 

[CGinMN]

If everyone is tied by the same chain to the same tree then how does that become a problem for any of them?

I’ll answer that with a prior post I made:

 

[CGinMN]

Being tied to a tree = adding weights.

 

[George Hatch]

Compared to what?

AFAICT the meddling only becomes an actual problem for appraisers if they're being asked to do something but being prohibited from disclosing that they're doing. Fewer alternatives = fewer decisions to fret and fewer decisions for which to be responsible.

Apart from that, if you ask me what the restorative value for a property is then that question isn't any more difficult to answer than MV.

We already do different definitions of value in appraisal reports on the regular:

Retrospective Value opinion
Prospective Value opinion
Insurable Value opinion
Orderly Disposition Value opinion
Liquidation Value opinion

None of these are particularly difficult to do, so why would it be any different for whatever form of equity value they're looking for? I'm not saying that to be argumentative (this time, anyway) but because we appraisers are capable of doing a lot of things that we haven't previously been asked to do. Not because we can't but because nobody asked before.

As for fee and turn time issues, they're not irrelevant to appraisers, but they're also not examples of the issue of the feds asking for something other than MV.

 

[Joe Flacco]

The real estate market is pretty complex. Less direction or instruction on how to do things the better.

That said, do have issues? Yes, we do. The why and how we got here is complicated.

 

[Joe Flacco]

Federal valuation agency kind of sounds like we are about to get national licensing though.