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Uniform Standards of Professional Appraisal REVIEW Standards
- Thread starter Eli
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hastalavista
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I thought we did have them?
Or is SR3 something other than appraisal review?
Or is SR3 something other than appraisal review?
Terrel L. Shields
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Administrative reviews are, by necessity, non-technical reviews. They are mandated by bank rules. We cannot do anything about them. However, I do feel that such reviews should never be the basis of a sanction, nor be actionable in any way. If the administrative review sees issues, it should go to a technical (SR3) review and deal with it there.
OTOH, I view "review" as a pointless exercise and would prefer they be abolished. Simply send another appraiser out there and revalue it then compare the results. It was a custom and law in many states for decades that 3 people experienced in appraisal or real estate worked together to agree on a value. I think that system still has a lot of merit.
OTOH, I view "review" as a pointless exercise and would prefer they be abolished. Simply send another appraiser out there and revalue it then compare the results. It was a custom and law in many states for decades that 3 people experienced in appraisal or real estate worked together to agree on a value. I think that system still has a lot of merit.
George Hatch
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An "administrative review" was (when it was in effect) in reference to the type of opinion a user would develop about the credibility and utility of an appraisal when they read it, the decision at hand for them being whether or not the workproduct was sufficient for their use.
As non-users of someone else's appraisal report, our *role* when acting as an appraiser in review of someone else's work is distinctly different in than the role of an intended user (or any other potential user, for that matter). Whereas their decision is about what to do about the property being appraised from the user perspective, our role in performing an appraisal review is to develop that opinion of the quality of the workproduct itself from the outside D3P perspective.
The comparison of the two is not unlike the distinction between the property owner's opinion of value vs the appraiser's opinion of value. It's not how similar or how different the conclusions are that draws the distinction, but rather the difference in roles and perspectives between the two.
Moreover, we have professional standards in effect when we act in the role of one appraiser reviewing the workproduct of another appraiser precisely to protect the legitimate interests of everyone involved, whereas a user's interests when they review an appraisal report will usually be limited to their own personal interests.
As far as non-licensed individuals performing appraisal reviews when *acting* in the role of the appraiser - regardless of whatever nomenclature they may choose to use to describe their role or their workproduct, we consider those actions to be appraisal practice. That makes USPAP (especially SR3) an applicable standard even if it isn't an enforceable standard. Being able to state that a licensed appraiser would not be allowed to tell lies in an appraisal review, or would not be allowed to state the contrary opinion without presenting any support may seem like technicalities, but when an unlicensed reviewer starts hassling you in an unfair or unprofessional manner the ability to point out exactly where they're going wrong can be real helpful WRT defending your workproduct and your credibility.
As non-users of someone else's appraisal report, our *role* when acting as an appraiser in review of someone else's work is distinctly different in than the role of an intended user (or any other potential user, for that matter). Whereas their decision is about what to do about the property being appraised from the user perspective, our role in performing an appraisal review is to develop that opinion of the quality of the workproduct itself from the outside D3P perspective.
The comparison of the two is not unlike the distinction between the property owner's opinion of value vs the appraiser's opinion of value. It's not how similar or how different the conclusions are that draws the distinction, but rather the difference in roles and perspectives between the two.
Moreover, we have professional standards in effect when we act in the role of one appraiser reviewing the workproduct of another appraiser precisely to protect the legitimate interests of everyone involved, whereas a user's interests when they review an appraisal report will usually be limited to their own personal interests.
As far as non-licensed individuals performing appraisal reviews when *acting* in the role of the appraiser - regardless of whatever nomenclature they may choose to use to describe their role or their workproduct, we consider those actions to be appraisal practice. That makes USPAP (especially SR3) an applicable standard even if it isn't an enforceable standard. Being able to state that a licensed appraiser would not be allowed to tell lies in an appraisal review, or would not be allowed to state the contrary opinion without presenting any support may seem like technicalities, but when an unlicensed reviewer starts hassling you in an unfair or unprofessional manner the ability to point out exactly where they're going wrong can be real helpful WRT defending your workproduct and your credibility.
George Hatch
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In most of my reviews I end up assisting the original appraiser in complying with the expectations of the intended users. I have as much concern for their legitimate interests as I do for the interests of the intended user; which is to say that while neither party's interests will alter my opinion of the workproduct I am working to ensure they both get a fair shake. The ends do not justify the means, and as a reviewer I am not part of my client's "team" as such.
Rejecting appraisals that are fixable doesn't serve anyone's legitimate interests; especially those of the client who's trying to make a decision about the subject property. I don't summarily reject an appraisal as being wholly unusable unless it is beyond repair either as a result of gross incompetency or violations of the ETHICS RULE.
Eli
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The line between administrative or technical and a SR-3 review seems like a very fine line, which is being crossed in some cases, imho. I'm not sure the line don't need to be changed, based on the general change in procedures that has occurred over the past several years,
George Hatch
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I see nothing subtle about the distinction between the two.
If you're a loan officer and you obtain a copy of an appraisal that you intend to use to make a loan, your review of that appraisal and the opinion you develop of the quality and utility of that appraisal WRT the transaction you're considering is being done from a *completely* different perspective - using very different criteria - than what someone acting in the role of an appraiser is doing when they perform an review of an appraisal.
Appraisers don't make decisions about the property, either when they appraise them or when they review the appraisals other appraisers have developed. Users don't have unbiased opinions about the transactions they're engaged in. They're two separate wires that should never cross.
The only reason there's any confusion between the two terms is because there are people who act as appraisers when performing reviews but who use different nomenclature for what they're doing - similar to when brokers do BPOs for non-brokerage purposes. They're *acting* in the role of the appraiser but using different labels for that role.
A non-licensed person who is acting like an appraiser (outside perspective, impartial, unbiased, etc) is acting within the scope of appraisal practice whether they're licensed and required to adhere to USPAP or not. Just the fact that they aren't licensed doesn't mean they cannot choose to adhere to the professional standards that apply to that work. It only means they probably are not required to adhere to those professional standards.
The *applicability* of appraisal standards is all about the actions of the individuals and the expectations of the users; NOT about what labels are being used or whether the individual is required to conform to those standards.
If an unlicensed person performs a medical procedure that would normally require licensing as a physician the benchmark for whether that procedure was performed properly would be as specified under the standards of practice for the physicians, not under some other unstated standard they create on their own by using some non-standardized term for what they're doing. The benchmark for performance is a completely separate issue from the licensing issue. And the parties who establish those benchmarks are the professionals, so yes, as a profession they absolutely retain the right to judge the quality of that work by those standards irrespective of whether there are any laws prohibiting an unlicensed person from doing it.
If you're a loan officer and you obtain a copy of an appraisal that you intend to use to make a loan, your review of that appraisal and the opinion you develop of the quality and utility of that appraisal WRT the transaction you're considering is being done from a *completely* different perspective - using very different criteria - than what someone acting in the role of an appraiser is doing when they perform an review of an appraisal.
Appraisers don't make decisions about the property, either when they appraise them or when they review the appraisals other appraisers have developed. Users don't have unbiased opinions about the transactions they're engaged in. They're two separate wires that should never cross.
The only reason there's any confusion between the two terms is because there are people who act as appraisers when performing reviews but who use different nomenclature for what they're doing - similar to when brokers do BPOs for non-brokerage purposes. They're *acting* in the role of the appraiser but using different labels for that role.
A non-licensed person who is acting like an appraiser (outside perspective, impartial, unbiased, etc) is acting within the scope of appraisal practice whether they're licensed and required to adhere to USPAP or not. Just the fact that they aren't licensed doesn't mean they cannot choose to adhere to the professional standards that apply to that work. It only means they probably are not required to adhere to those professional standards.
The *applicability* of appraisal standards is all about the actions of the individuals and the expectations of the users; NOT about what labels are being used or whether the individual is required to conform to those standards.
If an unlicensed person performs a medical procedure that would normally require licensing as a physician the benchmark for whether that procedure was performed properly would be as specified under the standards of practice for the physicians, not under some other unstated standard they create on their own by using some non-standardized term for what they're doing. The benchmark for performance is a completely separate issue from the licensing issue. And the parties who establish those benchmarks are the professionals, so yes, as a profession they absolutely retain the right to judge the quality of that work by those standards irrespective of whether there are any laws prohibiting an unlicensed person from doing it.
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Terrel L. Shields
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While not subtle, the purpose of an administrative review should not be to influence an appraiser. If they catch an actual error, fine. Tell the appraiser to fix it. But most reviews tend towards two things. A - nit picky crap about arguing whether the street is spelled Fairmount (like the cemetery and the town in Georgia it was named after and like the highway department has it) or is the street named Fairmont, like some illiterate moron at the Post Office put down 20 years ago and the state seems totally helpless to "fix"...
Or, B - the reviewer disagrees with the adjustments, the comps, the value, and other opinion and attempts to influence the appraiser and basically force them to create a document which isn't their independent opinion.
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