USPAP 2006 Online

[Austin]

Look At It Through Fannie Mae Lenses

One of the problems I have seen with USPAP is that a lot of people look at USPAP with a Fannie Mae mentality. I have a completely different view of this scope of work thing. For example, I did an appraisal yesterday and have one laying right in front of me at this moment of two commercial lots in very odd situations. One was zoned M1 but is commercial in nature just subdivided from an industrial parent tract with all kinds of utility and assessment easement issues etc. The other lot is four adjoining tracts, three zoned commercial and the largest tract on the back side zoned residential, access by a turning lane at a stop light and 15 feet below grade fronting on the hottest commercial strip in the area.
Purpose of appraisal is to estimate mv to support a purchase money loan. If I had to resolve all of those issues I could spend a week on each appraisal and could not do it without a title report or engineering study. The only way I can do what the client needs is scope of work my way around it. I explained the issues involved, explained how they would affect the property, explained the extraordinary assumptions I had to make, and appraise it accordingly.
I have to do this on almost ever assignment I do for a variety of reasons. Specifically, under the zoning and comprehensive plan in the city, you really don't know at what intensity level or how you can develop a commercial lot until you submit a plan to the planning commission. You cant' appraise a lot to its highest and best use until the planning commission determines how much of the site area qualifies for development intensity and there is no way an appraiser can get these answers before the fact, so I have to scope my way around the issue with extraordinary assumptions. That is the best I can do. To residential appraisers, that may not make much sense because you never see these issues and this sow thing was not designed with you guys in mind. Personally, I love it.

 

[Fred]

Austin

One of the problems I have seen with USPAP is that a lot of people look at USPAP with a Fannie Mae mentality.

That may be the truest statement ever posted on this forum.

Denis,

I did modify my SOW (cut it down to 5 pages from 9)

I don't think your SOW is 9 pages or 5. I think your SOW is:
1) Research (e.g., looking for comps and property metrics)
2) Analysis (e.g., developing approaches).
I have never scene a scope of work comprised of “pages.” :icon_smile:
Sorry, just having fun. I believe it is common on the forum for people to refer to their “scope of work” as a report section, rather than a set of tasks performed (or not performed).

Some years back, a coffee-induced daydream caused me to come up with the idea of USPAP card game based on Richard Simmons deal-a-meal concept. A friend suggested it would work better as a board game. You would travel around trying to collect cards for the components of, say, problem identification - a “client’ card and an “intended use” card or “jurisdictional exception” (also known as ‘get-out-of-jail-free card'). Once you assembled those, you could move on to next level of determining the necessary scope. The first one to complete an appraisal and get paid while staying out of jail wins an invisible USPAP trophy. :icon_smile:

I crossed a point (don't know when) where it is just too difficult to take the AF seriously any more - and maybe that was 1994. The Jack Nicholson character in A Few Good Men said something about the memo against "code reds" - because it came from command, he gave it its due, but whoever wrote never faced the working end of a machine gun. It's just too much easier to criticize the AF work than to defend or make sense of it. Let's see. There was:
- The 1994 major changes (snuck in during themiddle of the year) that wrought the dreaded six combinations of two types of appraisals and three types of reports.
- That was "clarifed" by the 1999 changes which mistakenly linked departure to the "applicable."
- Those were "fixed" from 2003-2006, not by just deleting the departure rule, but by copying a whole bunch of Std 1 and duplicating in the spot where the departure rule was. They just keep trying fix structual problems from the top down, instead of the bottum up. And somehow in the process of doing this, the 06 USPAP is now completely unhinged from any literal requirement to produce accurate and reliable results.
So, go ahead and say you complied with USPAP. And I would have t say, yeah, but is your appraisal any good?

If "public trust" is measured in the context of a country that bought Ford Pinto's... we are there. For me, the subject of "standards" is easy, but I don't see USPAP getting any better or easier. Twenty years old this year and this "young document" (as the AF calls it) is, at best, a wayward child lacking sound supervision.

 

[hastalavista]

Denis,

9 page SOW?

Lee

I let the "Otis" in me come out! :rainfro:

No doubt it is too long and perhaps an over-reaction to Fannie's implementation of the new form. I have been in the process of getting it to 2 pages or less. George Hatch posted an excellen 3rd party disclaimer which covers all the bases; if I had any sense, I'd just borrower George's and not try to reinvent the wheel!

 

[hastalavista]

Denis,
I don't think your SOW is 9 pages or 5. I think your SOW is:
1) Research (e.g., looking for comps and property metrics)
2) Analysis (e.g., developing approaches).
I have never scene a scope of work comprised of “pages.” :icon_smile:
Sorry, just having fun. I believe it is common on the forum for people to refer to their “scope of work” as a report section, rather than a set of tasks performed (or not performed).

Steven-

You are right on point (which is too easily missed!).

 

[Austin]

1004 Form Is Scope of Work

In my view, the 1004 form defines the scope of work and the only thing you have to report that you didn't do is explain why you did not do what the forum calls for. For example, if you didn't search the sale history of the comps, just say I didn't search the sale history of the comps because I live in a non disclosure state and the info is not available. Other than that, I don't see anything else you have to explain that you didn't do.
I know what is going to happen. The GSE appraisers are going to use the sow ruse to try and justify doing what they feel like doing and I think that dog won't hunt.

 

[hastalavista]

I know what is going to happen. The GSE appraisers are going to use the sow ruse to try and justify doing what they feel like doing and I think that dog won't hunt.

I'm not sure I follow you (call me dense); can you give an example?

 

[Austin]

Read Your 9 Pages For Starters

Denis:
Who better to answer your question then yourself. You already have 9 pages of answers. It would take me all day to think up that many examples.

 

[hastalavista]

Denis:
Who better to answer your question then yourself. You already have 9 pages of answers. It would take me all day to think up that many examples.

Oh, now I think I get it.
I better re-read my SOW to make sure my "ruse" flies. Might have to expand it a little more to justify myself.

 

[Steve Owen]

In my view, the 1004 form defines the scope of work and the only thing you have to report that you didn't do... just say I didn't search the sale history of the comps because I live in a non disclosure state and the info is not available.

YES! (You poor people in disclosure states can't say that, of course.)

 

[John SRA]

Steven,

Since value is not a fact fact, how would one measue its accuracy?

JC