We need to get Laws changed in the States

[Terrel L. Shields]

Congressional lobbyist nearly bankrupted some of our appraisal societies. Others have contended against unjust or partial Appraisal boards. I contend we need to be writing letters to our state senators and reps to try and "fix" some problems.

1 - Limit lawsuits to a 2 or 3 yr. statute of limitations.

2 - clearly state that a report which complies with USPAP cannot damage a plaintiff.

3 - loser pays. If the suit goes nowhere, the appraiser/victim should be compensated.

4 - Limit damages to $1 punitive and actual damages.

5 - No one can file a complaint except the client or intended users as identified. All others (buyers, sellers, whatever) cannot file complaint or suits.

These changes alone would go a long way towards giving appraisers some peace of mind that they will not be sued frivolously. These need to be done on a State level, one state at a time.

Ter

 

[George Hatch]

Ah, tort reform. The holy grail of professional practice. Good Luck on that one.

Terrel, if you can figure out how to tame the lawyers, I'm sure the world would beat a path to your door. The doctors, the real estate agents and the building contractors would put your smiling face on their calendars, right next to the supermodels. Until then, we're gonna have to live with 'litigation lotto', just like everyone else.

George Hatch

 

[Anonymous]

I agree with all of your points however I think that first each state should require that all appraisals or property valuations done for a fee should be done ONLY by licensed appraisers. Once we are rid of unfair competition we will be in a stronger position to address other concerns.

 

[Terrel L. Shields]

I never had been afraid of competition, whether licensed or not. Against the wishes of the Appraisal Board, my state passed a law requiring all appraisers to register. They have only to take USPAP and if they claim to be USPAP compliant, they must be co-signed by a Certified or Licensed appraiser. What has it accomplished? Nothing. Realtors still do BPOs or CMAs and people still take those to the Equalization Board, for instance.

Also, banks have in house appraisers, aka evaluators. My brother does those and because this falls under fed regulation, there is no state law that can stop them. The bulk of the work is simple verification (like a 2070) Ed is borrowing $15,000 to pay for a hip replacement and has 200 acres of land. No point is costing him hundreds of dollars to appraise it when he has an over abundance of collateral.

I would like to see the AMCs be required to be licensed and BONDED in each state.

In my area the problem is too few appraisers, not too much competition from the unlicensed. Commercial property and agri properties in particular are short of help. With the difficulty of upgrading and the 3 - 5 year lag time before a trainee could possible qualify for Cert. General, the shortage is very real and very acute in my area.

I will post seperately concerning my vision of what the profession will look like 30 years from now.

ter

 

[Anonymous]

There is fair competition and unfair competition. I have no fear of fair competition, I know that I give my clients professional and prompt service. I can not compete with an unlicensed computer for price and speed. Since the state and federal governments have forced me to obtain a license and spend money taking uselesspap classes they must require anyone providing appraisal services for a fee to obtain the same license. By the way New Jersey tax boards require all appraisals presented to them to be prepared by a licensed appraiser. This is a tax board rule, not a state law.

 

[Terrel L. Shields]

I took 5 properties for tax consulting / and 2 of those before the board of equalization. I did not appraise any of them. I served on a board of equalization in 97. NJ obviously intends to screw the taxpayer. The logic of many of my fellow board members was that, regardless what was written, any appraisal explicitly for tax purposes was flawed. No exceptions. They would accept an appraisal done for other purposes, but generally looked very unfavorably upon appraisals done explicitly for them.

My tact has always been to punch holes in the appraisal by the Assessor. I have a 100% success ratio so far for about 15 appeals in the past 5 years. What works best? Under the taxpayer bill of rights in Arkansas, the assessor must provide the comparables to the taxpayer. The assessor uses the Cost Approach, so these comps are invaribly an after thought. This year I took a 105 year old house to the board and the comps were all less than 3 years old. Won that handily. 3 cases were conversion of ag land into market rates. One had sold $64,000 worth of timber off it. Valuation went from $30,000 to $300,000+, and actually got it below the $30,000 mark, lower than it was in 1999 (we have a 3 year cycle) One I took was my own. The assessor "only" missed adding the land and buildings together by $50,000. Like $25,000 + $80,000 = $155,000....duh.

USPAP by not allowing contingent fees for tax consulting, appraisers are fenced out of that market. Whose fault is that? Taxpayers who only have to pay a fee if you win often forego protesting taxes because they may be throwing good money after bad. Otherwise, they have nothing to lose. It means only the wealthy and industrials get protested and lowered. Another way that poor people are shafted by the government.

ARVEST, the bank group operated by the Walton Family, recently had a seminar from a AVM. In our region they wanted $425 for each property they appraised. OK, that is fully $100 more than anyone else charges.

Again, we have the opposite problem. My commercial turn around is now approaching 6 weeks and only getting worse. Got a call Friday asking me when I was going to go look at zzz Easy street. Who are you? So and so said you would be the appraiser. I don't have an order for that so I call the bank. No, we did not tell them that the Realtor did. This is FHA and we are trying to find an appraiser in OK. They have spent 4 days trying to find an FHA appraiser. And they may have to end up using Bozo the Clown [good a name as any for him]..ever notice the most arrogant and self-righteous appraisers are usually the worst ones?
ter