Appraisal Standards Should Age Like Fine Wine

Charles (Don) Clark

Charles (Don) Clark

Certified Real Estate Appraiser at Clark Realty Services
AQB Certified USPAP Instructor, Member of VaCap & NCPAC, Peer Assistance Consultant & Advisor, State Certified Residential Real Estate Appraiser, VA & NC, Consultant, Educator & Expert Witness. He can be reached at 757-497-9344.
Charles (Don) Clark

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Appraisal Standards should age like fine wine

Changes in Appraisal Standards?

We have barely got into the “New” 2016-2017 copy of USPAP and the ASB is meeting on February 19, 2016 to discuss making changes to the 2018-2019 edition of USPAP. Here is part of what I have written to the ASB. I believe it should be the duty of every appraiser to write to the Foundation and any board that is contemplating making changes. You have that right, and they will read your comments.

Letter to ASB:

I have been a real estate appraiser since the mid 1980’s and prior to mandatory licensure. I have been in the Real Estate Profession since 1972, 2 years prior to retirement from the U.S. Navy. I hold a brokers license as well as being a Certified Residential Real Estate Appraiser. I have been an educator/instructor of real estate and appraisal courses since the early 1980’s and have an Associates Degree in real Estate. I am qualified by my state to teach all pre licensure courses for real estate agents, real estate brokers, and real estate appraisers with license #64 for real estate pre licensure and license #2 for appraisers.

I state the above simply to say I have been around awhile, and have seen many changes in both professions, some good, some not so good. And that is the purpose of my letter to you today.

When the licensure of appraisers was to become mandatory, I was in total agreement. I put together a series of courses for a local real estate school to begin the education process for applicants. This was 1990, well before the mandatory date. I was also at that time, a member of the Real Estate Educators Association.

The first copy of USPAP I ever saw, and used, came by Fax to the real estate school. I took considerable time to understand it, prior to teaching others. By serving on a committee of the REEA I was also privy to what the “New” Appraisal Foundation wanted appraisers to have as minimum qualifications to be state licensed or certified. It was basically a 4 year degree, and 5 years of experience as I recall. The committee I was on, advised that this was not likely, and, the fact that some states objected, and several even received wavers when licensing went into effect, with bare minimum qualifications. It seems that a 4 year degree has always been the goal of The Appraisal Foundation, and now, even that is being questioned. But, more about that later.

In the 1990’s I attended a meeting of The Foundation in Washington, D.C., mid year where the great and glorious “Departure Provision” was born. It took several years for the professions, and the Foundation to finally realize that such had been a terrible mistake. I also attended a meeting in Reston, Virginia, where the Foundation wanted to totally revamp the standards, reorganize them, and develop as I recall, 12 standards. Fortunately that was shot down rather quickly by all concerned.

Then we had the famous 3 types of appraisal reports, that never lived up to their purpose. For example, no one ever created a truly “Self Contained Appraisal Report”. That too was eliminated in time, and we now have what we should have had all along, a report of an appraisal with a scope of work dictating what that means in each report.

With the 2016-2017 edition of USPAP we have eliminated the “Statements” and have made them into new Advisory Opinions. Likely where they should have been all along.

Now, it appears that once again, The Foundation is considering changing the standards, and adding new standards. Why? To me a standard of practice should be one on which we can depend, year after year. It seems that each new edition of USPAP will just have to have some tweaking, change, or addition or the Foundation and it’s boards are not doing their job.

Each and every time the standards, any standard, is changed, modified, or deleted, it causes confusion. It also causes appraisers to be sanctioned. Some have or will have their license revoked, and a few of those, through no fault of their own, but mistakes made by the state(s) in interpreting and enforcing new standards or regulations. And, I understand that this is not new.

Specifically, the state of Virginia (I do not know about other states) is about to take the license/certifications of 12 appraisers. This came about due to the state not reading correctly, the educational requirements beginning in 2015, a 4 year degree. And, no one it seems is willing to help these appraisers whose income, profession, and good names are about to be damaged. No one it seems is willing to help, in any manner.

That is just one example as to how USPAP, and qualifications, as a moving uncertain target can harm appraisers, and certainly can cause damage to what I thought was our goal, the Public Trust. I imagine that there may be 1,200 or more appraisal out there completed by these appraisers. Some for FHA, many for AMC’s. Does the taking of a license and declaring it invalid also have an impact on the loans that are the results of these appraisers’ work? Might very well be the case, and maybe lawsuits to follow.

I believe that standards should be reliable, not ever shifting. They should be like fine wine that only gets better with age.

And, given the fact that no one, that I am aware of, has ever proven that the Public Trust has been harmed by appraisers, long licensed or certified by now, and lacking a 4 year degree, have ever been harmed any more than they have been harmed by those with a 4 year degree or higher. It might be worthwhile to do a study of that.

I am not saying that standards should never change, but, simply saying there needs to be a good reason for any change. I recall attending a meeting a few years ago when we still met in person to qualify to renew our AQB Certification to teach USPAP, that one board member (not sure which board) stated that it had taken them 6 months to decide on one change whether to insert or leave out, a single word in a change. There was laughter in the room, but honestly, it really was not very funny.

I have not seen any proposal for developing the 2 new standards (4 & 6) that is referred to in the announcement of the next meeting, but I would hope that there are very good reasons if such changes are necessary.

I likely will not attend such a meeting as I do not have the resources to attend, and not sure if I could add anything else as well.

Image credit flickr - Neil H
Charles (Don) Clark

Charles (Don) Clark

AQB Certified USPAP Instructor, Member of VaCap & NCPAC, Peer Assistance Consultant & Advisor, State Certified Residential Real Estate Appraiser, VA & NC, Consultant, Educator & Expert Witness. He can be reached at 757-497-9344.

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7 Responses

  1. Retired Appraiser Retired Appraiser says:

    How would their OVER PAID ARMY OF DO NOTHINGS justify their salaries (and their existence) if everything regarding the appraisal profession were not written and rewritten 1 to 4 times each year?  This applies to those in charge of USCRAP and the HUD sector.  Don’t think for a second that regulations regarding Realtors are completely overhauled year in and year out.  You can count the changes in the real estate sales arena on a couple of fingers each year.

    This is yet one more reason to run like L from this “profession” and find a job that nets more than minimum wage.

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  2. Retired Appraiser Retired Appraiser says:

    The fact that they’ve been writing and rewriting these G.D. regulations every single year for nearly two decades tells you everything you need to know about the competence of those who rule over your careers.

    *Not surprisingly, these are the same people who have no clue about why fee transparency on the HUD-1 is a big deal…especially when it spits in the eye of the Truth In Lending regulations and the borrower.

    *Not surprisingly, these are the same groups who cannot grasp the fact that a reverse auction style ordering process (lowest bid wins) will consistently yield the lowest quality appraisal results.

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  3. bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

    incompetence is a big piece of the pie RA, but you also have to wonder who is sleeping with who around here too. constantly forcing all appraisers retake these worthless USCRAP re-view classes creates a nice little income for the education providers doesnt it? last re-view class i went to was a complete waste of time and money. in a nut shell, we all spent the day and a great deal of money, just to find out about all the “thee”‘s that were changed to “the”‘s, or whatever it was that was just as ridiculous.

    one of these days i would also love to see how many times appraisers are forced to spend hundreds of dollars and time away from work, to take 2-day USCRAP classes, or more, to make complaints go away.

     

    hey, the statistics show that everything is going GREAT!!  right?!  i agree – full steam ahead!

    the bleeding continues . . . . .

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  4. BC says:

    I honestly believe the purpose of USPAP is to make changes for the sake of changes for every 2 yr edition in order to justify being able to charge for classes for the Continuing Ed RACKET! I’m still pondering the 2010 change about exposure time for a hypothetical listing of the subject property at a made up point in time. No matter what anyone says that one will always be GLORIFIED FORTUNE TELLING TO ME!

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  5. REValuator says:

    USPAP has become a racket…just like anything else where “power” is perceived and compliance is required.

    Falls right in line with HUD, FHA, FNMA, etc . They should at least get it to an every 5 year update by now…right?

     

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  6. Stephen E Meyer says:

    The Appraisal Foundation is all powerful and is addicted to money. They are secretive and not accountable to anyone. This needs to stop. I will use my real name below, but if I have an “accident” you will know where to start looking!

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  7. Don, ALL great points re unnecessary changes.

    Also, I see you are a member of VaCap. It’s inconceivable to me that VaCap is not already standing up for those twelve appraisers about to lose their licenses (via rescission)? Were they asked?

    It’s incorrect to say “no one will do anything to help them…” without knowing if they have done anything to help themselves. Are they MEMBERS of VaCap?

    Are they members of the American Guild of Appraisers (AGA) OPEIU/AFL-CIO? Since I have been Chair of the National Appraiser Peer Review Committee at AGA we have not turned down one members request for help. Not one. we have referred several to attorneys where that appeared to be the necessary solution.

    While no one can guarantee outcome, we have been effective in numerous issues confronting our members. If corresponding with state Governors, Labor organizations, Legislatures, Regulatory Agencies, State Attorney Generals, or others is called for, we are ever ready to do our part. We have helped with research, and peer review opinions; and counterpoints to alleged ‘violations’ of purported “commonly accepted sound appraisal practices”

    In California, we were instrumental in killing AB624 AFTER IT HAD ALREADY PASSED both State Houses!

    The ONE thing that IS necessary however for our assistance…is MEMBERSHIP. Even membership after the events took place.

    Any or all of the twelve should contact me at (714) 366 9404 or Jan Bellas at (301) 220-4100 or Jan@appraisersguild.org to explore potential solutions; including petitioning for waivers if that is what’s called for.

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