Are Bifurcated Appraisals Legal in Your State?
Lately there has been a push for bifurcated (hybrid) appraisal products. Those promoting these questionable products claim it will reduce the amount of time to obtain an appraisal. Most appraisers are screaming foul play, and for good reason. It is because of bad players doing questionable things that licensing became mandatory in Virginia. Mandatory. Licensing of appraisers protects the public trust.
We all know splitting the process will not save time, but rather create delays. The only reason for this questionable product is the profit of the amc, nothing more. And then there is the quality of the information being provided and the credibility of the appraisal report that relies upon it. Consumers, investors, appraisers and insurance companies all have raised concerns about bifurcated appraisals.
Well VaCAP wants to share something with each and every one of you. It has been discovered that the Code of Virginia may not allow this type of product.
Here is what Virginia Statute states:
§ 54.1-2011. Necessity for license
- After December 31, 1992, except as provided in § 54.1-2010 and in subsections C and E of this section, it shall be unlawful to engage in the appraisal of real estate or real property for compensation or valuable consideration in this Commonwealth without first obtaining a real estate appraiser’s license in accordance with Board regulations promulgated pursuant to the Administrative Process Act (§ 2.2-4000 et seq.).
- After December 31, 1992, except as provided in § 54.1-2010, it shall be unlawful for any person who is not licensed pursuant to this chapter to perform an appraisal in connection with a federally related transaction.
- Notwithstanding subsections A and B of this section, an individual who is not a licensed residential real estate appraiser, a certified residential real estate appraiser, or a certified general real estate appraiser may assist in the preparation of and sign an appraisal if:
- The assistant is under the direct supervision of a licensed residential real estate appraiser, a certified residential real estate appraiser, or a certified general real estate appraiser; and
- The appraisal is reviewed, attested to be accurate and complete, and signed by such licensed residential real estate appraiser, certified residential real estate appraiser, or certified general real estate appraiser in accordance with this chapter.
If that does not raise some questions of legality, perhaps this will:
From the Commonwealth of Virginia Department of Professional Occupational Regulation, Virginia Real Estate Appraiser Board, Appraisal Management Company Regulations:
18 VAC 130-30-160. Prohibited acts.
The following acts are prohibited and any violation may result in disciplinary action by the board:
#10: Failing to act as an appraisal management company in a manner that safeguards the interests of the public
We are not professors of law, nor are we licensed to practice law, but we can read and comprehend the English language.
Is providing property data that is intended to be used in an appraisal report providing significant assistance? If an amc orders a bifurcated appraisal are they harming the public? What is the verbiage in your state’s laws and regulations?
Now The Appraisal Foundation is asking for comments on the 2020-2021 USPAP Exposure Draft. The main area of change is the report options. This has a ripple effect to lessen the standards and provide more opportunity for substandard work, which could be harmful to public trust.
Promoters of the bifurcated (hybrid) appraisal product argue the scope of work rule allows these products to be done in accordance to USPAP. Does anyone else find it interesting The Appraisal Foundation wants comments on the proposed Scope of Work Rule?
Appraisers not only have the opportunity to voice their opinions on the proposed changes to USPAP, but expand your comments to include your opinion of the bifurcated appraisal products. Explain how they are harmful to consumers, neighborhoods and the economy. Public trust is paramount to the Appraisal Standards Board.
The deadline for comments is July 15th, so please take a stand for your profession and send your comments to The Appraisal Foundation.