It’s Time to STOP the Foolishness

Michael Ford

Michael Ford

General Certified Real Estate Appraiser at Michael F. Ford Appraisal
Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory
Michael Ford

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STOP the Idiotic Constant Parsing Changes in All Areas of USPAP

STOP the constant parsing changes in all areas of USPAP

I encourage ALL appraisers in the DC Metro area to attend the upcoming ASB Public Meeting on October 21, 2016.

In a nut shell, my strong belief is that they need to STOP the constant parsing changes in all areas of USPAP.

NOT ONE of the proposed changes is a necessary change. NOT ONE! No wonder state regulators no longer comprehend USPAP!

If they need the extra money that selling new versions of USPAP produces, then just CHARGE US DIRECTLY!

The purpose of FIRREA was to preserve the public’s trust in the integrity of the appraisal process, not to promote unnecessary USPAP educational course offerings and lectures opportunities for so called USPAP “experts”. Over the years the TAF and its Boards have done the opposite. Their actions are eroding confidence! These are honorable people who have lost focus as so many boards often do.

TAF needs to stop appointing people to the various boards who rely on creating or teaching appraisal courses for a living rather than on appraising real estate!

These “experts” have had over 25 years to get USPAP “right”. If they haven’t done so by now they never will.

What they have created is an environment in which debating what the meaning of ‘is’ has become more important than the far more significant underlying PRINCIPLES & practices are!

When a state like Oregon tells us they consulted with eleven other states that also thought non delivery of an appraisal report in stipulated time frames was a USPAP violation then we have far bigger issues to deal with than linguistic ballets.

In almost all instances in which I investigated complaints against appraisers in the past year, 90% or more of the ‘charges’ were nonsensical ‘pile on’ charges that the investigators use to coerce appraisers into signing consent agreements. They would rather seek extremely excessive fines for minor omissions than to reeducate the appraisers that make them.

It’s time to STOP the foolishness… including adoption of IVSC but that’s a topic for another time.

The Appraisal Foundation Announcement

ASB Public Meeting

The Appraisal Standards Board (ASB) invites you to its upcoming Public Meeting on October 21, 2016, in Washington, DC. In August 2016 the ASB published the Second Exposure Draft of proposed changes for the 2018-19 Uniform Standards of Professional Appraisal Practice (USPAP).

Topics under consideration include:

  • Definition of Report and Edits to the ETHICS RULE and the RECORD KEEPING RULE;
  • Definitions of Assignment, Intended Use, and Intended User, and related edits to the COMPETENCY RULE;
  • Definitions of Assumption and Extraordinary Assumption;
  • STANDARD 3 – Dividing into STANDARD 3, Appraisal Review, Development and STANDARD 4, Appraisal Review, Reporting;
  • STANDARD 6 – Dividing into STANDARD 5, Mass Appraisal, Development and STANDARD 6, Mass Appraisal, Reporting;
  • Removing the term Market Value from STANDARDS 7 and 8;
  • Edits to the Personal Property Certification in Standards Rule 8-3
  • Advisory Opinion 37, Computer Assisted Valuation Tools; and
  • Edits to Advisory Opinion 21, USPAP Compliance; Advisory Opinion 31, Assignments Involving More than One Appraiser; and Advisory Opinion 1, Sales History

The Board seeks feedback from government regulators, educators, appraiser organizations, practitioners, and users of appraisal service.

To register for the public meeting, click on the Register Here button to your right. Please visit our website for a list of all events www.appraisalfoundation.org.

Questions? Please contact: Aida Dedajic, Standards Board Administrator, a…@appraisalfoundation.org

Image credit flickr - Teunie van Hernen
Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. – Michael Ford on e-AppraisersDirectory

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14 Responses

  1. Don Clark says:

    Very timely: this is what I had sent this morning to a professional group(Buzz Forum):
    “I for one believe that education is important. But, the question is, how much and what kind of education? For example, appraisers very often end up taking courses in the same subject over and over again, year after year. In some states you can take the required 7 Hour USPAP update and fulfill that mandatory subject, but, in some states, you can take it a 2nd time and it will count as “general appraisal knowledge” and get a 2nd 7 hour credit in the same renewal period.

    Having taught courses to real estate agents, brokers, and appraisers since 1984, there is very often, very little that is new under the sun when it comes to education. With one exception……..USPAP. I beileve the 7 hour update course is flawed. It should easily be 14-15 hours, and with an exam to at least measure what has been learned, not necessarily to renew a license/certification.

    The most common issues that really need revamping, in my opinion, are the subjects withing the Advisory Opinions and the Frequently asked questions. I would like to see a seperate course in those subjects. The most often asked questions I get, and haviung taught in many states, coast to coast, and for many years, are the same questions over and over again as it relates to the AO’s and FAQ’s.

    Just wondering if anyone else had any similar concerns?

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    • Bill Johnson says:

      Don, the same questions over and over again are, “what’s your fee and what’s your turn time”. With 15 page engagement letters that either ignore or expand to the point where USPAP is all but meaningless to our clients, education to the truth doesn’t matter for most.

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    • GAPeach says:

      Don, I like your idea of a separate course covering the AO and FAQs. But I don’t think we need 7 hours of USPAP every 2 years. So definitely not 14-15 hours!

      The online USPAP courses I’ve taken had a quiz after each chapter and a final quiz at the end of each course.

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    • Mike Ford, AGA, SCREA, GAA, RAA Mike Ford, AGA, SCREA, GAA, RAA says:

      No.

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    • Retired Appraiser Retired Appraiser says:

      Here is the only appraisal education course you will ever need…FREE OF CHARGE.

      Good morning class

      “GTF OUT OF APPRAISING IF YOU VALUE YOUR TIME”

      Class dismissed

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  2. Jeff says:

    I couldn’t agree more.

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  3. Nick Gioia says:

    Based on the current USPAP guidelines it is virtually impossible for any appraiser to be 100% compliant. You can always find some minutia that can be loosely perceived as a violation. In the end, it comes down to the appraisers opinion vs. an uninformed board member trying to qualify their existence.

    The real issue is the AMC’s engagement letters which limit how the appraiser shall develop his or her opinion of value. AMC’s also are not vursed on USPAP, nor do they understand in most cases what they are asking for in the engagement letter.

    If I get one more email or phone call asking “what’s your fee and turn time” I am going to scream!

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  4. Bubba Jay / Retired Appraiser II Bubba Jay / Retired Appraiser II says:

    USCRAP is nothing but a bad joke for the profession, and a cash cow for some, and i will tell you why.

    first of all, USCRAP is so vaguely written its absurd. “explain this . . .” , “explain that . . .”. what does EXPLAIN mean anyway? “explain” to new appraiser (lets call him Joe), means what it means to Joe at his time. so lets say new appraiser Joe explains “x” to the best of his knowledge, abilities and skills at that time. ok, fine, then he turns in the appraisal.

    oh damn, some home owner just turned in his appraisal to the state because they disagreed with his value.

    now what happens? now people with higher appraisal education like a Certified General looks at his report, now one or more people with law degrees are looking at his report, now people with a bunch of initials behind their names are looking at Joes report.

    who in their right mind thinks Joe has any chance here?

    Joe explained “x” to his best of his knowledge, abilities and skills at his time. the Certified General, the lawyer, the people with the initials behind their name are of course going to say “he needed to explain more”. Joe is immediately screwed because he DIDNT HAVE the knowledge, the skill level or the experience as those other people. well, how convenient. JOE WASNT PLAYING AT THE SAME LEVEL AS THOSE OTHER PEOPLE, but he is getting reviewed by them isnt he?

    the definition of “explain” to new guy Joe isnt the same as a CG or a lawyer. but those are the people are are going to be telling Joe if he was right or wrong, and those are the people who are going to be issuing a punishment to Joe because HE DIDNT KNOW EVERYTHING THOSE CG OR LAWYERS KNEW. its a gotcha. ALL OF USCRAP IS A GOTCHA, and when broke departments need to raise money to fund their broke departments, they will getcha if they want to, every time.

    news bulletin – USCRAP will NEVER be able to regulate a persons integrity, their honesty, or their ethics, and thats exactly the kind of thing USCRAP tries to do. a person is either ethical or they arent, and a ridiculously written 2″ thick manual will never do anything to change that. Joe may have done the best job he could, he may have done it ethically, he may have done everything honestly, but it wont matter one bit if someone wants to use USCRAP against him, and the way USCRAP is written, it wont be hard to do.

    second, USCRAP is nothing but a cash cow at this point for some. its a total waste of time to sit in a class all day every two years, to hear why the word “thee” was changed to “the” in paragraph four on page 17. its ABSURD. its a total waste of time and its a waste of a lot of money for the appraiser. HOWEVER, the people who put on these classes like the Appraisal Institute, are making out quite handsomely with the cost of their over-priced classes and the cost of their over-priced books arent they? but hey, revenue is all that matters, right?

    watch and see what happens as the appraiser numbers continue to dwindle in the next few years. soon you will see the class and book costs double and triple, so the class and book providers can maintain their same level of income.  😉

    the ridiculousness continues . . . .

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    • Bubba, as always you raise several good points.

      I think the most critical one is admission by the Appraisal Foundation & Boards that existing versions of USPAP (and presumably all previous iterations) are ambiguous and unclear to state regulators.

      Just like honesty and integrity cannot be ‘imposed by regulation’ or governmental fiat, neither can common sense. Regulators look for absolutes because they either lack or are not permitted to exercise professional discretionary opinion.

      The end result is ever increasing micro managing of the process…to the point where sound appraisal practices have given way to compliance with overly parsed and unnecessary reinterpretation of regulations by 50 different state’s regulators (plus territories).

      Neither FIRREA nor USPAP were designed, intended or written for the convenience of State Regulators. They were written to promote and preserve the publics trust in the integrity of real estate appraisal.

      It is the typical bureaucratic reinterpretation over time of fundamental English language, appraisal standards, core principles and even USPAP itself that is eroding the Public confidence.

      You see, bureaucrats see no difference between the ‘real public’ and its interests, and their own arbitrary, subjective and clearly confused perceptions of those interests; and their ability to claim “public interest” for their various and sundry misinterpretations.

      Almost all states have language that require ALL licensed appraisers to comply with USPAP as the minimum acceptable appraisal standards in those states. Yet those same states rarely (almost never) comply with USPAP themselves when developing or reporting the results of appraisals and their own appraisal reviews in complaints or proposed stipulation agreements for appraisers.

      Apparently regulatory enforcement is incompatible with compliance with the MINIMUM acceptable appraisal standards dictated by USPAP and sound appraisal practices.

      Let me modify a statement I made about about USPAP updates. ONE change is clearly needed. That is a statement in the conduct and ethics section that notwithstanding any state enforcement agency’s belief or operating rules that they may be exempt from USPAP; that no appraisal or appraisal review by any such state agency that fails to meet ALL requirements under USPAP shall be deemed to be a credible appraisal or USPAP compliance analysis.

      They can’t have it both ways. Either USPAP is minimally definitive as a set of standards, or it is not.

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  5. Ralph says:

    These people sit around making changes for the sake of changes, in order to charge for a useless class every 2 yrs.  The only ones benefiting are textbook companies, on-line Continuing Ed and USPAP instructors who have not done an actual appraisal in 20+ yrs.  What other profession drops and adds standards every 2 yrs and continues to debate weather or not an appraisal is an OPINION!

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  6. GAPeach says:

    Mike, I couldn’t have said it better!

    None of these proposed revisions promote public trust. These “draft experts” just won’t give up. They seem to be working on a plan to shorten the remaining economic lifespan of the appraisal profession!

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  7. Jeanie says:

    This document does not need to be updated every couple of years. The trivial changes over the last few cycles have done little, beyond reinforcing the perception by many that changes are made strictly for the purpose of selling books & courses, and for income opportunities for the so-called experts.

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  8. Baggins - AppraisersBlogs#1 Baggins - AppraisersBlogs#1 says:

    The asb is the one who’s going to be collecting the per approved appraiser registration fees from amc’s right? That one is the big one. No more free market, if the provider has to pay, just to deal with you, before you ever take an order. Don’t take the ethics book for granted though, we’re one of the very last industries in America which still maintains legal ties regarding the ethic book, and daily business practice. Ethics in journalism, medicine, and many educational institutions, has long since been absent and is only present for show.

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  9. Wayne says:

    Who selects the members of the Appraisal Standards Board? Have any of these dudes ever done an appraisal? Really…like measured a house, photo of a toilet, on and on, I really doubt it! I think most of us have forgotten more than they will ever know! What a damn joke on our silly profession!

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It’s Time to STOP the Foolishness

by Michael Ford time to read: 2 min
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