USPAP Third Exposure Draft
…the Ethics Rule has been expanded with a new highly detailed Nondiscrimination section, which also affects the Competency Rule.
Folks, the Appraisal Foundation’s Appraisal Standards Board released the THIRD Exposure Draft to USPAP on July 26, 2022. To be honest, I didn’t know there have been two previous Exposure Drafts.
I would encourage you to download and print this Draft here. The PDF is also embedded below. It’s only 11 pages total. The key difference in this Draft is that the Ethics Rule has been expanded with a new highly detailed Nondiscrimination section, which also affects the Competency Rule.
You may submit your comments about this Draft to the ASB on or before Sept. 24, 2022. Comments should be submitted here. If you are unable to provide your comments via SurveyMonkey, you may also email the ASB at ASB@appraisalfoundation.org.
One item of note, well actually two. This Draft does not include the effective dates for the next version of USPAP. I question whether it will actually be effective on January 1, 2023 due to potential additional Drafts, the formal ASB approval actions, printing, preparing of the 7 hour USPAP update course… If not, there will have to be a formal announcement from the ASB to further extend the 2020-21/22 USPAP to a specific ending date.
Secondly, I have not seen anything yet that tells stakeholders what the next term length of the next USPAP will be. For the past decade or so USPAP has been on a two year revision cycle. But that duty cycle has infuriated many users and appraisers, who believe revising this necessary document so often is ridiculous. So keep your “eyes peeled” and watch for news about this, which may be disclosed at and after the next ASB meeting on Oct. 20,2022.
The ASB will also accept verbal comments at its virtual public meeting on October 20, 2022.
Proposed Addition of a Nondiscrimination Section in the ETHICS RULE:
Dave Towne on e-AppraisersDirectory.com
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Thanks Dave
Thanks for the info and downloads.
Below is right off Fannie Mae’s “Unacceptable Appraisal Practices”
“failure to comment on negative factors with respect to the subject neighborhood, the subject property, or proximity of the subject property to adverse influences;”
Seems contradictory to the proposed changes; they do not want “crime ridden” etc. comments in the appraisal report. We need to state FACTS about the neighborhoods and if it has a high incidence of crime and we do NOT mention this, then it seems like we would be liable for misleading the intended user by OMISSION. Any way you slice it, you are going down a slippery slope. They clearly want to know about negative or adverse influences. So they need to make up their damn minds!
Another unacceptable practice: “failure to use comparable sales that are the most locationally and physically similar to the subject property;”
Well good for that! At least they are not trying to have us select comps in areas that are NOT comparable to the subject to artificially inflate values in minority neighborhoods since the powers that be seem to think that perpetuates bias and discrimination!
I have no issues with the new expanded definition because I don’t care who owns the house or who is buying the house. All I care about is the HOUSE and how the comparable sales prove the Subject’s value. How the BUYERS/Market dictate the value… Period, end of sentence!
Amen to that!!! I completely agree with Mary Thompson. Are we supposed to not make any remarks at all about the neighborhood? If you state that it’s a desirable area for families with school aged children due to the grade “A” schools that comes up as a red flag. We can’t use the word “Exclusive” because that comes up as a red flag. What the heck is anyone allowed to say these days? We can’t state positive or negative things about the area. And when I state the boundaries in my reports a lot of times they are bounded by the Indian River to one direction or the other. Is that now a racist term? That is the name of the river. All of this bias nonsense is just that.. a lot of nonsense. Leave us alone and we will do our jobs in a much better more accurate way. I don’t know of any appraiser that is biased towards anyone or anything. I do not like going to an area with a high crime rate and drive-by shootings. Well, am I being biased because I don’t want to get shot in the head? Enough is Enough!
you are correct enough is enough. this is more of the liberal democrat left woke equity non-sense. more speech silencing. they have no common sense most are getting PAID under the table. these people are trying to ruin our country with this non-sense. Anyone with a functioning brain cell knows you should put what the neighborhood is about. also put all the crime stats in big bold letters. just as people in the democrat crime ridden states are starting to take the law into their own hands so should appraisers use common sense for their reports.
You can state such things, the trick, however, is to avoid words that state, or imply subjectivity. For instance, stay away from reporting “ desirable”, desirable as it might be. Simply state that an X schools/s rated A or whatever are in proximity. Let the reader draw their own conclusions. Now, as far as the Indian River, it is the Native American flowing body of water ?.
Appraisals are discriminatory. How else can we make a studied opinion. language is important, thoroughness is important. Interpretation of rules made by legislators and others are dangerous to all businessmen, bankers’ and investors.
I took a USPAP class and asked the instructor about this, should we mention all of the negative things we see. He basically said that with all of the heat that the appraisers are receiving it might just be better to include photos but be very careful with your words. Well, that was helpful. So basically, we do not want to upset any snowflakes by telling the truth. However, if someone thinks that we were misleading they will also come after use.
So, if the subject is located on a street with 12 homes, 10 are boarded up, gangbangers shoot up the homes at night, the crackheads are doing deals In front of the subject, the street walkers are on the corner, and you fear for your life just by driving down the street. Don’t say anything just use comps from a market that is well maintained.
Is that what we are headed for? Are all properties and markets considered equal now? Is this why they want desktops because that appraiser will not see much of the negativity? But we will still be responsible for the report. If the Hell Angels clubhouse is next to the subject and the night before a rival MC shot up the clubhouse next to the subject and killed 6 Angels is that an environmental hazard? Would I need to locate at least one sale with a similar condition. If I go across town and locate a comparable sale next to the Sons of Silence clubhouse which was also attacked would that be a good comparable?
If you had children or grandparents living with you, should you be concerned if the subject was located next to this??
https://www.istockphoto.com/photos/run-down-house
https://www.flickr.com/photos/will139/5480167526
https://www.wafb.com/story/19506970/previous-homeowner-warns-buyers-of-meth-house/
Should well tell it like it is or just look away.
Those are complex issues, with simple appraisal problem solutions. No, you do not adjust for neighborhood blight, because anyone and everyone actually participating in that local market knows where they are at. There is no need to adjust because the market response is already reflected in current market values, or if not, it will eventually be reflected as such. Either positive or negative, appraisers report on the market response and we do not project or forecast. Any demands to select comparables from non competing areas with different market conditions would result in unacceptable engagement conditions, and the ethical requirement for the appraiser to decline the appraisal service engagement request.
‘an appraiser must not act with bias, or otherwise discriminate against or treat differently,’
Well it’s a good thing our reports are about the local market value of houses and land, not populace demographics.
Whom would be the best resource to publish such a factual statement on an official industry document?
Police or newspaper reports. One you get from a local government source the other from a Public Library.
A geo-based software company still actively publishes a popular data based one.
Are you restricted from giving your opinion?
Stick with a professional posture.