“Credible valuations of real property are critical to the health of the overall real estate industry; therefore the practice of bifurcated/hybrid appraisals must be regulated”
There has been lots of talk over the past few weeks about bifurcated appraisal products. First came the announcement form Working RE Magazine they were conducting a survey on bifurcated appraisal products. VaCAP recommends every appraiser complete the survey if you have not done so already. Next came rumors that Mark Calabria, Director of FHFA stopped all pilot programs which included bifurcated appraisals and appraisal waivers. Working RE Magazine published an article explaining what is really going on in their digital email copy. And finally the National Association of Realtors has adopted a policy on bifurcated/hybrid appraisals.
Now we know what you are thinking, they should have banned them all together, but take a look at what the Real Property Valuation Committee proposed and ultimately got passed by NAR’s Board of Directors. NAR has many appraiser members but let’s be honest, the bulk of their members are sales agents. Some of those sales agents may complete the property data collection piece of bifurcated appraisals, so keep in mind a happy median is a good policy for NAR.
The policy addresses training and liability of the property data collector and oversight of performance. There also must be transparency, meaning the consumer is informed of the bifurcation process; accuracy of the data and communication between the appraiser and the data collector. Geographical competency is also necessary, so no more appraisers sitting behind a desk three states away. Finally, USPAP compliance with the ability for the appraiser to control the form, the process and the work file. This was adopted by NAR on November 11, 2019 as an official NAR policy.
By no means are we promoting bifurcated appraisal products, however, this official policy addresses most of the concerns appraisers have with the bifurcated appraisal products. It also gives each state some talking points with their state legislators.
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This is a start, but by no means should lead to the end result. The signing appraiser should have complete control over who does the inspection and the outcome.