Trouble is Brewing

$15 USPAP Appraisal Reviews in 15 minutes?

A VaCAP member shared with us something they read in an appraiser group on Facebook this morning and expressed concern. We agree there is a reason to be concerned and want to alert our members to be cautious.  We do not know if the source of this request is an amc or a lender, but either way, there is reason for concern.  Here is what was shared:

“I have been diligently looking for appraisers to complete to do our NEW USPAP reviews. These pay $15 per report and are completed in 10-15 minutes. We utilize our own form and the reviewer answers 15 USPAP compliance (Yes or No) questions on the appraisal.

The 15 Questions are:

1. Did the appraiser provide all necessary State disclosures (fee statement, AMC information, etc.)?
2. Did the appraiser exhibit competency in performing the assignment with the specific property type, value amount, in compliance with applicable zoning and market influences?
3. Was the appraiser’s scope of work reasonable and sufficient to deliver credible assignment results?
4. Did the appraiser identify the client? Intended users? Intended use? And real property interest being appraised?
5. Did the appraiser identify and employ the correct methods and techniques in this appraisal assignment?
6. Did the appraiser analyze agreements of sale, previous listings and sales of the subject property within the past three (3) year period?
7. Did the appraiser clearly state all extraordinary assumptions and hypothetical conditions employed within the appraisal?
8. Did the appraiser develop an opinion of the highest and best use of the subject?
9. If exposure is relevant, did the appraiser develop and report exposure?
10. When the Sales comparison approach is necessary, did the appraiser analyze sales data available?
11. When the Cost approach is necessary, did the appraiser develop the site value using an appropriate technique? Did the appraiser analyze cost data and correctly apply depreciation?
12. When the Income approach is necessary, did the appraiser analyze rental data?
13. Did the appraiser reconcile the applicability and relevance of the approaches to value?
14. Did the appraiser address prior services within the past 36 months?
15. Did the appraiser include a signed certification?”

As we stated , VaCAP does not know if the source is a lender or AMC. We do know that any review done by a licensed appraiser must comply with USPAP Standard 3  and the reporting of the review results must comply with USPAP Standard 4.

We are not sure how any appraiser could even possibly complete a review in compliance with USPAP Standards 3 and 4 in 15 minutes. Market research and your own analysis must be performed in order to determine if the original appraiser has complied with USPAP Standards 1 and 2.

Even greater concern is the amc or lender’s on-line form. This raises questions if the reporting format allows the reviewer to comply with USPAP Standard 4.  Does the reviewer have the ability to add to or subtract verbiage that may or may not be appropriate? What about any comments that maybe necessary to support your conclusions? Is checking a box sufficient for USPAP compliance? 

Remember when you are doing a review, you are making an opinion to the quality of another appraisers work. If you agree the original appraiser has complied with USPAP and his  or her results are credible, you own that opinion and the value stated on the original appraisal. If you disagree, you own that opinion as well and better have the support to back it up. 

We do not wish to get involved with any fee discussions as the fees each appraiser charges is their own personal or business decisions. But we do ask you seriously consider if the $15 fee being offered is reasonable for the amount of work and liability you take when completing any review. 

Now more than ever, appraisers need to stick together. VaCAP membership remains at $84 per year and we welcome new and returning members. To learn more about VaCAP, please visit our website.  To join or renew your VaCAP membership, click here. 

Thank You for Being Part of VaCAP!