Comments on: Appraisers Must Be Local or Disclose According to USPAP

By: Chicago June Home Sales Up Substantially at 25.8% | The Chicago 77

Mon, 27 Jul 2009 16:13:18 +0000

[...] Appraisers must be local [...]

By: Renee Healion

Renee Healion — Sat, 18 Jul 2009 02:26:05 +0000

There is more to be done and before the report is even written. The appraiser must, under the Competency Rule, disclose this lack of geographical familiarity (in this case) to the client BEFORE accepting the assignment.Then after the appraisal is developed, the appraiser must report the steps taken to become proficient. Here’s the current rule:

USPAP 2008?2009

COMPETENCY RULE
Prior to accepting an assignment or entering into an agreement to perform any assignment, an appraiser must properly identify the problem to be addressed and have the knowledge and experience to complete the assignment competently; or alternatively, must:

disclose the lack of knowledge and/or experience to the client before accepting the assignment;

take all steps necessary or appropriate to complete the assignment competently; and

describe the lack of knowledge and/or experience and the steps taken to complete the assignment competently in the report.

Renee

By: Appraisal Police

Appraisal Police — Sat, 18 Jul 2009 02:01:58 +0000

Appraisers Must Be Local or Disclose According to USPAP

No they don’t.

USPAP states this:

“In an assignment where geographic competency is necessary, an appraiser preparing an appraisal in an unfamiliar location must spend sufficient time to understand the nuances of the local market and the supply and demand factors relating to the specific property type and the location involved. Such understanding will not be imparted solely from a consideration of specific data such as demographics, costs, sales, and rentals. The necessary understanding of local market conditions provides the bridge between a sale and a comparable sale or a rental and a comparable rental. If an appraiser is not in a position to spend the necessary amount of time in a market area to obtain this understanding, affiliation with a qualified local appraiser may be the appropriate response to ensure development of credible assignment results.”

Read the COMPETENCY RULE.