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Important Updates

March 15, 2010: USPAP Changes-Apprasial Review

March 15th, 2010 9:05 AM

STANDARD 3 has been rewritten significantly. The ASB’s intent was to update and clarify the requirements for appraisal review, not to introduce changes to current appraisal review practice or create new appraisal review requirements. An examination of the requirements for appraisal review revealed that although the Standard addresses the requirements for both development and reporting, the requirements are often not distinct or fully elaborated. Therefore, revisions were made to expand and distinguish the development and reporting requirements. STANDARD 3 was divided into two sections: one addressing development, and one addressing reporting. The revised language mirrors the form and content of the other STANDARDS. A review of the other Standards revealed that they all include a basic format of general requirements followed by specific requirements. For example, Standards Rule 1-1 provides for the basic requirements of appraisal development, followed by the requirements of problem identification in Standards Rule 1-2. The remaining Standards Rules present more specific requirements. However, STANDARD 3 did not follow this format, which complicated understanding, application, education, and enforcement. Therefore, revisions were made to create a more logical and comprehensive structure. The requirements of Standards Rules 3-1(d) through (g) present the requirements related to the process of appraisal review. The considerations previously required (completeness, adequacy, relevance, appropriateness, and reasonableness) failed to reflect the true nature of current practice and were somewhat repetitive. The FOREWORD ©The Appraisal Foundation U-vii reviewer’s scope of work can include much less than and much more than these considerations. Further, there was no distinction of the difference between reviewing an analysis (development) and reviewing a report. The revisions made are intended to better guide a review process that is in practice quite broad and flexible. A common area of misunderstanding in STANDARD 3 related to the requirements that apply to reviewers who are providing their own opinion(s) related to the subject of an appraisal, an appraisal review, or an appraisal consulting problem addressed in the work under review. In the review of an appraisal assignment, the reviewer can provide an opinion of value for the property that is the subject of the appraisal review assignment. In the review of an appraisal review assignment, the reviewer can provide an opinion of quality for the work that is the subject of the appraisal review assignment. In the review of an appraisal consulting assignment, the reviewer can provide an analysis, recommendation, or opinion for the consulting problem that is the subject of the appraisal consulting assignment. Revisions were made to organize and clarify the requirements that apply to a reviewer providing their own opinion of value, review opinion, or consulting conclusion related to the work that is the subject of the appraisal review assignment. Administrative edits were also made to USPAP and all guidance material, including the USPAP Advisory Opinions and USPAP Frequently Asked Questions, for conformity and consistency.

Posted by Douglas E. Hendricks on March 15th, 2010 9:05 AMPost a Comment (0)

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