Chapter 2: Regulation of Appraisal Profession and Appraisal Standards
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 1989)
Under the Appraisal Foundation two sub-agencies were created
Appraisal Standards Board
Appraisal Qualifications Board
State Certifications and Licenses (state dependent)
Registered--allows regulatory control while gaining experience. Must work for Certified Appraiser.
Licensed appraiser (residential less than $1,000,000 and complex less than $250,000)
Uniform Standards of Professional Appraisal Practice (USPAP)
Standard 1--The practice of real property appraisal
Requirement of professional practice (due diligence)--avoid material errors
Use of appropriate techniques
Fees may not be based upon value outcomes.
Appraisers may not perform appraisals for which they have no experience without proper disclosure.
Standard 2--The reporting of real property appraisal
Appraisals should communicate clearly to the client--be legible, using proper grammar, and a non-technical vocabulary
Appraisers may not disclose any material fact or conclusion from an appraisal assignment except to the client unless required by a court or regulatory agency.
Appraisal reports and records should be retained for at least five years and at least two years after final disposition of any judicial proceeding where testimony has been given.
Appraisals must contain certification statement.
Other USPAP Standards
Standard 3--The practice and reporting of real property review appraisals
Standard 4--The practice of real property consulting where an opinion of market value is not rendered.
Standard 5--The reporting of real property consulting where an opinion of market value is not rendered.
Standard 6--The practice and reporting of mass real property appraisal (property assessments)
Standard 7--The practice of personal property appraisal
Standard 8--The reporting of personal property appraisal
Standard 9--The appraisal of businesses
Standard 10--The reporting of business valuations
Always do professional work--type of appraisal form (letter, form, narrative) should not drive the amount of work done in support of value estimate.
The fee should not influence the amount of work done in support of the value estimate.
Should not accept unfamiliar assignments without "teaming" with a more experienced appraiser, or, if none available, full disclosure to the client of the appraiser’s inexperience.