Daily Archives: January 12, 2012
ICAP Board Member attended the Appraisal Foundations first public meeting of the Appraisal Practices Board
In order to keep their membership informed of industry changes; ICAP Board Member Brian Masterson attended the Appraisal Foundations first public meeting of the Appraisal Practices Board (APB).
According to their webpage, www.appraisalfoundation.org, The APB has been charged with the following:
- Providing financial support for the work of the AQB, APB and ASB,
- Appointing members to the AQB, APB and the ASB, and
- Oversight of the activities of the Foundation Boards & Advisory Councils.
In addition, the APB has the responsibility of identifying and issuing opinions on Recognized Valuation Methods and Techniques, which may apply to all disciplines within the appraisal profession, and will offer voluntary guidance in topic areas which appraisers and users of appraisal services feel are the most pressing.
The APB consists of seven members as well as individual panels of Subject Matter Experts (individuals with expertise in the specific areas under consideration) who are tasked with researching and vetting the pressing issues, allowing for public comments, ultimately resulting in the adoption of “guidance that may include more than one recognized method or technique that addresses the specific topic.”
Among the issues the APB disused were “Adjusting Comparable Sales for Seller Paid Concessions” and “Residential Appraising in a Declining Market” (First Exposure Drafts found here: https://appraisalfoundation.sharefile.com/download.aspx?id=seb1923e99be47968#). These drafts offer real world insight on how practicing appraisers can address these issues.
While USPAP Advisory Opinions offer guidance, the APB takes it a step further and offers actual guidance with real world examples. The second exposure draft of these topics will be released in January, 2012 and will have a 30 day exposure period.
Guidance offered by the APB is voluntary, and the Appraisal Institute is urging the APB to remove the statement acknowledging that guidance documents may be adopted by government agencies. Additionally, the Appraisal Institute is urging that all guidance documents – including the current Exposure Draft – at a minimum, should include a clear statement in the preamble along the following lines:
“This voluntary guidance for appraisers is not intended for enforcement purposes or for direct incorporation or incorporation by reference, into state laws affecting the standards by which opinions of value of real property are developed”.
To read a letter written by the Appraisal Institute to the Chairman of the Appraisal Practices Board Click: www.appraisalinstitute.org/newsadvocacy/downloads/ltrs_tstmny/2011/ai_afb_exposure_draft_fnl.pdf
Before adjourning the meeting the board members emphasized the importance of involving every day appraisers in helping to establish the industry standards that impact their profession. The thoughts of the Appraisal Institute are that the codification of best practice documents places the quality of appraisal reports at risk, as it likely would cause appraisers to fixate on procedures, rather than analyzing and reporting the market. With appraisal, there may be more than one “right” way to approach a problem, and these may not be fully captured in guidance documents; in addition, it may stunt the development of legitimate methods and techniques that are developed in response to new technologies and client and consumer needs. ICAP is encouraging its membership to get involved and share their expertise with the APB, an application can be obtained by e-mailing SMEapplicants@appraisalfoundation.org.
2012 ICAP president Tamara Bellisario will be featured on WIND AM 560 this Sunday January 15th. The show airs from 9am to 10am, or you could click the following link to listen to the shows streaming podcast anytime: http://realestateedgechicago.com/REE/podcasts.html.