Highlights from ICAPs 2019 Seminars
May 20, 2019, Lisle-Sheraton Hotel, Lisle, IL
2019 Illinois Appraisers Update Seminar
ICAP Reporter: Karen Emerle, SRA
ICAP Photographer: Richard deVerdier, MAI, SRA, AI-GRS (Lisle), Theodore Neff, SRA (Collinsville), Karen Emerle, SRA (Springfield)
Approximately 280 appraisers gathered together on May 20th in Lisle, Illinois to attend the Illinois Coalition of Appraisal Professionals’ (ICAP) third and final 2019 Annual Update Seminar. A good turnout was also seen at the first two seminars. Combined, approximately 160 appraisers attended the seminars in Springfield on March 11th and Collinsville on April 1st. ICAP would like to thank its members for their continued support and for your consistent attendance at our seminars. Your Membership Matters!
The year 2019 marks ICAPs 25th anniversary of proudly serving all real estate appraisers in the State of Illinois. ICAP was established in 1994 as a political action group. Its purpose—to be a unified voice for the appraisal profession in Illinois. Its mission—“to promote the appraisal profession and its image to the general public and to users of appraisal services. ICAP initiates discussion and analysis of issues affecting professional appraisers and monitors political action with the intent to influence legislation, regulation, and public opinion toward the appraisal profession.” ICAPs sponsoring organizations include the American Society of Appraisers (ASA), the American Society of Farm Managers and Rural Appraisers (ASFMRA), and the Appraisal Institute (AI).
Opening remarks enumerated ICAPs accomplishments on behalf of Illinois appraisers and outlined ICAPs various areas of participation in local, state and national issues affecting the appraisal profession. A heartfelt thank you was extended to the ICAP membership for attending ICAPs seminars and faithful contributions, and to the many current and past Board members and committee members who volunteer their time working hard on behalf of the appraisal profession.
“My, how you’ve grown!” A common remark we often heard as a growing child or one made as an adult to a child. But, how do we know if we have grown professionally? Growth does require nourishment of some kind, and in appraisal practice may I suggest the nutrient is found in our continuing education instruction? Just receiving instruction doesn’t guarantee the understanding and obedience that produces professional maturity. How we listen to instruction plays an important part in our professional development. For the deluded or deceived listener simply hearing the instruction is sufficient. This type of listener doesn’t carefully consider what they hear, or allow it to have any impact on their thinking, attitudes, or practices. The distracted listener is the person who feels encouraged at the moment on hearing the instruction, but quickly forgets what it was about. The attentive listener exams and considers what is heard, is guided by and applies the instruction to their professional practices. The obedient listeneris one who takes seriously what he has learned and makes it principal in their professional practice. Nutrients for our professional growth were offered by all ICAPs 2019 speakers. The choice of how to listen rests upon the individual—which type will you choose to be?
Craig Capilla,attorney with the Franklin Law Group focuses his practice on representing appraisers and other professionals in state and federal lawsuits as well as various licensing bodies. Mr. Capilla’s presentation “The Calm Before the Storm? Litigation Against Appraisers is Down. Time to Relax?” draws our attention to past, present, and future trends in the real estate market, a market and complaint slowdown, or is it?, coming assignment changes on the horizon, increasing thresholds, agricultural and retail concerns. Mr. Capilla posed the questions if performing assignments using alternative valuation models brought increased opportunity, and whether or not there might be related potential unintended consequence risks? Up to date rulings related to the Zillow and big data class action law suit were provided. Mentioning USPAP AO21 Mr. Capilla made suggestions on finding new ways to enhance Your value. Mr. Capilla suggests asking ourselves “What did I do? And Why did I do it?” to help us determine if we have explained our work, clearly and concisely. Remember also to maintain the appropriate level of work files and develop the “4th Approach” to value….”would I pay this for that?” “Tools of the Trade” closed his presentation which highlighted suggestions for data aggregators, analytics tools, file management software and digital storage devices.
Richard Knitter, multi-state licensed general appraiser served three multi-year terms on the Appraisal Foundation’s Appraisal Standards Board (ASB). Mr. Knitter’s “Sneak Peak – Upcoming Changes to the 2020-21 Edition of USPAP”presentation was a precursor to the forthcoming edition, expected to include a number of significant changes. The exposure drafts themselves were voluminous. Speaking at all three seminars required Mr. Knitter to amend his presentation for each seminar as exposure drafts were released, discussed, amended, and a final 2020-21 Edition of USPAP, just prior to the Lisle Seminar, was adopted. Mr. Knitter’s presentation highlighted the available report options, changes adopted, and changes to the Competency Rule, Definitions, Standard Rules Comments, Scope of Work Rule, and Advisory Opinions—new, retired, or revised. Mr. Knitter encouraged everyone to write to the ASB, sharing your ideas by emailing your comments and suggestions to the ASB for their consideration of possible future changes. And, be engaged when the next Exposure Drafts for Proposed Changes to USPAP are released. How?; by submitting comments on the proposed changes. The ASB does value your input and does read each and every comment they receive. Point in fact, the unheard of fourth exposure draft and delay in the final adoption of the latest 2020-21 USPAP Edition was due in part to the comments received.
A general reminder from ICAP to all Illinois licenses appraisers—the 7-hour USPAP Update continuing education seminar course covering the 2020-21 Edition of USPSP must becompleted no later than June 30, 2020. Reference is the IL Admin. Code Title 68, Chapter VII, Sec. 1455.160(a)(3). ASB is in the process of writing the course. It should become available sometime after October, 2019.
Innovative Appraisal Technology,presented by LeeAnn Moss, an accomplished professional. LeeAnn brings her vast knowledge, skills, talents and expertise as an agricultural economist, consultant, real estate broker and auctioneer, certified general real estate appraiser, AQB certified USPAP instructor, accomplished instructor and course developer, and farm real estate related services provider together to provide a look at technology use in the appraisal profession through the eyes of history, status and trends. Discussing industry digitization, major innovations, challenges ahead, USPAP applicability, methods of valuation, artificial intelligence, data science, and additional tools. LeeAnn left us thinking about whether a “new industry paradigm” or “new appraiser thinking is needed.”
Ryan Nelson is the Valuation Officer for the U.S. Department of Veterans Affairs based in the St. Paul Regional Loan center, one of eight VA regional loan centers. Mr. Nelson’s presentation VA Appraisal 101provided appraisers an overview of the VA Home Loan Program addressing VA Home Loans, the loan process, and the VA Lenders Handbook policy document. How the VA appraisal process is different and appraiser VA requirements were explained. Mr. Nelson provided some reference tools and for general questions, the toll free telephone number is: 877-827-3702 opt. 5. The St. Paul Regional Loan center is currently recruiting appraisers in Illinois rural areas.
John D. Russell is ASA’s Senior Director of Government Relations and Business Development. Mr. Russell encouraged us to get more engaged, active, and involved with our organizations. Mr. Russell spoke about turbulent times, especially for the residential appraiser which have become commodities—but, we are people! He mentioned that real estate agents do appraisal waivers, property valuation, evaluations, AVMs, hybrids. Mr. Russell asked, “What is an FRT (federally related transaction)? Providing a brief history, of the threshold limit increases, he noted that today 90% of all lending activity is notfederally related transactions, and approximately 56% of lending activity falls below $250,000, and 72% falls below $400,000 thresholds. Send your comments to the Consumer Financial Protection Bureau—there are no “bad ideas.” In between mandatory states and voluntary states are those states that are mandatory FRTs.
Mr. Russell continued his presentation touching on appraisal process modernization, hybrid products, the “duty to serve requirement”, Freddie Mac “sweat equity program”, property data update, mobile apps, collateral validation, the Form 1004P and reminded everyone GSE conservatorship remains until 2020. There is a fixation on “time” and “cost.” In the evaluation space the question raised was, “Does anyone think these are being done for less than an appraisal and in less time?” A survey in South Carolina and Virginia found it took 9 days which when an AMC becomes involved the time increased to 18 days; average is 5 days. Hybrids are not saving time or saving money. Motivation of agents is to get the deal done in order to receive their commission. Reminding everyone, this is about people! The home buyer is making their single largest investment and should view the appraiser as the consumer protection tool! The question of value becomes a lot more inclusive: retrospective, prospective, range of values (or point), and curb to porch value asks is this fair? Does this make sense? The appraiser should write up their scope of work, and the engagement letter. There are no AMCs when it is just the home buyer. It is a better product, with more information, you make more, and the owner pays less. Residential real estate transactional appraisal work. The VA panel is a rotation panel based on a fee schedule. There is no rotation panel in Dodd Frank. Mr. Russell closed is presentation, leaving us with the thought, “You can’t race to the bottom just to get the work.”
Joel Ward’s Best Practices: Techniques for Creating Credibilitypresentation is derived from his 7-hour CE “Best Practices” course which was inspired by Joel’s Illinois Appraisal Board experience. Joel tells us USPAP Standards 1 and 2 set “best practices” with two prime directives: Produce a credible appraisal and communicate the results in a manner that is not misleading. Packed with information to guide the appraiser toward understanding how one can produce a “worthy of belief” appraisal, recognize when “credibility” might not be reasonably achieved, and what methods could be utilized to create appraisal credibility. Joel provides examples of both epic failures and solutions covering a variety of issues, such as: reasonable exposure time, listing and sales history, market analysis, comparable selection, site valuation, and various adjustments to answer the critical question, “is this appraisal worthy of belief?”
Brian Weaver, Real Estate Appraisal Coordinator & AMC Coordinator for the Illinois Department of Financial and Professional Regulation. Always informative, What We Need to Know Now!, did not disappoint. Coordinator Weaver acquainted the attendees with the new IDFPR Director Mario Treto, Jr. Coordinator Weaver made mention that the appraisal profession lost two respected mentors in 2019, legendary appraiser Eugene Stunard and educator Steve Patten.
Currently in Illinois there are 1544 Certified General Licensees, 2151 Certified Residential Licensees, 399 Trainees, 101 approved QE Courses, and 326 approved CE courses. The 500 appraisers which do not live in Illinois were sent a reminder link to fill out the CE form and update. Two weeks before April 1st, 557’s were held up and off from receiving their licenses so they didn’t need any hours for this renewal cycle. The Rules provide a pass on required CE hours to a real estate appraiser issued an initial license for less than 185 days prior to the expiration date of the license. (Sec.1455.160) The year 2006 saw 637 applications for 557 licenses, 243 applications for 556 licenses, and 86 applications for 553 licenses. In comparison, in 2018, respectively there were 102, 26, and 64 applications. How many days does it take upgraders, from completing and submitting an application to issuance of that license?
HB5502 became law, removing both the two year cycle limit and trainee exam. The criteria requires that qualifying education (QE) must be 5 years within exam. QE classes are sometimes licensed as CE classes too; and qualify for both CE and QE. If one is trying to upgrade as a trainee 30 hours (28 CE hours, 2 Exam hours).
How many are retiring this year? Write IDFPR an email saying, “I am retiring.” Please.
The biggest complaint for appraisers, in 2017 / 2018, are for unpaid state taxes; 33 faced or received suspensions. Spikes in the enforcements/complaints during the past five years are due to CE audits.
AQB criteria has changed. For those upgrading their Trainee to Certified Residential, the number of experience hours went from 2500 hours in no fewer than 24 months to 1500 hours in no fewer than 12 months. Certified General kept the 3000 hours experience requirement but changed the time frame from 30 months to 18 months. Trainees need core QE courses no older than 5 years, completion of the supervisor trainee course, an application and fee. An exam is not required.
|2019 License Renewal|
|CE completion date||6/30/2019|
|Renewal date||9/30 Odd Years|
|USPAP||6/30 Even Years|
CE lookup is available online at the IDFPR website. The July-August-September “Donut Hole” will be fixed going forward. However, for the 2019 renewal if one has completed all required 28 CE hours by 6/30/2019, then “whole” courses taken after July 1, 2019 will count toward the 2021 renewal cycle. “Whole” courses mean one cannot split a course between or into two cycles. Also it is the responsibility of the appraiser to make sure the education provider notifies the Department that the hours would apply to the 2021 renewal cycle. The May 17, 2019 CE Policy Statement, newly issued by Director Treto, can be found on the IDFPR website under “Notices” in the License Information Tab section.
A reminder, again: Effective June 1, 2015, and for consumer protection, Section 1455.245 of the Administrative Rules requires all appraisal reports of a 1 to 4 residential units property prepared by licensed real estate appraisers must include the statement “The comments by the licensed real estate appraiser contained within this appraisal report on the condition of the property do not address “standards of practice” as defined in the Home Inspector License Act [225 ILCS 441] and 68 Ill. Adm. Code 1410 and are not to be considered a home inspection or home inspection report.”
Addressing the future of appraising, Coordinator Weaver reminded everyone the consequences of Hybrids was “spelled out” in the IDFPR February 2019 Newsletter, which can be found on the IDFPR website under “Newsletters” in the License Information Tab section.
And, last but not least, Coordinator Weaver reminded all attendees that the IDFPR needs a good email address for everyone.
ICAP also wishes to thank each of the speakers for sharing their expertise and providing attendees with an excellent seminar program. Craig Capilla, Richard Knitter, LeeAnn Moss, Ryan Nelson, and Joel Ward’s presentations can be found on the ICAP website. www.icapweb.org, and their contact information is provided in the footnote below.
ICAPs emcee for the day was Randy Barcella, Real Estate Revealed. Randy’s show can be heard Sundays on Wealth Essentials Radio, AM560 the Answer. Thank you Randy for graciously hosting the day’s events.
ICAP wishes to thank our sponsors and the vendors who participated this year providing appraisers and attendees an opportunity to meet and learn more about the services offered to the profession. Randy’s, the sponsors’, and the vendors’ contact information is provided in the footnote below.
ICAP wishes to extend a special thank you to all the participants who attended our 2019 Seminars. It is a privilege to serve you. Your continued participation helps ICAP be successful in serving you and our collective profession as we continually look forward to and face the challenges ahead. We thank all of you who took the time to complete the survey. Your feedback is important to us, and provides us necessary information as to how we can better serve you, our fellow appraiser professionals.
Your Membership Does Matter!
Karen Emerle, SRA
2019 ICAP President & 2019 Seminar Chair
Footnote – Sponsors, Vendors, and Speakers
ASFMRA,American Society of Farm Managers & Rural Appraisers, www.asfmra.org
AI,Appraisal Institute, 25 plus years supporting ICAP, premier education provider, www.appraisalinstitute.org
ASA,American Society of Appraisers is a multiple disciplinary organization: Fine Arts, Gems & Jewelry, Business Valuation, Real Estate, ASA NAIFA merger with NAIFA complete June 2018. www.appraisers.org
Landy InsuranceExpert in cyber security and insurance, New Bodily Injury & Property Damage Policy www.landy.com
MRED, Real Estate multiple listing service. Provides appraisers training sessions. On-site training available when there is a guaranteed 8-or-more appraisers in attendance. www.mredllc.com
Craig Capilla, Franklin Law Group
Richard Knitter, Great Realty Advisors
LeeAnn Moss, AcreValue Granular
Ryan Nelson, U.S. Dept. of Veterans Affairs, St. Paul Regional Loan Center
John Russell, American Society of Appraisers
Brian Weaver, Illinois Department of Financial and Professional Regulation
Joel Ward, Joel Ward Homes