Tim Andersen, The Appraiser's Advocate Podcast

Timothy Andersen - USPAP Instructor
Tim Andersen, The Appraiser's Advocate Podcast

Tim Andersen, The Appraiser's Advocate, enlightens you about USPAP, Real Estate Appraisal, Report Writing, Highest and Best Use, Appraisal and Adjustment Protocols, Avoiding State Appraisal Boards, as well as defending yourself against them, and all the fun stuff about being a Real Estate Appraiser.

  1. DEC 2

    A Hill to Die On

    A hill to die on.  That sounds way too serious for a real estate appraisal podcast, right?  These are supposed to be about USPAP, and education, and more practical stuff.  But I've been studying on this topic for some time.  Frankly, what AMCs do (or don't do) does not bother me as much as it does some appraisers.  Those appraisers complain that AMCs do not distinguish between their gross fees and the proration of that fee that goes to the appraiser.  That's true.  But when you buy a car, the dealer does not make transparent the contributory cost of the spark plugs and drive shaft, either. And the fees the AMCs pay are not, in my opinion, a hill to die on, at least not right now.  That time is coming - soon.  So, unless the AMC withholds some pertinent information from the appraiser, or somehow misrepresents the situation, then the appraiser sets the fee by accepting it.  But there is a hill to die on when it comes to AMCs.  And that hill is USPAP, of which all AMCs, you'd think, would be aware.  But while the GSEs are pushing appraisal waivers, it also seems AMCs are stressing appraisers to accept lower fees for the same quantity of work, all to sustain the AMCs' fee structure.  Remember, the AMC can ask the appraiser anything it wants to ask.  If, however, that request includes a knowledgeable request to violate USPAP, then it is time the appraiser should fire that AMC and get a new client. Today, right now, get out of AMC work and into private work.  I'll be happy to consult with you on that.  And make sure your E&O insurance is as relevant as possible.  It will help to have expert legal counsel in your phone's directory, too!

    10 min

  2. NOV 18

    To Comply with USPAP – TAA Podcast 147

    To comply with USPAP can be such a pain in the neck!  For example, take what's happening now.  In the past, a commission was a commission and nobody gave any thought to it.  But now, it might be nothing we appraisers should worry about, but it also might be a sales concession.  If the commission inflates the purchase price over what it would have been otherwise, we appraisers have to account for that.  And that requires cash-equivalency adjustments.  And those are such a pain in the neck! To comply with USPAP can be such a bother!  Then there are mortgage buy-downs.  Let's face it, mortgage interest rates are high and will likely remain  high for the foreseeable future.  So, if a seller offers the buyer a buy-down from seven percent to five percent, what buyer is going to be dumb enough to say no to that?  But, yet, we appraisers must look at that as a financing concession.  And when it comes to financing concessions, we have to perform the cash equivalency calculations.  USPAP demands we do them.  The GSE's definition of market value demands we do them.  And, of course, every buyer wants to know they overpaid for their property, right? To comply with USPAP can be such an inconvenience.  For example, we appraisers are supposed to verify our sales, cost, and rental data.  Yet for the lousy fees the AMCs are willing to pay, we don't make enough money to verify data with the buyer, the seller, the broker, the builder, and so forth.  Yet, when we sign that Certification, we certify to the client we complied with USPAP.  Did we?  If you certify that you did, but you really did not, then you are going to need great legal counsel and comprehensive E&O insurance.  Contact me:  tim@theappraisersadvocate.com.

    9 min

  3. NOV 4

    There’s Too Much – TAA podcast 146

    There's too much going on in AppraisalWorld.  It is essentially impossible to keep track of what's going on.  FHFA just announced, in the most neutral of tones, that appraisal waivers could now be had, under certain conditions unheard of before.  Again, conditions apply, but waivers are going to be available up to a 90% loan-to-value ratio (and 97% with a property data collection requirement).  One of the conditions that applies is that the borrower would have to possess a killer FICO score.  But that condition is current at the end of 2024.  Given current political and social forces, who knows what those will be six-, twelve-, and eighteen-months from now?  If real estate appraisal is the adult supervision of the mortgage lending industry, it appears that industry has found a way to remove the adult's influence. And, there's too much going on in other areas, too.  Fannie Mae is still sending letters to state appraisal boards about time and GLA adjustments.  Certain states that do not accept anonymous complaints just trash them as a matter of course.  Other states that accept such complaints insert those letters way at the bottom of their to do list.  This may help the state with its administrative work load.  But it does not help the appraiser to sleep well at night as this hangs over the appraiser's head, family, and business. And speaking about there is too much going on.  There are now grumblings that USPAP needs to replace the ambiguous word credible (credible to whom and how to measure it?) with the word reliable.   This is especially true now that the ROV process assumes the borrower is an intended user of the appraisal report. So, what to do?  Consider making friends with an administrative law attorney in each state in which you have a credential.  And please make sure you have proper E&O insurance coverage.

    11 min

  4. OCT 21

    Financing Concessions and USPAP – TAA podcast 145

    Financing concessions and USPAP!  More on this?  Haven't we heard enough on concessions, cash equivalency, and stuff they don't teach us in appraisal school?!  If you listen to what Fannie and Freddie have to say on these topics, the answer would have to be an emphatic "NO!".  Why?  Because Fannie and Freddie continue to tell us we are not making the necessary adjustment when we need to.  If we can't believe Fannie and Freddie, who can we believe, right? Financing concessions and USPAP are real issues!  When it comes to making adjustments, any adjustments for that matter, education is the key.  We may not make the necessary adjustments because we don't know we are supposed to make them.  Or maybe we don't know how to make them.  Well, education solves those problems.  And this education is easy-to-access, as well as easy-to-afford.  So, what's stopping you from getting the education you need?! As you know, NAR settled the Sitzer-Burnett case.  And this case, in part, dealt with financing concessions.  Now, is the party who pays the buyer's broker's brokerage commission granting a sales or financing concession?  Or, is that party merely negotiating the best purchase and sale deal they can?  How you, the appraiser, choose to answer those questions is important.  One answer will require a sales financing adjustment.  One answer will not.  But there is no one-size-fits-all response.  So it will be necessary to do the analytics on this question for each and every assignment.  Critical thinking is a hallmark of a real estate appraiser.  So, think critically about your answers to the financing concessions question.  Your answers will affect how you make a living. And don't forget to make sure your E&O insurance is up-to-date.  If you answer the above critical thinking question properly, you won't need legal counsel to get you out of a jam!

    10 min

  5. OCT 7

    Technicians, Mechanics, and Engineers – TAA Podcast 144

    What do technicians, mechanics, and engineers have to do with USPAP and Real Estate Appraisal? Maybe nothing. But, at this point, it is easiest to conclude that a technician is one who knows that something should be done, though not necessarily how, when, or why.  Technicians, mechanics, and engineers understand there is a process involved somewhere.  A technician understands this, too, but for whatever reason, is not yet familiar with it. But a mechanic understands there is a problem within the system to be solved.  The mechanic also understands there is a process involved in its solution.  Then, via training and experience, the mechanic is capable of being part of that solution.  Indeed, the mechanic understands the system sufficiently to solve the problem alone.  So, if the mechanic can take care of the system's problems, what is the purpose of an engineer? Technicians, mechanics, and engineers all have their respective places in the natural order of things.  Technicians help mechanics.  Mechanics work within systems and fix the problems within them.  But mechanics are limited to working with existing systems.  Therefore, there must be somebody to design and implement the systems on which the technicians and mechanics work.  So, without engineers, there would be little need for mechanics and technicians. So, here's the connection.  Are appraisers technicians, mechanics, or engineers?  Filling out an appraisal reporting form is the job of a technician.  Knowing what to put into the form is the job of a mechanic.  But by designing and executing the appraisal, what we appraisers summarize on the form requires we function as engineers.  We do more than fix problems.  We design systems to have the fewest problems as possible. Oh, and make sure your E&O is always up to date.  And, when you need it, get proper legal advice.

    10 min

  6. SEP 23

    To Make You Mad! – TAA Podcast 143

    One of the purposes of this podcast is to make you mad.  Another is to open your eyes to the power the analytics of the cost approach have to analyze sales.  Another is to anger you.  About what?  About the depth of its questions and what is likely to be the shallowness of your answers to them.  With any luck at all, this podcast will do both.  If it does, then you’re paying attention.  Thank you!  If it does not, then I’m not doing a proper job as a USPAP instructor.  I’ll need to work smarter to open your eyes. Again, I want to make you mad.  It is clear most appraisers do not like to engage in the analytics of the cost approach.  Generally, we are not too familiar with it since most of its protocols are not market oriented.  And there is a lot of math involved.  Remember that four out of three appraisers do not understand math.  The GSEs make it clear that they do not think the cost approach results in a reliable indication of market value.  So, it is clear that most appraisers, because of these limitations, do not appreciate the deep analytical power the cost approach really has.  Most of us simply do not understand how the protocols of the cost approach help us to come to a credible opinion of market value.  Therefore, I’m going to ask you 10 questions on the cost approach and stuff related to it.  After we’ve finished with them, you probably will still not like to tackle the cost approach (and for the same reasons).  Nevertheless, you just may have a better understanding and appreciation of its powerful analytical capabilities. And remember to keep your E&O Insurance up to date, and understand the need for legal counsel.

    10 min

  7. SEP 9

    USPAP for Great Advice! – TAA Podcast 142

    This question comes up - a lot!  It is common for reviewers to conclude the appraiser did not support, for example, the GLA adjustment.  So the appraiser gets all bent out of shape and shouts, "I supported my adjustments!  Right in the narrative I write the GLA adjustment is $65 a square foot!  How can that reviewer say I did not support my GLA adjustment!?"  Now it is time to go to USPAP for great advice.  And that advice has to do with supporting adjustments.  What is that advice?  That advice is to support your adjustments.  Why is that so hard? Honestly, going to USPAP for great advice is easier than it sounds, although its advice may be indirect.  For example USPAP does not use the term adjustment (or any of its derivatives) until AO-13.  But right there, in USPAP's definition of credible is the Comment that makes it clear that "...credible assignment results require support by relevant evidence and logic..." Next, in the Record Keeping Rule, is the statement that the appraiser's workfile "...must include...documentation necessary to support the appraiser's opinions and conclusions..."  Therefore, the appraiser's insistence the above statement is "support" for the $65 GLA adjustment is simply wrong. Going to USPAP for great advice is both sound advice and a simple strategy.  In this example, the appraiser's support is already in the workfile, just not yet in the report itself.  Somehow, the appraiser had to arrive at the $65 conclusion.  Assuming these component processes are in the workfile, getting them into the report is easy.  Try this:  "Analysis of five comparable sales larger than the subject with five sales smaller than the subject indicates the market recognizes a $65 per square foot factor for size differences."  Taking USPAP's great advice avoids E & O and legal problems.  Try it.  You'll see.

    11 min

  8. AUG 26

    USPAP and The State Board – TAA Podcast #141

    When  you think of USPAP and the State Board, chills run up and down your spine, right?  In any given year, the typical real estate appraiser has less than a five percent chance of getting that letter from a state appraisal Board.  But what happens when that letter thuds on your desk?  It is not a time to panic, but it is a time to pay attention.  Close attention.   Life will go on.  You'll still be able to appraise real estate so you can make a living.  But you'll need help.  Remember, contact me at tim@theappraisersadvocate.com to help you when it happens. So what is going to happen when USPAP and the State Board become foremost in your professional life?  It is likely the state board will send you a questionnaire to complete and return to the investigator.  These questions will become the basis for the state's investigation into any complaint filed against you.  Therefore, you must answer them completely, fully, and truthfully.  But you must not give the state the rope to hang you with. For example, One question might be, "Were you compensated for the assignment?"  Assuming you did not work for free, the entirety of your answer would be, "Yes". No more, no less.  The state has no reason, frankly, to know your professional fee for that job. Since the topic of this podcast is USPAP and the State Board, there are indeed more such questions I could preview.  However, time and space do not permit a greater discussion.  So, please, listen to the podcast.  But one more thing.  If you do get that letter from the state, you need to act, not ignore it!  You'll need counsel from your E&O people, an attorney, and a USPAP expert.  This is not a job you do alone!

    10 min
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About

Tim Andersen, The Appraiser's Advocate, enlightens you about USPAP, Real Estate Appraisal, Report Writing, Highest and Best Use, Appraisal and Adjustment Protocols, Avoiding State Appraisal Boards, as well as defending yourself against them, and all the fun stuff about being a Real Estate Appraiser.

Information

  • Creator
    Timothy Andersen - USPAP Instructor
  • Years Active
    2019 - 2024
  • Episodes
    100
  • Rating
    Clean
  • Copyright
    © 2020 The Appraiser's Advocate, LLC (Timothy C. Andersen) All Rights Reserved
  • Show Website
    Tim Andersen, The Appraiser's Advocate Podcast

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