The Appraisal Foundation has found that a lot of appraisers are unaware of the inherent flexibility built into the Uniform Standards of Professional Appraisal Practice (USPAP), and that many view this set of industry-wide standards as vague.
What many don’t realize, is that the scope of work concept in USPAP actually allows appraisers to perform many types of assignments while still maintaining compliance with the standards. To help with this confusion, the Appraisal Foundation’s John Brenan (Director of the Appraisal Standards Board and Appraisal Issues Department) put together some examples of the type of flexibility appraisers have when deciding whether they can or should accept an assignment.
In his document titled, “Yes I Can Accept That Assignment – USPAP Flexibility at a Glance,” Brenan cites several examples of misperceptions, including those with appraisal consulting, performing an appraisal on donated real or personal property, and performing advocacy. As reported by Valuation Review, he also outlined the following USPAP-approved assignment types:
- Oral Appraisal Reports – where a client doesn’t require a written report.
- Purchase Price Negotiation – where a potential buyer is considering purchasing a property of business.
- Calculation of Engagement – where a CEO is considering an acquisition and wants to know the calculated results given a specific valuation method.
- Appraisals for Litigation/Expert Witness Testimony – where an attorney needs an impartial opinion of value for legal proceedings.
- Evaluations for Lending – where a lender needs an evaluation providing an opinion of market value to ensure a loan is adequately collateralized.
- Appraisals for Lending – where a lender needs an appraisal providing an opinion of value to ensure a loan is adequately collateralized.
- Appraisal Review – where a client needs to know whether or not an appraisal is credible.
- Appraisals for Estates – where an executor needs to know the Fair Market Value to pay estate taxes.
- Appraisals for Insurance – where a property owner wants to know how much insurance coverage is adequate; a property owner needs an independent appraisal to help settle a damage/loss claim.
- Assessment Appeals – where an appraiser is asked to work for a property owner in an assessment appeals hearing.
In order to protect public trust, however, USPAP doesn’t allow appraisers to accept assignments where their fee will be contingent upon the outcome – or on a subsequent event directly related to the appraiser’s opinions.
For more information, or to view a full copy of “Yes I Can Accept That Assignment – USPAP Flexibility at a Glance,” check out the Appraisal Foundation’s website.