- September, 2007: It is my understanding that the appraiser examinations used by the states will be changing. Is this correct and, if so, when will this occur?
- August, 2007: Can a licensed appraiser perform a BPO that is USPAP compliant?
- July, 2007: A client calls to order an appraisal but asks you to check some sales in the area to see if the owners opinion of value is “reasonable”. Before you go out, can you take a quick look at MLS material & the subjects tax records and give him any assurances?
- June, 2007: If I am currently a state licensed or certified real property appraiser and do not intend to seek another state appraiser credential, how does the new AQB Criteria impact me?
- May, 2007: As a licensed real estate salesperson, am I allowed to perform a "broker price opinion"?
- April, 2007: When Michigan implements the AQB Criteria changes will continuing education requirements change?
- April, 2007: USPAP Standards Rule 1-5(a) requires an appraiser to analyze all current listings ofthe subject property. Does it also require analysis of prior listings of the subject property?
September, 2007
Q: It is my understanding that the appraiser examinations used by the states will be changing. Is this correct and, if so, when will this occur?
A: There are two changes occurring that are related to the state examinations. First, new examination content outlines have been developed and will become effective at the same time as the new Criteria, January 1, 2008. Secondly, consistent with its Title XI charge, the AQB will be developing Uniform State Appraiser Examinations. These examinations will become effective on January 1, 2008. Examination providers may develop their own examinations, but the exams will need to be reviewed and approved by the AQB as being equivalent to the AQB examinations.
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August, 2007
Q: Can a licensed appraiser perform a BPO that is USPAP compliant?
A: A Broker Price Opinion is exactly that – a price opinion given by a real estate broker. Real estate appraisers may give an opinion on the value of real property but are subject to the requirements of USPAP that apply to all appraisal practice: the Definitions, the Preamble, the Conduct, Management, and Confidentiality sections of the Ethics Rule, the Competency Rule, the Jurisdictional Exception Rule and the Supplemental Standards Rule. The only exception is when you have a duel license as both an appraiser and a real estate broker. If that is the case you must make it clear to the client "which hat you are wearing". Meaning, if you are a dual licensee you are allowed to give a BPO provided that you clearly identify that your roll is as a real estate broker and not as a licensed appraiser.
If you have questions regarding BPO’s or need additional information, please e-mail MAR.
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July, 2007
Q: A client calls to order an appraisal but asks you to check some sales in the area to see if the owners opinion of value is “reasonable”. Before you go out, can you take a quick look at MLS material & the subjects tax records and give him any assurances?
A: No. It goes against USPAP to provide a value for a subject property without having appraised the property. It states that an appraisal may not be based upon a predetermined value. USPAP also makes it clear that if an appraiser states, writes, or otherwise transmits a value to another party, the appraiser is, in fact, reporting findings of an appraisal. Reporting a value without having done the analysis is also an ethics violation.
If an appraiser has any input into the comps that are generated, they are guiding the results, which means that the appraiser is guiding the resulting value, or range of value, that their client will conclude to. Thus it is a violation of USPAP.
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June, 2007
Q: If I am currently a state licensed or certified real property appraiser and do not intend to seek another state appraiser credential, how does the new AQB Criteria impact me?
A: As long as you maintain your current credential, the Criteria changes should not have any effect on you. Those impacted will be (a) individuals entering the profession (b) individuals seeking a different credential within their state, or (c) possibly those seeking a credential in another jurisdiction through reciprocity.
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May, 2007
Q: As a licensed real estate salesperson, am I allowed to perform a "broker price opinion"?
A: Listed below is a quote from Article 26 of the Occupational Code. This article is specific to Real Estate Appraisers, and also has applications to real estate sales licensees:
Sec. 2601. As used in this article:
(a) "Appraisal" means an opinion, conclusion, or analysis relating to the value of real property but does not include any of the following:
A market analysis performed by a person licensed under article 25 solely for the purpose of assisting a customer or potential customer in determining the potential sale, purchase, or listing price of real property or the rental rate of real property as long as a fee or any other valuable consideration is not charged for that analysis.
(ii) A market analysis of real property for a fee performed by a broker or associate broker licensed under article 25 which does not involve a federally related transaction if the market analysis is put in writing and it states in boldface print, "This is a market analysis, not an appraisal and was prepared by a licensed real estate broker or associate broker, not a licensed appraiser." Failure to do so results in the individual being subject to the penalties set forth in article 6.
A price analysis can be performed by real estate licensees, at no charge, as a regular part of their business to determine a sales price, a buyer's offering price or a rental fee. Brokers and Associate Brokers (but not Salespersons) can perform a price analysis for a fee as long as the required disclosure as shown in paragraph (ii) above is made.
If a real property valuation is required for purposes such as appealing taxable value, settling an estate if the real property will not be sold, settling a divorce if the real property will not be sold, obtaining a home equity loan, waiving private mortgage insurance (PMI), or generally testifying as to value in a court of law, than the valuation must be done by a licensed Real Estate Appraiser.
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April, 2007
Q: When Michigan implements the AQB Criteria changes will continuing education requirements change?
A: The continuing education requirements will remain at their current levels. Individuals must complete the equivalent of fourteen hours of continuing education per year. As part of that
overall hour requirement, the 7-Hour National USPAP Update Course or its equivalent must be taken every two calendar years.
Q: USPAP Standards Rule 1-5(a) requires an appraiser to analyze all current listings ofthe subject property. Does it also require analysis of prior listings of the subject property?
A: No. Similar to sales history requirements for comparable sales, this Standards Rule does not require an appraiser to analyze a prior listing history for the subject property.
However, in the development of an appraisal, an appraiser is required under Standards Rule 1-1(b), to not commit a substantial error of omission or commission that significantly affects an appraisal. If information about a prior listing is known by the appraiser, and that information is relevant to the appraisal problem, it must be considered. An analysis of the subject’s prior listing history may be required by applicable supplemental standards in some assignments.
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