Appraisal myths and misconceptions re dux - by Bill Pastuszek

Bill Pastuszek, Shepherd Associates

Every once in a while, getting some things out in the open is necessary and useful. Myth busting, as it were.

1. Myth: The Appraisal Profession is a Dinosaur Profession. Not really. There are a lot of practitioners that would like to keep it that way, like it that way, but there are a lot of exciting positive developments to those who welcome, and not fear, change.

2. Myth: The Appraisal Profession Consists Mostly of Old White Men. Not a myth. But, there is a generational turn over coming as this Baby Boomer group ages out. There is great opportunity to enter this profession.

3. Myth: It’s Too Hard to Get an Appraisal License. This is probably true, particularly on the residential side where many clients are reluctant to accept trainees’ work. On the other hand, there is a crying shortage of appraisers on the commercial side. A higher licensing bar doesn’t make it any harder to get a credential than requirements for other, similar professions. Consider it progress that appraisers can consider themselves as part of a profession.

4. Myth: Technology is Ruining Appraisal. This is a myth: probably perpetuated by those Old White Men. The Age of Manageable Data is upon us and real estate appraisal analysis will undergo cycles of positive and transformative change.

5. Myth: FHA Appraisers are Also Home Inspectors. Recent changes, while saying appraisers are not home inspectors, seem to suggest that they are. If not, why are appraisers being asked to inspect properties as if they were? If you don’t know what this means, consider yourself lucky!

6. Myth: When Appraisers Visit a Property, Are They Performing an Inspection? See previous myth. (Or, when at the property, are we observing “relevant physical characteristics,” per USPAP?)

7. Myth: Current Residential Appraisal Reporting Needs Overhauling. Somewhat a Myth. Current report forms, particularly on the residential side, require a stupendously confusing multiplicity of addenda, supplemental comments, comments on addenda, and decoding sheets such that the reports are rendered essentially unreadable.

8. Myth: Current Commercial Appraisal Reporting Needs Overhauling. Not entirely a Myth. So many reports are so filled with internet generated fluff and secondary sourced studies and surveys inserted into reports with screen capture software that the appraiser can get away with relatively little original content and can then average that into conclusions.

9. Myth: USPAP is Too Long. Actually, it got shorter, sort of. Remember those Statements that were part of USPAP that most people didn’t understand and no one really knew what to do with? They’re gone. Much of their guidance was moved out of USPAP into Advisory Opinions, which are technically not part of USPAP, but something somewhat mysteriously called “other communications.” So USPAP itself became smaller, but the Advisory Opinion section has swelled. Myth, therefore.

10. Myth: USPAP Changes Too Much. Probably right. But, on the other hand, the appraisal world is undergoing constant change, as is the rest of the world that is not appraisal centric. USPAP needs to change in order to respond to the chaotic universe to which it seeks to provide clarity.

11. Myth: USPAP Changes Too Much Without Creating Any Greater Clarity. There seems to be a trend with those that promulgate USPAP to decide that something developed by prior promulgators is confusing or unclear, and then making further changes in the interest of explanation and clarity. It appears at times that all this change obscures the clarity that is supposedly being created.

12. Myth: USPAP Changes Are Important. They really are. Just consider if your career hangs by a thread in a state enforcement hearing and USPAP is vague and confusing on that very issue. An example of a good change: editing the RECORDKEEPING RULE and moving it out of the ETHICS RULE.

13. Myth: USPAP Classes are Boring. They don’t have to be. Myth. You can learn stuff, get some hours, and enjoy. Find an instructor who can teach, knows USPAP and likes teaching it.

14. Myth: Clients Really Expect Appraisers to be Impartial, Independent and Objective. You decide. Let me know.

15. Myth: Appraising is Too Hard. Myth. Isn’t that’s why it’s called work? Appraising is a pretty good way, not only to make a day’s pay, but to have rewarding career. Not just a job!

Let me know if there are others myths that need busting.

Bill Pastuszek, MAI, ASA, MRA, heads Shepherd Associates, Newton, Mass.