All certified appraisers are required to take a 7-hour USPAP Update course each renewal cycle (2 years) which updates them on changes made to the USPAP document. I completed the course online May 7th and 8th for 2012. This was the first time I took a course online and found it to be very satisfactory. The course available from McKissock is the only AQB-approved online provider of the 7-hour 2012-2013 USPAP Update course. It is also available in a LIVE classroom setting. I believe they are a good source for other appraisal courses but have not had any other personal experience with McKissock.
This course was a multimedia experience, with video explanations from Appraisal Standards Board members, video case studies, narrated chapter summaries, interactive student polling and learning games, and practice exercises to maximize learning while fighting tedium. I found it to be a pleasant surprise in learning which gave me confidence in mastering the concepts sometimes not complete in regular "face time" classroom settings where all you have to do is show up and sign the log and get credit for the course. The price of an online course is similar but without the expense of gas and travel time.
For more information for this USPAP course and other appraisal courses from McKissock:
www.McKissock.com
For a comprehensive Real Estate Appraisal Curriculum for qualifying education and continuing education approved in Missouri, Kansas, Arkansas and Oklahoma I recommend Lowman & Co. which provide the best LIVE classroom setting:
www.lowman-co.com
The following are some of the highlights from the USPAP course I took online from McKissock which began with what USPAP changes are based on. These includes suggestions from appraisers, users of appraisal services, the ever-changing needs of the marketplace, written or oral public testimony on proposed changes and periodic review of existing standards and other materials.
There was a review of the general structure of The Appraisal Foundation (TAF) which is not a government agency and has no enforcement powers. There are 26 members but you cannot join as a member. Its sponsors include organizations representing appraisers and users of services. It is basically a private educational foundation. Since 1987, there are four boards: Board of Trustees (BOT), Appraisal Standards Board (ASB), Appraiser Qualifications Board (AQB), and Appraisal Practices Board (APB).
1.) Board of Trustees (BOT) which is the governing body that exercises all power and functions of TAF except for the authority delegated to ASB, AQB, and APB. BOT is responsible for funding all the boards as well as appointing their members.
2.) Appraisal Standards Board (ASB) exercises all authority over subject, style, content, and substance of USPAP and performs all functions of TAF with respect to establishing, improving, and promulgating USPAP. They may also issue "other communications" which don't change USPAP such as Advisory Opinions, Frequently Asked Questions, and USPAP Q&A's. Agenda is based on items suggested during prior year.
3.) Appraisal Qualifications Board (AQB) established education, experience, and other criteria for licensing, certification, and re-certification as identified by FIRREA as the source.
4.) Appraisal Practice Board (APB) was created in 2010 as guidance to assist appraisers in issues related to recognize valuation methods and techniques. It utilizes panels of Subject Matter Experts (SMEs) in developing guidance. This is all voluntary with no force behind it. Some of the early examples were in guidance on how to handle seller concessions and guidance on appraising in changing markets. This new board raises the question, "recognized by whom?" In my opinion and experience, it may take years to establish credible guidance from the SMEs as issues are challenged through the courts. It is in an infant stage at this time. It is only as strong as the client who orders the appraisal and their ability to hire an appraiser to comply with their guidelines...a highly manipulative strength which has the potential of misleading value. Without careful oversight, this board and its issues could muddy the otherwise clear waters finally established since the Federal Financial Institutions Reform Recovery and Enforcement Act (FIRREA) was established in 1989 after the Savings and Loan Crisis of the 1980's resulted in the Savings and Loan Bailout Bill. That was the catalyst for the government to draft standards.
Since 1993, USPAP compliance was required by another federal law - Uniform Relocation Assistance and Real Property Acquisition Policies Act (The Uniform Act). Also, the Office of Management and Budget (OMB) published Circular A729 which recognizes USPAP for federal agencies, HUD, IRS, Fannie Mae, Freddie Mac, Worldwide ERC.
The next part of the USPAP course concentrated on the steps needed to make changes in USPAP. The five steps are:
1.) Drafts are developed and submitted for public exposure.
2.) Comments are solicited and received during a specific period.
3.) Comments are analyzed and reviewed.
4.) Additional exposure drafts may be issued and comments sought.
5.) Changes finalized at a public meeting.
Then the course goes in much detail concerning changes made to definitions and exposure time. Much addition concerns issues related to the newly established concept and practice of an Appraisal Management Company (AMC) which have gained strength in recent years and has increased as the independent experienced appraisers decrease. The AMC is the so-called middle-man between the mortgage lender and the appraiser. As long as the appraiser knows the intended use of the appraisal, the AMC does not have to disclose the identity of the mortgage lender. The AMC can also request their name be left off the appraisal report if the client (mortgage lender) includes their name. It is my observation that a game of hide-n-seek can now be made so it is not clear as to who is named in the appraisal report which could lead to legal questions about whether the appraiser truly knows the "intended use." Hopefully, as the current market turns into a more stable market, the intended use of the appraisal will become more defensible. Market Value has many definitions. A certified appraiser cannot accept an assignment without a clear intended use of that appraisal report and the appropriate market value defined.
The exposure time reporting is explained in more detail but is only required to be reported when it is a component of the value definition. Marketing time is not required by USPAP, however, it may be an assignment condition by a client. Some appraisal terms needed additional explanation and so USPAP was revised to include more information on the effective date, extraordinary assumption, and hypothetical condition terms.
Further clarification and revisions were also made separating the Record Keeping Rule as part of the Ethics Rule. Any violation by the appraiser of the Ethics Rule had the highest violation. It was decided that clerical errors made in record keeping should not be considered an ethical violation so it stands as separate rule for 2012-13. Other miscellaneous changes were made in Standards 7&8 taking out the phrase Highest and Best Use. In Advisory Opinion 21, Advocacy is not allowed as the appraiser must be independent, impartial, and objective.
The rest of the USPAP course concentrated on relevant current issues and review. Much was reviewed with more detail concerning Scope of Work Rule. The bottom line is that the Scope of Work decision is the appraiser's alone who must be able to support any exclusions. An appraiser must withdraw from an appraisal assignment if relevant information is not available because assignment conditions limit research opportunities unless the appraiser can modify assignment conditions to expand the scope of work to include getting the information or use an extraordinary assumption about such information if credible assignment results can still be developed. My state appraisal work in 2009-10 was in direct conflict with this current USPAP update due to time restraints, budget cuts, and new management policies. Hopefully, the new manager will find the appropriate flexibility to get the job done right and in a reasonable time while following USPAP guidance for 2011-12.
Finally, the remaining topics in the course were very relevant and useful. The final two chapters were "USPAP in the Real World - Examples and Discussions" and "In the Real World Examples of Everyday Appraisal Issues." This is where it all came together. I mastered it well and printed out my certificate.
This USPAP course was my final 7 hours needed for Continuing Education requirements. The requirement is 28 hours and I had gotten 21 hours before I retired from my state position 12/1/2011. Before June 30, 2012, I will go online and pay the required $300 to renew my General Certification License for the State of Missouri. It will be good until June 30, 2014.
Right now, I have no plans to seek employment in the appraisal field and likely will go to an inactive status for 2014-15. This status can be reactivated when I complete another 28 hours and pay $300 again should I want to continue. So far, I have not seen enough changes in the market to show confidence in the real estate industry. I don't think it is fun anymore; 30 years is probably enough anyway.
You're welcome, Bryan.
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