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.