Real estate appraisers have been abandoned by them in significant quantities over the past few years. Uncertainty, confusion, and government interest in surveillance and intervention caused by allegations of racial and ethnic prejudice in real estate appraisals are causing concerns. Square Foot Adoption-Calculation Method, American National Standards Institute (ANSI) Z765-2021 has overturned long-standing routines and methodologies for thousands of appraisers. The issue is the quality monitoring of appraisers by Fannie Mae and Freddie Mac, as well as how Fannie Mae’s tips start complaints and warn the State Appraisal Commission about potentially non-compliant appraisals. Requests for revisions, requests for investigation and review of additional data, and requests for review impair productivity and profitability. All the stories and attention given to appraisal modernization, appraisal exemptions, desktop and hybrid appraisals contribute to anxiety. Borrowers, sellers, and realtors are trying to take responsibility for failed real estate transactions, often targeting appraisers as villains. No matter how long you have been in the appraisal profession, you are likely to be on the receiving side of the complaint.
However, there are some bright spots. Within the standards of practice used by plaintiffs and state regulators to create motions for improper conduct and ruin against appraisers, appraisers provide evidence in support of their actions, opinions, and conclusions. Must be maintained. Specifically, obligations are the record-keeping rules of the Unified Standards for Professional Evaluation Practices (USPAP), as well as the defined requirements for preparing and maintaining work files. In addition to demonstrating compliance with record keeping requirements, work files form the basis of defense.
After receiving a consumer or lender’s complaint (and often Fannie Mae’s “hint”) against the appraiser’s licensee, one of the first items requested by a regulatory agency or investigator is the appraiser’s work file. I have. If the complaint is a proceeding, you will often need to submit a copy of the work file to the plaintiff or his attorney as part of the discovery process. When that complaint or proceeding is filed against you, can you reconstruct what you did and how you did it, based on the contents of the work file? If you do not prepare and maintain that work file, it is useless to claim that all evaluation experiences in the world and your opinions and conclusions are correct and accurate.
Unfortunately, for many appraisers, preparing and maintaining work files is seen as an inconvenient burden rather than a means of protection. Some people mistakenly believe that a copy of a rating report or review and a single data sheet for each comparable sales contained in the report are appropriate. Check the full text of the Records Management Rule for minimum requirements. Indeed, lawyers handling license complaints and civil proceedings against you have a copy and know what they are expecting. Does it make sense to remove them from the game by keeping work files with far more information, data, and support than they would expect?
For your protection, and to help your defense, the work file must have sufficient information to endorse and justify the completed work as well as your opinions and conclusions. You also need enough additional information to restore your memory of the assignment. If you have taken steps to maintain a paperless work file, make sure that handwritten notes, phone notes, and call slips are scanned and available. It is imperative to store and maintain the entire file in a reproducible and readable format for 5-10 years from the date of allocation. This is especially important for photography. Additional photos included in the work file to document improvements, recent repairs, or good placement of custom embedded appliances and outstanding craftsmanship are not very useful if the file is corrupted. Hmm. Computers, hard drives, and some cloud-based storage solutions don’t last forever. High-tech electronic work files can’t help protect you if they’re stored on a computer that was recycled four years ago, on defective media, or can only be read by a long, outdated program.
Information provided by others is especially important. This may include transfer terms, contracts, leases, income and expense data, a description of the property covered, and builder cost information. Keeps the information needed to support your work area in a work file. It is not uncommon for plans to be changed during construction, or for specifications to be improved due to on-the-fly decisions. For your protection, if the rating assignment contains an opinion of value that is subject to improvement or additional construction, make sure that the work file contains improvement plans and specifications. Insist that the client provide a copy of your work file, or make a copy at your expense.
The five-year record keeping requirement is the minimum requirement for USPAP. In non-prescription jurisdictions, complaints and proceedings against appraisers are often filed years after the assignment is completed. To ensure that clients can perform defenses, some error and dropout insurers and defense specialists recommend extending record retention beyond the USPAP minimum for 3-5 years. increase. It may be time to consult a lawyer or insurance company for advice on how long to keep records. In addition, make sure that the work file contains records that were created at the same time you created the assessment and the assessment report. State investigators and regulatory agencies will raise legitimate questions about the appraiser’s compliance with standards and rules if the record is printed with a date indicating that it was created after the date of the complaint. .. Protect yourself by creating a work file record when you create a rating. Too many believe that sources of data and information will be available 3-10 years after the allocation is complete.
The world is a dangerous place for appraisers. Many consider us an easy and defenseless target. Be prepared for the inevitable complaints and proceedings. The content and appearance of your work file may indicate your abilities and professionalism, and may be evidence of tilting the table in your favor.