Appraisers try to accommodate their client’s interests. There is nothing wrong with this per se.  Appraisers commonly write, “at the client’s instruction…” or “per the client’s request…”, then the appraiser describes what the client instructed or what the client requested, as well as what the appraiser did to comply with the instruction or request.

This language, however, implies the appraiser is trying to do the appraisal, or write the appraisal report, in a manner that pleases the client, a potential USPAP violation. By definition, a real estate appraiser must be independent, impartial, and objective. Such accommodating language not only calls into question whether the appraiser has complied with these three qualifications but also smacks of advocacy.

Omit the offending language.  For example, appraisers commonly omit the analyses of the Cost approach. However, certain clients may request the inclusion of these analyses as part of the appraiser’s value conclusion. Instead of saying, “at the client’s request, the appraiser has included the protocols of the cost approach…”, please consider saying, “the appraiser included the protocols of the cost approach as both applicable and necessary to the formation of a credible value conclusion”, never mentioning the client’s request.

6 replies
  1. Kevin S
    Kevin S says:

    Sorry but this statement “the appraiser included the protocols of the cost approach as both applicable and necessary to the formation of a credible value conclusion” is misleading to assignments when the cost approach is not applicable and not necessary to develop a credible analysis.

  2. Brent Johnson
    Brent Johnson says:

    In that context, I would agree… Instead it may be better stated as…”the appraiser included the protocols of the cost approach as applicable to the formation of a credible value conclusion” – unless including the cost approach somehow does not contribute to a credible value conclusion, that would be rare. While there are properties where the cost approach may not provide additional support to the valuation, it would be rare for a well-reasoned and explained cost approach it to provide misleading results – especially where a client may like to see it provided.

  3. Anonymous
    Anonymous says:

    Why not just say something along the lines of “The cost approach was only developed at the request of the client but given no consideration in the final analysis”

  4. Bob Hatfield
    Bob Hatfield says:

    I find it ironic that this article revolves around accommodating the client and the dangers thereof, when is being quoted by national AMCs regarding “USPAP” compliant desktop reports. That whole concept is nothing but accommodating the client.

  5. Michael Jones
    Michael Jones says:

    What a client “instructs” an appraiser to do is irrelevant if it violates or even if it potentially could imply a violation of USPAP. A lender instructing the appraiser to omit the cost approach AND the appraiser then doing so is a USPAP violation. It is the appraiser that determines whether the approach is or is not applicable then explains the reasoning for not completing it. Furthermore, even if it is not applicable the appraiser still has to support the effective age of the subject property. Completing the cost approach is the best way to do this even if the cost approach is not very relevant. Simply stating the effective age and saying it (the effective age) is based on the appraiser’s judgement and experience is not flying anymore at least in the state of the Kentucky. Other examples of client overreach include lender criteria for comp selection. The appraiser is to select the comps. Lender criteria that suggest to how the appraiser MUST choose comps within 3 months, distance, size, etc. violates appraiser’s independence. Lender criteria that require that the UNADJUSTED sale prices of the comps must bracket the estimated market value is ILLEGAL as that implies that the appraiser must select comps based on a predetermined value and doing so is USPAP violation of the worst kind. Other things that lenders ask appraisers to do that are just flat out stupid include requiring the appraiser to comment when the estimated market value is more or less than 20% of the PREDOMINANT price in the neighborhood. The two are not even remotely related although for a very short time between 7/29/14 and 9/30/14 they were, due to an error in FNMA’s guidelines that FNMA correctly corrected. Unfortunately many lenders, AMCs and even appraisers are still not aware of the correction. The most recent stupid request from an AMC was just yesterday. I was asked to remove the word “popular” from a neighborhood description as it violates Fair Housing Laws. The context of the use was “neighborhood is popular with first time buyers”. I am at that point that I’m considering the following blanket statement for the neighborhood description “due to Fair Housing Laws and political correctness, I can not comment on the neighborhood as it potentially might offend someone or be implied as discriminatory in some way.” Rant completed.


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