With an influx of alternative valuation products now being offered to appraisers, I am often asked which of these assignments can be done by appraisers and which should be avoided. I am not a USPAP instructor, a lawyer, or a specialist in your individual state’s law, but I will give you the answer as I understand it (I am not responsible for your individual compliance to USPAP, the law, and blah blah blah).
First, an analogy is in order. Imagine you are a spectator at a sporting event. Sitting next to you is your buddy who asks you about a certain call the referee just made. Though you might offer him your version of what happened, nobody would give much credence to what you say because you are not an expert. It is just your opinion. As you are walking from the stadium, the lady in front of you suddenly grips her left arm and falls to the ground. Immediately, you spring to action, diagnose her with a heart attack, and begin treating her. Though all the signs are there, would anyone believe your diagnosis beyond a simple layman’s estimation? Probably not.
Let’s take the same scenario however, with a slight change. What if you prefaced your comments about the game by saying, “In my 20 years as a professional referee, I have never seen a call like that.” Or on your way out of the stadium you announce, “Please make way, I am a cardiac physician.” Would this change the expectations of those around you? Most likely. Representing yourself as an expert changes the anticipation of those in observation or receipt of your services. The same is true as an appraiser.
USPAP Advisory Opinion 21 makes it very clear that an appraiser who is acting as an appraiser in a valuation assignment is expected to adhere to the Standards of USPAP and expectations of individual state laws. In other words, you cannot obtain the valuation assignment because you are an appraiser and then say, “Well, I did not follow USPAP because I was not acting as an appraiser in that particular situation.” If you are actively promoting yourself as an appraiser and are asked to value property (no matter what the assignment), you are expected to follow the rules.
On the other hand, there are many assignments which would not require the same level of adherence. For example, many appraisers are also brokers, consultants, or experts in other, related fields. If you are asked to perform a Broker’s Price Opinion as a real estate broker, you would not be required to adhere to USPAP in that situation. Just be clear to distinguish the ‘hat’ you are wearing in the report. So, when is an appraiser not an appraiser? When he or she is not promoted as such or acting in the capacity of an appraiser.
Now, go create some value!