2020 21 15-hr national uspap course power point slides - day 2 (final).10.1.19

National Uniform Standards of
Professional Appraisal Practice
15-Hour
Course

15-Hour Course 2020-21
©2020 by The Appraisal Foundation Day 2—Slide 2

Learning Focus
Part 7. STANDARD 1
Part 8. STANDARD 2
Part 9. STANDARD 3
SECTION 3
Day 2—Slide 3©2020 by The Appraisal Foundation

Day 2—Slide 4
STANDARD 1
PART 7
©2020 by The Appraisal Foundation

Day 2—Slide 5
STANDARD 1 Part 7 - 92

Overview
STANDARD 1 requires:
 Identify the problem
 Determine the scope of work
 Complete research and
analyses for credible results

Overview
Requirements in STANDARD 1 follow the
development process
Can be used as a checklist
Includes six Standards Rules

Day 2—Slide 8
Standards Rule 1-1
 Elaborates on COMPETENCY RULE
 Addresses obligations:
1. Understand and employ recognized
methods & techniques
2. Not commit errors of omission or
commission
3. Do not be careless or negligent
Key Points

Day 2—Slide 9
Key Points
STANDARD 1
Standards Rule 1-2
 Follows the first 2 steps in
Appraisal Process
STEP 1 Definition of the Problem
Identify
client and
other
intended
users
Identify
the
intended
use
Identify the
type and
definition of
value
Effective
date of
the
opinion
Identify the
relevant
characteristics
of the property
Assignment conditions*
Extraordinary
Assumptions
Hypothetical
Conditions
STEP 2 Determine Scope of Work
Part 7 - 94

Day 2—Slide 10
Key Points
STANDARD 1
Standards Rule 1-2
 Applicable terms
 Client
 Intended Users
 Intended Use
Part 7 - 94

Day 2—Slide 11
Key Points
STANDARD 1
Standards Rule 1-2
 Applicable terms
 Exposure time
 Extraordinary assumptions
 Hypothetical conditions
 Assumptions
Part 7 - 94

Day 2—Slide 12
Standards Rule 1-2
 Reminders
1. Not allow intended use or client
objectives to bias
2. Must obtain reliable information
3. Identify relevant characteristics
Key Points

Standards Rule 1-2
 Reminders
4. Proposed improvements; plans and
specs
5. Identify the real property interest
6. Not required to value the whole,
when valuing partial interest
Key Points

Am I permitted to comply with this request?to
comply with this request?
Yes
Appraiser must comply with any
laws & regulations.
FAQ 197
Discussion Example 31

Am I permitted to comply with this
request?
Can I agree to perform this
assignment and comply with
USPAP?
No
Appraiser must identify client
and intended users.
FAQ 131

Standards Rule 1-3
 Reminders
1. Avoid unsupported assumptions
2. Analyze relevant factors for
highest and best use
STEP 3 Data Collection and Analysis
Market Analysis
Demand studies
Supply studies
Marketability studies
Highest and Best Use Analysis
Site as though vacant
Ideal improvement
Property as improved
Key Points

Standards Rule 1-4
 Includes requirements for the three
approaches to value
STEP 4 Application of the Approaches to Value
Cost Sales Comparison Income Capitalization
Key Points

Is she required to measure
improvements and verify her data?
No
USPAP does NOT require measurement
or inspection.
However, you still need to provide
credible results.

Standards Rule 1-4
 Other component analysis
1. Leased fee or leasehold
2. Assemblage or component parts
3. Anticipated improvements
4. Non-realty items
Key Points

Standards Rule 1-5
 Analyze information if available:
1. All current agreements of sale,
options, & listings
2. All sales of the subject property
with three years
Key Points

Standards Rule 1-6
 Includes requirements to reconcile
1. Quality and quantity of data
2. Applicability and relevance of
approaches, methods, & techniques
STEP 5
Reconciliation of Value Indications and
Final Opinion of Value
Key Points

Am I required to analyze this
transaction?
Yes
See AO-4 & Standards Rule 1-5 (b)
FAQ 254

Does Standards Rule 1-5 require analysis
of sales history of the comps?
No
Standards Rule only addresses the
subject property.
FAQ 253

Does USPAP require reconciliation of
data in each approach?
Yes
Standards Rule 1-6.
FAQ 210

Advisory Opinion References

STANDARD 1 Part-7 - 103

Part 7 Review Quiz
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. TRUE

6. Three
7. Understand / Correctly employ
8. Verify / Analyze
9. Intended use / Intended users
10. Current date
STANDARD 1
Part 7 Review Quiz
Part 7 - 104

STANDARD 2
PART 8

Day 2—Slide 30

STANDARD 2 addresses:
 Content and level of information
for reporting
 Does NOT dictate form, format, or
style
STANDARD 2 has four Standards Rules
STANDARD 2
Overview
Part 8 - 108

Standards Rule 2-1; reports must:
 Clearly and accurately set forth to
not be misleading
 Contain information for intended
users to understand
 Clearly disclose:
Extraordinary assumptions
Hypothetical conditions
Limiting conditions
STANDARD 2
Key Points
Part 8 - 108

Standards Rule 2-2
 Identifies written report options
1. Appraisal Report (2-2(a))
2. Restricted Appraisal Report
(2-2(b))
STANDARD 2
Key Points
Part 8 - 109

Standards Rule 2-2
 Report identification required
1. Prominently state which option
2. May use another label for each type
of report provided, in addition to,
but not in place of this Standard
STANDARD 2
Key Points
Part 8 - 109

Standards Rule 2-2
 Differences in options
1. Content and level of information
2. Dependent on intended use and
intended users
STANDARD 2
Key Points
Part 8 - 109

Standards Rule 2-2
 Reminders
1. Use care when identifying the client
to avoid violations of Confidentiality
section of ETHICS RULE
2. Intended users other than client
identified by name or type in an
Appraisal Report.
STANDARD 2
Key Points
Part 8 - 109

Standards Rule 2-2
 Reminders
3. Intended users other than the client
must be identified by name in a
Restricted Appraisal Report.
4. An appraiser must supplement a
report form, when necessary.
STANDARD 2
Key Points
Part 8 - 109

Standards Rule 2-2
 Reminders
5. A Restricted Appraisal Report must
clearly and conspicuously state
restriction limiting use of the report
to the client and the named intended
users.
STANDARD 2
Key Points
Part 8 - 109

Standards Rule 2-2
 Reminders
6. A party who receives a copy of either
type report in order to satisfy
disclosure requirements does not
become an intended user unless
identified as such by the appraiser.
STANDARD 2
Key Points
Part 8 - 110

Standards Rule 2-2
STANDARD 2
Key Points
Part 8 - 110

Standards Rule 2-3 requirements
 Signed certification in any written
report
 Signed and dated certification in
workfile for an oral report
 Signed certification evidences
recognition of obligations
STANDARD 2
Key Points
Part 8 - 111

 Recognizes:
1. Full responsibility of certification,
contents, & results
2. Sign any part of report, sign the
certification
3. Sign for real property only;
responsible for real property only
STANDARD 2
Key Points
Part 8 - 111

 Professional Assistance:
1. Signing appraiser accepts
responsibility for reliance on work
of others. No reason to doubt work
is credible or that individual not
competent in performance.
STANDARD 2
Key Points
Part 8 - 112

 Professional Assistance:
2. Individuals providing significant real
property appraisal assistance not
signing certification must be stated
in the certification. Disclosure of
such assistance may be in any
part(s) of the report.
STANDARD 2
Key Points
Part 8 - 113

 Supplemental Certification:
When certification does not include all
the elements in SR 2-3, appraisal
report must contain a supplemental
certification, which includes the
remaining required certification
elements.
STANDARD 2
Key Points
Part 8 - 112

Standards Rule 2-4
 An oral report, must address substantive
matters of an Appraisal Report
 References RECORD KEEPING RULEWorkfile includes summaries, testimony,
signed and dated certification
In existence prior to the report
Summary of oral report in a reasonable time
STANDARD 2
Key Points
Part 8 - 112

Must the certification include a
description of my assistance?
No
AO-31
FAQ 283
STANDARD 2
Part 8 - 113

What are my obligations under USPAP?
Do NOT sign the report.
Standards Rule 2-3
FAQ 285

What are the appraiser’s obligations
under USPAP?
She has communicated an oral report.
A signed and dated certification is required
for the workfile.
Standards Rule 2-4

STANDARD 2
Key Points
Part 8 - 114

Part 8 Review Quiz
1. FALSE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
6. TRUE
7. FALSE
8. TRUE
9. FALSE
10. TRUE

STANDARD 3
PART 9

Day 2—Slide 54

STANDARD 3, a reviewer must:
 Develop a credible opinion as to
the quality of another appraiser’s
work performed as part of an
appraisal or appraisal review
assignment.
STANDARD 3
Overview
Part 9 - 118

Standards Rule 3-1
 Elaborates COMPETENCY RULE
 Obligations
Correctly employ recognized methods
Do not commit a substantial error
Do not be careless or negligent
STANDARD 3
Key Points
Part 9 - 118

Standards Rule 3-2
 Describes the steps in development
 Review terms
 Reminders:
No biased results / No advocacy
Reviewer may provide value opinion
STANDARD 3
Key Points
Part 9 - 119

Standards Rule 3-2
 Reminders:
Opinion on quality of work
May review part or all of report or workfile
Extraordinary assumptions / hypothetical
conditions
May use information disregarded or not
available
STANDARD 3
Key Points
Part 9 - 119

Standards Rule 3-3
 In development, must apply
methods necessary for credible
results
 Reminders:
Develop opinion on completeness,
accuracy, relevance, & reasonableness
of work and report
STANDARD 3
Key Points
Part 9 - 120

Standards Rule 3-3
 Reminders:
With a value opinion, reviewer must
comply with applicable Standard
Scope of work may be different from
original appraisal
Not necessary to replicate steps
STANDARD 3
Key Points
Part 9 - 120

Does my agreement = value opinion?
If yes, what’s needed to comply?
Yes
Standards Rule 3-3(c)
AO-20 & FAQ 339
STANDARD 3
Part 9 - 121

Is he permitted by USPAP to file a
complaint?
USPAP does not address
filing complaints.
FAQ 340
STANDARD 3
Part 9 - 122

STANDARD 4
PART 10

Day 2—Slide 65

STANDARD 4, a reviewer must:
 Report the results of an appraisal
review in a manner that is not
misleading.
STANDARD 4
Overview
Part 10 - 125

Standards Rule 4-1
 Report must be separate and:
Clearly set forth the appraisal review
and not be misleading
Have sufficient information to be
understandable
Clearly disclose assignment conditions
STANDARD 4
Key Points
Part 10 - 125

Standards Rule 4-1
 Reminders:
Communicate the results of the
appraisal review
Content is specific to needs of client or
assignment
Reporting requirements are minimums
STANDARD 4
Key Points
Part 10 - 125

Standards Rule 4-2
 Describes content
 Reminders:
May withhold client’s name at their
request; state in report client request
Must state if appraiser(s) name withheld
State scope of work performed
STANDARD 4
Key Points
Part 10 - 126

Standards Rule 4-2
 Describes content
 Reminders:
State the appropriate dates
Must be understandable to intended users
STANDARD 4
Key Points
Part 10 - 127

Standards Rule 4-2
 Reminders (cont’d):
When reviewer provides value opinion:
State all appropriate information,
analyses, and conclusions
Do not have to prepare a separate
report
STANDARD 4
Key Points
Part 10 - 127

Are two certifications necessary?
STANDARD 4
Part 10 - 128
No.
See Comment to SR 4-2 (j)(iii).
Also see FAQ 357.

Is it appropriate for a reviewer to add
additional information to discredit an
appraiser’s opinion of value?
No.
FAQ 350
STANDARD 4
Part 10- 128

Standards Rule 4-3
 Similar to Standards Rule 2-3
 Signed certification is integral
 Certification indicates compliance
 Comment presents additional
obligations
STANDARD 4
Key Points
Part 10 - 129

Standards Rule 4-4
 Oral review report, if possible, must
address Standards Rule 3-5
 Comment section references
RECORD KEEPING RULE
See AO-20
STANDARD 4
Key Points
Part 10 - 129

Parts 9 & 10 Review Quiz
STANDARDS 3 & 4 Part 10 - 131
1. Developing
2. Appraisal Review
and Appraisal
3. Effective date
4. Scope of work
5. All/Part
6. True
7. True
8. False
9. False
10. False

1. C
2. D
3. B
4. C
5. B
6. C
7. B
8. A
9. D
10. D
11. D
12. D
13. C
14. A
15. D
16. C
Answers
Section Practice Test Part 10 -132

Part 11. STANDARDS 5-10
Part 12. Advisory Opinions
Part 13. Examination
Learning Focus
SECTION 4

PART 11
STANDARDS
5 - 10

Day 2—Slide 81
STANDARDS 5-10 Part 11-138

Applies to all mass appraisal regardless
of purpose or use
Contains requirements for
development
STANDARDS 5-10
STANDARD 5, Mass Appraisal,
Development
Part 11 - 139

Defined:
the process of valuing a universe of properties
as of a given date using standard methodology,
employing common data, and allowing for
statistical testing.
STANDARDS 5-10
Development
Part 11-139

Includes:
- Identifying
properties
- Define market area
- Identify market
area characteristics
- Develop model
- Calibrate model
- Apply conclusions
- Review results
STANDARDS 5-10
Development
Part 11-139

Reminders:
 JURSIDICTIONAL EXCEPTION RULE
 May apply to ad valorem taxation,
but not necessarily to other mass
appraisals
STANDARDS 5-10
Development
Part 11 - 139

Key points: Standards Rule 5-1
 Similar to 1-1
 Obligations similar to STANDARD 1
STANDARDS 5-10
Development
Part 11 - 140

Standards Rule 5-2
 Parallel to 1-2
Standards Rule 5-3
 Similar to 1-3, except for personal
property
STANDARDS 5-10
Development
Part 11 - 140

Standards Rule 5-4
 Procedures and information
required for models
 The Comment addresses forms,
procedures, and training
STANDARDS 5-10
Development
Part 11 - 140

Standards Rules 5-5 & 5-6
 Similar to 1-4
Standards Rule 5-7
 Similar to 1-6
STANDARDS 5-10
Development
Part 11 - 140

Standards Rules 6-1 & 6-2
Reporting of results
 Similar to 2-1 & 2-2
Standards Rule 6-3
 Similar to 2-3
STANDARDS 5-10
Reporting
Part 11 - 140

Did the appraiser violate USPAP using
market instead of contract rents?
No
Market rents are appropriate for
fee simple.
Comment to 5-6 (c)
STANDARDS 5-10
Part 11 - 141

STANDARD 7 addresses development
E.g., furnishings, artwork, antiques
Similar to STANDARD 1, except specific
to personal property
STANDARDS 5-10
STANDARD 7,
Personal Property Development
Part 11 - 142

Differences between STANDARD 7 &
STANDARD 1
 Discusses an appropriate market or
market level
 No highest and best use
 Market value not common
STANDARDS 5-10
STANDARD 7,
Part 11 -142

Differences between STANDARD 7 &
STANDARD 1
 Often multiple objects
 Most significant are the focus
 Sales within an applicable time,
rather than 3 years
STANDARDS 5-10
STANDARD 7,
Part 11 - 142

STANDARD 8 addresses content for
communication
Most of STANDARD 8 mirrors
STANDARD 2
AO-38 Chart (Page 143)
STANDARDS 5-10
STANDARD 8,
Personal Property Reporting
Part 11 - 143

Did the appraiser comply with USPAP?
No
Failed to comply with STANDARD 8.
Prospective interest?
COMPETENCY RULE
STANDARDS 5-10
Part 11 - 145

Three USPAP definitions:
 Business enterprise
 Business equity
 Intangible property (Intangible
assets)
STANDARDS 5-10
STANDARD 9,
Business Appraisal Development
Part 11 - 146

Most STANDARD 9 similar to
STANDARD 1
Differences:
 “Standard” rather than “type”
 Controlling/Non-controlling interest
 Standards Rules 9-3 & 9-4
STANDARDS 5-10
STANDARD 9,
Business Appraisal Development
Part 11- 146

Similar to STANDARD 2
Differences:
 No discussion of market value
 No inspection language
AO-38 Chart (page 148)
STANDARDS 5-10
STANDARD 10,
Business Appraisal Reporting
Part 11 - 147

What should the appraiser do?
What is the role of the appraiser?
“Rules of thumb” value probably limits the
scope of work.
If not ACTING as an appraiser, probably ok.
STANDARDS 5-10
Part 11 - 150

Did the appraiser comply with USPAP?
Issue addressed in Standards Rule 9-4.
Appraiser must analyze past sales when
relevant.
Should be noted in the report.
STANDARDS 5-10
Part 11 - 150

STANDARDS 5-10 Part 111 - 151

Part 11 Review Quiz
1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. FALSE
STANDARDS 5-10 Part 11 - 152

Advisory Opinions
PART 12

Day 2—Slide 105
Advisory Opinions Part 12 - 153

Advisory Opinions
Do not establish new standards
Illustrate the applicability & offer
advice
Do not have the full weight
Advisory Opinions Part 12 - 154

Advisory Opinions Part 12 -157

1. B
2. D
3. A
4. C
5. A
6. B
7. D
8. B
9. A
10. C
11. D
12. B
13. D
14. C
15. A
Answers
Section Practice Test Part 12 - 158

16. D
17. B
18. D
19. A
20. D
Answers
Part 12. Exam Prep Part 12 - 161

Thank you!
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