The Appraisal Foundation Announces
Establishment of New Independent Board
Appraisal Practices Board (APB) to Commence Work in July 2010
The appraisal foundation has announced the formation of a new board, the Appraisal Practices Board APB). This board joins the Appraisal Standards Board (ASB) and the Appraiser Qualifications Board (AQB). This posting will try to explain what is going on with the new board. The press release follows this posting. The idea behind the new board is to provide specific guidance on various techniques and methods used in the appraisal process. USPAP refers to “recognized methods and techniques that are necessary to produce a credible appraisal” (Standards Rule 1-1 (a). In the past, guidance and methodology for methods and techniques has been left to the sponsoring organizations of the Foundation and they continue to do an excellent job of educating their members. It has become very apparent however that many of the appraisers in the United States are not affiliated with any professional appraisal organization and consequently are not getting this kind of guidance.
The past few years has seen a major shifting of market conditions in real estate, particularly residential real estate. Many of the appraisers who have been licensed over the past ten years had never gone through a down market and were unprepared to adjust their practice to recognize the shifts, particularly where downward adjustments were required for market conditions. There has also been a huge increase in foreclosed properties which has raised the question “should foreclosed properties be used as comparable sales”. Each of these examples shows the need for timely education on these subjects.
The sponsoring organizations of the Foundation have stepped up to the plate and introduced new timely courses covering these subjects and much more. Unfortunately, many appraisers were not exposed to these courses for various reasons. I can positively state as a state regulator that we are getting several appraisers appearing before our board who do not seem to know what to do in this market. These people for the most part of trying to good job and produce credible appraisals but they just don’t have the knowledge or training. It is the hope of the Foundation that we will reach these people better than they are being reached now.
The specifics of the new board will be finalized over the next few months and applications for the new board will be taken in the spring. For further information please refer to the following press release.
Joe Traynor (Note – Joe is NAR’s representative to the Appraisal Foundation’s Board of Trustees).
Washington, DC, November 5, 2009 — The Appraisal Foundation, a Congressionally authorized non-profit organization dedicated to promoting professionalism in appraising through the establishment of appraisal standards and appraiser qualifications, announced today the establishment of a third independent board, the Appraisal Practices Board (APB).
Earlier this year, the Foundation Board of Trustees established a Task Force to study the issue of how to best address a void in the marketplace related to guidance on appraisal methods and techniques that would be available to all appraisers practicing in the United States. This guidance will cover all valuation disciplines, with a focus on emerging issues.
With the unanimous consent of The Appraisal Foundation Board of Trustees, it was agreed that a new board be established, similar in structure and composition to the already existing independent boards, the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB).
The purpose of this third board is to issue voluntary timely guidance to appraisers on emerging valuation issues that are occurring in the marketplace. This guidance will be of assistance to appraisers, appraiser regulators and educators. The new Board will enlist the help of market surveys to identify issues that need to be addressed and will empanel small groups of volunteer Subject Matter Experts (SMEs) to draft the guidance for review and approval by the Board.
The need for this type of guidance was underscored with the onset of the declining real estate market. Many appraisers had not previously faced this type of market condition and the impact of foreclosed properties and short sales. Because a majority of state licensed and certified real estate appraisers do not belong to a professional society, they had limited access to guidance.
“In unanimously supporting this concept, the Board of Trustees strongly believes that this is the best avenue for issuing voluntary guidance to appraisers,” said Paul Welcome, Chairman of The Appraisal Foundation Board of Trustees. “We believe that this is the right thing to do for the profession, that it is the right time to do it and that we are the right organization to undertake the task,” added Welcome.
Those interested in serving on the Appraisal Practices Board should consult The Appraisal Foundation’s web site (http://www.appraisalfoundation.org/) for more details after the first of the year. Applications for qualified candidates will be solicited in the Spring of 2010, with the new Board to be constituted and commencing work in July 2010. We anticipate that selection of SME panels will follow in the latter part of 2010.