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We have a conflict – apply new tools and tech – now or later?

Public policy on home ownership appraisal is controlled by the non-profit Appraisal Foundation’s (AF) standards (USPAP), and licensing curricula.  The uniform standards, unfortunately, are not uniformly nor fairly enforced (a topic for later in this series).

The most current advice from the AF is in the form of an Advisory Opinion (AO-41), on appraisers’ use of technology, “without compromising their USPAP.”  Problem.

We have an internal conflict, exposed by reality, of this AO-41 advice.

The page 3 section of AO-41 is called “Relevant USPAP® & Advisory References”.

This section starts by quoting Standards Rule 1-1(a), which “requires that an appraiser ‘be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.’”   [Emphases added].

Key words here (worth exploring) are: “correctly” and “recognized.”  Again, we see the goal of “credible (worthy of belief).”  Also, we note that the words tool or tools are not found.  We find the words “methods and techniques.”

Of course, these words raise questions for the appraiser.  Do they mean the same?  Or something different?  If different, how do I think about this?  If reviewed or accused, how do I show my complete understanding of the “nuances” of the required “credible” word?

Or maybe it is just not important, and can be ignored . . .

Anyway, I know I must correctly employ recognized methods and techniques, and probably tools and technology.  Stick with “recognized” stuff.  Perhaps later, it will tell me how to be correct.

OK, later is the very next paragraph.  It says the opposite.  “Recognized” is … “not sufficient.”  Wow!

Things change.  Each appraiser “must continuously improve his or her skills” … to “new methods and techniques to meet new circumstances.”

All this while “addressing the ethical and competency challenges associated with evolving technology.”

Well, at least the pay must be good.  Millions of dollars at stake . . .  Do it now.  (Or is it safer later?)

Let’s get that help on how to be correct:

  • What is my responsibility about a tool / software which “produces results or suggests conclusions”?
  • How do I evaluate a tool before relying on its output?
  • Do I disclose my reliance?
  • How do I document (if any) a tool’s use in my workfile?
  • How do I safeguard confidential information?

The answers are always how do I make the tool/technology/method/technique fit to comply with USPAP, and still be believable (or at least worthy of . . .)?

How about commercial third-party pre-analyzed software?  How about “automated” analyses?  And how about client-specified tools?

All this, for “upholding public trust” through the ultimate “worthy of belief”.

The pay must be really good . . .