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Virginia Regulatory Town Hall
Agency
Department of Professional and Occupational Regulation
Guidance Document Change: Providing guidance to real estate appraisers and AMCs on the use of hybrid appraisals
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6/4/19  4:56 pm
Commenter: Virginia Coalition of Appraiser Professionals

Proposed Hybrid Guidance Document
 

The proposed guidance document does not meet the definition of a guidance document in Town Hall. It merely restates the language in statutes and regulations in paragraph form. It fails to provide any meaningful direction, guidance or interpretation. 

54.1-2009 defines an appraisal as an analysis, opinion, or conclusion relating to the nature, quality, value or utility of specified interests in, or aspects of identified real estate…. 

  • If a property inspector provides an opinion on the quality, condition, and utility of a property for the purpose of an appraisal, this is considered appraisal services as defined in 54.1-2020.
    • "Appraisal services" means acting as an appraiser to provide an appraisal or appraisal review. 
      • 18VAC130-20-10 defines an appraiser as an individual who is expected to perform valuation services competently and in a manner that is independent, impartial and objective. 
      • 54.1-2020 defines an appraiser as a person licensed or certified under 54.1-2017 and as otherwise provided in Chapter 20.1. 
      • 54.1-2022 states an appraisal management company shall not enter into any contracts or agreements with an independent appraiser for the performance of real estate appraisal services unless the independent appraiser is licensed to provide such service…. 
      • 54.1-2011 C states any assistance by an unlicensed individual must be directly supervised by the licensed appraiser. Providing subject property data, opinions as to the condition, quality and utility of a property is the foundation in which the appraisal is completed. This is significant assistance, which is not defined in statutes, regulations, or USPAP. 

The inter-twine of statutes and definitions between AMC and appraiser statutes and regulations is confusing. Although USPAP does not require a physical observation of the subject, when one is completed for the purpose of obtaining information for an appraisal, common sense tells us it is part of the appraisal process and should be completed by the appraiser. 

The VREAB is encouraged to remember why licensing of appraisers occurred after the savings and loan failures of the 1980s. FIRREA was passed to protect consumer trust in appraisal practice. Moving backwards with unlicensed activity defies common sense and logic. It is harmful to public trust, the housing market and the economy. 

Appraisers have already heard stories from agents that the person coming to observe the property identities themselves as the appraiser. Allowing unlicensed, uninsured, unregulated individuals into a consumer’s home; walking through each and every room, poses a risk of safety to the consumer. What recourse does a consumer have if something goes awry?  

Pressure on appraisers to complete these products is increasing and best practice is to address the concerns proactively, rather than through disciplinary actions. The VREAB is encouraged to provide meaningful direction and interpretation of the statutes and regulations they are charged with enforcing.

Thank You. 


 

CommentID: 72521