Monday , 28 September 2020

Common Appraisal Violations & How to Avoid Them

Everybody makes mistakes. Sometimes it’s hard to catch yourself in the act, so we’re here to remind you of common violations that occur in the appraisal world, and tips on how to avoid them. A mistake here and there is understandable, but continuing to make them will end up hurting your reputation and thus your business.

Common Violations

  • Failure to:
    • give reasoning for adjustments
    • provide sufficient info for the reader to understand the report
    • select comparables using proper methods
    • follow the current USPAP (Uniform Standards of Professional Appraisal Practice)
    • provide full descriptions
    • report the scope of work
  • Inconsistencies:
    • Inconsistencies between descriptions and other parts of the report (photos, sales comparisons, etc.)
  • Mischaracterization/misrepresentation:
    • Not editing boilerplate statements to adhere to the specific appraisal
    • Not recognizing provided professional assistance by other individuals
    • Misidentifying the intended use/purpose

This is not an exhaustive list, but you get the idea. If you think about it, there are probably some you can think of that are not on this list. There are many violations that can occur that seem to sneak past your notice. 

Rules for Avoiding Violations

Avoiding violations may seem like common sense, “just don’t do that”, but sometimes we have to think about what steps that may require. 

Rule #1:  Knowing what constitutes as a violation! If you don’t know you’re doing something wrong, it’s going to be hard to fix it. Stay up to date with USPAP. Take classes or read up on new practices or rules. Different states may also have different requirements too!

Rule #2: Don’t cut corners to get the job done faster.  We know it’s wrong, but the temptation and the pressure to meet deadlines can win over doing what’s right. Remember that even if it seems like the fastest and easiest route, the consequences from getting caught can end your career. 

Rule #3:  Double check your work! A part of your routine should be double checking over your work and checklist to make sure everything has been covered. It’s one small step to help avoid a violation. 

Rule #4: Get coverage just in case! No matter if it’s a true claim or not, it’s best to having Errors & Omissions Insurance to back you up if a client tries to come after you over one of your appraisals. Additionally, some clients even require it before working with you!  

Most times we know what we’re doing, but anyone can slip up. There’s a reason some violations are so common. Being aware of what is a violation in an appraisal report is the first step to avoiding one. Making sure to avoid taking shortcuts, and thoroughly completing and checking over your checklist will ensure no violations occur on the report. Knowing about violations and how to avoid them (or protect yourself from them) will only help you in the long run!

The post Common Appraisal Violations & How to Avoid Them appeared first on Real Estate Appraisers.

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