When I came up with the concept of the URARS (Uniform Residential Appraisal Reporting Standards), it was "all about communication", between us and the clients, readers, reviewers and underwriters. I thought that if we had better communication, we would have fewer problems, so I proposed such things as "de facto standards" to replace "subjectivity with objectivity".
I also proposed that we enlist "a la mode, Inc." to once again "step up and help us help ourselves", similar to what they did with the HVCC petition. Both suggestions met with favorable responses, but with some raised eyebrows as well, as so before we take a step forward, I want to take a step backward and do what I originally set forth to do when Brian Davis and I created the "Clarification of Scope of Work Addendum" (COSOW) , "clarify what we should be doing and why".
The "de facto standards" I am advocating will not be similar to Wayne Brady’s Las Vegas act, "Making $%# Up", which seems to be the opinion of some. We won’t be pulling "de facto standards out of the air" so that appraisers can use them to justify actions or procedures that are contrary to good judgment or inappropriate for the requirements of the assignment.
Since I am advocating "de facto standards", let’s revisit the meaning of "de facto".
"De facto is a Latin expression that means "of the fact" or "in practice" but not ordained by law. It is commonly used in contrast to de jure (which means "by law") when referring to matters of law, governance or technique (such as standards) that are found in the common experience as created or developed without or contrary to a regulation. When discussing a legal situation, de jure designates what the law says, while de facto designates action of what happens in practice. It is analogous and similar to the expressions "for all intents and purposes" or "in fact". The term de facto may also be used when there is no relevant law or standard, but a common practice is well established, although not universal".
Essentially, I am proposing through the URARS to "reference existing sources" and adopt as "de facto standards", those policies, procedures, definitions and techniques that are already cited and "well established", but "not ordained by law" and "not contrary to a regulation". The URARS would define (by reference to a nationally known and published resource), that which has not been defined or referenced in USPAP, Fannie, Freddie, etc.
- ANSI measuring standards,
- The Real Estate Terminology book,
- The Appraisal of Real Estate from the Appraisal Institute,
- rural community definitions from the Federal Government
- Essentials of Real Estate Economics, etc.,
All have definitions, techniques and recommended procedures for appraisers (and others), that provide for "good appraisal practice". Most have simply never been formally or universally adopted or referenced by the profession, although a majority of appraisers recognize and accept them as practical and reliable references and or resources.
Not all problems resolved
Adopting by reference any publication, book, reference source, etc., will not address every possible situation, but it will develop a foundation and framework from which we can provide appraisers and the users of appraisal services with a common understanding of how to analyze different problems and also how those conclusions should be reported. It will remove (for the most part) subjectivity and opposing opinions, provide for "uniform reporting" and create a defensible position for appraisers faced with supporting their actions with respect to USPAP, Fannie Mae, Freddie Mac, HUD and VA guidelines that are often vague and at times conflicting.
By establishing the URARS addendum and the URARS.org website, appraisers and users of appraisal services will have a "definitive reference source" that "clarifies the actions of our peers" and "generally accepted appraisal practice".
"What if" the same 31,000+/- appraisers that signed the HVCC, also subscribe to the URARS? If they did, for the first time in the profession’s history, we would have a definitive reference set, providing clients with a higher level of confidence in our services.
While underwriters, reviewers, boards and commissions may have their own personal or professional opinions, they would be hard pressed to provide a more widely accepted resource that specifies in greater detail, the underlying principles set forth within their own guidelines and USPAP, "the actions of our peers" and "generally accepted appraisal practice".
How will they dispute our actions, techniques, definitions, etc., if we can reference them back to Fannie Mae, Freddie Mac, HUD or USPAP? For once, they would have to back their observations with more than "their opinion" as opposed to the collective opinion of a large, national group of professionals.
Last words on "a la mode, Inc."
I’ll still be promoting a la mode, Inc. as a possible partner in this process, not because of some clandestine relationship I have with them, but because of what’s obvious, "they showed a willingness to help with the HVCC and they have the ability to communicate (via The Appraisal Press) with the largest segment of the profession that we need to reach, residential appraisers.
While I am open to suggestions of others that could provide us with the communication levels we need to develop and adopt the URARS, it will take more than "consider this one or that one". A la mode is approachable and has the needed resources in place. They have an interest in our success and no reason (please don’t write me with allegations and innuendo that you can’t prove) to do anything other than to support appraisers in our effort to improve the profession.
I am not suggesting that they control the process, only that we look to them for assistance in communicating our efforts, providing us with the server technology to reach and respond to the largest group of residential appraisers that we can, to get the most participation in developing and adopting the URARS. If you have a better partner in mind, state your logic and back it up with "your commitment to get their participation".
It is time to move another step forward.
Up next: Part Four - Three Basic Rules – Patience Persistence and Compromise
Click here to join in on the "URARS" discusson on the Appraiser's Water Cooler.