Getting back to the original story, Dorothy, the Tin Man, Scarecrow and Lion arrived at OZ with great expectations. After all, the Wizard was known for his powers, however they quickly discovered that he wasn’t about to grant their wishes without some showing of worthiness on their part. He gave them a test to measure their patience; their persistence and in the end, their willingness to compromise.
The same holds true for us. To be successful, we will need patience with others (and trust on both sides), we will need to be persistent (continue to get appraisers involved) and we will need to recognize that in the end, compromise will be necessary to develop a version of the URARS that will be acceptable to a widespread group of professionals.
The Basic Setup
The original intent of the URARS was to compliment the URAR – Uniform Residential Appraisal Report by specifically addressing reporting requirements related to residential mortgage transactions as opposed to a more comprehensive addendum that would cover a wide range of issues related to residential appraising in general.
To get us started and as a general direction to take, the focus here will be on Fannie Mae, Freddie Mac, HUD and VA appraisal guidelines along with USPAP, to develop both the URARS addendum and to create the URARS.org website.
As George Hatch, Charles Baker and others suggested, private and government sectors of the accounting profession have different reporting standards but both reference GAAP (Generally Accepted Accounting Principles) as a "general set of standards" and then provide guidance as to their specific application to a problem. This would seem to be a good example for us to follow.
Chicken and Egg Theory
Since we already have Fannie Mae, Freddie Mac, HUD and VA appraisal guidelines, USPAP, the Clarification of Scope of Work addendum (COSOW), etc. and as a variety of issues and problem areas have been identified over the years, I don’t think we need to start from scratch.
Many of the key concerns are already addressed in the COSOW and so, we need to expand on it, include areas that are not addressed, to provide references and define procedures, techniques and applications that serve as "best practices" for residential mortgage appraising and reporting your findings in the URAR.
So which comes first, the URARS addendum or The URARS.org website? While it may seem like putting the cart before the horse, in this series, I plan to work from the COSOW addendum (or the end product for appraisers) and back into creating the URARS addendum.
The URARS addendum will serve as an outline of the topic areas that should be incorporated and expanded on in the URARS.org website, where we can get into specifics on a "field by field basis" if needed. The goal is to have an addendum that communicates what the appraiser’s actions were and references for a user, "a repository of information" that make those actions "verifiable and measurable" within the industry.
I have linked a copy of the original Clarification of Scope of Work for all to review and comment on. I am sure many have seen this and perhaps have already modified a version to suit their intended purposes. The URARS needs to go beyond the COSOW, to address "key reporting issues" by providing a reference to "de facto standards". What should those "de facto standards" be?
The COSOW expands on the Scope of Work already in URAR, so there is no reason to change that, other than to perhaps shift a few things around, make a few edits and reference those sections to the URARS.org website. The logical next step is to expand it to cover "the actions of our peers" and "generally accepted appraisal practice", to tackle those nagging little issues that seem to cause us problems, conflicts and concerns.
Relating the URARS and the URAR
All of the possible issues, problems, definitions, etc. cannot be covered in detail within the URARS addendum itself. We need to develop a list of what should be included to provide guidance for techniques, definitions, methods, recommended statements, etc. that will eventually be summarized over several pages as "the URARS addendum" to serve as a general statement on "the actions of our peers" and "generally accepted appraisal practice" and as a reference to the URARS.org website.
Perhaps the first step should be to have an opening statement to tell readers what the URARS is.
URARS Uniform Residential Appraisal Reporting Standards
Most appraisal guidelines refer to "the actions of the appraiser’s peers" and "generally accepted appraisal practice" which serve as "de facto standards" for all within the profession to follow. The URARS represents the acknowledgement of appraisal professionals, that the items incorporated within the URARS.org website and referenced in this addendum, clarifies those "de facto standards" and provides access to all for the express purpose of improving communication between real estate appraisers and the users of appraisal services.
The purpose of the URARS is to provide references to definitions, techniques and applications that can be used by all to address many "subjective" components of the exisitng appraisal guidelines in order to provide those that develop and those that rely on the value opinions, with a definitive source for appraisal related issues that may not be fully (or clearly) addressed in Fannie Mae, Freddie Mac, HUD and VA guidelines or not specified in sufficient detail in USPAP.
Well, that should get us thinking and moving on this. Remember to sign-up at the Appraiser's Water Cooler so you can post more about your suggestions, ideas, etc. The idea is to get something in draft form and work from there.
Next up -- Part Five: Making the List: Key Reference Sources for Residential Appraisal Definitions and Techniques
Click here to join in on the "URARS" discusson on the Appraiser's Water Cooler.
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