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Arizona Supervisory Appraiser - Trainee Appraiser Seminar 4 Hours CE September 6, 2013 Phoenix, AZ.

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Presentation on theme: "Arizona Supervisory Appraiser - Trainee Appraiser Seminar 4 Hours CE September 6, 2013 Phoenix, AZ."— Presentation transcript:

1 Arizona Supervisory Appraiser - Trainee Appraiser Seminar 4 Hours CE September 6, 2013 Phoenix, AZ

2 Before We Begin… Thank-you! 2 Arizona Board of Appraisal – Board Members Kevin R. Yeanoplos, Chairperson B. Michael Petrus II, Vice Chairperson Erik Clinite James B. Heaslet. Mark Keller Joe T. Stroud Frank Ugenti Jeff Nolan AZ Supervisory Appraiser / Trainee Appraiser Course

3 Before We Begin… Thank-you! 3 Arizona Board of Appraisal Debra Rudd, Executive Director and staff AZ Supervisory Appraiser / Trainee Appraiser Course

4 Why Are You Here Today? AZ Supervisory Appraiser / Trainee Appraiser Course4

5 a)To satisfy my continuing education requirements b)Because I want to be here c)To hopefully learn something to improve my appraisal practice d)I have no idea why Im really here AZ Supervisory Appraiser / Trainee Appraiser Course5 Why Are You Here Today?

6 Question: Q:How long have you been active in appraisal practice? a)Less than 5 years b)5 to 10 years c)11 to 15 years d)16 to 20 years e)Greater than 20 years AZ Supervisory Appraiser / Trainee Appraiser Course6

7 Announcements Break times and lunch Restroom locations Smoking areas Telephones Be considerate of those near you Please silence your cell phone Attendance sheet Certificate and evaluation forms 7AZ Supervisory Appraiser / Trainee Appraiser Course

8 8

9 Supervisory Appraiser Objectives Specifically, that the student understands: –AQB minimum qualifications for becoming and remaining a Supervisory Appraiser –Jurisdictional requirements for both the Supervisor and the Trainee Appraisers –Expectations and Responsibilities of being a Supervisory Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course9

10 Supervisory Appraiser Objectives Specifically, that the student understands: (continued) –Responsibilities and requirements of a Supervisory Appraiser in maintaining and signing all appropriate Trainee Appraiser experience logs –Expectations and responsibilities of the Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course10

11 Trainee Appraiser Objectives Specifically, that the student understands: –AQB minimum qualifications for becoming a Trainee Appraiser –Jurisdictional requirements for the Trainee Appraiser that may exceed those of the Criteria –AQB minimum qualifications for becoming and remaining a Supervisory Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course11

12 Trainee Appraiser Objectives Specifically, that the student understands: (continued) –Processes and roles of the entities involve in establishing qualifications for credentialed appraisers –Expectations and responsibilities of the Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course12

13 Trainee Appraiser Objectives Specifically, that the student understands: (continued) –Qualifications to become a credentialed appraiser –Basics of USPAP –Responsibilities and requirements of a Trainee Appraisers role in maintaining and signing all appropriate Trainee Appraiser experience logs AZ Supervisory Appraiser / Trainee Appraiser Course13

14 Qualification and Credentialing Entities

15 AZ Supervisory Appraiser / Trainee Appraiser Course15 History –Direct result of the financial institution crisis of the 1980s –Individuals forming value opinions for loans were not regulated by the states or the federal government Qualification and Credentialing Entities

16 AZ Supervisory Appraiser / Trainee Appraiser Course16 History (contd) –Congress passed legislation in 1989 (FIRREA); mandated the regulation of real estate appraisers by the states for federally- related transactions –Only real property appraisers are regulated Qualification and Credentialing Entities

17 AZ Supervisory Appraiser / Trainee Appraiser Course17 The Key Players –Federal Government: The Appraisal Sub- Committee (ASC) oversees the program to ensure it remains consistent with the original intent of Congress. –State Governments: Established regulatory agencies to issue credentials and perform disciplinary actions. Qualification and Credentialing Entities

18 AZ Supervisory Appraiser / Trainee Appraiser Course18 The Key Players –Private Sector: The Appraisal Foundation (TAF) provides Standards of Professional Appraisal Practice (ASB) and Appraiser Qualification Requirements (AQB). –Private Sector: Professional Appraisal Organizations (National, State, Local) Qualification and Credentialing Entities

19 AZ Supervisory Appraiser / Trainee Appraiser Course19 The Appraisal Subcommittee (ASC) has a supervisory role over state boards and appraisers, to ensure that the government has sufficient controls in place over all real estate appraisal activity for federally- regulated banks to protect them from loss –FIRREA established the ASC within the Federal Financial Institutions Examination Council (FFIEC) The Appraisal Subcommittee

20 The ASC has six members: Board of Governors of the Federal Reserve System (FRB) Office of the Comptroller of the Currency (OCC) Federal Housing Finance Agency (FHFA) Federal Deposit Insurance Corporation (FDIC) National Credit Union Administration (NCUA) Consumer Financial Protection Bureau (CFPB) The Appraisal Subcommittee AZ Supervisory Appraiser / Trainee Appraiser Course20

21 The ASC has authority from Title XI of FIRREA to monitor TAF actions, including AQB and ASB Title XI authorizes the ASC to oversee the activities of state appraisal licensure and certification agencies The Appraisal Subcommittee AZ Supervisory Appraiser / Trainee Appraiser Course21

22 ASC operations are funded by state- certified or licensed appraisers through their license renewal payment in the form of a National Registry fee. The ASC manages grants to The Appraisal Foundation that support real- property-related work of the AQB and the ASB. The Appraisal Subcommittee AZ Supervisory Appraiser / Trainee Appraiser Course22

23 The AQB and ASB are responsible for establishing minimum criteria and standards for practice for real property appraisers The state appraiser regulatory agencies have complete authority for enforcement State Appraisal Licensure & Certification Agencies AZ Supervisory Appraiser / Trainee Appraiser Course23

24 States are independent of each other; therefore, it is important that an appraiser understand the specific states licensure and certification laws and regulations State Appraisal Licensure & Certification Agencies AZ Supervisory Appraiser / Trainee Appraiser Course24

25 State Appraiser Regulatory Agencies –Typically governed by a board of 5-9 individuals –Generally appointed by the governor of the state –Public members (non-appraisers) are often also appointed State Appraisal Licensure & Certification Agencies AZ Supervisory Appraiser / Trainee Appraiser Course25

26 State Appraiser Regulatory Agency Responsibilities –Validate qualifications –Issue credentials –Investigate complaints –Perform disciplinary actions State Appraisal Licensure & Certification Agencies AZ Supervisory Appraiser / Trainee Appraiser Course26

27 The Structure of The Appraisal Foundation (TAF) –Not a government agency (private non-profit) –Not an appraisal organization –No members –Given specific authority by Congress regarding appraisal qualifications and appraisal standards The Appraisal Foundation AZ Supervisory Appraiser / Trainee Appraiser Course27

28 The Appraiser Qualifications Board –Establishes minimum criteria for licensing and certification of qualified appraisers –Defines, issues and promotes criteria –Disseminates Criteria –Creates and maintains the National Appraisal Examination The Appraisal Foundation AZ Supervisory Appraiser / Trainee Appraiser Course28

29 The Appraisal Standards Board –Performs all functions of TAF with respect to USPAP –Exercises all authority and power over USPAP and other communications related to Standards USPAP establishes standards of professional appraisal practice for the guidance and education of appraisers and users of appraisals The Appraisal Foundation AZ Supervisory Appraiser / Trainee Appraiser Course29

30 Qualifications for Appraiser Credentials

31 AZ Supervisory Appraiser / Trainee Appraiser Course31 The RPAQC can be downloaded at: AppraisalFoundation.org

32 On December 9, 2011, the AQB adopted changes to the Real Property Appraiser Qualification Criteria that will become effective January 1, These changes represent minimum national requirements that each state must implement no later than January 1, Qualifications for Appraiser Credentials AZ Supervisory Appraiser / Trainee Appraiser Course32

33 National Uniform Licensing and Certification Examinations –Education and experience must be completed prior to taking the AQB-approved National Uniform Licensing and Certification Examination. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course33

34 Background Checks –All candidates for a real property appraiser credential must undergo background screening. –State appraiser regulatory agencies are strongly encouraged to perform background checks on existing credential holders as well. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course34

35 College Degree Acceptance and Core Curriculum Requirements –Credit towards qualifying education requirements may be obtained via the completion of a degree program in Real Estate from an accredited degree-granting college or university provided the college or university has had its curriculum reviewed and approved by the AQB. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course35

36 Restriction on Continuing Education Course Offerings –Aside from complying with the requirements to complete the 7-Hour National USPAP Update Course (or its AQB approved equivalent), appraisers may not receive credit for completion of the same continuing education course offering within an appraisers continuing education cycle. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course36

37 Distance Education Requirements –A written, proctored examination is required for all qualifying education distance course offerings. The term written refers to an examination that might be written on paper or administered electronically on a computer workstation or other device. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course37

38 Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course38

39 –State-certified Supervisory Appraiser shall be in good standing with the training jurisdiction and not subject to any disciplinary action within the last three (3) years that affects the Supervisory Appraisers legal ability to engage in appraisal practice. Shall have been state certified for a minimum of three (3) years prior to being eligible to become a Supervisory Appraiser. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course39

40 A Supervisory Appraiser may not supervise more than three Trainee Appraisers at one time, unless a state program in the licensing jurisdiction provides to progress monitoring, supervising certified appraiser qualifications, and supervision oversight requirements for Supervisory Appraisers. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course40

41 All qualifying education must be completed within the five (5) year period prior to the date of submission of an application for a Trainee Appraiser credential. A Trainee Appraiser is permitted to have more than one Supervisory Appraiser. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course41

42 Both the Trainee Appraiser and Supervisory Appraiser shall be required to complete a Supervisor/Trainee course that, at a minimum, complies with the specifications for course content established by the AQB. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course42

43 The Supervisor/Trainee course must be completed by the Trainee Appraiser prior to obtaining a Trainee Appraiser credential, and completed by the Supervisory Appraiser prior to supervising a Trainee Appraiser. Qualifications for Credentials Overview of 2015 Changes AZ Supervisory Appraiser / Trainee Appraiser Course43

44 Appraisers in all classifications shall perform and practice in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP). All credential holders must comply with ongoing requirements for continuing education, and state renewal procedures. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course44

45 For Qualifying Education (QE) –Class hours may be obtained only where: a)the minimum length of the educational offering is at least 15 hours; and b)the individual successfully completes a proctored, closed-book final examination pertinent to that educational offering. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course45

46 For Continuing Education (CE) –Appraisers must successfully complete the 7- Hour National USPAP Update Course, or its AQB-approved equivalent, every two calendar years. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course46

47 For Continuing Education (CE) –Aside from complying with the requirements to complete the 7-Hour National USPAP Update Course, or its equivalent, appraisers may not receive credit for completion of the same continuing education course offering within an appraisers continuing education cycle. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course47

48 For Continuing Education (CE) –Credit towards the continuing education hour requirements for each appraiser classification may be granted only where the length of the educational offering is at least two (2) hours. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course48

49 For Continuing Education (CE) –The equivalent of fourteen class hours of instruction in courses or seminars for each year during the period preceding the renewal is required (e.g., a two-year continuing education cycle would require twenty-eight hours). The class hour requirement can be fulfilled at any time during the cycle. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course49

50 A new applicant not currently licensed or certified and in good standing in another jurisdiction, shall have up to 24 months, after approval by the state, to take and pass an AQB-approved qualifying examination for the credential. Successful completion of the examination is valid for a period of 24 months. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course50

51 The verification for experience credit shall include: 1.Type of property 2.Date of report 3.Address of appraised property 4.Description of work performed by the trainee/applicant and scope of the review and supervision of the supervising appraiser Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course51

52 The verification for experience credit shall include (contd): 5.Number of actual work hours by the trainee/applicant on the assignment; and 6.The signature and state certification number of the supervising appraiser if applicable. Note: Separate appraisal logs shall be maintained for each supervising appraiser if applicable. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course52

53 All candidates for a real property appraiser credential must undergo background screening. In addition to all applicants for new credentials, state appraiser regulatory agencies are strongly encouraged to perform background checks on existing credential holders as well. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course53

54 State appraiser regulatory agencies shall not issue a real property appraiser credential if: –The applicant has had an appraiser license or certification revoked in any governmental jurisdiction within the five (5) year period immediately preceding the date of application. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course54

55 shall not issue a credential if: (contd) –The applicant has been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, or foreign court: a)during the five (5) year period immediately preceding the date of the application for licensing or certification; or b)at any time preceding the date of application, if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering. Qualifications for Credentials 2015 Criteria for ALL Classifications AZ Supervisory Appraiser / Trainee Appraiser Course55

56 The Trainee Appraiser classification is intended to incorporate any documented non-certified/non-licensed real property appraisers who are subject to the Real Property Appraiser Qualification Criteria. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course56

57 The scope of practice for the Trainee Appraiser classification is the appraisal of those properties which the state-certified Supervisory Appraiser is permitted by his/her current credential and that the Supervisory Appraiser is competent to appraise. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course57

58 All Trainee Appraisers must comply with the COMPETENCY RULE of USPAP for all assignments. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course58

59 There is no examination requirement for the Trainee Appraiser classification, but the Trainee Appraiser shall pass the appropriate end-of-course examinations in all of the prerequisite courses in order to earn credit for those courses. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course59

60 As the prerequisite for application, an applicant must have completed 75 creditable hours of qualifying education as specified in the Required Core Curriculum. All qualifying education must be completed within the five (5) year period prior to the date of submission of a Trainee Appraiser application. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course60

61 No experience is required as a prerequisite for the Trainee Appraiser classification. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course61

62 The Trainee Appraiser shall be subject to direct control and supervision by a Supervisory Appraiser in good standing, who shall be state-certified. A Trainee Appraiser is permitted to have more than one Supervisory Appraiser. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course62

63 The Supervisory Appraiser shall be responsible for the training, guidance, and direct control and supervision of the Trainee Appraiser by: 1)Accepting responsibility for the appraisal by signing and certifying the appraisal complies with USPAP; 2)Reviewing and signing the Trainee Appraiser appraisal report(s); and Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course63

64 The Supervisory Appraiser shall be responsible by: (contd) 3)Personally inspecting each appraised property with the Trainee Appraiser until the Supervisory Appraiser determines the Trainee Appraiser is competent to inspect the property, in accordance with the COMPETENCY RULE of USPAP for the property type. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course64

65 The Trainee Appraiser is permitted to have more than one Supervisory Appraiser, but a Supervisory Appraiser may not supervise more than three (3) Trainee Appraisers, at one time… Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course65

66 An appraisal experience log shall be maintained jointly by the Supervisory Appraiser and the Trainee Appraiser. It is the responsibility of both the Supervisory Appraiser and the Trainee Appraiser to ensure the appraisal experience log is accurate, current and complies with the requirements of the Trainee Appraisers credentialing jurisdiction. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course66

67 The state-certified Supervisory Appraiser shall be in good standing in the training jurisdiction and not subject to any disciplinary action within the last three (3) years that affects the Supervisory Appraisers legal eligibility to engage in appraisal practice. Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course67

68 Qualifications for Credentials Trainee Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course68

69 The Licensed Residential Real Property Appraiser classification applies to the appraisal of non-complex one-to-four residential units having a transaction value less than $1,000,000, and complex one-to- four residential units having a transaction value less than $250,000. Qualifications for Credentials LR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course69

70 Complex one-to-four unit residential property appraisal means one in which the property to be appraised, the form of ownership, or the market conditions are atypical. 1 1 Bank Holding Company Supervision Manual, 12 C.F.R (d) Qualifications for Credentials LR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course70

71 The AQB-approved Licensed Residential Real Property Appraiser examination must be successfully completed. Qualifications for Credentials LR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course71

72 The prerequisites for taking the AQB- approved examination are completion of: 1)One hundred fifty (150) creditable class hours as specified in the Required Core Curriculum; and 2)Completion of 30 semester hours of college level education; and 3)Two thousand (2,000) hours of qualifying experience in no fewer than twelve (12) months. Qualifications for Credentials LR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course72

73 Qualifications for Credentials LR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course73

74 The Certified Residential Real Property Appraiser classification qualifies the appraiser to appraise one-to-four residential units without regard to value or complexity. Qualifications for Credentials CR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course74

75 The AQB-approved Certified Residential Real Property Appraiser examination must be successfully completed. Qualifications for Credentials CR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course75

76 The prerequisites for taking the AQB- approved examination are completion of: 1)Two hundred (200) creditable class hours as specified in the Required Core Curriculum; 2)Completion of a Bachelors degree, or higher, from an accredited college or university.; and 3)Two thousand five hundred (2,500) hours of qualifying experience obtained in no fewer than twenty-four (24) months. Qualifications for Credentials CR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course76

77 Qualifications for Credentials CR Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course77

78 The Certified General Real Property Appraiser classification qualifies the appraiser to appraise all types of real property. Qualifications for Credentials CG Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course78

79 The AQB-approved Certified General Real Property Appraiser examination must be successfully completed. Qualifications for Credentials CG Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course79

80 The prerequisites for taking the AQB- approved examination are completion of: 1)Three hundred (300) creditable class hours as specified in the Required Core Curriculum; and 2)Completion of a Bachelors degree or higher from an accredited college or university and 3)Three thousand (3,000) hours of qualifying experience obtained in no fewer than thirty (30) months, where a minimum of one thousand five hundred (1,500) hours must be obtained in non- residential appraisal work. Qualifications for Credentials CG Appraiser AZ Supervisory Appraiser / Trainee Appraiser Course80

81 Qualifications for Appraiser Credentials AZ Supervisory Appraiser / Trainee Appraiser Course81

82 Overview of USPAP

83 Purpose of USPAP –Promote and maintain a high level of public trust in professional appraisal practices –Establish minimum requirements for professional appraisal practice Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course83

84 What services are covered by USPAP –Appraisals –Appraisal reviews –Real property appraisal consulting –Other services when choosing to represent oneself as an appraiser Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course84 Stds. 1-10

85 USPAP addresses ethical and performance obligations of appraisers through: –Definitions –Rules –Standards (1-10) –Standards Rules –Statements Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course85

86 Five Primary Rules –ETHICS RULE –RECORD KEEPING RULE –COMPETENCY RULE –SCOPE OF WORK RULE –JURISDICTIONAL EXCEPTION RULE Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course86

87 ETHICS RULE –Sections of the Rule Conduct Management Confidentiality Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course87

88 Conduct Section –In general conduct you must Perform ethically and competently In accordance to USPAP Not engage in criminal conduct Not willfully or knowingly violate RECORD KEEPING RULE Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course88

89 Conduct Section you must: –perform with impartiality… –not perform assignments with bias –not advocate the cause or interest of any party or issue –not accept assignments that include the reporting of predetermined opinions and conclusions Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course89

90 Conduct Section (contd) you must not: –misrepresent his or her role when providing valuation services that are outside of appraisal practice –use or rely on unsupported conclusions –perform an assignment in a grossly negligent manner Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course90

91 you must not: –communicate assignment results with the intent to mislead or defraud –use or communicate a report that is known by the appraiser to be misleading or fraudulent –knowingly permit an employee or other person to communicate a misleading or fraudulent report Overview of USPAP ETHICS RULE – Conduct Section AZ Supervisory Appraiser / Trainee Appraiser Course91

92 Disclosure obligations - If known prior to accepting an assignment, and/or if discovered at any time during the assignment, an appraiser must disclose to the client, and in the subsequent report certification… Overview of USPAP ETHICS RULE – Conduct Section AZ Supervisory Appraiser / Trainee Appraiser Course92

93 you must not accept an assignment or compensation contingent on: –Predetermined result –Direction that favors the client –Amount of a value opinion –Attainment of a stipulated result –Occurrence of a subsequent event directly related to value Overview of USPAP ETHICS RULE – Management Section AZ Supervisory Appraiser / Trainee Appraiser Course93

94 you must: –Not advertise for or solicit assignments in a manner that is false, misleading, or exaggerated –affix, or authorize the use of, his or her signature (on an assignment-by-assignment basis), to certify recognition of USPAP responsibilities –Not affix the signature of another appraiser without his or her consent Overview of USPAP ETHICS RULE – Management Section AZ Supervisory Appraiser / Trainee Appraiser Course94

95 An appraiser must protect the confidential nature of the appraiser-client relationship Appraiser must act in good faith Appraiser must be aware of, and comply with laws and regulations Overview of USPAP ETHICS RULE - Confidentiality Section AZ Supervisory Appraiser / Trainee Appraiser Course95

96 Appraiser may disclose to: –Client –Persons specifically authorized y the client –State appraiser regulatory agencies –Third parties as may be authorized by due process of law –A duly authorized professional peer review committee Overview of USPAP ETHICS RULE - Confidentiality Section AZ Supervisory Appraiser / Trainee Appraiser Course96

97 An appraiser must: –Be competent to perform the assignment –Acquire the necessary competency to perform the assignment –Decline or withdraw from the assignment Overview of USPAP COMPETENCY RULE AZ Supervisory Appraiser / Trainee Appraiser Course97

98 An appraiser must prepare a workfile for each appraisal, appraisal review, or appraisal consulting assignment A workfile must be inexistence prior to the issuance of any report An appraiser who willfully or knowingly fails to comply with the RKR is in violation of the ETHICS RULE Overview of USPAP RECORD KEEPING RULE AZ Supervisory Appraiser / Trainee Appraiser Course98

99 An appraiser must retain the workfile for a period of at least five years after preparation or at least two years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever expires last. Overview of USPAP RECORD KEEPING RULE AZ Supervisory Appraiser / Trainee Appraiser Course99

100 For each appraisal, appraisal review, or appraisal consulting assignment, an appraiser must: –Identify the problem to be solved; –Determine and perform the necessary SOW –Disclose the SOW in the report Overview of USPAP SCOPE OF WORK RULE AZ Supervisory Appraiser / Trainee Appraiser Course100

101 In an appraisal assignment, identification of the following elements is required: –Client and any other intended users; –Intended use of the opinions and conclusions –Type and definition of value –Effective date –Subject of the assignment and its relevant characteristics –Assignment conditions Overview of USPAP SCOPE OF WORK RULE AZ Supervisory Appraiser / Trainee Appraiser Course101

102 Assignment conditions include: –Assumptions –Extraordinary assumptions –Hypothetical conditions –Laws and regulations –Jurisdictional exceptions –Other conditions that affect the scope of work Overview of USPAP SCOPE OF WORK RULE AZ Supervisory Appraiser / Trainee Appraiser Course102

103 Requirements in STANDARD 1 (Real Property) follow appraisal process, beginning with the identification of the problem. STANDARD 1 covers all the development activities that are distinctly different from the final step, reporting, which is covered in STANDARD 2. Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course103

104 Appraisal Process SR 1-3 SR 1-6 Std. 2 SR 1-2(h) SR 1-2(a-g) SR 1-5 SR AZ Supervisory Appraiser / Trainee Appraiser Course

105 Report: –any communication, written or oral, of an appraisal, appraisal review or appraisal consulting service that is transmitted to the client upon completion of the assignment. Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course105

106 STANDARD 2 covers final step in the real property appraisal process, reporting of the concluded value opinion. This Standard addresses both communication and reporting. Communication involves transmitting information from one source or person to another and is distinctly different from the development process. Overview of USPAP AZ Supervisory Appraiser / Trainee Appraiser Course106

107 STANDARD 2 –Addresses the content and level of information required in each reporting option that communicates results. –Does not dictate the form, format, or style of real property appraisal reports. The substantive content determines if it complies with the reporting options identified in the Standard. When USPAP Applies AZ Supervisory Appraiser / Trainee Appraiser Course107

108 Overview of Supervisory Appraiser Expectations and Responsibilities

109 Supervisory Appraisers provide a critical role in the mentoring, training and development of future valuation professionals. It is inherently important to strike a proper balance between ensuring Supervisory Appraisers are competent and qualified without making the criteria too stringent and restrictive. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course109

110 What are important traits of a good Supervisory Appraiser? –Ethics and honesty (trustworthiness) –Competent with a desire to continue to learn –Patience –Attention to detail –Takes responsibility for own actions –Respectful –Communication skills Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course110

111 What are important traits of a good Supervisory Appraiser? (contd) –Accessible –Promotes a coaching culture –Goal oriented and able to express a mission and/or vision –Etc. Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course111

112 Supervisory Appraisers shall be responsible for the training, guidance, and direct supervision of the Trainee Appraiser by: 1)Accepting responsibility for the appraisal by signing and certifying the appraisal complies with USPAP; 2)Reviewing and signing the Trainee Appraiser appraisal report(s); and Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course112

113 Supervisory Appraisers shall: (contd) 3)Personally inspecting each appraised property with the Trainee Appraiser until the Supervisory Appraiser determines the Trainee Appraiser is competent to inspect the property, in accordance with the COMPETENCY RULE of USPAP for the property type. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course113

114 Supervisory Appraisers shall be state- certified and in good standing in the jurisdiction in which the Trainee Appraiser practices for a period of at least three (3) years. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course114

115 Supervisory Appraisers shall not have been subject to any disciplinary action within any jurisdiction within the last three (3) years that affects the Supervisory Appraisers legal eligibility to engage in appraisal practice. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course115

116 A Supervisory Appraiser subject to a disciplinary action would be considered to be in good standing three (3) years after the successful completion/ termination of the sanction imposed against the appraiser. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course116

117 Supervisory Appraisers shall have been state-certified for a minimum of three (3) years prior to being eligible to become a Supervisory Appraiser. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course117

118 Supervisory Appraisers must comply with the COMPETENCY RULE of USPAP for the property type and geographic location the Trainee Appraiser is being supervised. Supervisory Appraiser Requirements AZ Supervisory Appraiser / Trainee Appraiser Course118

119 Whereas a Trainee Appraiser is permitted to have more than one Supervisory Appraiser, Supervisory Appraisers may not supervise more than three (3) Trainee Appraisers at one time… Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course119

120 The Supervisory Appraiser must: –Provide the Trainee Appraiser with a basic understanding of USPAP requirements –Understand the AQB minimum requirements of both the Supervisory Appraiser and Trainee Appraiser, as well as the requirements of the credentialing jurisdiction that may exceed those of the Criteria Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course120

121 The Supervisory Appraiser must: –Provide proper guidance to the Trainee Appraiser when he or she selects a specific credentialing path (i.e., Licensed Residential, Certified Residential or Certified General) Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course121

122 Monitor the Trainee Appraisers progress in satisfying both the education and experience requirements necessary to achieve his or her selected credentialing path Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course122

123 The Supervisory Appraiser must: –Monitor the Trainee Appraisers progress in satisfying both the education and experience requirements necessary to achieve his or her selected credentialing path Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course123

124 The Supervisory Appraiser must: –Verify that the Supervisory Appraiser and Trainee Appraiser are properly documenting all appropriate experience logs Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course124

125 The Supervisory Appraiser must: –accompany the Trainee Appraiser on all inspections until the Trainee Appraiser is competent to conduct inspections independently, and has met all specific requirements pertaining to property inspection established by the credentialing jurisdiction Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course125

126 The Supervisory Appraiser must: –monitor and provide assignments and duties that ensure the Trainee Appraiser is developing an understanding and progression of knowledge and experience of all applicable valuation methodologies and approaches to value Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course126

127 The Supervisory Appraiser must: –verify that the Trainee Appraiser is properly identified and acknowledged in the appraisal report in compliance with USPAP requirements Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course127

128 The Supervisory Appraiser must: –immediately notify the Trainee Appraiser if the Supervisory Appraiser is no longer qualified to supervise and/or sign the Trainee Appraisers experience log Supervisory Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course128

129 Overview of Trainee Appraiser Expectations and Responsibilities

130 What are important traits of a good Trainee Appraiser? –Ethics and honesty (trustworthiness) –Desire to learn –Patience –Attention to detail –Takes responsibility for own actions –Respectful –Communication skills –Etc. Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course130

131 The Trainee Appraiser must: –develop a basic understanding of the AQB minimum requirements to become a Trainee Appraiser, as well as the requirements of the credentialing jurisdiction that may exceed those of the Criteria Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course131

132 The Trainee Appraiser must: –have an understanding about the importance of selecting an appropriate Supervisory Appraiser. For example…. Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course132

133 For example…. –The Supervisory Appraiser-Trainee Appraiser relationship is a long-term commitment by both parties –The Trainee Appraiser is inherently connected to the good standing of the Supervisory Appraiser Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course133

134 For example…. –The importance of selecting a Supervisory Appraiser with the experience and competency that best matches the Trainee Appraisers selected credentialing path –Options for the Trainee Appraiser if a Supervisory Appraiser is no longer qualified to serve as a Supervisory Appraiser Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course134

135 The Trainee Appraiser must: –have an understanding of how to determine if an appraiser is qualified and in good standing to be a Supervisory Appraiser by searching the Appraisal Subcommittee (ASC) National Registry and/or jurisdictional websites Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course135

136 The Trainee Appraiser must: –understand the Supervisory Appraiser must accompany the Trainee Appraiser on all inspections until he or she is competent to conduct inspections independently, and has met all requirements pertaining to property inspection established by the credentialing jurisdiction Trainee Appraiser Expectations and Responsibilities AZ Supervisory Appraiser / Trainee Appraiser Course136

137 Overview of Jurisdictional Requirements Beyond AQB Criteria

138 Minimum Continuing Education Course length Inspection requirements for Supervisory Appraiser and Trainee Appraiser Summary of Arizona Requirements AZ Supervisory Appraiser / Trainee Appraiser Course138

139 Questions?

140 USPAP Overview Revisions to the DEFINITIONS of Assignment Results and Scope of Work Revisions to the PREAMBLE – When do USPAP Rules and Standards Apply? AZ Supervisory Appraiser / Trainee Appraiser Course140

141 USPAP Overview Revisions to the ETHICS RULE- Clarification about disclosure requirement for current or prospective interest and prior services when there is no appraisal or appraisal review Revisions to the COMPETENCY RULE AZ Supervisory Appraiser / Trainee Appraiser Course141

142 USPAP Overview Report Options in STANDARDS 2, 8, 10 – Appraisal Report and Restricted Appraisal Report Revisions to Standards Rule 3-5 – Date of the report Retirement of STANDARDS 4 and 5 Revisions to AO-11 and AO-13 AZ Supervisory Appraiser / Trainee Appraiser Course142

143 Appraisal: –(noun) the act or process of developing an opinion of value; an opinion of value. –(adjective) of, or pertaining to appraising and related functions such as an appraisal practice or appraisal services. –(cont. next slide) Definitions AZ Supervisory Appraiser / Trainee Appraiser Course143

144 Appraisal: (cont.) –Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g. no more than, not less than) to a previous value opinion or numerical benchmark (e.g. assessed value, collateral value) Definitions AZ Supervisory Appraiser / Trainee Appraiser Course144

145 Report: –any communication, written or oral, of an appraisal, appraisal review or appraisal consulting service that is transmitted to the client upon completion of the assignment. Definitions AZ Supervisory Appraiser / Trainee Appraiser Course145


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