First American Valuation and Property Solutions recently unveiled its Appraiser-ValidatedPriceOpinion, or AVPO. According to the company, AVPOs are not appraisals, but rather expert opinions that provide a second level of review for broker priceopinion users, without the need to build in-house review functions. But appraisal experts, including the Appraisal Institute’s senior manager of ethics and standards counseling and The Appraisal Foundation’s director of research and technical issues, argue otherwise.
According to First American, under an AVPO, a licensed appraiser confirms the specific set of values determined by a local real estate agent by looking at comparable sales and verifying accuracy. If discrepancies are found, the appraiser provides a new set of values, complete with an explanation of how they were determined. The language used by First American has raised red flags for appraisers concerned that AVPOs are violations of the Uniform Standards of Professional Appraisal Practice.
When sent First American’s news release, Appraisal Foundation Director of Research and Technical Issues John Brenan responded: “While it is not within our purview to determine whether any particular product or service complies with USPAP, we can tell you that, as far as USPAP is concerned, the product appears to qualify as an appraisal or an appraisal review assignment.”
Stephanie Coleman, MAI, SRA, the Appraisal Institute’s senior manager of ethics and standards counseling, agreed with TAF’s assessment, noting that AVPOs are appraisals. She pointed out that if appraisers are looking to perform BPOs, they should read the article she penned last year for Valuation magazine titled “Matter of Opinion: How (and when) Appraisers can Expand into BPO Work,” which is available at www.valuation-digital.com/valuation/20091stQ/#pg22 .
First American, the Dallas-based appraisal arm of First American Corp., has made its AVPOs available as exterior-only or exterior and interior reports. The reports can be made available to the customer in seven to 10 days, according to the company.
According to Coleman, appraisers need to be cautious about performing any valuation assignments that could violate USPAP, even if the product claims to be outside the purview of USPAP.