In January 2006 the new edition of USPAP will be available and distributed, though its changes will not become effective until June. The Appraisal Standards Board
>recognizes that the marketplace will need time to adjust
>to the changes and this five-month period between
>publication and the effective date should allow for that.
2006 USPAP has some radical changes that will impact the appraisal business in 2006. Taken from the November 2005 newsletter of the Appraisal Foundation,
>the Departure Rule has been removed and the new
>Scope of Work Rule has been added. The terms
>Limited Appraisal, Complete Appraisal, Binding
>Requirement and Specific Requirement have also
>been removed from USPAP.
_I am not sorry to see these terms go._
After 10 years, there is still widespread confusion amongst appraisers as to what they mean. One major lending client routinely asks for _limited appraisals_, when they want a brief (i.e., _cheap_) report. Another asks for a _summary_ appraisal but cautions that it must be “complete enough so that we can understand everything that you did”. (In this case, _summary_ also means _cheap_.”) And, frankly, I’m still not sure what a _Specific Requirement_ is.
Although abused, these terms at least serve as a benchmark for discussions. Going forward, the onus will be on the buyers of appraisal services to clearly spell out the scope of services that they require under the new USPAP, something that can be quite difficult with the impersonal on-line bidding systems that continue to gain in popularity. That is certainly wishful thinking of course, and my guess is that five months will barely scratch the surface in incorporating these changes into daily practice.