Appraisal: Taking the Stand on USPAP

SPECIALTIES IN BRIEF: Appraisal, Commercial, International, and Property Management. The latest news on your real estate niche.

July 1, 1998

NAR favors the withdrawal of the Appraisal Standards Board's exposure draft proposing a comprehensive revision of the Uniform Standards of Professional Appraisal Practice. This position was presented in recent testimony before the ASB by Andy Peressin, GAA, RAA, a member of NAR’s Appraisal Committee and NAR’s representative on the Appraisal Foundation Advisory Council. NAR urges the ASB to work, instead, within the existing standards to make necessary revisions.

NAR also agrees with the Counselors of Real Estate that Standards 4 and 5 of USPAP should be eliminated. Those standards deal with real estate counseling issues, which both groups agree should not be part of the appraisal standards. According to NAR’s recent testimony, “the oversight of the real estate counseling profession is not nor was it ever the responsibility of the Appraisal Standards Board of The Appraisal Foundation.”

The ASB has announced that a second exposure draft of the proposed revisions to USPAP will be released early this summer.

To obtain a copy of the proposed revisions, visit the Appraisal Foundation's Web site at www.appraisalfoundation.org.To read the recent testimony regarding the first draft of the proposed revisions, visit One Realtor Place®at REALTOR.COMand select from the menu “Real Estate Specialties,” then “Appraisal Section of the National Association of REALTORS®.”

AI, NAR Talks Heating Up

Russell K. Booth, NAR immediate past president, recently provided the NAR Appraisal Committee with an update regarding a possible NAR affiliation with the Appraisal Institute. According to Booth, the groups are discussing such issues as legislative advocacy, infrastructure (staffing and office location), transition of designations, and membership categories.

According to Booth, the AI-NAR Study Group, which was appointed to explore the benefits of joining the two groups, believes that “a consolidation within the industry would benefit the appraisal profession and the overall real estate industry.”

Stay tuned to the NAR Appraisal Section's Web page, in the One Realtor Place® “Specialties” area, for updates regarding a possible affiliation.

Lightening-Fast Appraisal Process

Lenders using Freddie Mac's electronic network can look forward to a speedy new system that will order, manage, receive, and review appraisals. Beginning the second quarter this year, a new service called Rapid Request will allow the 950 lenders on Freddie Mac's network to order electronically an appraisal anywhere in the country.

Lenders will first choose from a national network of appraisal providers. Next, using special software, lenders complete an appraisal request form specifying the level of property valuation necessary. The request is then transferred to the appraisal provider via the electronic connection. Finally, the appraisal provider completes the job and electronically returns the report to the lender.

For more information on appraisal-related issues, contact the NAR Appraisal Section at 800/354–2397. Be sure to request a membership application and a sample Appraiser Updatenewsletter.

Commercial: Profits Going ‘Through’ the Roof

Sweep off those dirty city rooftops, commercial property owners! Even that space can bring you profit. In today’s telecommunications craze, it’s becoming more and more common for commercial building owners to lease rooftop space for placement of large antennas and other equipment. Companies, such as Subcarrier Communications Inc., that offer site acquisition and development services for the wireless industry are leasing the space and selling transmission rights to telecommunications companies. The telecommunications companies, in turn, put large transmitters on the rooftops to provide wireless service to area residents and businesses.

Subcarrier is one of the biggest players to provide this new “service,” placing more than 100 clients, such as Bell Atlantic and Cellular One, on rooftops nationwide. According to Subcarrier, the amount of revenue brought in through the leasing of this otherwise useless space depends on the telecommunications company that decides to set up shop. Most buildings are earning more than $5,000 per month.

Suburban Office Overbuilding Danger Seen

Many suburban areas may be in danger of overbuilding, according to Cushman & Wakefield, a real estate services company based in New York. Considering the number of office buildings being built, vacancy rates may soon be on the rise, says Maria Sicola, the company's director of research.

The national suburban vacancy rate increased, albeit slightly, for the first time in eight years, primarily because of the new construction nationwide. Officials estimate that nearly 48 million square feet of office space is at some stage of development in the United States. A recent Cushman & Wakefield survey identifies suburban areas around Chicago, Dallas, Denver, and Philadelphia as the biggest “trouble spots.”

For more information on commercial real estate issues, contact the Commercial Investment Real Estate Institute at 800/621–7027 or visit CIREI's Web site at www.ccim.com.

International: Franchises Closing the Gap

The main reason that franchise expansion into global markets is successful is that international practitioners and consumers benefit when quality real estate business practices are brought overseas.

This was the consensus of a panel of industry experts at NAR’s Midyear Business Meetings in April.

The panel noted that, on the road to global success, franchises have overcome many obstacles, such as cultural differences, varying time zones, and different exchange rates.

The explosion of office technology and online applications has aided big franchises in expanding overseas, the panel said.

Panelist Dave Mathis, director of international franchise services for ERA Franchise Systems, said, “The most satisfying thing for me is knowing we’ve upgraded the real estate business standard in those countries.”

But expansion should be well thought out, according to Darlene Aut, Coldwell Banker Real Estate Corp.'s vice president of international development. In the real estate business, it’s all about location, location, location, as Coldwell Banker found out in recent months. “We lost our master franchises in Singapore, Thailand, and Malaysia because of the economic crisis,” said Aut. She said the company won't be gun-shy, however, about looking into other locations. “To remain competitive as a U.S. franchise, you have to be everywhere.”

Currently, Coldwell Banker Real Estate Corp. has master franchises in Canada, the Caribbean, Mexico, and the Philippines. ERA Franchise Systems has master franchises in the Cayman Islands, Europe, Guam, Indonesia, Israel, Japan, the Philippines, Singapore, South Africa, Taiwan, and Thailand.Also strong overseas, RE/MAX International has master franchises in Australia, the Caribbean, Europe, Mexico, Singapore, and South Africa.

What’s Out There for Specialists?

Commercial practitioners: NAR has added commercial real estate information to its intranet, One Realtor Place®. The site offers information ranging from a commercial education calendar to research findings, including the Institute of Real Estate Management's Income/Expense Trend Reports. To access, visit One Realtor Place®, enter the Specialties area, and click on the commercial links.

Follow that REIT! Commercial practitioners: If you're a player in the REIT game, you'll be interested to know that some Dow Jones REIT Indexes are now being published daily in The Wall Street Journal. The indexes track entities that make up about 95 percent of the market capitalization for publicly traded real estate investment trusts.

Good news for those interested in obtaining a property management-related education. The Institute of Real Estate Management has reconfigured its educational offerings to meet the needs of today’s busy real estate professional. According to IREM, “short, convenient one- and two-day courses allow you to gain the knowledge you need while minimizing time away from your office.” The courses have been divided into three categories—fundamental, intermediate, and advanced—and have been linked together so that they can be taken consecutively at the same location during the same week. For more information, visit IREM's Web site, www.irem.org.

Appraisers who are state licensed and certified can be found on the Appraisal Subcommittee's Web site, www.asc.gov. The site is also a good resource if you're looking for information on how to contact your state appraisal regulatory agency.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

Related