Appraisereport

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Volume 15 January 2005 Number 1

There are several changes to USPAP

for 2005. The definition of APPRAISAL

REVIEW was changed to limit the defini-tion

only to the work of another appraiser

in appraisal, appraisal review or appraisal

consulting assignments. The definition of

CASH FLOW ANALYSIS and the comment

in the definition of REPORT were deleted.

The term “ purpose” was replaced

with the use of the terms type and defini-tion

of value, intended use or problem to

be solved. This is especially noted in Rules

1- 2 ( c) and 2- 2( a)( v), ( b)( v) and ( c)( v),

where a requirement has been added for

the appraiser to include the citation for the

source of the value definition used.

Rules 1- 3( b) has been amended to

remove the requirement in the develop-ment

of highest and best use that land

must always be valued as if vacant and

available for development. This does not

mean that appraisers do not have to devel-op

an opinion of the subject land. The

Appraisal Standards Board has stated that

this requirement is one of methodology,

which is covered by Rule 1- 1( a).

Rules 2- 1, 2- 2 and 3- 2 have been

amended to require clear and conspicuous

disclosure of extraordinary assumptions

and hypothetical conditions. The require-ment

that the appraiser indicate the

impact on value of an extraordinary

assumption or hypothetical condition has

been deleted.

Rule 2- 2 has been clarified regarding

reporting requirements for reconciliation.

Rule 2- 3, the appraiser’s certification,

has been amended to require that the cer-tification

state whether any one has pro-vided

significant real property appraisal

assistance. Formerly this section required

the appraiser to mention any person who

gave significant professional assistance.

In Standard 3, a clarification was

made that this standard applies only to the

work of another appraiser in an appraisal,

appraisal review or appraisal consulting

assignment. Previously, this standard

applied to another’s appraiser’s work.

Two Statements on Appraisal Stand-ards

were amended. Statement 6 was

changed to delete the requirement to

report exposure time in all assignments.

The appraiser is still required to develop

an estimate of exposure time in market

value assignments. Statement 7 was

changed to correctly address levels of reli-ability.

Previously this Statement indicated

that a Complete Appraisal had the highest

level of reliability, while Limited Ap-praisals

had varying levels of reliability.

This language has been eliminated.

Advisory Opinion 6 has been retired,

and changes were made to Advisory

Opinion 21 to clarify an appraiser’s obliga-tions

for complying with USPAP.

Finally, one potentially important

issue is noticed on the cover of the 2005

edition of USPAP. This edition is not limit-ed

to just the calendar year 2005. It is

entirely possible that either there will not

be a 2006 edition, or that the 2006 edition

will not become effective until some time

after January 1, 2006.

The 2005 edition of USPAP may be

viewed on the Appraisal Foundation’s

website at www. appraisalfoundation. org.



The Appraisal Board has worked

many years in anticipation of con-structing

or purchasing an office build-ing

as additional space is needed and

rents continue to increase. The Board

purchased a building site some two

years ago and began developing plans

for a new office building. An architect

was employed after receiving bids and

conducting interviews. Many hours

have been devoted to developing

plans for a building containing approx-imately

14,000 square feet of modern

design with size to meet our needs

now and in the future. Competitive

sealed bids were received and a con-tract

was recently negotiated and

signed to begin construction which is

anticipated to take one year. The loca-tion

of the new office is approximately

1.5 miles north of the existing office

directly on Six Forks Road in North

Raleigh. The Board and staff will be

able to better serve all licensees with

this new facility which is considered

financially feasible after analyzing

future space needs and rent rates in

the Raleigh area. 

2005 Changes To USPAP

New Board Building BOARD NEWS

The Appraisereport will be published in January

and July each year with an expanded amount of in-formation

and all disciplinary actions of the Board. The

Board website at www. ncappraisalboard. org will be

updated and expanded to include any pertinent

monthly news and all disciplinary actions. These

changes are being made in an effort to improve com-munications

with licensees and to better utilize our

website. More information will be published as we

work to develop online renewals and the electronic

transmission of various forms.

New Employee

Christy Henson began employment in January as a part- time office assistant. Ms.

Henson has a BSBA degree from the University of Florida and an MBA degree from

Fuqua School of Business, Duke University. She will be working primarily with Legal

Counsel and the Deputy Director of Investigations. Ms. Henson is involved as a vol-unteer

in many organizations and she and her family make their home in Wake

Forest. 

Reciprocity

North Carolina and Virginia signed a reciprocal licensing agreement allowing

appraisers from both states to obtain an appraisal license or certificate in the other

state in a streamlined manner. For a complete list of states North Carolina holds

reciprocal agreements with, please visit the Board’s website at: http:// ncappraisal-board.

org/ reciprocity/ default. htm

Note: Reciprocal agreements do not apply to trainees. 

Top Trainee Problems

You became a trainee a few years ago, worked under the supervision of an apprais-er

and compiled the correct amount of appraisal experience. You send in your appli-cation

to upgrade your status, but then receive a letter from the Appraisal Board stat-ing

that your application is being returned because you do not have enough points

to qualify to upgrade. What happened?

In order to receive experience credit, the appraisals you have done must have been

made in compliance with USPAP and applicable state laws and rules. Unfortunately,

in too many instances trainees have not made sure that their supervisor has com-plied

with Board rules when performing supervision. What can a trainee do to make

sure the appraisals will be counted?

1. Make sure that your supervisor has sent in the supervisor declaration form to

the Appraisal Board before you begin work with that supervisor. Although

you can have more than one supervisor, each supervisor must be on record

as a supervisor, or reports done for a supervisor not on record will not be

given credit. Do not wait to begin employment before checking that the

Appraisal Board has received the form and documented the supervision in

both of your files.

2. Make sure that either you sign the appraisal report, or, if you do not sign the

report, that the appraisal report states that you have provided significant real

estate appraisal assistance in the preparation of the report.

3. Keep a copy of the appraisal report for your own records, or have an agree-ment

in writing with your supervisor that the supervisor will give you a copy

of any appraisal report you work on if you ask for it.

4. Make sure that a supervisor accompanied you on the first 50 appraisals you

did once you are registered.

5. Make sure your supervisor goes with you on all inspections of the subject

property, no matter how many appraisals you have done, if the property is

located more than 50 miles from the supervisor’s primary business location.

6. Make sure that your supervisor completes the Supervisor Verification of

Experience form for all appraisals you do, and that you have a copy of that

form for each appraisal.

7. Make sure that you are using the most recent Appraisal Board appraisal log to

report your experience. Older versions will not be accepted. 

2

Published as a service to appraisers to promote a bet-ter

understanding of the Law, Rules and Regulations,

and proficiency in ethical appraisal practice. The arti-cles

published herein shall not be reprinted or repro-duced

in any other publication, without specific refer-ence

being made to their original publication in the

North Carolina Appraisal Board Appraisereport.

NORTH CAROLINA

APPRAISAL BOARD

Mailing Address:

P. O. Box 20500

Raleigh, North Carolina 27619- 0500

Street Address:

3900 Barrett Drive, Suite 101

Raleigh, North Carolina 27609

Phone: 919/ 420- 7920

Fax: 919/ 420- 7925

Website:

www. ncappraisalboard. org

Email Address:

ncab@ ncab. org

Michael F. Easley, Governor

APPRAISAL BOARD MEMBERS

Henry E. Faircloth

Chairman . . . . . . . . . . . . . . . . . . . . . Salemburg

Earl M. Worsley, Jr.

Vice- Chairman . . . . . . . . . . . . . . . . Wilmington

Bart Bryson . . . . . . . . . . . . . . . . . Hendersonville

Charles K. Hinnant . . . . . . . . . . . . . . . . . . . Kenly

E. Ossie Smith . . . . . . . . . . . . . . . . . . . . . . Oxford

J. Vance Thompson . . . . . . . . . . . . . . . . . . . Elkin

Larry N. Wright . . . . . . . . . . . . . . . . . . . . Candler

STAFF

Philip W. Humphries, Executive Director

Roberta A. Ouellette, Legal Counsel

Matthew W. Green, Deputy Director

Donald T. Rodgers, Deputy Director

Donna K. Krites, Investigator

Preston “ Buddy” Tucker, Investigator

Kim N. Giannattasio, Administrative Assistant

Lynn White, Appraiser Secretary

Paula Ford, Appraiser Clerk

Christy Henson, Office Assistant

APPRAISER COUNT

( As of January 24, 2005)

Trainees . . . . . . . . . . . . . . . . . . . . . . . . . . . 1235

Licensed Residential . . . . . . . . . . . . . . . . . . . 388

Certified Residential . . . . . . . . . . . . . . . . . . 1837

Certified General . . . . . . . . . . . . . . . . . . . . . 935

Total Number . . . . . . . . . . . . . . . . . . . . . . 4395

APPRAISER

EXAMINATION RESULTS

July- December 2004

Examination Total Passed Failed

Trainee 207 148 59

Licensed Residential 32 29 3

Certified Residential 54 31 23

Certified General 14 5 9

Examinations are administered by a national testing

service. For information, please contact the North

Carolina Appraisal Board in writing at

P. O. Box 20500, Raleigh, NC 27619- 0500.

On February 20, 2004, the

Appraiser Qualifications Board of The

Appraisal Foundation adopted changes

to the Real Appraiser Qualification

Criteria that will become effective on

January 1, 2008. These changes repre-sent

the minimum national require-ments

that each state must implement

for individuals applying for a real estate

appraiser license or certification as of

January 1, 2008. The changes include

increased required education, which is

summarized as follows:

3

Important Changes To Appraiser Qualifications!!!

Current 1/ 1/ 08

Category Requirements Requirements 1/ 1/ 08 College- Level Course Requirements

License 90 Hours 150 Hours None

Certified Residential 120 Hours 200 Hours Twenty- one ( 21) semester credit hours covering the following

subject matter courses: English Composition; Principles of

Economics ( Micro or Macro); Finance; Algebra, Geometry or

higher mathematics; Statistics; Introduction to Computers- Word

Processing/ Spreadsheets; and Business or Real Estate Law. In

lieu of the required courses, an Associate degree will qualify.

Certified General 180 Hours 300 Hours Thirty ( 30) semester credit hours covering the following subject

matter courses: English Composition; Micro Economics; Macro

Economics; Finance; Algebra, Geometry or higher mathematics;

Statistics; Introduction to Computers – Word Processing/

Spreadsheets; Business or Real Estate Law; and two ( 2) elective

courses in accounting, geography; ag- economics; business man-agement;

or real estate. In lieu of the required courses, a

Bachelors degree will qualify.

The Appraiser Qualifications Board

( AQB) of the Appraisal Foundation has

adopted new standards for education

for appraisers effective January 1, 2008.

As of that date, applicants seeking to be

licensed or certified appraisers must

have substantially more education than

is currently required. Questions have

arisen regarding education obtained

before January 1, 2008.

There are two options for imple-mentation

of this change. The first

option, the “ drop dead’ or “ firm date”

option, requires that before any license

or certificate can be issued on or after

January 1, 2008, the applicant must

meet the new education requirement.

The second option, the “ segmented”

option, breaks down certification into

three components: education, experi-ence,

and examination.

The North Carolina Appraisal

Board has adopted the segmented

option in North Carolina.

Under the segmented option, an

applicant must meet the criteria in

effect at the time the segment is com-pleted,

not the criteria in effect when

the application is filed or when the

license or certificate is issued. For

example, if a state- certified residential

appraiser currently desires to upgrade

to state- certified general, he or she must

complete an additional 60 hours of edu-cation,

consisting of G- 2 and G- 3, and

pass the examination. Under the seg-mented

approach, if the appraiser takes

the additional 60 hours before January

1, 2008, he or she does not have to com-ply

with the new 2008 educational

requirement.

The examination to become a

licensed or certified appraiser will be

changed effective January 1, 2008. If an

applicant completes his or her educa-tion

prior to January 1, 2008 and files an

application with the Board, the old

examination can be taken up to and

including December 31, 2007. If the

applicant does not pass the examina-tion

before January 1, 2008, the appli-cant

will have to take and pass the new

examination. 

Segmented Option For 2008 Appraiser

Education Changes

2005

Board Meeting Dates

January 18- 19

February 15- 16

March 15- 16

April 19- 20

May 17- 18

June 21- 22

July 19- 20

August 16- 17

September 20- 21

October 18- 19

November 15- 16

December 13- 14

The Office of the Commissioner of

Banks ( OCOB) provided the following

guidance on their agency’s procedures

for handling unpaid appraisal

complaints.

The following provisions of the

Mortgage Lending Act require brokers

and lenders to promptly pay, when due,

fees for appraisals they requested be

done. This same statute also prohibits

them from attempting to inappropriately

direct an appraiser in the performance

of his/ her job.

§ 53- 243.11. Prohibited activities.

In addition to the activities prohibit-ed

under other provisions of this

Article, it shall be unlawful for any per-son

in the course of any mortgage loan

transaction:

( 9) To fail promptly to pay when

due reasonable fees to a licensed ap-praiser

for appraisal services that are:

a. Requested from the appraiser in

writing by the mortgage broker or

mortgage banker or an employee of

the mortgage broker or mortgage

banker; and

b. Performed by the appraiser in

connection with the origination or

closing of a mortgage loan for a cus-tomer

or the mortgage broker or

mortgage banker.

( 11) To influence or attempt to influ-ence

through coercion, extortion, or

bribery, the development, reporting,

result, or review of a real estate ap-praisal

sought in connection with a

mortgage loan. Nothing in this subdivi-sion

shall be construed to prohibit a

mortgage broker or mortgage banker

from asking the appraiser to do one or

more of the following:

a. Consider additional appropriate

property information.

b. Provide further detail, substan-tiation,

or explanation for the

appraiser’s value conclusion.

c. Correct errors in the appraisal

report.

If a licensed broker or lender en-gages

in these prohibited activities, they

are subject to penalties or loss of license

under the Mortgage Lending Act.

Unpaid appraisal complaints are

processed by the Consumer Assistance

Group if at least ninety days have

passed from the date the fee was due

( most often near or at closing) and sup-portive

documentation is included i. e.,

the appraisal request form, past due

invoice, any related written contracts,

and evidence of collection attempts. We

will not reject any complaint filed soon-er

than this, but will ( i) hold it as “ pend-ing”

and ( ii) generate a response letter

addressed to the complaining appraiser

requiring the complainant to contact us

again at or after the 91st day if he or she

still hasn’t been paid. We expect the

appraiser to have exhausted all reason-able

means of collecting the outstanding

balance before submitting a complaint

to our office. Our office will not under-take

to adjudicate disputes between an

appraiser and lender/ broker. One way

to ensure that no facts are in dispute is

to obtain a judgment against the lender/

broker prior to submitting a complaint

to this office.

The OCOB advises appraisers to

use its website www. nccob. com to veri-fy

their client is licensed as a mortgage

lender/ broker before submitting a com-plaint.

Real estate and property man-agement

companies, national banks,

federally chartered thrifts, credit

unions, and certain entities of those

wholly owned subsidiaries are not

required to be licensed by the OCOB;

thus, the OCOB has limited jurisdiction

over them.

Once a complaint has been filed

with supporting documentation, the

Consumer Assistance Group sends a let-ter

to the respondent requesting a writ-ten

response within three weeks. Upon

receipt of the response, it is reviewed to

determine if the complaint has been

resolved or if continued investigation is

needed. As stated, failure to follow the

law may have serious consequences for

the lender/ broker; however, this office

does not view itself as a collection agen-cy

for appraisers. Appraisers need to

take some responsibility to check out

the clients and discontinue working for

them if not paid in a timely manner. 

4

Information from the Office of the Commissioner

of Banks for Real Estate Appraisers

RULEMAKING

IN PROGRESS

The Appraisal Board has be-gun

the process of changing

some of its rules. The pro-posed

text of the rules will be

published in the March 15,

2005 edition of the North

Carolina Register, which

can be viewed on line at

http:// www. ncoah. com/ rules/

register/. A public hearing

will be scheduled for some

time after that date. Check

the Board’s website for up- to-date

information.

In Memory

Pioneer member of the

North Carolina Appraisal Board,

William G. Brown,

passed away July 9, 2004.

Mr. Brown served a

three- year term beginning

in 1991 after appointment by

former Governor Jim Martin.

Adopted December 14, 2004

Many appraisals require the ap-praiser

to measure structures, calculate

areas and report the results. These

actions are an important component in

development of the cost, sales and

income approaches to value. Many

provisions of the Uniform Standards

of Professional Appraisal Practice

( USPAP) apply to measurement, area

calculation and description of property

improvements, including the ETHICS,

COMPETENCY, JURISDICTIONAL EX-CEPTION,

and SUPPLEMENTAL STAND-ARDS

RULES, as well as Standards

Rules 1- 1( a), ( b) and ( c), 1- 2( e)( i), 2- 1( a)

and ( b), and 2- 3.

The appraiser’s objective must be

to measure accurately, calculate compe-tently,

and describe the various areas of

an improvement in a manner that is not

misleading and facilitates understand-ing

of the property. The North Carolina

Appraisal Board recognizes that assign-ments

from various clients and for vari-ous

purposes may require adherence to

specific supplemental standards for

measurement, calculation and descrip-tion.

Appraisers may need to utilize,

among others, supplemental standards

imposed by courts, secondary mortgage

market or mortgage guaranty agencies,

or other governmental agencies.

No one scheme for measuring, cal-culating

areas and describing improve-ments

can perfectly address all the var-ied

designs and construction types

found in North Carolina real estate. For

each method, exceptions are easily

identified. No one standard or method-ology

can measure market reaction.

Thus, responsibility lies with appraisers

to engage their experience and judg-ment

so as to apply supplemental stan-dards

and methodologies relating to

square footage in a manner that is not

misleading and does not conflict with

the Uniform Standards of Professional

Appraisal Practice.

The North Carolina Appraisal

Board recognizes, but does not require

adherence to, ANSI Standard Z765- 2003,

titled “ American National Standard for

Single- Family Residential Buildings”,

“ Square Footage- Method for Calculat-ing.”

In addition, the Appraisal Board

recognizes, but does not require adher-ence

to, the Residential Square Footage

Guidelines published by the North

Carolina Real Estate Commission

( known as the “ yellow book”). The

Appraisal Board considers that using

either of the above standards as

guidelines for measuring and calcu-lating

areas is appropriate appraisal

methodology.

In certain assignments the apprais-er

may be required to rely on subject

property measurements, calculations

and descriptions supplied by clients, or

obtained from other sources such as

governmental agencies, builders, archi-tects,

engineers or marketing organiza-tions.

Such reliance should be ex-plained

in the scope of work of the

appraisal. When the appraiser relies on

data developed by others, this fact must

be clearly disclosed in the report.

The description of areas below

grade has been an item of controversy

for many years. Appraisers should exer-cise

care when describing areas which

may be characterized as basement, gar-den

level, semi- basement, walk out

basement, or the like. At times, addi-tional

photographs may be advisable to

assist the reader in understanding the

subject property. A description of the

level of finish may also assist recipients

of reports. These cautions have particu-lar

application to hillside and multi- level

structures.

Note: The ANSI Standard may be

ordered from:

NAHB Research Center, Inc.

400 Prince George’s Boulevard

Upper Marlboro, MD 20774- 8731

Inquiry Phone: ( 301) 249- 4000

Order Phone: 1- 800- 638- 8556

An online version is available at:

www. nahbrc. org/ bookstore

The Residential Square Footage Guide-lines

may be ordered from:

North Carolina Real Estate

Commission

PO Box 21500

Raleigh, NC 27619

( 919) 875- 3700

An online version is available at:

http:// www. ncrec. state. nc. us/ 

5

Appraisal Board Guidelines on Measurement,

Calculation and Reporting of Square Footage of

Residential Improvements to Real Estate

RENEWAL NOTICES

The Appraisal Board will mail renewal notices to

licensees in early May. This will be the only renew-al

notification appraisers will receive from the

Board’s office. Renewal fees and forms must be

submitted by June 30th to avoid late fees.

Who is my client? What are my obliga-tions

to my client? When do those obliga-tions

end? Can my client have me reassign

the report to others? Can I appraise the

same property for a different client? What if

the lender hires me but the homeowner

pays my fee at the door? These are some of

the many questions we receive regarding the

appraiser- client relationship.

Question 1. I recently performed an

appraisal on a subject property for a lender,

and now a mortgage broker has contacted

me to ask me if I can transfer the report to

him. He wants to have a different lender’s

name placed in the client line. He says he

has the permission of the first lender for me

to do this. Is this okay under USPAP?

Answer: No. Once a report has been

prepared for a named client, the apprais-er

cannot readdress or transfer the report

to another party. Simply changing the

client name on the report cannot change

or replace the original appraiser- client

relationship that was established with the

first client. See Advisory Opinion 26 for

more information.

Question 2. I know that I cannot

transfer a report from one client to another,

but I get calls all the time asking me to do

this. Is there any way I can accept the assign-ment

and comply with USPAP?

Answer: Yes. The appraiser can con-sider

the request a new assignment and es-tablish

a new appraiser- client relationship

with the second client. See Advisory Opin-ion

27 for more information.

Question 3. I recently performed an

appraisal on a subject property and a

new lender contacted me to request a sep-arate

but complete appraisal on the same

property. Can I do this new assignment?

Answer: Yes. As long as the ap-praiser

does not use any confidential infor-mation

given to him or her by the first client,

the appraiser can accept an assignment to

appraise the same property for a different

client. See Advisory Opinion 27 for more

information.

Question 4. The lender hired me to

do an appraisal, and told me to collect at

the door. The homeowners paid my fee,

and now they want a copy of the report.

What can I do?

Answer: USPAP defines the client as

“ the party or parties who engage an apprais-er

( by employment or by contract) in a spe-cific

assignment”. The determining factor is

not who pays for the appraisal or how it is

paid, but who contacted the appraiser in the

first place and placed the appraisal order.

For a federally- related transaction, federal

law requires the lender to be the one to

engage the appraiser’s services. In many, if

not most cases, the homeowner pays for the

appraisal either directly to the appraiser or

indirectly through the lender, thus payment

for services is not the determining factor. In

the above scenario, it is the lender who is

the client, not the homeowner, and the

appraiser cannot give a copy of the report to

the homeowner without the lender’s

consent.

Lenders are required by federal law

( the Equal Credit Opportunity Act) to fur-nish

a copy of the appraisal to the borrower

if the borrower requests a copy in writing.

This applies to both consumer and business

loans for which real estate will be collateral.

If the homeowner wants a copy of the ap-praisal,

they can be told to contact the

lender directly or the appraiser can ask the

client for permission to send a copy.

Question 5. A mortgage broker

hires me to appraise a property. The bro-ker

asks that his name not be used as the

client, but that I instead identify the

client as a local lender on the written

appraisal report. The mortgage broker’s

name or relationship to the parties is not

to be mentioned in the report. Can I do

this?

Answer: Once an appraiser places a

client name on the appraisal report, that per-son

or company is the client, resulting in an

appraiser- client relationship. If a mortgage

broker wants an appraiser to perform an ap-praisal

on a property that will then be offered

to several lenders, the appraiser should not

submit an appraisal report naming anyone

other than the broker as the client. The

appraiser could state that intended users

include lending institutions, without naming

any one lender. If the appraiser does state a

client name in the appraisal report, the

appraiser cannot simply change the name of

the client and submit the appraisal to a new

lender ( See Question 1 above).

Question 6. What if it is the home-owner

who engages my services and

wants me to put a lender’s name on the

report as the client?

Answer: First of all, before the ap-praiser

accepts the assignment, the apprais-er

must disclose to the homeowner that a

lender or its agent is required to directly

engage the services of an appraiser in a fed-erally-

related transaction. The appraiser

should make it clear to the homeowner that

a lender may not accept the report even if he

states on the report that the lender is the

client. Also, the homeowner should be

informed that once the appraiser states in

the report the name of the client, the

appraiser cannot change the name of the

client on the report.

For more information on these and

other questions, see Advisory Opinions 26

and 27.

Analyzing and Reporting

of Exposure Time

Question 1. Why was language in

STATEMENT No. 6 related to the reporting of

exposure time deleted from USPAP?

Answer: The following passage,

The discussion of reasonable exposure

time should appear in an appropriate

section of the appraisal report, one that

presents the discussion and analysis of

market conditions, and also be refer-enced

at the statement of the value defi-nition

and at the value conclusion.

was deleted from STATEMENT No. 6

Reasonable Exposure Time in Real Property

and Personal Property Market Value Opinions

because:

6

Reissuing Or Assigning An Appraisal Report

USPAP

Questions &

Answers

• USPAP requires that each real property

and personal property appraisal report

contain sufficient information to enable the

intended users of the appraisal to under-stand

the report properly. Meeting this

requirement does not require the reporting

of exposure time in all assignments;

• The amount of detail in which exposure

time is reported should be determined

based on the intended user, the intended

use and the type and definition of value. It

should not be a “ one- size- fits- all” reporting

requirement for every appraisal assign-ment;

and

• The reporting requirement for all com-ments

related to the definition of value,

including exposure time, is incorporated

in the Comment to Standards Rules 2-

2( a)( v), 2- 2( b)( v), 8- 2( a)( v), and 8- 2( b)( v),

which states:

Stating the definition of value requires the

definition itself, an appropriate reference

to the source of the definition, and any

comments needed to clearly indicate to

the reader how the definition is being

applied. ( bold added for emphasis)

If disclosure of the exposure time is nec-essary

for intended users to understand

the report, this reporting requirement

necessitates inclusion of an appropriate

discussion.

Note: The deletion in STATEMENT No. 6

related to the reporting of exposure time

does not change the development require-ment

to analyze exposure time if the value

opinion to be developed is market value, i. e.,

Standards Rules 1- 2( c)( iv) and 7- 2( c)( iv).

Appraising Land

Question 2. I am appraising a prop-erty

improved with an apartment complex,

but have found that the land is zoned for

commercial use. My research indicates that

such commercial land would have a value

different from that of apartment land, but

still far less than the current total value of

the apartment complex.

According to USPAP, how should I value

the land?

Answer: USPAP does not dictate the

use of any particular theory or technique.

You may apply any method, as long as it is

recognized, applicable, and correctly

employed. SR 1- 1( a) only requires the

appraiser to correctly employ those recog-nized

methods and techniques that are neces-sary

to produce a credible appraisal.

Edits to the 2005 edition of USPAP re-sulted

in the elimination of language in the

Standards Rules that appeared to require a

particular theory.

Type and Definition of Value,

and Citation of Source

Question 3. USPAP requires appraisal

reports to identify the type and definition of

value and cite the source of the definition.

What is the “ type of value?” Why is this no

longer referred to as the “ purpose” of the

assignment? What sources can be used to

comply with the requirement to cite the

source of the definition of value?

Answer: STANDARDS 2, 6, 8 and 10

require that appraisal reports state the type

and definition of value and cite the source of

the definition. The exact wording varies by

reporting option.

Previously, the term “ purpose” in

USPAP was used to refer to several different

concepts, including the type and definition

of value. For the 2005 edition of USPAP, this

and other special meanings of this term

were eliminated to increase clarity. Where it

is now used “ purpose” will only convey the

standard dictionary meaning of the word.

The “ type of value” is the general class

or category of value. Examples include mar-ket

value or fair value.

The “ definition of value” provides a

specific description of the characteristics

and conditions of the type of value.

Examples include definitions provided on a

form report, in FIRREA, in U. S. accounting

regulations, and U. S. tax regulations.

USPAP does not provide any specific

definition of value or endorse any particular

source. Sources could include, for example,

a regulatory agency, a legal jurisdiction, an

engagement letter, or a textbook.

Reporting Use of Extraordinary

Assumptions and Hypothetical

Conditions

Question 4. What are the USPAP re-porting

requirements relating to the use of

extraordinary assumptions and hypothetical

conditions in an appraisal assignment?

Answer: The report must clearly dis-close

the use of extraordinary assumptions

and hypothetical conditions and notify

intended users that the extraordinary

assumptions and hypothetical conditions

might have affected the assignment results.

For example, Standards Rule 2- 1 ( c) states

that each written or oral real property

appraisal report must:

clearly and accurately disclose all assump-tions,

extraordinary assumptions, hypo-thetical

conditions, and limiting conditions

used in the assignment. ( bold added for

emphasis)

This requirement creates an obligation to dis-close

all extraordinary assumptions and hypo-thetical

conditions used in the assignment.

For example, Standards Rule 2- 2 ( a)( viii)

states that Self- Contained Appraisal Report

must, at a minimum:

( viii) clearly and conspicuously:

• state all extraordinary assumptions

and hypothetical conditions; and

• state that their use might have affect-ed

the assignment results; ( bold

added for emphasis)

This requirement directs the appraiser

to provide a clear and conspicuous state-ment

of the extraordinary assumptions and

hypothetical conditions. The form and loca-tion

of the statement is left to the discretion

of the appraiser, but it must be clear and

conspicuous to intended users.

The requirement further directs the

appraiser to provide notice to intended

users that the use of the extraordinary

assumptions and hypothetical conditions

might have affected the assignment results.

The appraiser is not required to report on

the impact of the extraordinary assumptions

and hypothetical conditions on assignment

results.

Note: The requirements for other report

types are similar. Neither appraiser is

required to have custody of the workfile.

However, an appraiser who does not have

custody must make appropriate arrange-ments

for retention, access, and retrieval.

For further information, regarding USPAP

Q& A, please contact: John S. Brenan,

Director of Research & Technical Issues, The

Appraisal Foundation, 1029 Vermont Avenue

NW, Suite 900, Washington, DC 20005. ( 202)

624- 3044 ( 202) 347- 7727, fax. 

7

8

A. JOSH TUNNELL, JR.

P. O. Box 554

Elizabeth City, NC 27907- 0554 ( 252) 335- 5219

National USPAP Update ( 7/ 7)

Working with Underwriters ( 7/ 7)

ALAMANCE COMMUNITY COLLEGE

P. O. Box 8000

Graham, NC 27253 ( 336) 578- 2002

Appraising Small Residential Income Properties ( 10/ 10)

Intro to Commercial Real Estate ( 4/ 4)

New Exstg Residential Codes Affecting RE Appr ( 10/ 10)

Real Estate Finance ( 4/ 4)

ALLEN TATE SCHOOL OF REAL ESTATE –

A DAN MOHR SCHOOL

6632 Fairview Road

Charlotte, NC 28210 ( 704) 362- 2296

Mfg/ Mod Homes & Real Property ( 7/ 7)

National USPAP Update ( 7/ 7)

New Rules & Regs FHA/ HUD ( 14/ 14)

Residential Construction Seminar ( 14/ 14)

Staying Out of Trouble – NC Ap ( 7/ 7)

ALLSTATE HOME INSPECTION

TRAINING INSTITUTE

Route 1, Box 130

Randolph Center, VT 05061 ( 800) 245- 9932

Environmental Awareness Seminar ( 8/ 8)

FHA Test Preparation ( 8/ 8)

Introduction to Home Inspection ( 8/ 8)

USPAP Refresher ( 8/ 8)

AMERICAN SCHOOL OF REAL

ESTATE APPRAISERS

P. O. Box 275

Cherryville, NC 28021 ( 704) 435- 1111

National USPAP Update ( 7/ 7)

Value? What Value? ( 4/ 4)

AM SOC FARM MANGRS & RURAL

APPRAISERS

950 S. Cherry Street, Suite 508

Denver, CO 80222 ( 303) 758- 3513

A- 12 Part 1 ASFMRA Code of Ethics ( 7/ 7)

A- 12 ( III) National USPAP Update ( 7/ 7)

Eminent Domain A- 25 ( 19/ 19)

Highest & Best Use A- 29 ( 15/ 15)

Advanced Appraisal Review A- 35 ( 49/ 30)

Advanced Resource Appraisal A- 34 ( 30/ 30)

Appraising Agricultural Land in Transition ( 8/ 8)

Appraising Broiler Grower Far ( 16/ 16)

Appraising Rural Residential Properties ( 15/ 15)

Conservation Easements ( 16/ 14)

Rural Business Valuation ( 16/ 16)

Yllw Bk – Uniform Standards for Fed Land Acq ( 8/ 8)

AM SOCIETY OF APPRAISERS NC CHAPTER

159 Lake Ellen Drive

Chapel Hill, NC 27514 ( 919) 942- 2544

Appr Sm Residential Income Properties ( 7/ 7)

National USPAP Update ( 7/ 7)

The Appraisal of Small Subdivisions ( 7/ 7)

Using Marshall & Switf/ Res Prop ( 7/ 7)

APPRAISAL ACADEMY ( THE)

3802 N. University Street

Peoria, IL 61614 ( 309) 681- 8100

Limited Res Appr Assignment ( 4/ 4)

O/ L Fundamentals of Small Business Valuation ( 7/ 7)

O/ L Limiting Appraiser Liability Exposure ( 7/ 7)

O/ L Manufactured Home Appraising ( 7/ 7)

O/ L Tough Residential Appraisal Assignment ( 4/ 4)

APPRAISAL INSTITUTE

550 W. Van Buren Street, Suite 1000

Chicago, IL 60607 ( 312) 335- 4236

320 General Applications ( 39/ 30)

330 Apartment Appr: Cncpts & ( 14/ 14)

400 National USPAP Update ( 7/ 7)

410 National USPAP ( 15/ 16)

420 Business Practice and Ethic ( 7/ 7)

500 Adv Res Form & Narrative ( 40/ 30)

520 High & Best Use & Mkt Anal ( 40/ 30)

530 Adv Sales Comp & Cost Appr ( 40/ 30)

600 Inc Val of Sm Mixed- Use Prop ( 15/ 15)

610 Cst Val of Sm Mixed- Use Prop ( 15/ 15)

620 Sls Comp Val Sm Mixed- Use ( 15/ 15)

700 Appraisers as Expert Witness ( 15/ 15)

705 Litigation Appr: Spclzd Topics & ( 16/ 16)

710 Condemnation Appr: Basic Prin & ( 15/ 15)

720 Condemnation Appr: Adv Topics & ( 15/ 15)

800 Separating Real & Personal ( 15/ 15)

810 Computer- Enhanced Cash F ( 15/ 15)

Analyzing Commercial Lease c ( 7/ 7)

Appr Consulting: A Solutions Appr ( 7/ 7)

Appraising Manufactured Housing ( 7/ 7)

Appraising the Tough Ones ( 7/ 7)

Avoiding Liability as a Residential Appraiser ( 7/ 7)

Case Studies in Limited Partnership &

Common Tenancy Valuation ( 14/ 14)

Energy Prfrmnc & Commc Prpr ( 7/ 7)

Gen Demo Appr Rpt Writing Sem ( 7/ 7)

Intro to Income Capitalization ( 7/ 7)

Mathematically Modeling Real Est ( 7/ 7)

O/ L Eminent Domain & Condemnation ( 7/ 7)

O/ L 320: General Applications ( 7/ 7)

O/ L Course 400: 7- Hr National USPAP ( 7/ 7)

O/ L Course 420: Business Practices & Ethics ( 8/ 7)

O/ L Analyzing Distressed RE ( 4/ 4)

O/ L Analyzing Operating Expen ( 7/ 7)

O/ L Appraisal of Nursing Facilities ( 7/ 7)

O/ L Appraising from Blueprints ( 7/ 7)

O/ L Apartment Appraising, Concepts &

Applications ( 15/ 15)

O/ L Feasibility, Mkt Value, Investment ( 7/ 7)

O/ L Internet Search Strategies for R ( 7/ 7)

O/ L Intro to GIS Apps for RE App ( 7/ 7)

O/ L Overview of RE Appr Princip ( 7/ 7)

O/ L Res Design & Functional Uti ( 7/ 7)

O/ L Res Property Construction & In ( 7/ 7)

O/ L Sm Hotel/ Motel Val: Lmtd S ( 7/ 7)

O/ L The Cost Approach to Commercial Appraising ( 7/ 7)

O/ L The FHA and the Appr Proce ( 7/ 7)

O/ L Using Your HP12C Financial ( 7/ 7)

O/ L Val of Detrimental Conditions ( 7/ 7)

Rd Less Traveled: Spcl Purpose Pr ( 7/ 7

Res Demo Appr Report Writing S ( 7/ 7)

Scope of Work: Expanding Range ( 7/ 7)

APPRAISAL INSTITUTE, NC CHAPTER

2306 W. Meadowview Road, Suite 101

Greensboro, NC 27407 ( 336) 297- 9511

Appraising in NC ( 4/ 4)

Evaluating Residential Construction ( 8/ 8)

New Tech for RE Appr: Cool Tools ( 4/ 4)

Rates & Ratios: Making Sense of GIM’s, OAR’s & DCF’s

APPRAISAL. COM

334 Harris Hill Road

Buffalo, NY 14221 ( 716) 633- 2428

NOVA for Appraisers ( 7/ 7)

ASHEVILLE- BUNCOMBE TECH CC

340 Victoria Road

Asheville, NC 28801 ( 828) 254- 1921

National USPAP Update ( 7/ 7)

PDH RE - Basic Surveying ( 5/ 5)

The UDO: Regulating RE Use & Dev ( 4/ 4)

BILL GALLAGHER SCHOOL OF REAL ESTATE

380 Knollwood Street, Suite 420

Winston- Salem, NC 28103 ( 888) 778- 1245

Intro to Residential RE Investment ( 7/ 7)

The Appraiser As An Expert Witness ( 7/ 7)

BOB IPOCK & ASSOCIATES, INC.

1218 Heatherloch

Gastonia, NC 28054 ( 704) 807- 1985

Appraising In NC ( 4/ 4)

National USPAP Update ( 8/ 8)

BRUNSWICK COMMUNITY COLLEGE

P. O. Box 30

Supply, NC 28462 ( 910) 754- 6900

Manufactured Homes ( 7/ 7)

CARTERET COMMUNITY COLLEGE

3505 Arendell Street

Morehead City, NC 28557 ( 252) 222- 6127

Mold Inspectionas & Remediation ( 4/ 4)

CCIM INSTITUTE

430 N Michigan Avenue, 8th Floor

Chicago, IL 60611- 4092 ( 312) 321- 4473

C1101 Fin Analysis Comm Invest ( 30/ 30)

C1102 Market Analysis Comm In ( 30/ 30)

C1103 User Decision Analysis Comm ( 30/ 30)

C1104 Invest Analysis Comm Inv ( 30/ 30)

Introduction to Com Investment RE An ( 12/ 12)

CLARK REALTY SEMINARS

P. O. Box 61083

Virginia Beach, VA 23462 ( 888) 316- 7182

National USPAP Update ( 7/ 7)

RE Environmental Concerns ( 7/ 7)

CLE INTERNATIONAL

1620 Gaylord Street

Denver, CO 80206 ( 303) 377- 6600

Eminent Domain ( 13/ 13)

DAN MOHR RE SCHOOLS

1400 Battleground Avenue, Suite 150

Greensboro, NC 27408 ( 800) 639- 9813

Depreciation Workshop ( 7/ 7)

Environmental Hazards- Residential Prop ( 7/ 7)

Extraction of Data from Market Res ( 7/ 7)

HP 12C Course ( 7/ 7)

Intro to Residential Construction ( 30/ 30)

Mfg/ Modular Homes & Real Property Appr Review ( 7/ 7)

National USPAP Update ( 7/ 7)

Res Appr & Conventional Underwriting Guide ( 7/ 7)

Residential Construction Cost ( 7/ 7)

Residential Construction Seminar ( 14/ 14)

Rules & Regs FHA/ HUD Requirements ( 14/ 14)

Staying Out of Trouble – NC Ap ( 7/ 7)

The Narrative Appraisal Report ( 7/ 7)

Using Streamlined Appraisal Report Forms ( 7/ 7)

DUKE UNIVERSITY

A108B LSRC/ Box 90328

Durham, NC 27708 ( 919) 613- 8082

What’s it Worth - Forest Appraisal ( 36/ 30)

DYNASTY SCHOOL

2373 S. Hacienda Boulevard

Hacienda Heights, CA 91745 ( 800) 888- 8827

National USPAP Update ( 7/ 7)

EDGECOMBE CC

225 Tarboro Street

Rocky Mount, NC 27801 ( 252) 446- 0436

Appraising Manufactured, Modular & Mobile ( A) ( 7/ 7)

Appraising Manufactured, Modular & Mobile ( B) ( 7/ 7)

Cost Appr Marshall & Swift Res & Co ( 7/ 7)

Income Capitalization ( 14/ 14)

Income Capitalization ( A) ( 7/ 7)

Income Capitalization ( B) ( 7/ 7)

Manufactured, Modular & Mobile ( 4/ 4)

Narrative Appraisal Report Writing ( 14/ 14)

National USPAP Update ( 7/ 7)

Pricing Small Income Properties ( 4/ 4)

Principles & Techniques Val 2- 4 Units Res Prop ( 14/ 14)

Real Estate Finance for Appraisers ( 14/ 14)

Rural Valuation Seminar ( 14/ 14)

Single Family Residential Appraisal ( 14/ 14)

Standards of Professional Practice ( 15/ 15)

USPAP & NC Board Rules & Regs For ( 15/ 15)

ELLIOTT & COMPANY APPRAISES

3316- A Battleground Avenue

Greensboro, NC 27410 ( 336) 854- 3075

Nuts & Bolts of Appraising ( 14/ 14)

EMPLOYEE RELOCATION COUNCIL

1717 Pennsylvania Avenue NW # 800

Washington, DC 20006- 4665 ( 202) 862- 4236

Relocation Appr Training Prog ( 6/ 6)

Approved Continuing Education Courses

( As of January 5, 2005)

Listed below are the courses approved for appraiser continuing education credit as of date shown above. Course sponsors are listed alphabetically

with their approved courses. Shown parenthetically beside each course title are sets of numbers [ for example: ( 15/ 10)]. The first number indicates the

number of actual classroom hours and the second number indicates the number of approved continuing education credit hours. You must contact the

course sponsor at the address or telephone number provided to obtain information regarding course schedules and locations.

FOUNDATION OF RE APPRAISERS

2140 W. Chapman Avenue # 107

Orange, CA 92868 ( 714) 935- 1161

National USPAP Update ( 7/ 7)

HIGNITE TRAINING SERVICE

208 Gloria Street

Greenville, NC 27858 ( 252) 756- 7288

Appraisal FAQ’s ( 14/ 14)

National USPAP Update ( 7/ 7)

The Review and The Reviewer ( 7/ 7)

INSTITUTE OF GOVERNMENT, UNC CHAPEL

HILL

Knapp Building, CB# 3330

Chapel Hill, NC 27514 ( 919) 966- 4157

Appr of Commercial Prop in a Declining Market ( 7.5/ 7)

Appraisal of Land ( 30/ 30)

Assessment Administration ( 30/ 7)

Fundamentals of Assessment Ratio Studies ( 16/ 16)

Fundamentals of Mass Appraisals ( 30/ 30)

IAAO 101: Fundamentals of Real Prop ( 30/ 30)

IAAO 102: Inc Approach to Valuation ( 30/ 30)

Income Approach to Valuation II ( 30/ 30)

Marshall & Swift – Commercial ( 13/ 13)

Principles & Techniques of Cadestral Mapping ( 30/ 30)

Residential Modeling Concepts ( 30/ 30)

INTERNATIONAL RIGHT OF WAY

ASSOCIATION

19750 S. Vermont Avenue, Suite 220

Torrance, CA 90502- 1144 ( 213) 538- 0233

103 Ethics & Right of Way Profession ( 8/ 8)

403 Easement Valuation ( 8/ 8)

801 Land Titles ( 10/ 10)

JOHNSTON CC

P. O. Box 2350

Smithfield, NC 27577 ( 919) 934- 3051

Appraisal 2004 ( 7/ 7)

I’ve Got This House ( 7/ 7)

Manufactured Homes ( 7/ 7)

National USPAP Update ( 7/ 7)

JVI

222 South Westmonte Drive, Suite 206

Altamonte Springs, FL 32714 ( 407) 774- 3344

Appraising REO Properties

LENOIR CC

P. O. Box 188

Kinston, NC 28502- 9946 ( 252) 527- 6223

Appraising Manufactured, Modular, & Mobile ( A) ( 7/ 7)

Appraising Manufactured, Modular, & Mobile ( B) ( 7/ 7)

Challenging the Appraisal ( 4/ 4)

Cost Approach Marshall & Swift ( 7/ 7)

Income Capitalization ( A) ( 7/ 7)

Income Capitalization ( B) ( 7/ 7)

Maximizing Value ( 4/ 4)

National USPAP Update ( 7/ 7)

NC Rules & Regulation Update ( 7/ 7)

Pricing Complex Properties ( 4/ 4)

Pricing Small Income Properties ( 4/ 4)

Principles/ Techniques Val 2- 4 Unit Residential ( 14/ 14)

USPAP & NC Rules & Regulations for App ( 15/ 15)

M CURTIS WEST

P. O. Box 947

Zebulon, NC 27597 ( 919) 217- 8040

USPAP 2002/ 2003 ( 7/ 7)

MCKISSOCK APPRAISAL SCHOOLS

P. O. Box 1673

Warren, PA 26365 ( 814) 723- 6979

2- 4 Family Finesse: Appraising Multi- Family

Properties ( 7/ 7)

Appr For the Secndary Market ( 7/ 7)

Appraising High Value Residential Properties ( 7/ 7)

Appraisal Review ( 7/ 7)

Appraiser Liability ( 7/ 7)

Appraising the Oddball ( 7/ 7)

Disclosures and Disclaimers ( 7/ 7)

Does My Report Comply with USPAP? ( 7/ 7)

Legal Issues for Appraisers ( 7/ 7)

Lmtd Apprs & the Scope of Wk D ( 7/ 7)

Made in America: Apprising Factory Built Housing ( 7/ 7)

National USPAP Update ( 7/ 7)

National USPAP ( 15/ 15)

O/ L Appr for the Secondary Market ( 7/ 7)

O/ L Appraiser Liability ( 7/ 7)

O/ L Construction Details & Trends ( 7/ 7)

O/ L Factory- Built Housing ( 7/ 7)

RE Damages: Assessment & Testi ( 7/ 7)

Real Estate Fraud & Appraiser’s Role ( 7/ 7)

Residential Construction ( 7/ 7)

MEL BLACK

P. O. Box 459

Cherryville, NC 28021 ( 704) 435- 0753

2- 4 Family Properties ( 7/ 7)

Board Rules and Laws ( 7/ 7)

National USPAP Update ( 7/ 7)

Trainees & Supervisors ( 7/ 7)

Value? What Value ( 4/ 4)

MINGLE SCHOOL OF REAL ESTATE

P. O. Box 35511

Charlotte, NC 28235 ( 704) 372- 2984

Is This A Commercial Appraisal? ( 4/ 4)

NC RE Appr Act & Appraisal Board Rules ( 4/ 4)

Role of the Supervisory Appraiser ( 4/ 4)

MOULTRIE B. WATTS

P. O. Box 447

Cary, NC 27512 ( 919) 851- 2100

National USPAP Update ( 7/ 7)

NAIFA

7501 Murdoch Avenue

St. Louis, MO 63119 ( 314) 781- 6688

1.2 Dfndng, Dcmntng & Spprtng ( 4/ 4)

1.4B Commercial Report Writing ( 15/ 15)

11.8A Calculating Gross Living Area Using ( 7/ 7)

15.0 Intro to Automated Valuation Model Tech

Seminar ( 4/ 4)

15.1 Environmental Concerns Seminar ( 4/ 4)

16.0A Understanding Legal Des ( 4/ 4)

16.2C Appraisal of Foreclosure ( 4/ 4)

2.0 Financial Analysis Inc Property ( 15/ 15)

4.7B Preparing Your Listing for FHA ( 4/ 4)

5.0 National USPAP Update ( 7/ 7)

5.3 Scope of Work ( 8/ 8)

9.7 Fannie Mae Updated Prop & A ( 8/ 8)

9.7A Fannie Mae Update ( 4/ 4)

99.1A Fraud, Flip and the FBI ( 4/ 4)

99.7A Blue Print Reading Seminar ( 4/ 4)

Mobile/ Manufactured Home Re ( 8/ 8)

NC RE EDUCATION FOUNDATION ( NCAR)

4511 Weybridge Lane

Greensboro, NC 27407 ( 800) 443- 9956

Legal Issues in Real Estate ( 7/ 7)

National USPAP Update ( 7/ 7)

Residential Construction ( 7/ 7)

Residential Real Estate as an Investment ( 7/ 7)

Tax Planning for the Real Estate Agent ( 7/ 7)

NCDOT

1605 Westbrook Plaza Drive, Suite 301

Winston- Salem, NC 27103 ( 336) 760- 1925

Apply Marshall & Swift and Valuing Medical/

Assisted Living Facilities ( 7/ 7)

Appr Board Speaks to You/ Ct Rm Eti ( 7/ 7)

Appraisal of Residue & Special Use Properties ( 7/ 7)

National USPAP Update ( 7/ 7)

NC Rules & Regulations – USPAP Update/ Avd Ltg ( 7/ 7)

Revisiting the Cost Approach & Recurring Errors ( 7/ 7)

Sales Comp Grid/ Appr of Trans ( 7/ 7)

Trending Via Demographics/ Appraising Land for

Development Potential ( 7/ 7)

NCPAC

2801- 3V Ward Boulevard

Wilson, NC 27893 ( 252) 291- 1200

Changes in the Appraisal Profession ( 4/ 4)

USPAP Instructor Recertification ( 7/ 7)

NCSU FORESTRY ED OUTREACH PROGRAM

Campus Box 8003

Raleigh, NC 27695 ( 919) 515- 3184

Accurate Forest Inventory ( 16/ 16)

Applied Intermediate GIS – Foresters ( 15/ 15)

Conservation Design: Greener Comm ( 14/ 7)

Dlntn of Pdmnt & Cstl Pln Jrsd ( 30/ 30)

Introduction to Applied GIS – Foresters ( 15/ 15)

Introduction to Applied GPS – Foresters ( 13/ 13)

NCSU SOIL SCIENCE DEPT

Campus Box 7619

Raleigh, NC 27695 ( 919) 513- 1678

Basics of On- Site Sewage ( 7/ 7)

Getting the Dirt on Soils ( 7/ 7)

On- Site System Tech Refresh ( 7/ 7)

Septic System Options for Diff ( 14/ 14)

Wastewater in the Environment ( 7/ 7)

Wells & Septic Systems ( 4/ 4)

REALETECH. COM

4819 Drummond Drive

Wilmington, NC 28409 ( 910) 352- 9693

Appraisers and Residential Reviews ( 7/ 7)

Fannie Mae Guidelines for Appraises ( 7/ 7)

Introduction to Environmental Risk Screenings ( 7/ 7)

National USPAP Update ( 7/ 7)

What the NC Appraisal Board Expects from You ( 4/ 4)

STACEY P. ANFINDSEN

1145- E Executive Circle

Cary, NC 27511 ( 919) 460- 7993

Appraisal Process and Val of Residential Prop ( 4/ 4)

National USPAP Update ( 7/ 7)

Smry Frm Rptng & Cmplnce W U ( 4/ 4)

SURRY CC

P. O. Box 304

Dobson, NC 27017 ( 910) 386- 8121

Fannie Mae Updated Prop & App ( 8/ 8)

Home Inspections & Common De ( 4/ 4)

Is the Comparable Comparable ( 8/ 8)

Mobile Mfg Homes & Types of M ( 4/ 4)

National USPAP Update ( 7/ 7)

Reviewing a Residential Appraisal ( 8/ 8)

Testing Highest & Best Use ( 8/ 8)

T H HUNTER & ASSOCIATES, INC.

1908 Sterling Road

Charlotte, NC 28209 ( 704) 372- 5855

Appraiser as an Expert Witness ( 7/ 7)

Intro to Res RE Investment ( 7/ 7)

Land, Res & Com Investment St ( 7/ 7)

Understanding Appraiser Liability ( 7/ 7)

TOM DANIEL SCHOOL OF RE

2932 Breezewood Avenue, Suite 110

Fayetteville, NC 28303 ( 800) 865- 8301

Property Disclosure: Reducing Risks ( 4/ 4)

TRIANGLE APPRAISAL & REAL

ESTATE SCHOOL

2801- 3V Ward Boulevard

Wilson, NC 27693 ( 252) 291- 1200

or ( 919) 971- 1887

Manufactured Home Construction ( 7/ 7)

National USPAP Update ( 7/ 7)

New FNMA Forms ( 7/ 7)

North Carolina Rules ( 7/ 7)

WENDELL HAHN & ASSOCIATES

P. O. Box 245

Columbia, SC 29250 ( 803) 779- 4721

Appraisal Update ( 7/ 7)

FHA Guidelines 2001 ( 7/ 7)

National USPAP Update ( 7/ 7)

Property Inspection for the App ( 7/ 7)

The Modern Appraisal Office – Part I ( 7/ 7)

The Modern Appraisal Office – Part II ( 7/ 7)

Tools or Toys – Technology For ( 7/ 7)

WESTERN PIEDMOND COMMUNITY COLLEGE

1001 Burkemont Avenue

Morganton, NC 28655 ( 828) 438- 6104

Appraising Manufactured, Modular & Mobile ( 14/ 14)

Income Capitalization ( A) ( 7/ 7)

Income Capitalization ( B) ( 7/ 7)

Maximizing Value ( 4/ 4)

Manufactured, Modular & Mobile ( 7/ 7)

National USPAP Update Course ( 7/ 7)

Pricing Complex Properties ( 4/ 4)

USPAP & NC Rules and Regulations for App ( 15/ 15)

WORLD SAVINGS

4101 Wiseman Boulevard

San Antonio, TX 78251 ( 210) 543- 5464

Appraisal Review 2 ( 8/ 8)

Appraising in a Changing Market ( 4/ 4)

National USPAP Update ( 7/ 7)

9

Approved Continuing Education Courses

10

Appraisers obtain comparable sales

information from listing services, tax

records, real estate agents and others in

performing appraisals. For the most

part, that information is correct and reli-able.

Sometimes, however, the informa-tion

is incorrect and relying upon it will

result in a misleading appraisal.

USPAP Standards Rule 1- 4 ( a)

requires that appraisers “ collect, verify,

and analyze such comparable sales data

as are available to indicate a value con-clusion.”

This is a three- step process.

First, you obtain the information from

your data source. Then you are

required to verify the information from

another source. Finally, you analyze all

the information you received.

For example, if you obtain compa-rable

sales information form MLS, you

then verify the information by calling

the listing or sales agent, the tax office,

or another source. If there is any dis-crepancy

between these two sources,

you must continue to research the sale

until you are confident that the informa-tion

you will use in your analysis is cor-rect.

This is especially important if you

receive verbal information, especially

from a homeowner.

You should also be careful to cor-rectly

identify both your data source

and verification source, and to keep in

your workfile a copy of the information

relied upon for the appraisal. For exam-ple,

if you use listing service data as

your data source and tax records as

your verification source, you should

have a copy of the listing service sheet

and tax record in your file. Sometimes

you may receive information orally,

such as from the listing broker over the

telephone. You should make a note for

the file of your conversation, including

the name and telephone number of the

source of information and the date, as

well as a summary of the information

received.

Verifying information is even more

important when you are performing an

appraisal outside your geographic area.

It is difficult to know who will give reli-able

data and who will not. Listing serv-ices

may use different ways to report

items such as square footage. Lack of

knowledge about a particular market

area does not relieve the appraiser of

responsibility for the misinformation in

the report, since the USPAP Com-petency

Provision makes it clear that

appraisers in an unfamiliar location

must spend sufficient time to under-stand

the nuances of the local market.

Verification of comparable sales

information for manufactured housing is

especially important. You must make

sure that the sale is not a land home

package, since a land home package has

not been exposed to the market and is

not an appropriate comparable. If you

obtain a HUD settlement on the sale of a

manufactured home, you should always

check public records such as the deed

office. If the tax stamps indicate a much

lower sales price than that on the HUD

statement, it is likely that the sale was

for the land only, and you are dealing

with a land home package and you can-not

use the sale. When you find a man-ufactured

home sale in a listing service,

you still must verify that it was not a

land home package. In addition, since

there are often financing considerations

and incentives involved in the sale of

manufactured homes, you must analyze

the data very carefully to make sure to

take these into account.

The question is often raised as to

whether it is ever appropriate to use a

stick- built home as a comparison sale

for a manufactured home. Generally

speaking, it usually is not appropriate to

do so. There may be occasions, howev-er,

where there are no sales that can

legitimately be used, and stick built

homes that are similar to the subject are

all that are available. If such sales are

used, adjustments should be made for

all appropriate factors, especially quali-ty

of construction. The appraiser must

note that the comparison sales are stick

built and must explain why they were

chosen as comps for a manufactured

home.

USPAP requires appraisers to main-tain

a copy of the workfile for every

appraisal assignment for at least five

years after preparation or two years after

court testimony, whichever period

expires last, thus it is important to keep

copies of all information and verification

in the file. Remember, the appraiser and

anyone else signing the report take full

responsibility for the data in the report,

and if the information source provides

inaccurate data, that fact does not ab-solve

the appraiser of responsibility. 

Verify Your Comparable Sales Information!

Continuing Education

REMINDER

Appraisers and trainees must have

28 hours of continuing education credit

in order to renew their licenses this year,

including the 7- hour National USPAP

Update course.

 If you took the 15- hour National

USPAP course between July 1, 2003

and December 31, 2004, the 15- hour

class will count towards the 7- hour

USPAP class requirement. If you take

the 15- hour class on or after January

1, 2005, you may still receive continu-ing

education credit, but you will still

have to take the 7- hour National

USPAP Update course in order to

renew your registration, license or

certificate.

 Appraisal Board rules allow you to

take up to 14 hours of the 28- hour

requirement as on- line courses. You

will not get continuing education cred-it

for any on- line courses that exceed

14 hours.

 No continuing education credit will be

carried over from the 2003- 2005 edu-cation

cycle into the 2005- 2007 cycle.



11

Ronald Best ( Cornelius)— By consent,

the Board suspended Mr. Best’s general cer-tification

for a period of six months. The

Board ordered Mr. Best to take a sales com-parison

course, and a course in appraiser lia-bility

or NC Board laws and rules by May 1,

2005. If he completes the courses by that

date, the suspension will be inactive. Mr.

Best also agrees that he will no longer super-vise

any trainees. The Board found that a

trainee working under the supervision of Mr.

Best appraised a manufactured home locat-ed

in Shelby, NC in November 2003, finding

an appraised value of $ 90,000. The trainee

did not sign the report, and Mr. Best signed

the report on the left side. He then checked

the “ Did not inspect” box on the right side.

Respondent noted in an addendum that the

trainee had provided significant professional

assistance, including inspecting and measur-ing

the subject property. The appraisal

report stated that subject was on a paved

road, and the photograph of the street in the

report shows a paved road with markings.

The subject is actually at the end of a long

unpaved, fair to poorly maintained gravel

road. The MLS sheet in the work file states

that the subject road is gravel. The sales

prices of the first and second comparable

sales could not be verified in the public

records. Mr. Best stated that there had been

no prior sales of his third comparable sale

that took place within one year of the

appraisal, but there had in fact been one sale

within that time period. The trainee

obtained his comparable sales information

from MLS but did not verify the data. There

were limited sales of homes in the subject

neighborhood that were listed on the local

MLS.

Dewayne Boyd ( Wake Forest)— By

consent, the Board suspended Mr. Boyd’s

residential certification for a period of 18

months effective November 1, 2004. Before

Mr. Boyd can renew his certification, he

must complete all required continuing edu-cation,

and must successfully complete a 7-

hour sales comparison class and a course in

appraiser liability. The Board found that Mr.

Boyd completed an appraisal on two prop-erties

located in Zebulon, NC in September

2002, indicating final values of $ 101,000 and

$ 86,000. A local realtor with knowledge of

the historical and current local real estate

market estimated that the property would

sell for no more than $ 80,000 and that the

other property would sell for no more than

$ 50,000. Mr. Boyd selected comparable sales

for his appraisals of both properties that

were superior in location, design and appeal

when compared to the subject properties.

The subject neighborhoods included a mix-ture

of single- family and 2- 4 family homes.

One of the subject properties had double-wide

and singlewide homes in the neighbor-hood.

None of those characteristics were

mentioned in Mr. Boyd’s appraisal reports.

Michael Casey ( Raleigh)— By con-sent,

the Board suspended Mr. Casey’s resi-dential

license for a period of thirty days,

beginning November 2004. Mr. Casey also

must successfully complete a course in

property inspection by December 31, 2004. If

he fails to do so, he will receive an addition-al

one- month suspension. The Board found

that Mr. Casey appraised a property located

in Raleigh, NC in May 2003, finding an

appraised value of $ 850,000. He reported

that the house contained 5,239, when it actu-ally

contained 3989 square feet. Mr. Casey

admits that he added 1,250 square feet of

unfinished second level area to the heated

square footage by mistake. This error was

caused by incorrectly inputting the 1,250

square foot unfinished attic information into

his software program. The value for the sub-ject

property would have been lower based

on the correct square footage of 3,989.

Tammy Childers ( Kings Mountain)—

By consent, the Board suspended Ms.

Childers’ trainee registration for a period of

one year. The first month of the suspension

will become active on September 1, 2004.

The remaining months are stayed until

December 1, 2004. Ms. Childers also agrees

to take two courses approved by the

Appraisal Board; a sales comparison course

and the 15- hour national USPAP course.

These courses must be completed by

December 1, 2004, or the remainder of the

suspension will become active. The Board

found that Ms. Childers, while working

under the supervision of a state- licensed

appraiser, appraised a 2120 square foot

home located in Monroe, NC in December

2003, finding an appraised value of $ 230,000.

Sales in the subject subdivision were all

smaller than the subject property, ranging

from 1143 to 1804 square feet, so Ms. Childers

chose sales from other subdivisions located

near the subject subdivision. Those sales

were all of similar size, and adjustments

were made for differences in age. The sales

were located in neighborhoods that were

superior to the subject neighborhood in

maintenance, appeal and quality, yet Ms.

Childers made no adjustments for those fac-tors.

The unadjusted sales prices of the com-parable

sales were $ 231,000, $ 235,000 and

$ 252,000. The “ customer estimated value”

on the appraisal order form was $ 220,000.

The appraisal was done for refinancing pur-poses,

but the loan did not close.

Corey Clark ( Charlotte)— By consent,

the Board suspended Mr. Clark’s trainee reg-istration

for a period of six months. The sus-pension

is stayed until November 1, 2004.

Mr. Clark must take R- 3 and a 14- hour course

in standards ( USPAP) by November 1, 2004.

Since he took the courses, the suspension is

inactive. The Board found that Mr. Clark,

while working under the supervision of a

state licensed appraiser, appraised a home

located in Kannapolis, NC in November

2001, finding an appraised value of $ 100,000.

The subject property is a 36- year- old 920

square foot ranch. Although Mr. Clark

described the house as of average quality

and condition, he used cost figures for a

good quality home. He gave the house an

effective age of 10 years. There was no men-tion

in the appraisal report of any upgrades

or renovations. Mr. Clark stated that the con-dition

of the comparable sales was also aver-age,

even though they were either new or

one- year old, and he made no adjustments

for condition. All of the comparable sales in

the report were either new or one year old,

and Mr. Clark used an across the board

adjustment of minus $ 8,500 for age. There

were a total of 95 sales in the neighborhood

ranging in value from $ 22,000 to $ 127,500. Of

these sales, 20 were built between 1950 and

1980 which would have been within 15- years

on either side of the time the subject was

constructed. Those sales ranged predomi-nantly

from $ 70,000 to $ 85,000.

Robert C. Cox ( Morganton)—

Following a hearing, the Board revoked Mr.

Cox’s residential license. The Board found

that an appraiser previously employed by

Mr. Cox filed a complaint with the Board

alleging irregularities in the appraisal assign-ments

and reports she prepared while a

trainee in Respondent’s employment. She

further alleged that Respondent did not ade-quately

supervise her work and that he

made false statements on appraisal reports.

Although Mr. Cox sent in a response to the

complaint, he failed or refused to send in

Disciplinary Actions

The following is a summary of recent disciplinary actions taken by the Appraisal Board. This is only a summary; for brevity, some of the facts and conclu-sions

may have not been included. Because these are summaries only, and because each case is unique, these summaries should not be relied on as prece-dent

as to how similar cases may be handled.

12

thirteen appraisal reports after numerous

requests by Board staff that he do so, a vio-lation

of state law and Appraisal Board rules.

Arthur Dec ( Raleigh)— By consent, the

Board issued a reprimand to Mr. Dec. He

must also successfully complete a sales com-parison

course by December 1, 2004, or the

reprimand will be vacated and a one- month

suspension will be imposed as of that date.

The Board found that Mr. Dec appraised a

home located in Durham, NC in October

2003, finding an appraised value of $ 724,000.

The subject property is located on a gravel

road in a rural area. The comparable sales

are located on paved streets in subdivisions

that appear to be superior. Comparable 3 is

located on the fairway of a golf course. Mr.

Dec made no adjustments for location as he

believed the location adjustments were off-set

by the subject’s 2.06- acre site versus the

comparable sites of .7 to 1.18 acre sites.

There were other differences between the

subject and the comparable sales that Mr.

Dec offset in his appraisal process, but he

failed to mention in this appraisal report. He

also inadvertently left out 1294 square feet of

unfinished basement area on one of his com-parable

sales.

Margaret English ( Gold Hill)— By

consent, the Board accepted the voluntary

surrender of Ms. English’s residential

certification.

Norma Harless ( Lenoir)— By consent,

the Board suspended Ms. Harless’ residen-tial

license for a period of six months. She

must take a course in sales comparison

before her license will be returned to her.

The Board found that Ms. Harless performed

three appraisals of a property located in

Granite Falls, NC. The first appraisal was per-formed

in March 2002 and indicated a value

of $ 198,100. The second appraisal was per-formed

in August 2002 and indicated a value

of $ 212,000. The third appraisal report was

performed in October 2002 and indicated a

value of $ 239,000. The first appraisal report

correctly indicated that the subject had an

addition that was incomplete at the time of

the inspection, but Ms. Harless valued the

property as though the addition were com-pleted

even though she stated that the

appraisal was done “ as is”. The second two

appraisal reports stated that the addition

was complete, although it was not. She again

valued the property as though the addition

were complete, but did both those appraisal

reports “ as is”. Ms. Harless stated that the

actual age of the property was 28 years,

when in fact the subject dwelling was built in

1945, indicating an actual age of 57 years. She

averaged the actual age of the dwelling and

the age of the new addition to indicate her

actual age, but she did not provide an expla-nation

in the report. The sales utilized in the

appraisal reports were superior to the sub-ject,

and there were other sales available

that would have indicated a lower value for

the subject.

Nathan Henderson ( Wilmington)—

Following a hearing, the Board revoked Mr.

Henderson’s trainee registration. The Board

found that in August 2001, Mr. Henderson

filed an application to become a state- regis-tered

trainee. On his application, Mr.

Henderson reported that in September 1994,

he had been found guilty of possession of

drug paraphernalia and possession of mari-juana.

The Appraisal Board deferred his

application, and a hearing was held so that

Mr. Henderson could demonstrate that he

possessed the requisite trustworthiness,

honesty and integrity to engage in the busi-ness

of a real estate appraiser trainee. After

that hearing, the Appraisal Board granted his

application, and his registration as a trainee

was issued in December 2001. In June 2004,

Mr. Henderson notified the Board that he

had been charged with growing marijuana at

his personal residence. He admitted that he

was convicted in June 2004 of manufacturing

marijuana, a Schedule VI controlled sub-stance,

which is a felony conviction, and that

at the time of the hearing, he was on proba-tion

for that offense. He testified that he grew

the marijuana for his personal use as a way

to control pain. The pain was the result of a

1998 incident where his arm was severely

injured. Mr. Henderson presented no medi-cal

testimony regarding his injury or treat-ment.

He continued to use marijuana after

the Appraisal Board granted him a trainee

registration in 2001. His use of marijuana dur-ing

this time may have affected his perfor-mance

in the real estate appraisal business.

Nadine Hicks ( Marshville)— By con-sent,

the Board issued a reprimand to Ms.

Hicks. She must also complete a course in

appraiser liability by December 31, 2004 or

the reprimand will be vacated and a one-month

suspension will be activated on that

date. The Board found that Ms. Hicks

appraised a home located in Charlotte, NC in

September 2001, finding an appraised value

of $ 68,000. On the effective date of the

appraisal, the owner of the subject property

was Richard Strikeleather. Although Re-spondent

had a tax card in her work file indi-cating

that Mr. Strikeleather was the owner,

she listed SS & Associates as the owner in

the appraisal report as she also had an

unrecorded deed that showed the transac-tion

date as August 2000. In the appraisal

report, Respondent indicated that the data

sources for all her comparable sales were

“ Drive by/ MLS Public Records”, when none

of her comparable sales were listed on MLS.

Respondent obtained her comparable data

solely from the local GIS service, which did

not list details of the condition of those sales

and also did not list any sales concessions.

On the appraisal report, she stated that all

comparable sales were in average condition

and that there were no seller concessions,

but there was no evidence in her work file to

support these statements. There were limit-ed

sales of homes in the subject neighbor-hood

that were listed on the local MLS. Sales

that were listed indicate a lower value for the

subject property.

Benny Hilliard ( Winston- Salem)— By

consent, the Board issued a reprimand to

Mr. Hilliard. Mr. Hilliard must also success-fully

complete a course in property inspec-tion,

by September 30, 2004 or the repri-mand

will be vacated and one- month sus-pension

will be imposed as of that date. The

Board found that Mr. Hilliard appraised a

home located in Winston- Salem, North

Carolina on November 15, 2003, finding an

appraised value of $ 149,000. The subject is a

single- family residential dwelling with asso-ciated

site improvements located on a 1.39-

acre site. A private school surrounds the

subject site with the school building and

parking lot to the rear or west of the subject.

The entrance driveway for the school

bounds the north side of the subject site and

the exit driveway for the school bounds the

south side of the subject site. The school and

parking lot lie below the subject site with a

well- landscaped embankment that slopes

down from the subject site to the parking lot.

Additionally, there is a high- tension power

line easement and substation located adja-cent

to the north side of the school and with-in

view of the subject dwelling. There was no

mention of the school or the power lines

within the report.

Nathaniel Holloway ( Durham)— By

consent, the Board suspended Mr.

Holloway’s general certification for a period

of six months. The suspension is stayed until

March 1, 2005. If Mr. Holloway completes a

course in sales comparison and an apprais-er

liability course by that date, the suspen-sion

will be inactive. The Board found that

Mr. Holloway completed an appraisal report

on a property located at 915 Chalice Drive,

Durham, North Carolina, indicating a final

value of $ 200,000 on September 8, 2001. Mr.

Disciplinary Actions

Holloway stated in the appraisal report that

the subject property had an above grade liv-ing

area of 2417 square feet. Of that total, 354

square feet was a den that was not heated

and cooled like the remaining area of the

subject property, and thus should not have

been included in gross living area. The sub-ject

property is a split- level home located in

the Archer Woods subdivision. Mr.

Holloway used three comparable sales in his

report. Two of the sales were in Westwood

Estates, which is a somewhat superior sec-tion

of a subdivision connected to the sub-ject

subdivision. One of those sales was a

two story and one was a one and a half story,

yet Mr. Holloway made no adjustments for

design or location. The third sale was from

the subject subdivision. By utilizing the

incorrect square footage for the subject and

by failing to make appropriate adjustments

for differences in design and location in the

appraisal report, the final value for the sub-ject

property was higher than it should have

been.

Sandra Keith ( Winston- Salem)— By

consent, the Board suspended Ms. Keith’s

residential certification for a period of six

months. The suspension is stayed until

March 1, 2005. If Ms. Keith takes a sales com-parison

course and a course in appraiser lia-bility,

the suspension shall be inactive. The

Board found that Ms. Keith and another

appraiser performed an appraisal on a prop-erty

located at 2668 S. Stratford Road,

Winston- Salem, NC, indicating a final value

of $ 251,000 as of April 8, 2002. The appraisal

was made “ as is”. The subject property was

a vacant two- story building located on a .52

acre lot that was zoned LO- S ( limited office –

special use). It was located on a major four

lane road, and was surrounded by proper-ties

which were either vacant or were being

used for non- residential purposes. Ms. Keith

was aware that the borrower owned several

residential rental properties, and believed

that she was planning to make the subject

property her home. She appraised the prop-erty

as residential, indicating in the appraisal

report that the “ highest and best use” was

the present use as a single- family residence.

By appraising the property as residential,

the borrower was able to obtain financing at

more favorable rates. The subject had been

used as an office for at least two years prior

to the appraisal report and was being used

as a mortgage company office at the time of

the Board’s investigation. The highest and

best use of the property should have been

indicated as commercial. Ms. Keith used

three single- family residences as compara-ble

sales. Even if she had appraised the

property to its correct highest and best use,

the value would not have been significantly

different.

B. Carter Kennemur ( Zebulon)— By

consent, the Board suspended Mr.

Kennemur’s general certification for a period

of one year effective September 15, 2004, the

first month of which shall be active. In addi-tion,

Mr. Kennemur agrees that he will per-form

no more appraisals for condemnation

or eminent domain proceedings until he

have successfully completed 30 hours of

education regarding condemnation apprais-ing.

The Board found that Mr. Kennemur

and another appraiser appraised a property

located in Navassa, NC in September 2002,

with an effective date of April 2000. The sub-ject

property consists of approximately 196

acres of undeveloped, heavily wooded land.

Brunswick County had acquired 35 acres of

the subject property in order to expand a

wastewater treatment plant. Mr. Kennemur

valued the subject property before the tak-ing

at $ 3,472,000. He valued 163.8 acres of

upland at $ 21,000 per acre and 32 acres of

wetland at $ 1,000 per acre. He valued the

160.748 acres that remained after the taking

at $ 2,060,000, a difference of $ 1,412,000 for the

value of the 35 acres taken. He used four

sales in their report. Three of the four sales

were developed lots in an industrial park,

complete with access streets and utility serv-ice.

These sales ranged from $ 20,530 to

$ 29,596 per acre, and ranged from 6.69 to

12.81 acres. These sales were not truly com-parable

to the subject property, and Mr.

Kennemur made inadequate adjustments to

these sales. The other sale was a lot near the

subject that contained 60.1369 acres and that

sold for $ 1,300,000. Although that site was

improved with an old fertilizer plant, since

the lot was already cleared it would have

taken substantially less cost to develop it as

opposed to the subject site, which was heav-ily

wooded. Forty acres were usable upland

and the remaining were wetlands. Mr.

Kennemur stated in the appraisal report that

the price per acre was $ 32,500 based on 40

acres of upland, and $ 21,617 per acre straight

through; however, he used a figure of $ 32,500

per acre in the appraisal. This sale had sig-nificant

frontage along the Brunswick River

and was purchased by a boat manufacturing

company specifically because it had river

frontage south of a railroad bridge tender.

Although a large portion of the sales price

was paid by the county, Mr. Kennemur did

not note this fact in the appraisal report or

make any adjustments for it. There were larg-er

acreage sales available that were located

further in distance than the comparables

used, but were much more similar than the

comparables used. These sales ranged

$ 2,333 to $ 8,405 per acre. In the after condi-tion,

Mr. Kennemur valued the upland at

$ 15,750 per acre, and the wetlands at $ 1000

per acre. He used the same four comparable

sales as in the before condition, then stated

the property was diminished by 25% by the

taking. There was insufficient information

contained in the work file to support this

adjustment. The appraisal report did not

comply with USPAP Standards Rule 2- 2( c) in

that the report did not disclose the scope of

work, nor did it describe the appraisal pro-cedures

followed in the valuation of the

property in the after condition.

John Kennemur ( Zebulon)— By con-sent,

the Board suspended Mr. Kennemur’s

residential certification for a period of one-year

effective September 15, 2004, the first

month of which shall be active. In addition,

Mr. Kennemur agrees that he will perform

no more appraisals for condemnation or

eminent domain proceedings until he have

successfully completed 30 hours of educa-tion

regarding condemnation appraising.

The Board found that Mr. Kennemur and

another appraiser appraised a property

located in Navassa, NC in September 2002,

with an effective date of April 2000. The sub-ject

property consists of approximately 196

acres of undeveloped, heavily wooded land.

Brunswick County had acquired 35 acres of

the subject property in order to expand a

wastewater treatment plant. Mr. Kennemur

valued the subject property before the tak-ing

at $ 3,472,000. He valued 163.8 acres of

upland at $ 21,000 per acre and 32 acres of

wetland at $ 1,000 per acre. He valued the

160.748 acres that remained after the taking

at $ 2,060,000, a difference of $ 1,412,000 for the

value of the 35 acres taken. He used four

sales in their report. Three of the four sales

were developed lots in an industrial park,

complete with access streets and utility serv-ice.

These sales ranged from $ 20,530 to

$ 29,596 per acre, and ranged from 6.69 to

12.81 acres. These sales were not truly com-parable

to the subject property, and Mr.

Kennemur made inadequate adjustments to

these sales. The other sale was a lot near the

subject that contained 60.1369 acres and that

sold for $ 1,300,000. Although that site was

improved with an old fertilizer plant, since

the lot was already cleared it would have

taken substantially less cost to develop it as

opposed to the subject site, which was heav-ily

wooded. Forty acres were usable upland

and the remaining were wetlands. Mr.

Kennemur stated in the appraisal report that

the price per acre was $ 32,500 based on 40

13

Disciplinary Actions

acres of upland, and $ 21,617 per acre straight

through; however, he used a figure of $ 32,500

per acre in the appraisal. This sale had sig-nificant

frontage along the Brunswick River

and was purchased by a boat manufacturing

company specifically because it had river

frontage south of a railroad bridge tender.

Although a large portion of the sales price

was paid by the county, Mr. Kennemur did

not note this fact in the appraisal report or

make any adjustments for it. There were larg-er

acreage sales available that were located

further in distance than the comparables

used, but were much more similar than the

comparables used. These sales ranged

$ 2,333 to $ 8,405 per acre. In the after condi-tion,

Mr. Kennemur valued the upland at

$ 15,750 per acre, and the wetlands at $ 1000

per acre. He used the same four comparable

sales as in the before condition, then stated

the property was diminished by 25% by the

taking. There was insufficient information

contained in the work file to support this

adjustment. The appraisal report did not

comply with USPAP Standards Rule 2- 2( c) in

that the report did not disclose the scope of

work, nor did it describe the appraisal pro-cedures

followed in the valuation of the

property in the after condition.

Karen Faith Mims ( Four Oaks)— By

consent, the Board accepted the voluntary

surrender of Ms. Mim’s residential

certification.

Dexter G. Moore ( Grifton)— By con-sent,

the Board suspended Mr. Moore’s gen-eral

certification for a period of six months.

Mr. Moore also agreed to successfully com-plete

a course in condemnation appraising

by May 1, 2005. If he completes the course

by that date, only three months of the sus-pension

shall be active. The Board found

that Mr. Moore performed an appraisal of 47

acres of land located in Rocky Mount, North

Carolina in October 2002, with an effective

date of January 4, 2001. His client was the

owner of property, which was subject to con-demnation.

The condemnation involved the

taking of about 1.5 acres of the land for a

sewer pump station and a sewer easement.

Part of the subject was in a 100- year flood

plain and the other part was in a 500- year

floodplain. The 1.5 acres taken during the

condemnation was from the center and high-est

part of the property. The entire property

was flooded during Hurricane Floyd in

September 1999, which was over a year

before the taking. Mr. Moore stated that the

land was worth $ 470,000 before the taking

and $ 27,000 after the taking. He used 3 sales

in his appraisal to value the property in the

before condition. These sales were superior

to the subject in location and drainage, yet

Mr. Moore did not make adjustments for

drainage. Mr. Moore stated that in the after

condition, the property was worth only $ 600

per acre. Although he had supporting infor-mation

in his file from several local develop-ers

concerning the difficulty of developing

the property in the after condition, he had

no support in the appraisal report for this

opinion of value.

E. Lindsay Morris ( Troy)— By consent,

the Board suspended Mr. Morris’s residen-tial

certification for three months effective

October 1, 2004. The Board found that Mr.

Morris appraised the subject property locat-ed

in Albemarle, NC in December 1998, indi-cating

a final value of $ 66,000. Although

there was a buyer and seller name listed on

the appraisal report, Mr. Ramsey failed to

identify a sales price, and failed to address

the sales contract. The subject property

transferred two times on December 22, 1998.

It first sold for $ 38,000, and then immediately

sold for $ 66,000. On his appraisal report, Mr.

Morris failed to identify the client. He also

failed to state the type of reporting format

used for the appraisal report. In addition, his

work file was not complete in that it did not

contain copies of his limiting conditions and

his certification.

Gina Morris ( Salisbury)— By consent,

the Board issued a reprimand to Ms. Morris.

Ms. Morris agrees to take a sales comparison

course and a course in appraiser liability by

April 30, 2005. If she does not take these

courses before this date, the reprimand will

be vacated and a two- month active suspen-sion

will be activated. The Board found that

Ms. Morris, working under the supervision

of a state- certified residential appraiser,

appraised a home located in Charlotte, NC in

June 2002, finding an appraised value of

$ 105,000. The subject is a mostly brick 1126

square foot home, with three bedrooms and

two bathrooms. The sales used in the ap-praisal

report were all of similar size ( 1001 to

1048 square feet) and age ( all 53 years old),

and were located within .5 miles of the sub-ject.

They were located in a neighborhood

that was superior to the subject neighbor-hood

in maintenance and appeal, yet Ms.

Morris made no adjustments for location.

The sales used in the report were $ 118,500,

$ 104,900 and $ 125,000. The “ customer esti-mated

value” on the appraisal order form

was $ 105,000. The property was foreclosed

in June 2003 for $ 50,000, sold by the lending

institution for $ 48,000 in November 2003 and

sold again in December 2003 for $ 84,000.

John Norwood ( Belmont)— By con-sent,

the Board suspended Mr. Norwood’s

residential certification for a period of six

months effective November 1, 2004. If Mr.

Norwood takes a class in sales comparison

course and the 15- hour National USPAP

course, only the first month of the suspen-sion

shall be active. The Board found that

Mr. Norwood appraised a home located in

Rutherfordton, NC in February 2001, finding

an appraised value of $ 74,000. The subject is

a 1498 square foot ranch style home, with

three bedrooms and one bathroom. It was

63 years old at the time of the appraisal, and

in average condition. The subject street con-tains

manufactured homes, both single and

doublewide manufactured homes, block

homes, and deteriorating buildings, none of

which were mentioned in the appraisal

report. Mr. Norwood chose sales from supe-rior

areas within a mile of the subject neigh-borhood,

where the homes were of similar

age, but the homes in those areas were well

maintained and frequently updated. The

sales used in the appraisal report were supe-rior

in quality to the subject, having improve-ments

such as 10' ceilings, fresh interior

paint, pine floors, new carpet and vinyl, etc.,

yet Mr. Norwood made an adjustment for

condition to only one of his sales, and that

was for $ 1000. He made no adjustment for

the fact that his comparable sales were locat-ed

in superior neighborhoods.

Chappell V. “ Dick” Parker ( Smith-field)—

Following a hearing, the Board

revoked Mr. Parker’s general certification.

The Board found that Mr. Parker appraised a

property located in Wayne County in March

2003. His final estimate of value for the prop-erty

was $ 560,000. The subject property was

a new 3,855 square foot custom built home

situated on a rural lot. Mr. Parker’s work file

contained a detailed list of the specifications

for construction for the subject. The original

total cost to build was $ 398,312; however, the

cost figure on the subject increased after all

change orders and adjustments were made.

Mr. Parker stated in the appraisal report that

the gross living area of Comparable Sale No.

1 was 4,361 square feet, when it actually con-tained

5,061 square feet. He reported that

Comparable Sale No. 2 had four baths and a

double garage, when it actually had four and

a half baths and a three- car garage. He

reported that his third sale sold on April 20,

2002, when it actually sold on April 20, 2000.

Mr. Parker had MLS sheets in his work file

that indicated the correct information for his

three comparable sales, but he reported

incorrect information in his appraisal report

without any explanation. Mr. Parker’s three

14

Disciplinary Actions

comparable sales were located in a private

country club known as Walnut Creek, which

has a golf club, swimming pool, clubhouse

and various other amenities. Lot values for

properties in Walnut Creek run from about

$ 40,000 for interior lots to $ 150,000 for lots on

the golf course or with a lake view. Two of

his three comparable sales were located on

the golf course, and one was located on the

lake; their lot values all exceeded $ 125,000.

Mr. Parker stated in the Cost Approach in his

appraisal report that the subject site was

worth $ 25,000. Despite the significant differ-ences

in lot values between the subject and

the comparable sales, Mr. Parker made no

adjustment for site for his first two compara-ble

sales, and made a $ 12,500 negative

adjustment to his third sale. The subject was

located on a road in a rural area. It was not

in a subdivision and had no subdivision

amenities or view, yet Mr. Parker made no

adjustments for differences in location for

the subject property. His comparable sales

sold in December 1999, April 2000 and

October 2001, while the appraisal was per-formed

in March 2003. Mr. Parker chose the

three highest priced sales that had ever sold

in the county. Another appraiser performed

a review on Mr. Parker’s appraisal report in

April 2003. In his review, he used three sales

that were much more comparable to the

subject. Those sales ranged in price from

$ 283,000 to $ 347,460 and ranged from 3223

square feet to 3965 square feet. The oldest

sale he used was from June 2001. The

reviewer valued the property at around

$ 300,000. There were several other sales that

were more comparable to the subject prop-erty.

Those sales ranged in price from

$ 275,000 to $ 315,000 and ranged from 2950 to

4310 square feet. By using sales that were not

comparable to the subject property, and by

not making appropriate adjustments for the

differences, Mr. Parker inflated the value the

subject property. Mr. Parker had previously

been disciplined by the Appraisal Board in

two separate consent orders. In the first con-sent

order, his certification was actively sus-pended

for three months, and in the second,

his certification was actively suspended for

two months.

John Parrish ( Concord)— By consent,

the Board suspended Mr. Parrish’s residen-tial

certification for a period of two months.

The suspension is stayed until April 30, 2005.

If Mr. Parrish takes a sales comparison

course and the course in the role of a super-visor

by that date, the suspension will be

inactive. Mr. Parrish also agrees that he will

not act as a supervisor for either of his

trainees until he has completed the course

in the role of a supervisor. The Board found

that Mr. Parrish and a trainee appraised a

home located in Charlotte, NC in June 2002,

finding an appraised value of $ 105,000. The

subject is a mostly brick 1126 square foot

home, with three bedrooms and two bath-rooms.

The sales used by in the appraisal

report were all of similar size ( 1001 to 1048

square feet) and age ( all 53 years old), and

were located within .5 miles of the subject.

They were located in a neighborhood that

was superior to the subject neighborhood in

maintenance and appeal, yet Mr. Parrish

made no adjustments for location. The sales

used in the report were $ 118,500, $ 104,900

and $ 125,000. The “ customer estimated

value” on the appraisal order form was

$ 105,000. The property was foreclosed in

June 2003 for $ 50,000, sold by the lending

institution for $ 48,000 in November 2003 and

sold again in December 2003 for $ 84,000.

Jack A. Ramsey, Jr. ( Mt. Ulla)— By

consent, the Board suspended Mr. Ramsey’s

residential certification for a period of three

months. If Mr. Ramsey takes a course in

manufactured housing and a course in

appraiser liability by December 1, 2004, the

suspension will be inactive. The Board

found that Mr. Ramsey appraised a home

located in Dallas, NC in August 2003, indicat-ing

a final value of $ 122,500. The subject was

a modular home, and the appraisal was

made “ as is.” The tax value on the property

at the time of appraisal was $ 143,690. There

were no sales in the immediate area that

could be used as comparable sales, and Mr.

Ramsey did discuss in the report that the

manufactured/ modular home resale market

in the subject areas was minimal. Mr.

Ramsey made a minus $ 19,100 adjustment

for Sale No. 1 having superior quality of con-struction.

He made positive adjustments of

$ 8,300 for Sale No. 2 and $ 7,750 for Sale No. 3,

due to both having inferior quality of con-struction

compared to the subject. There

was no support in the appraisal report or

work file for these adjustments. Although

there was a buyer and seller name listed on

the appraisal report, Mr. Ramsey stated in

the report that there was no contract pend-ing

on the subject.

Leslie Robinson ( Kings Mountain)—

By consent, the Board suspended Ms.

Robinson’s residential license for a period of

one year. The first month of the suspension

will become active on September 1, 2004.

The remaining months are stayed until

December 1, 2004. Ms. Robinson also agrees

to take two courses approved by the Ap-praisal

Board; a sales comparison course

and the 15- hour national USPAP course.

These courses must be completed by

December 1, 2004, or the remainder of the

suspension will become active. The Board

found that a trainee working under the

supervision of Ms. Robinson appraised a

2120 square foot home located in Monroe,

NC in December 2003, finding an appraised

value of $ 230,000. Sales in the subject subdi-vision

were all smaller than the subject prop-erty,

ranging from 1143 to 1804 square feet, so

Ms. Robinson chose sales from other subdi-visions

located near the subject subdivision.

Those sales were all of similar size, and

adjustments were made for differences in

age. The sales were located in neighbor-hoods

that were superior to the subject

neighborhood in maintenance, appeal and

quality, yet Ms. Robinson made no adjust-ments

for those factors. The unadjusted

sales prices of the comparable sales were

$ 231,000, $ 235,000 and $ 252,000. The “ cus-tomer

estimated value” on the appraisal

order form was $ 220,000. The appraisal was

done for refinancing purposes, but the loan

did not close.

Richard Simmons ( Charlotte)— By

consent, the Board suspended Mr.

Simmons’ residential certification for a peri-od

of two ( 2) years with the first year being

active. The Board found that Mr. Simmons

Respondent appraised a property located in

Charlotte, NC in May 2002, finding an

appraised value of $ 255,000. The appraisal

report, dated May 24, 2002, was completed

for the sale of the property. The closing state-ment

indicated a contract price of $ 255,000.

Mr. Simmons appraised the subject property

again on January 9, 2003, indicating a final

value of $ 265,000. The appraisal report,

dated January 9, 2003, was completed for the

refinancing of the property. Sales in the sub-ject

neighborhood ranged from $ 153,000 to

$ 218,000. In the 2002 appraisal report, Mr.

Simmons adjusted approximately $ 22.50/

square foot for Gross Living Area. In the 2003

report, Mr. Simmons adjusted approximately

$ 15.00/ square foot. There was no explana-tion

as to why the adjusted value changed

by 33% in approximately 8 months. The pho-tographs

of the comparables in both of the

appraisal reports were not of the correct

properties.

Donald Spake ( Hickory)— By con-sent,

the Board issued Mr. Spake a repri-mand

and ordered him to take a course in

condemnation or eminent domain apprais-ing.

If he does not complete the course by

March 1, 2005, the reprimand will be vacated

and a one- month suspension will be activat-

15

Disciplinary Actions

16

NORTH CAROLINA

APPRAISAL BOARD

P. O. Box 20500

Raleigh, NC 27619- 0500

4,500 copies of this document were printed at a cost of $. 69 per copy.

PRESORTED STD

U. S. Postage

PAID

Permit No. 1978

RALEIGH, NC

ed. The Board found that Mr. Spake per-formed

an appraisal for condemnation pur-poses

of a property located in Gastonia, NC.

Mr. Spake estimated that the property mar-ket

value was $ 259,000 before the taking ( it

was a total take). The jury awarded $ 263,000

in damages to the property owner. The sub-ject

property consists of a half- acre site,

improved with a split- level style single- family

dwelling. On the effective date of the

appraisal the property was zoned O & I 1C.

He made a positive adjustment for costs to

convert the subject to an office, when he

should have made a negative adjustment for

those expenditures. Although Mr. Spake stat-ed

that there was a shortage of similar sales

within the city and that he therefore used

office sales from another area, there were

several sales of dwellings converted to com-mercial

use that were located closer to the

subject.

John Vestal ( Charlotte)— By consent,

the Board issued a reprimand to Mr. Vestal.

Mr. Vestal also agreed to successfully com-plete

a course in sales comparison by March

1, 2005. If he does not complete the course

by that date, the reprimand will be vacated

and a one- month suspension will be activat-ed.

The Board found that Mr. Vestal per-formed

an appraisal of a property located in

Charlotte, NC in August 22, 2001, finding an

estimated value of $ 110,000. He used three

comparable sales that were all located out-side

the subdivision. Those properties were

all newer than the subject, were superior in

quality to the subject and were in superior

neighborhoods, yet Mr. Vestal failed to make

adequate adjustments for those factors.

There was only one sale in the subject

subdivision that had sold within a year of

the Mr. Vestal’s appraisal. This sale was sig-nificantly

smaller than the subject and

would have required excessive adjustments.

Mr. Vestal should have mentioned the sale

in his report as it was within the subject

subdivision.

Samuel Walters ( Winston- Salem)—

By consent, the Board suspended Mr.

Walter’s residential certification for a period

of six months. The suspension is stayed until

March 1, 2005. If Mr. Walters takes a sales

comparison course and a course in apprais-er

liability, the suspension shall be inactive.

The Board found that Mr. Walters and

another appraiser performed an appraisal

on a property located at 2668 S. Stratford

Road, Winston- Salem, NC, indicating a final

value of $ 251,000 as of April 8, 2002. The

appraisal was made “ as is”. The subject

property was a vacant two- story building

located on a .52 acre lot that was zoned LO-S

( limited office – special use). It was located

on a major four lane road, and was sur-rounded

by properties which were either

vacant or were being used for non- residen-tial

purposes. Mr. Walters was aware that the

borrower owned several residential rental

properties, and believed that she was plan-ning

to make the subject property her home.

He appraised the property as residential,

indicating in the appraisal report that the

“ highest and best use” was the present use

as a single- family residence. By appraising

the property as residential, the borrower

was able to obtain financing at more favor-able

rates. The subject had been used as an

office for at least two years prior to the

appraisal report and was being used as a

mortgage company office at the time of the

Board’s investigation. The highest and best

use of the property should have been indi-cated

as commercial. Mr. Walters used three

single- family residences as comparable

sales. Even if he had appraised the property

to its correct highest and best use, the value

would not have been significantly different.

Michael Wright ( Concord)— By con-sent,

the Board issued a reprimand to Mr.

Wright. He must also successfully complete

a sales comparison course by April 1, 2005,

or the reprimand will be vacated and a one-month

suspension will be imposed as of that

date. The Board found that Mr. Wright per-formed

an appraisal in October 2000 of a

property located in Charlotte, NC, finding an

appraised value of $ 106,000. The appraisal

report incorrectly indicated that the subject

had two fireplaces when it only had one. Mr.

Wright adjusted the square footage differ-ences

for two of his comparable sales at $ 15

per square foot and at $ 20 per square foot for

one comparable sale, when the square

footage adjustment for all sales should have

been $ 20 per square foot. Mr. Wright stated

in the income approach section of the

appraisal report that the market rent for the

subject property would be $ 950 and the

appropriate gross rent multiplier is $ 110, but

he provided no support for those figures in

his report or within his work file. The final

indicated market value would have been

slightly lower if not for the errors in the

appraisal report.

Disciplinary Actions