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					                  KANSAS REAL ESTATE APPRAISAL BOARD
                                   2003
                            WINTER NEWSLETTER
                 Vol. XI                           2003                                          No. 4


                                                      Although the 15-hour course may be used to
              2004 RENEWAL                            meet the continuing education requirement,
                                                      it will not meet the USPAP requirement and
     The 2004 renewal period is fast ap-              the 7-hour USPAP Update course must still
proaching and appraisers should be aware              be completed at least once during each two-
of their continuing education requirements to         year education cycle.
avoid that last minute dash that results in
taking courses you have no interest in.                           EDUCATION CYCLES
Keep in mind that renewals must be submit-                Education cycles are now two years in
ted on or prior to May 31, 2004, to be con-           length and will run as follows:
sidered “on-time”. Renewals received after
May 31 will be subject to a $50 late fee.                          July 1, 2003 - June 30, 2005
     All appraisers originally licensed prior to                   July 1, 2005 - June 30, 2007
July 1, 2003, are required to meet the 14                          July 1, 2007 - June 30, 2009, etc.
hours of approved continuing education in
order to renew. Those hours must have                      While the 28 hours (total) required dur-
been completed after June 30, 2003. As                ing each two-year cycle may be completed
this is the first year of a two-year education        in the first year and carried forward to meet
cycle, if you have taken more than 14 hours           the 2nd year’s requirement, you cannot take
since June 30, 2003, you may carry the ex-            13 or less hours the first year with the inten-
cess over to your 2005 renewal.                       tion of making it up during the second year.
     Appraisers licensed on or after July 1,               A complete list of all approved providers
2003, are exempt from continuing education            and their courses can be accessed from the
at their first renewal, however, will be re-          Board’s website at www.accesskansas.org.
quired to meet the 14 hours needed for their
2005 renewal.

                    USPAP
     Although articles have been published in                                    INSIDE THIS ISSUE
the Board’s newsletters for the past year
regarding the changes to the Uniform Stan-                BOARD ACCEPTING RESUMES FOR REVIEWER
dards of Professional Appraisal Practice                  POSITIONS ......................................................2
(USPAP) requirement, we are still receiving               EX PARTE COMMUNICATION ............................2
numerous calls indicating that there is con-              BOARD UPDATES DATABASE ...................... 2-3
fusion as to which USPAP can be used and                  BOARD HOLDS ELECTION OF OFFICERS ...........3
when it is needed.
                                                          USPAP Q&A ............................................. 3-4
     All appraisers are required to complete
the 7-hour USPAP Update course once                       REPORTING LENDER PRESSURE .................. 4-5
every two-year education cycle. For those                 KEY FEATURES OF THE 2004 USPAP .............5
appraisers needing continuing education in                NEW APPRAISER LISTING ................................6
both 2004 and 2005 (a total of 28 hours), the             WHO DO I ASK?..............................................6
7-hour USPAP Update course may be taken
                                                          CONTACT INFORMATION ..................................6
for either renewal period. For those ap-
praisers who are exempt from continuing
education in 2004, the course must be taken
for the 2005 renewal.
     We have also received several calls re-
garding the 15-hour tested USPAP course.
                                                   nary matters, make decisions and direct
        BOARD ACCEPTING RESUMES
                                                   staff to take specific action.
         FOR REVIEWER POSITIONS
                                                        All questions should be directed to the
                                                   staff who will provide general information
     The Board is now accepting resumes for        and advice on all procedures. Meetings are
desk reviewers. The preference is for ap-          open to the public and everyone is invited to
praisers with five to ten years of experience      attend.
and a thorough understanding of Uniform
Standards. Reviewers are contracted each
fiscal year (July 1 through June 30) and are
currently reimbursed at the rate of $80 per
hour for residential reviews and $90 per
hour for commercial/agricultural reviews.               BOARD OFFICE UPDATES DATABASE
     If you would be interested in contracting
with the Board as a reviewer, please submit
                                                        The Board has been working over the
your resume, three letters of reference and a
                                                   past two-years to upgrade and update our
cover letter with current contact information
                                                   database and computer system. While the
to: Kansas Real Estate Appraisal Board,
                                                   new database went into use last year, we
1100 SW Wanamaker Rd., Ste. 104,
                                                   are still in the process of “tweaking” it to al-
Topeka, KS 66604.
                                                   low for an easily accessible bank of informa-
                                                   tion. One of the modifications is the addition
                                                   of a “mailing address” to the information cur-
                                                   rently on record. When this new field was
                                                   downloaded, it automatically populated with
              Got an idea for an article you       the appraiser’s current residence address.
              would like to see in our                  When renewal applications are mailed
              newsletter? Send your ideas          out, they will again be accompanied by the
              to the Board at 1100 SW              Address Verification form and it is here that
              Wanamaker Rd., Ste. 104,             you will be able to list a separate mailing
Topeka, KS 66604, fax to (785) 271-3370            address. Keep in mind that as it stands
or e-mail them to cheryl.magathan@                 now, all information leaving this office is
kreab.state.ks.us.                                 mailed to the appraiser’s residence address.
                                                   As of January 1, 2004, all information will
                                                   mail to the appraiser’s mailing address. This
                                                   can be your residence, a PO Box or your
                                                   business address. Just bear in mind that all
       EX PARTE COMMUNICATION                      mailings from the Board will go to that ad-
                                                   dress. That would include renewal informa-
     Individual appraisers who are tempted         tion, license certificate, disciplinary actions,
to contact members of the Appraisal Board          etc.
to seek information on a pending applica-               The Board has prepared an “Address
tion, to discuss a pending complaint or dis-       Change Request” form and this is now
ciplinary action, or to influence a decision       posted         on      our      website       at
are advised that such ex parte communica-          www.accesskansas.org/kreab under Appli-
tions are improper and may be detrimental          cations. If you wish to submit your address
to the individual appraiser.                       change without the form, please be sure to
     A Board member who might have been            include the following information:
favorable is placed in the difficult position of
having to abstain from discussing or voting        •   Appraiser’s Name
on the application or disciplinary case in         •   License/Certificate Number
question.                                          •   Type of Change (i.e., residence, mailing,
     The Board’s authority and power to act            business or a combination)
exists only during lawfully convened board         •   The address change to be made
meetings. Only as a Board do they receive          •   Although your contact information may
information, act on applications and discipli-         not be changing (phone, e-mail, fax),



KREAB 2003 WINTER NEWSLETTER                                                                PAGE 2
   please include this information so that       veloped an opinion of value that was differ-
   our records can be verified.                  ent from the value in the appraisal report. I
                                                 understand that I must provide a signed cer-
    Keep in mind that the addition of the        tification for the review pursuant to Stan-
mailing address does not negate an ap-           dards Rule 3-3. However, the language in
praiser’s responsibility for notifying the       Standards Rule 3-2 seems to suggest that I
Board office of a change of address, either      am also required to prepare an additional
business or residence (ref. K.S.A. 58-4114).     certification to comply with Standards Rule
                                                 2-3. Are two certifications necessary?


                                                 A     No, you are not required to provide two
                                                      certifications in an appraisal review as-
                                                 signment that includes reporting your own
BOARD HOLDS ELECTION OF OFFICERS                 value opinion.
                                                    In USPAP this is addressed in the Com-
                                                 ment to SR 3-2(d), which was revised for
     At their December 5, 2003 meeting, the      2004 as follows:
Board elected Ronald D. Aul (Lawrence) as
Chairman and G.N. (Jerry) Capps (Wichita)        “…data and analyses provided by the re-
as Vice-Chair.                                   viewer to support a different value conclu-
     Mr. Aul is a general certified appraiser,   sion must match, at a minimum, the report-
carrying certificates in both Kansas and Mis-    ing requirements for a Summary Appraisal
souri. He is a commercial real estate ap-        Report for a real property appraisal (Stan-
praiser with Aul & Hatfield Appraisals, L.C.     dards Rule 2-2(b)) and a personal property
in Lawrence, dealing with multifamily, retail,   appraisal (SR 8-2(b))…and an Appraisal
office, industrial, special use, eminent do-     Report for a business appraisal (SR10-
main and commercial land and farm ap-            2(a))…” (bold added for emphasis).
praisals. Mr. Aul was appointed to the
Board on December 8, 2001. His current              This revision underscores that whenever
term will end on June 30, 2004.                  a reviewer provides a value conclusion dif-
     Mr. Capps is a sales, use, property and     ferent from the value opinion in the report
state tax consultant and an attorney. His        under review, it is only the data and analy-
credentials in these areas include represent-    ses provided by the reviewer that must be
ing national, state and local taxpayers at all   consistent with the applicable reporting
levels of the state and local tax system. He     Standard.
represents clients at the county level, at the
administrative level and through the court
system, including the state’s highest courts.
Mr. Capps represents taxpayers and pro-
                                                 Q      I am employed at a firm where my
                                                       reports are reviewed by a supervisory
                                                 appraiser. The supervisory appraiser re-
vides state and local tax services in Kansas,    cently asked me to make changes to a re-
Oklahoma, Arkansas, Minnesota, Indiana,          port that resulted in a value opinion with
Texas, Nevada, California and New Mexico.        which I do not agree. I am not comfortable
Mr. Capps represents a diverse group of          signing the amended report. What are my
industries, including construction, retail,      obligations under USPAP?
manufacturing, oil and gas, entertainment,

                                                 A
lodging and industrial. Mr. Capps was ap-              If the report does not represent your
pointed to the Board on December 8, 2001.              own opinions and conclusions, then
His current term will end on June 30, 2004.      you must not sign the report or the certifica-
                                                 tion.
                                                     Standards Rule 2-3 states that any ap-
                                                 praiser signing an appraisal report must sign
                                                 a certification, which must include a state-
              USPAP Q & A                        ment similar to:

                                                 “I certify that, to the best of my knowledge
Q    I recently reviewed an appraisal re-
     port. As part of the assignment I de-       and belief the reported analyses, opinions,



KREAB 2003 WINTER NEWSLETTER                                                             PAGE 3
and conclusions are limited only by the re-
ported assumptions and limiting conditions
and are my personal, impartial, and unbi-
                                                Q     Do Standards Rules 1-5 and 7-5 re-
                                                      quire an appraiser to analyze the sales
                                                history for comparable sales?
ased professional analyses, opinions, and
conclusions.” (bold added for emphasis)

   An appraiser required to make changes
                                                A     No, they do not. These Standards
                                                      Rules address only the subject prop-
                                                erty, not the comparable sales. However,
that he or she does not agree with would not    appraisers may be subject to Supplemental
be reporting his or her own personal analy-     Standards in certain assignments that re-
ses, opinions, or conclusions.                  quire the appraiser to provide a more de-
                                                tailed analysis than otherwise required by

Q     I received a request to update an ap-
      praisal I previously completed. The
                                                USPAP.

original report was issued as a Self-
Contained Appraisal Report? Am I required
to use the same reporting format in my up-
                                                Q      I know that Standards Rule 1-5(a) re-
                                                      quires an appraiser to analyze any cur-
                                                rent listings of the subject property. Does it
date?                                           also require analysis of prior listings of the
                                                subject property?

A     No. Advisory Opinion 3 (AO-3) states,
     in part:
                                                A      Similar to sales history requirements
                                                      for comparable sales, this Standards
The new report is not required to have the      Rule does not require an appraiser to ana-
same level of detail as the original report -   lyze a prior listing history for the subject
i.e. a different reporting option may be        property. However, an analysis of a prior
used. However, the new report must con-         listing history may be required by applicable
tain sufficient information to be meaningful    Supplemental Standards in some assign-
and not misleading to the intended users.       ments.
(bold added for emphasis)
                                                This communication by the Appraisal Standards Board
                                                (ASB) does not establish new standards or interpret
   Refer to AO-3 for further guidance on
                                                existing standards. The ASB USPAP Q&A is issued to
updating a prior assignment.                    inform appraisers, regulators, and users of appraisal
                                                services of the ASB responses to questions raised by

Q     Can an appraiser use “any” type of        regulators and individuals; to illustrate the applicability
                                                of the Uniform Standards of Professional Appraisal
     hypothetical condition in developing an
                                                Practice (USPAP) in specific situations; and to offer
appraisal?                                      advice from the ASB for the resolution of appraisal
                                                issues and problems.

A    No. The Comment to Standards Rule
     1-2(h) states:

A hypothetical condition may be used in an
assignment only if:                                  REPORTING LENDER PRESSURE
• use of the hypothetical condition is
   clearly required for legal purposes, for
   purposes of reasonable analysis, or for          The Board continues to hear appraiser
   purposes of comparison;                      concerns regarding lender pressure to raise
• use of the hypothetical condition results     their real estate valuation conclusions to
   in a credible analysis; and                  target values. Appraisers who accommo-
• the appraiser complies with the disclo-       date such lenders are not adhering to the
   sure requirements set forth in USPAP for     standards promulgated by the Uniform
   hypothetical conditions. (bold added for     Standards of Professional Appraisal Prac-
   emphasis)                                    tice. Article XI of the Financial Institutions
                                                Reform and Recovery Act of 1989 (FIRREA)
    Standards Rules 7-2(h) and 9-2(g) con-      is intended to address this issue. Verified
tain similar Comments.                          complaints of this nature can be brought to
                                                the attention of the authorities. The Office of
                                                the Comptroller of the Currency (OCC) Cus-



KREAB 2003 WINTER NEWSLETTER                                                                       PAGE 4
tomer Assistance Group have provided the       indicated the review of a Restricted Use Ap-
following contact numbers for handling con-    praisal    Report     in    compliance   with
sumer complaints:                              STANDARD 3 is not possible without the
                                               reviewer having the benefit of the informa-
NATIONAL BANKS - Office of the Comptroller     tion retained in the work-file was removed.
of the Currency: 1-800-613-6743
                                               STANDARDS RULES 10-2(B)(VII) AND 10-3:
SAVINGS/LOAN BANKS - Office of Thrift Su-      Edits have been made to these Standards
pervision: 1-800-842-6929                      Rules regarding the appraiser’s certification
                                               and disclosure of the nature of nature of pro-
CREDIT UNIONS - National Credit Union Ad-      fessional assistance to make them more
ministration: (703) 518-6330                   consistent with parallel Standards Rules.

STATE CHARTERED BANKS - Federal Deposit        ADVISORY OPINION 10 (AO-10): This Advi-
Insurance Corporation: (877) 275-3342          sory Opinion titled “The Appraiser-Client
                                               Relationship” has been retired. Many of the
MORTGAGE COMPANIES - Federal Trade             issues addressed in this Advisory Opinion
Commission: (877) 382-4357                     have incorporated into the new Advisory
                                               Opinions 25, 26 and 27.
You can also contact the Office of the State
Bank Commission, 700 Jackson, Ste. 300,        ADVISORY OPINION 24 (AO-24): “Normal
Topeka, KS 66603, 785-296-2266 (phone)         Course of Business”: This is a new Advisory
or 785 -296 -0168 (fax), http://www.osbc       Opinion addressing the concept of “Normal
kansas.org.                                    Course of Business” that is used in Stan-
                                               dards Rules 1-5 and 7-5.

                                               ADVISORY OPINION 25 (AO-25): “Clarification
                                               of the Client in a Federally Related Transac-
                                               tion” - This is a new Advisory Opinion that
 KEY FEATURES OF THE 2004 USPAP                addresses whether an appraiser has an ob-
                                               ligation to ensure that his or her services are
                                               directly engaged by a federally insured de-
DEFINITIONS:             Two definitions,      pository institution.
INVESTMENT ANALYSIS and MARKET
ANALYSIS have been deleted because of          ADVISORY OPINION 26 (AO-26): “Readdress-
their limited use in USPAP.                    ing (Transferring) a Report to Another Party”
                                               - This new Advisory Opinion addresses the
DEFINITIONS: The definition of BIAS has        practice of altering a report to indicate that a
been edited to represent the full range of     new recipient is the client when it was origi-
mental and emotional predispositions re-       nally completed for another party.
quired of appraisers by USPAP.
                                               ADVISORY OPINION 27 (AO-27): “Appraising
PREAMBLE: The PREAMBLE has been                the Same Property for a New Client” - This
revised to enhance its clarity.                new Advisory Opinion addresses the prac-
                                               tice of appraising a property for a party after
ETHICS RULE: The Record Keeping sec-           appraising it for another party.
tion of the ETHICS RULE has been edited to
clarify the intent and responsibility of ap-   GLOSSARY: The Glossary has been re-
praisers regarding record retention relative   moved from the USPAP publication.
to judicial proceedings. An edit has also
been made to clarify the need for appraisers
to have appropriate custody or access to
their work-file.

STANDARDS RULES 2-2(C)(IX) AND 8-2(C)(IX):
Language in these Standards Rules that



KREAB 2003 WINTER NEWSLETTER                                                            PAGE 5
                                                            tion.   Contact numbers for the Foundation
        LICENSED/CERTIFIED APPRAISERS
                                                            are:
            AS OF JANUARY 7, 2004
                                                            Phone:         (202) 347-7722
General Certified............................... 423        Fax:           (202) 347-7727
Residential Certified ......................... 338         E-Mail: info@appraisalfoundation.org
State Licensed .................................. 303       Website: www.appraisalfoundation.org
Provisional (Trainee) ........................ 159

TOTAL ............................................. 1,223


                                                                      APPRAISAL BOARD MEMBERS
        NEW APPRAISERS (SINCE 9/10/03)
                                                                             CHAIRMAN
PROVISIONAL LICENSE                Beard, Gary                         Ronald D. Aul, Lawrence
Sehorn, Patrick                    Gilbreath, Richard
Driscoll, Matthew                  Bottiger, Allen                          VICE-CHAIRMAN
VanNostran, Colleen                Trent, Kerry                       G.N. (Jerry) Capps, Wichita
Hargett, Dwayne                    Hall, James
Wood, Clayton L.                   Reed, Michael                              MEMBERS
Spaulding, Brent                   Higgs, Will                        Steven R. Adams, Wichita
Lietz, Matthew                     Holloway, Bradley                   Donna Hutcheson, Lakin
Finney, Heather                    Drennan, Timothy                     Ralph Leno, Gardner
DeSelm, Steven                     Knipper, Phillip                      Gregg Lesh, Wichita
Biggs, Mark                        Breer, Toby                      James E. Pfeffer, Overland Park
Kauffman, David
Korte, Steven                      RESIDENTIAL CERT.
Pauly, Adam                        Weaver, Tracy                                  STAFF
Rohr, Patricia                     Maschger, Mark
Christoph, James                   Miller, Tamara                          Executive Director
Lechtenberg, Barbara               Titus, Kenneth                            Sally Pritchett
                                   Terrell, David
STATE LICENSE                      Caldwell, Kenneth                   Public Service Executive
Williamson, John                   Gronewold, Scott                       Cheryl Magathan
Sheetz, Darnelle                   Sizemore, Jerry
Munson, Scott                                                   Kansas Real Estate Appraisal Board
Terzis, Pete                       GENERAL CERT.                1100 S.W. Wanamaker Rd., Ste. 104
Totman, Brad                       Inskeep, Keith                          Topeka, KS 66604
Atkins, Bruce                      Curran, Michael                      (785) 271-3373 (phone)
Noller, Shannon                    Sutte III, Donald                      (785) 271-3370 (fax)
Mezzacasa, Joseph                                                http://www.accesskansas.org/kreab



                                                              Please note the following e-mail address
                                                              changes for the Board staff:
                  WHO DO I ASK?
                                                                                Sally Pritchett
                                                                     sally.pritchett@kreab.state.ks.us
    The Kansas Real Estate Appraisal                                         Cheryl Magathan
Board staff is always ready and willing to                          cheryl.magathan@kreab.state.ks.us
provide assistance to both appraisers and
the public. However, questions regarding
the interpretation or application of USPAP
must be directed to the Appraisal Founda-



KREAB 2003 WINTER NEWSLETTER                                                                             PAGE 6

				
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