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The Appraisal Institute and The Appraisal Foundation

VIEWS: 413 PAGES: 22

									    V o l. 18 • N o. 4
   July- August 2010
     WalNut Creek

 N o r t h e r n Ca li f o r ni a Ch a p t e r o f t h e A p p r a i sa l I n s t i t u t e
The Appraisal Institute and The Appraisal Foundation
T   he Appraisal Institute is cur-
    rently facing a ver y impor tant
                                                                                    content and explanation of the situa-
                                                                                    tion, which we later learned was for
issue: As recently repor ted to us by             Jeff Enright, MAI                 good reason: TAF was in the midst of
our organization’s leadership, The                                                  considering what it perceived to have
Appraisal Foundation (TAF) has pro-                                                 been a violation of its Code of Conduct.
posed to suspend the AI as a sponsor
of TAF for a seven-month period star t-
                                           It is important that                     Since that time, and following TAF’s
                                                                                    formal decision to suspend the AI,
ing September 15, 2010. This pending            we understand                       our leadership has been substantially
action by the entity responsible for                                                more informative with regard to the
the Uniform Standards of Professional           exactly what is                     facts and other information per taining
Appraisal Practice (USPAP) and mat-       happening, and why.                       to the issues. President Sellers has
ters relating to appraiser licensing                                                held multiple LiveMeeting conferences
and cer tif ication is in response to                                               with Chapter and Regional leadership;
allegations that the AI has “engaged         Our membership first learned of the    Vice President Sara Stephens, MAI,
in conduct materially and seriously       issue in an email sent by the Appraisal   and Past President Jim Amorin, MAI,
prejudicial to the purposes and inter-    Institute’s President, Leslie Sellers,    SRA, have participated in our Chapter’s
ests of The Foundation.” Obviously,       MAI, SRA, on June 18, 2010. President     recent webinar titled “TAF Information
this has caused significant confusion     Sellers noted issues of “disagreement     & Chapter Events Update”; and the AI
and/or consternation among many of        and miscommunication between the          most recently made available hundreds
our Chapter members. It is impor tant     two organizations,” as well as TAF’s      of pages of letters and presentation
that we understand exactly what is        accusations regarding actions by the      material relating to the current situ-
happening, and why.                       AI’s Government Relations Commit-         ation, along with a summarized FAQ
                                          tee (GRC) and Washington of f ice.
                                          That original email was limited in its         ➤ President ’s Message , page 12
 In This Issue
  2010 Fall Conference ......... 2        Lennhoff to Present
  FREE Resources .................. 3     “Yellow Book” Seminar
  National BOD Actions ........ 8         September 13-14 / San Jose
  CA PACE Suit ..................... 9
  Feature Ar ticle ................. 10   I nsure that your work for the federal acquisition agencies meets the highest
                                            standards. Federal land acquisition programs have unique appraisal needs.
                                          This two-day seminar will acquaint par ticipants with these needs and provide
  IMHO: Unification................. 14
                                          practical procedures and solutions to insure appraisal repor ts fulfill them. Any
  Member Benefits .............. 16
                                          experienced residential or general appraiser interested in expanding their client
  Available Scholarships .... 18          base to include federal acquisition agencies will learn to apply the Uniform
  New Associate Requirements ...18        Appraisal Standards for Federal Land Acquisitions.
                                             The Nor thern California Chapter is pleased to have highly-rated and
  Opportunities in Litigation... 20       experienced instructor David Lennhoff, MAI, SR A, present this newly updated
  Classifieds & Calendar .... 22          and “in demand” offering. If you’ve not yet secured your space, you’ll want to
                                          do so immediately. Click here for additional details and to register.

               Northern California Chapter’s Mission Statement
              “To serve our members through education, professional development,
                    and support in achieving their professional designations.”
2   Newsletter of the Northern California Chapter of the Appraisal Institute   Return to page 1

                      Northern California Chapter

           2010 Annual F all Conf e rence
                        Real Estate and Appraisal Symposium
                          Plan to celebrate a
                   60-year tradition with us this Fall
           Early and Group registration discounts available

                                 Wednesday, October 20
                                  San Francisco Hilton

Return to page 1                                                                                        July-August 2010   3

                        Members in the News
H    ere is a member who was literally in the news! Carole
     Laval, SR A, was recently quoted in an ar ticle titled
“ Watch Dog Repor t / Assessor Cuts Cost Fresno County”
                                                                running for Fresno County Assessor. Good luck, Carole!
                                                                    Richard M. Betts, MAI, SR A, has been granted Life
                                                                Membership status. Rick has been a practicing (and
that appeared in the Fresno Bee on August 8, 2010. Carole       extremely active) member of the Appraisal Institute and
currently ser ves as the Secretar y for the California Gov-     its predecessor organizations continuously for at least 40
ernment Relations Subcommittee and is a member of the           years and is currently engaged in business identified by
Northern California Chapter’s Board of Directors. In addition   the Standards of Professional Appraisal Practice. Con-
to owning/managing Laval & Associates, she is currently         gratulations, Rick!

Don’t Miss Out                               Congratulations                        New Contact
A    re you getting the impor tant news
     you need to manage your business
                                             Newly                                  Info
in these challenging times? Are your
peers and clients able to contact you
                                             Designated                              Howard R. Levy, MAI
                                                                                      Howard Levy Appraisal Group, Inc.
– easily? Are you taking advantage            Michael Lockard, MAI                    811 Third Street
of the many discounts sent to you              Associated Right of Way, Inc.          Santa Rosa, CA 95404
via email?                                     1239 S. Highland Avenue                707/575 -7778 x11
    Members are encouraged to keep             Ripon, CA 95366 -9591                  FA X 707/575 - 0240
their email addresses up to date. Simply       925/691-2838                           howard@
log into w w /        Fax: 925/691- 6505                           howardlev
my appr aisalinstitute and click the           mlockard@ar
“Manage My Account ” tab.

                                                Missed a Workshop?
                                           Looking for Market Data?
                     Couldn’t Decide which Breakout to Attend?
                  Be sure to visit the download section of our
          website for FREE copies of available presentations !
    Handouts * Videos * Audio Recordings * Podcasts

                             Online Education: Learn at your own pace anytime, anywhere.
                   Top-notch Appraisal Institute courses and seminars come straight to your desktop with
                      online education! Learn from any computer anywhere, whenever you have time.
                          It’s easy, convenient and a great way to get the education you want.
                                           Check out the current course listing now!
4    Newsletter of the Northern California Chapter of the Appraisal Institute                         Return to page 1

 2010 Officers and Directors & Branch Chapter Leadership
O f f icers                                       Kathr yn Sturgis- Bright , MAI     Silicon Valley
President                                           ksb@sturgisbright .com            Fred Arredondo, MAI – Chair
    Jef f Enright , MAI                           Rober t Hensley, MAI        
     jef                            Rober t .        Benj Becker – Vice Chair
Vice President                                    Josh Fronen, MAI            
    Larr y Hopper, MAI                                     Monterey Bay
     ldhopper@rpaappr                   George Comitos, MAI                 Ellen Glasgow – Chair
                                                  Darin Polsley, MAI                  Bonnnie Brown – Co-Vice Chair
    Melissa Bach, MAI
                                                  Carole Laval, SR A                  Brian Nicholson, SR A – Co-Vice Chair
Secretar y                                          claval@comcast .net       
    Brad MacLane, MAI
     br            2010 Branch Chapter                  North Bay
                                                                                      Bill Hafner, MAI – Chair
E xO f f icio / Immediate Past                  Leadership                    
   President                                    Central California                    John Stobba – Vice Chair
    Steve Castellanos, MAI, SR A                  Carole Laval, SR A – Co- Chair        stobbaappr aisals@comcast .net                claval@comcast .net              Golden Gate
National Director                                 Kelly Stevens – Co- Chair
                                                                                      Cherin Mooradian, MAI – Chair
    Claudia Carleton, MAI                           Kelly 0           moor                       East Bay                              Michele Hegedus – Vice Chair
Directors                                         Marian Huntoon, SR A – Co- Chair      michelehegedus@k
    Sara Cohn, MAI                                  Sierra
     scohn@cbpappr                      Nancy Townsend, SR A – Co- Chair
                                                                                      Richard Taylor – Chair
    R. Scott Jura, SR A                             nancy t
     sjur a@giur a .com                                                                 r t
                                                  Darin Polsley, MAI – Co- Chair
    Kelly Stevens                                                                     Ross Schemmel – Vice Chair
     Kelly 0

                                       2010 Committee Chairs
Membership Development                            Lori Horn, SR A – Co- Chair         Matt Carriere – Co- Chair
and Recr uitment                                  650/348- 4100                       650/853-1638
    Darin Polsley, MAI                                    mat t
    925/933 - 5000                                Marian Huntoon, SR A – Co- Chair    Marlene Deason, SR A – Co- Chair                            510/547- 4585                       209/604 -7276 FA X 925/228-2767
E xper ience Review – General               
    Susan Burnett , MAI                         Education – Seminars                 Nominating
    510/336 - 0052                                George Comitos, MAI – Chair         Steve Castellanos, MAI, SR A
E xper ience Review – Residential                 650/356 -1152                       209/929-14 41
    Peggy Darnall, MAI, SR A                   
    510/523 - 4 477                               Benj Becker – Vice Chair           Scholarships                        650/356 -1153                       Roland Burchard, MAI – Co- Chair
                                                          925/932- 9200
    Melissa Bach, MAI                           Fall Conference                        roland@burchardandrinehar t .com
    925/256 -1463                                 Erik Woodhouse                      Norm Hulberg, MAI – Co- Chair
     mbach@cbpappr                      925/935 - 9200                      408/279-1520 X142
                                                    erik@burchardandrinehar t .com
Gover nment Relations
                                                Spr ing Conference                    Gar y DeWeese, MAI – Co- Chair
    Carole Laval, SR A
                                                  Richard Taylor                      925/216 - 8751
    559/435 - 4043
                                                  209/569- 0450                        gar ydeweese@comcast .net
     claval@comcast .net
                                                    r t            Technology / Net wor king
                                                Public Relations                      Ryan Lorenzini – Co- Chair
    Joe Napoliello, MAI
                                                  Rich Paddock                        925/327-1660 x 208
    650/875 -1459
                                                  209/551- 3110                        r
                                                    Rich@Paddock Appr       Kyle Brown – Co- Chair
                                                                                      831/455 -1991
                                                                                       k yle@sba-realest
                                                                                     Wor kshops
                                                                                      Gene Williams, MAI

                                      the Month
                          Question of Newsletter
Education – Courses
     Q. Is there a way that I can see how many CE credits I’ve accu-
     mulated over the past year or two from the Appraisal Institute?
     A. Y es ! s implY log iNto “ mY ai ” ( at the top right CorNer of the
     NatioNal Web page ) aNd You CaN VieW Your reCords oNliNe . Tr y
     it !
Return to page 1                                                                                                                                                                                                                  July-August 2010   5

                      Art Estate Tax Return
       In                                 of
                            Must-know strategies and great movies combine in
                    the ultimate guide to Form 706 preparation and estate tax savings

                                            by Keith Schiller, Esq.
                                            Foreword by Charles W. Morris, Esq.
                                            Former IRS Territory Manager, Estate and Gift Tax for the Western United States

                                             One of my long-time friends asked,

                                             “Are you publishing your secrets
                                             for estate tax savings and opti-
                                             mum Form 706 preparation?” Art    of
                                             The answer: “Yes!”               the
          ”Keith Schiller’s work here, the substantive work tied togetherax                                                                                Art Est                         of
                                                                                                                                                           Tax Returate
          with his personal insights and experiences and in some cases
          the insights of others is, by far, the best work on the subject
          that I have ever seen. By far!”                                                                                                                            n
          Charles W. Morris, Esq.; Former IRS Territory Manager,
          Estate and Gift Tax for the Western United States
                                                                                                                                                        : CHAP
                                                                                                                                                                TER 3
                                                                                                                                                                        — SO
                                                                                                                                                                              ME LIK
                                                                                                                                                             HOT AN                      E IT
                                                                                                                                 Must-k                             D SAVIN
                                                                                                                        the ul          now st

                                                                                                                                   S om e L i k
                                                                                                                                                                            G A FO
                                                                                                                              timate           rategi                              RTUN

                                                                                                                                     guide            es
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          “Schiller wrote this book the way Spielberg directs a                                 r                                                    706 pr          ovies co

                                                                                                                                                           eparat                mbine

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                                                                                                                                                                          d esta                                                          3-1
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          a spell-binding story — and that’s not easy when you
                                                                                                                                              ord by
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                                                                                                                                                                              Gift Tax
                                                                                                                                                                                         for the
                                                                                                                                                                                                        rn United
                                                                                                                                                           First Ed


          Stephan R. Leimberg, Esq.; CEO of Leimberg and Le Clair, Inc.

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6   Newsletter of the Northern California Chapter of the Appraisal Institute                                   Return to page 1

                               News Wor th Noting
Appraisal Reviews Increasingly Important After
Real Estate Meltdown: The Appraisal Journal
ChiCago (a ug . 6, 2010)                                               that can be used to confirm that an appraisal complies

R    eviews of appraisal reports, an essential quality-control
     function in the real estate industr y and especially
so in the wake of the residential and commercial market
                                                                       with regulator y requirements and appraisal standards. The
                                                                       ar ticle also gives a checklist of elements that the reviewer
                                                                       should address in his or her repor t.
meltdowns, are the subject of The Appraisal Journal’s                      Sorenson writes that the essence of appraisal review
Summer issue cover ar ticle.                                           is to investigate, analyze and verify the logic and proce-
   The Appraisal Journal is the quar terly technical and               dure used in an appraisal and to ensure a sound value
academic publication of the Appraisal Institute,                                                      opinion. Appraisal reviews are
the nation’s largest organization of real estate                                                      ordered by lenders, mor tgage
appraisers. The materials presented in the                                                            insurance companies, and
publication represent the opinions and views of                                                       government-sponsored enter-
the authors and not necessarily                                                                       prises, especially when there
those of the Appraisal Institute.                                                                     is a foreclosure that results
   “Developing the Appraisal Review                                                                   in a full audit of the loan file.
Opinion,” by Richard C. Soren-                                                                        There are an estimated 11,000
son, MAI, offers a framework for                                                                      to 14,000 appraisal reviewers
appraisal reviews and identifies                                                                      in the United States.
the most common areas where                                                                               Read “Developing the Appraisal
appraisal deficiencies may be found.                                                                  Review Opinion” in the Summer

The author lists 12 steps as the                                                            2010 issue of The Appraisal Journal
star ting point for any review and                                                          at: ht tp://lumlibrar /webpac/pdf/
provides a compliance checklist                                                             TAJ2010/AppraisalReview.pdf .

Changes to Fair-Value                                                                        accounting standards would be rules
                                                                                             that require alter native investment

Reporting Could Impact                                                                       managers to disclose the effect on
                                                                                             the repor ted value of cer tain assump-

Valuations                                                                                   tions they made to value an asset.
                                                                                             Currently, many valuations of assets

U    nder new U.S. and international           exposure drafts of revised fair-value         are made on a best estimate approach
     accounting proposals being cir-           standards seeking public and industr y        from managers using internal company
culated, managers of private equity,           comment by September 7. The IASB’s            infor mation. Under the new r ules,
venture capital and other alternative          draft focuses on increased transpar-          managers would have to disclose any
private investment funds could face            ency about fair-value measurements,           of the significant inputs that went into
muc h tougher r ules on explaining             including valuation techniques and            that best guess – a controversial move
how they arrived at an asset’s value           assumptions made to measure fair value,       bec ause some industr y obser ver s
and the methods used to appraise               according to Pensions & Investments.          believe this could expose managers
such assets, according to Pensions             The FASB’s draft would essentially            to a host of legal issues, according to
& Investments’ July 26 stor y.                 require managers to clearly state how         Pensions & Investments.
    The proposed changes are part of an        they arrived at fair-value valuations             Another controversial change would
ongoing effor t to standardize the way         and would more plainly bring U.S.             be the altering of ways that firms could
fair-value repor ting is handled at the        standards in line with international          value assets. As it stands, a private
international level, which has attracted       ac c ounting standards, Pensions &            equit y inve st ment f ir m c an eit her
increasing interest since the financial        Investment repor ted.                         combine assets and value them as
crisis expanded overseas. Pensions &               Among the more controversial poten-
Investments repor ted that at the June         tial changes to international and U.S.                  ➤ Fair-Value Changes, page 7
meeting of the G-20, executives of both
the Financial Accounting Standards
Board and the International Account-                        The proposed changes are part of an
ing Standards Board were called to
account for their progress converging                       ongoing effort to standardize the way
the differences in accounting standards                      fair-value reporting is handled at the
between nations.
    In conjunction with the G -20 meet-                                        international level…
ing, both the FASB and IASB released
Return to page 1                                                                                              July-August 2010   7

                             News Wor th Noting
FHA Launches Refinance Opportunity                                                               another tool to
for Underwater Homeowners                                                                    help overcome the
                                                                                                negative equity
H     omeowners under water on their
      mortgages could be getting relief
through a government program designed
                                            is another tool to help overcome the
                                            negative equity problem facing many
                                            responsible homeowners who are looking
                                                                                                problem facing
to encourage principal write-downs for      to refinance into a safer, more secure
                                                                                              many responsible
responsible borrowers, according to         mortgage product.”                                     homeowners
a Department of Housing and Urban               The FHA Short Refinance option is
Development news release issued             one of several Obama administration         be current on their existing mortgage,
August 6.                                                                               qualify for the new loan under standard
    In an ef for t to help responsible                                                  FHA under writing requirements, have
but struggling homeowners, HUD has                                                      a credit score equal to or greater than
detailed adjustments to its refinance                                                   500, and the property must be their
program, which the agency hopes will                                                    primary residence. Also, the borrower’s
enable lenders to provide additional                                                    existing first lien holder must agree
refinancing options to homeowners who                                                   to write off at least 10 percent of the
owe more than their home is worth.                                                      borrower’s unpaid principal balance,
    Starting September 7, the Federal                                                   br inging that bor rower ’s c ombined
Housing Administration will offer certain                                               loan-to-value ratio to no greater than
under water non-FHA borrowers who                                                       115 percent.
are current on their existing mortgage                                                      Existing FHA-insured loans cannot
and whose lenders agree to write                                                        be ref inanced, and the ref inanced
off at least 10 percent of the unpaid                                                   FHA-insured first mortgage must have
principal balance of the first mortgage,                                                a loan-to-value ratio of no more than
the opportunity to qualify for a new                                                    97.75 percent.
FHA-insured mortgage, according to                                                          To facilitate the refinancing of new
the HUD news release.                       initiatives introduced as par t of an       FHA-insured loans under this program,
    “ We’re throwing a life line out to     administration plan to help stabilize       the Treasury Department will provide
those families who are current on their     residential markets by helping 3 to 4       incentives to existing second lien holders
mortgage and are experiencing financial     million struggling homeowners through       who agree to provide principal write-
hardships because proper ty values          the end of 2012.                            downs. To be eligible for the program,
in their community have declined,”              To be eligible for a new loan, the      servicers are required to execute a
FHA Commissioner David H. Stevens           homeowner must owe more on their            Servicer Participation Agreement with
said in the HUD news release. “This         mortgage than their home is worth,          Fannie Mae on or before October 3.

IVSC Releases Two Documents for Comment
T    he International Valuation Profes-
     sional Board of the International
Valuation Standards Council has released
                                            timely for the International Valuation
                                            Professional Board to be defining the
                                            ‘Professional Valuer’.”
                                                                                        ethical responsibilities of valuation
                                                                                        professionals, according to the IVSC
                                                                                        news release.
for industr y comment two documents             The documents — a discussion               “It is our intention that this Discus-
intended to define “professional valuer.”   paper titled “Definition of a Profes-       sion Paper, along with the companion
Comments are due by September 30.           sional Valuer,” and an exposure draft       Code of Ethics Exposure Draft, will
    “Subsequent to the global finan-        titled “Proposed Code of Ethics for         afford both valuers and non-valuers the
c ial c r isis, c hange is likely to be     Professional Valuers” — were published      oppor tunity to shape the expectations
more f requent and m o re c o mplex         to enhance the public’s awareness           for the future of the global valuation
than ever before,” IVPB Chair Brad          of the valuation profession and the         profession,” Wagar said.
Wagar said in a July 20 IVSC news           desired attributes of a professional           The documents are available on the
release. “Therefore, it is par ticularly    appraiser while also addressing the         IVSC website at http://w w

Fair-Value                                  Under the new proposal, firms would
                                            be required to individually value assets,
                                                                                        neither the FASB nor the IASB has
                                                                                        stated when it will release final stan-

Changes                                     which could negatively affect holdings
                                            that would be wor th more if they were
                                                                                        dards for fair-value accounting rules.
                                                                                        Insiders with knowledge of the proceed-
                                            grouped together, Pensions & Invest-        ing say they could be made public by
from page 6
                                            ments repor ted.                            the first quar ter of 2011, according to
a group, or value each individually.           Despite issuing exposure drafts,         Pensions & Investments.
8   Newsletter of the Northern California Chapter of the Appraisal Institute                          Return to page 1

                              News from National
AI Board Sends Core                                                                  Rick Borges,
Competency, International                                                            MAI, SRA,
Issues to 45-Day Notice                                                              Elected as
And Other Important Decisions from the
                                                                                     National Vice
August 2010 National BOD Meeting                                                     President
                                                                                     CHICAGO (Aug. 17, 2010) – Rich-
The Appraisal Institute Board of Directors sent two impor tant topics to 45 - Day    ard L. (Rick) Borges II, MAI, SR A,
Notice and addressed other pressing issues during its Aug. 12-13 meeting             formerly of Seymour, Ind., has been
in Chicago.                                                                          elected as 2011 vice president of the
                                                                                     Appraisal Institute, the nation’s larg-
Core Competency                                                                      est professional organization of real
    The Board passed a motion to direct 45 -Day Notice to the membership of          estate appraisers.
proposed amendments to the Bylaws and Regulations that would implement                   Borges will ser ve as vice president
the changes in designation requirements reflected in the Core Competency             of the Appraisal Institute beginning
Model, which recently was shared with membership via an exposure draft               Jan. 1, 2011. The following year he will
(      ser ve as president-elect, and in 2013
    The Core Competency Project Team and the Admissions and Designation              will become the Appraisal Institute’s
Qualifications Committee worked for about two years to create the core com-          president for one year, followed by a
petency model. ADQC believes that its implementation will keep the MAI and           year as immediate past president. He
                                                                                     also will ser ve on the organization’s
SR A designation requirements relevant and rigorous for all qualified candidates
                                                                                     Executive Committee those four years
and will strengthen the Appraisal Institute in the long run.
                                                                                     and will be a member of the Board
International Members                                                                of Directors during that time as well.
    The Board also sent to 45 -Day Notice three items related to the Appraisal           “I truly appreciate the oppor tunity
Institute’s international members. The first would define as international members   to continue ser ving the public, the
all AI members whose principal place of business or residence falls outside          Appraisal Institute and the appraisal
the United States, U.S. territories and Canada. The second would create              profession as a member of the Institute’s
a regional structure for international members, and the third would create           leadership team,” Borges said. “It is
a chapter structure for international members. The Board passed motions              a great honor that brings tremendous
sending all three issues to 45 -Day Notice so that members may provide their         responsibility requiring long and hard
                                                                                     work that I am eager to begin. I look
feedback before the Board’s next meeting.
                                                                                     for ward to building the Appraisal Insti-
And in Other Actions                                                                 tute’s relationship with its more than
    ■ The Board also elected three Board members to the Appraisal Institute’s        25,000 members in about 60 countries
        Audit Committee for 2011: Harmon H. Garrin, MAI, SR A; John (Pat) Asay,      around the globe.”
        MAI; and Jim Amorin, MAI, SR A.                                                  He has been a member of the Appraisal
    ■   Voted to fund chapters up to $625,000, taken from Associate member           Institute since 1978, a member of the
        dues, in 2011. The Appraisal Institute in 2011 also will provide $15 from    National and Indiana Associations
        tuition revenue of each online course/seminar (excluding webinars and        of Realtors and the Jackson County
        special programs), which has a registration fee in excess of $100, to be     Board of Realtors since 1974 and the
        credited to chapters on a quar terly basis.                                  Columbus (Ind.) Board of Realtors since
                                                                                     1997. Borges received the President’s
    ■   Passed a motion to hold an annual national conference and expo for
                                                                                     Award from the Appraisal Institute in
        AI’s membership beginning in 2011, with the first event to take place
                                                                                     2009, the Richard E. Nichols, MAI,
        next August in Las Vegas.
                                                                                     SRA, Lifetime Achievement Award from
    ■   Approved ADQC’s recommendations to appoint a project team (up to six
                                                                                     the Hoosier State Chapter in 2008, the
        members) to study the organizational impact, legal issues, implementa-
                                                                                     Edward L. White Achievement Award
        tion timeframe and cost and revenue projections of a potential Candidate
                                                                                     from the Hoosier State Chapter in 2000,
        member program.
                                                                                     the Dick Snyder Ser vice Award from
    ■   Voted to hold the May 2011 Board of Directors and Strategic Planning         the Indiana Association of Realtors
        Committee meetings in Puer to Rico, at the invitation of the Puer to Rico    in 1984 and the Realtor of the Year
        Chapter, based on research that showed the meetings would cost less          Award from the Jackson County Board
        than if they were held in Chicago.                                           of Realtors in 1982.
    ■   Approved a 45 -Day Notice item dealing with three appraisal repor t alter-       Borges is a par tner with his wife,
        native for the MAI designation, described as a “housekeeping” item to        B. LaVonne Borges, SR A, in Borges
        revise Regulation No. 1.
    ■   The next AI Board of Directors is scheduled for Nov. 3 -5 in Miami.             ➤ National Vice President , page 9
Return to page 1                                                                                                      July-August 2010   9

National Vice                               AI’s Newest Release:

                                            Visual Valuation: Implementing
from page 8
                                            Valuation Modeling and Geographic
& Borges Real Estate Advisors, a full-
                                            Information Solutions
ser vice real estate firm with offices in
Seymour and Greenwood, Ind., providing      T   his book offers innovative thinking
                                                and technological solutions to many
                                            of the issues confronting the valuation
                                                                                                technologies to address valuation issues.
                                                                                                The discussions and demonstrations
                                                                                                provided will educate appraisers new
counseling, brokerage, development
and appraisal ser vices since 1977.         profession today. It explores information           to valuation modeling and GIS while
   He is concluding three years of                             technology — the latest          also addressing the concerns of more
ser vice as a member of the Appraisal                          generation of geographic         sophisticated users who are already
Standards Board of The Appraisal                                information systems             comfortable with practical applications
Foundation. In addition, Borges has                             (GIS), valuation model-         of the technology. Each chapter can be
been a contributor and developer for                               ing applications, and        read on its own or as part of a larger
several appraisal-related tex tbooks                                  predictive analytics      argument about the evolution of appraisal
and seminars, including “Appraising                                   software — and its        practice in the 21st century.
                                                                       implementation by real       This new text, written by Mark R.
Residential Properties,” fourth edition,
published by the Appraisal Institute                                    estate professionals.   Linne, MAI, SRA with Michelle Thomp-
in 2007.                                                                   The valuation sce-   son, PhD, is a 318-page, soft-cover
                                            narios presented in this new book range             publication. To order, call 1-800/504-
                                            from the approachable to the complex,               7440 (stock number: 0737M); Member
Appraisal                                   as various contributors with diverse                $50. / Non-Member $60. (plus shipping

                                            expertise find ways to leverage existing            and handling).

Seeks Award                                 during the Appraisal Institute’s awards             level; provides ser vice to his or her
Nominations                                 luncheon in Miami.
                                               The Lifetime Achievement Award
                                                                                                community; and has contributed to
                                                                                                the appraisal profession for at least

T   he Appraisal Institute is seeking
    nominations by AI members and
chapters for lifetime achievement and
                                            is presented to an Appraisal Institute
                                            member who demonstrates high ethi-
                                            cal standards; has volunteered several
                                                                                                20 years.
                                                                                                   The Outstanding Ser vice Award is
                                                                                                presented to an individual who has
outstanding ser vice awards. Nomi-          years of ser vice and contribution to               contributed ideas, service and dedica-
nations are due by Sept. 15 for the         the Appraisal Institute on the chapter,
awards, which will be presented Nov. 3      regional, national and/or international                    ➤ Award Nominations, page 13

                              Legislative Update
Fannie/Freddie Overseer Sued                                                                              ...the state of
by California Attorney General                                                                         California could
T    he regulator y agency responsible
     for overseeing mor tgage giants
                                            either own or guarantee about half of
                                            all U.S. mor tgages and have stopped                    stand to lose more
Fannie Mae and Freddie Mac has
been sued by the California Attorney
                                            accepting loans tied to PACE.
                                                The subsequent shutdown of the
                                                                                                      than $100 million
General over its role in ef fectively       PACE program after the FHFA’s posi-                     in federal stimulus
shutting down a program that allows         tion was released prompted California
homeowners to finance solar panels          Attorney General Jerr y Brown to file                   money if the PACE
and other energy-saving improvements        suit. Calling the FHFA’s move a “regu-
through their proper ty tax bills.          lator y strangulation of the st ate’s                         program isn’t
    The Federal Housing Finance Agency      grass-roots program,” Brown alleges
on July 6 said that the Property Assessed   in the suit that the federal government                              revived.
Clean Energy program, known as PACE,        had mischaracterized PACE funds as
presented “unusual and difficult risk       “loans” instead of “assessments” and
management challenges” for lenders,         improperly por trayed the program as                the PACE program isn’t revived. That’s
ser vic ers and mor tgage secur ities       violating Fannie and Freddie’s stan-                because the Obama administration
investors in a “ fragile housing finance    dard lending procedures, according                  has devoted more than $150 million
market,” according to The Los Angeles       to the Times.                                       in stimulus funds to PACE nationwide.
Times. Since then the market for loans          According to Brown, the state of                California, the state in which PACE
with PACE assessments has essen-            California could stand to lose more than            has its roots, is par ticularly active in
tially frozen as Fannie and Freddie         $100 million in federal stimulus money if           promoting the program.
10   Newsletter of the Northern California Chapter of the Appraisal Institute                               Return to page 1

                 Feature Ar ticle of the Month
           Are You Sustainable?
   Past environmental disasters like the Deepwater                    to add construction and real estate to the sector-specific
Horizon oil spill have generated power ful fundamental                guidelines in the widely used sustainabilit y repor ting
shifts in business methods and approach.                              framework known as the Global Repor ting Initiative.
                                                                          Clearly, positioning real estate to maximize financial
By Timothy P. Runde, MAI, LEED AP and Stacey Thoyre
                                                                      returns requires that an owner understand sustainability.

W      ith so much attention focused on green building, it’s
       easy to miss the real stor y: Sustainability, a much
larger and more power ful force. Dubbed an emerging
                                                                      For example, now that one in four square feet of offices
                                                                      in downtown San Francisco is cer tified under LEED, what
                                                                      kind of competitive disadvantage do brown buildings face?
“megatrend” in the May Har vard Business Review, sus-                 . How many brown buildings do you want in your por tfolio
tainability is profoundly changing the way corporations               in an environment of increasingly common and stringent
do business and consumers behave. The trend is global                 green building codes and market forces like Ceres that
and cuts across industries, touching retail giant Wal-Mar t           are pressuring institutional investors to adopt sustain-
Stores Inc., landlord Tishman Speyer and Oakland health               ability principles? Will McMansions in the suburbs retain
care company Kaiser Permanente. Seventy percent of                    their value if Generation Y prefers urban centers and
commercial real-estate executives cite sustainability as              transit-oriented development? What if consumers react
a critical business issue and 89 percent consider it in               to sustainability imperatives by permanently reducing how
their real estate decisions, according to the 2009 annual             much they buy or where they shop? A structural shift to
sur vey by global real estate ser vices company Jones                 lower levels of consumption would increase retail vacancy
Lang LaSalle.                                                         and suppress rents, causing devaluation.
     But what is sustainability, and how does it differ from              One doesn’t have to agree with the principle of sustain-
green building? Green building describes a process (build-            ability to heed its influence. What gives sustainability its
ing green) and a product (a green building). Sustainability,          traction relies on basic issues of supply versus demand.
on the other hand, is the underlying principle that gives             Global population is projected to increase nearly 40 per-
rise to expressions as diverse as green building, farmers’            cent to 9.2 billion people by 2050, according to the U.S.
markets, hybrid cars, solar panels, cap-and-trade legisla-            Census Bureau. Much of this population growth will occur
tion, sustainability product indices, responsible proper ty           in developing nations like Brazil, India and China, where
investing, clean-tech investment and countless others. In             consumption rates are expected to increase dramatically
a Venn diagram, green building, corporate social respon-              to levels akin to those of developed nations. With Ear th’s
sibility, conser vation, environmentalism and the local food          finite resources, this type of increased demand will cer-
movement would all be sustainability subsets.                         tainly have significant repercussions.
     For all that, sustainability remains ill-defined. Many               In the past, technology eased some supply constraints,
definitions have evolved but not a universal one. In a                most notably the Green Revolution that—temporarily at
business setting, sustainability often is expressed as a              least— alleviated wor ld hunger through industr ialized
triple bottom line concept. The social and environmen-                agriculture beginning in the 1940s. The problem is that
tal benefits and costs of an activity must be reconciled              technological fixes often create unintended consequences
alongside economic costs and benefits. Sustainability                 such as the resultant water crisis that now faces many
considers intergenerational equity and implies stewardship            of the countries that benefited the most from the Green
of collective resources.                                              Revolution.
     While the most obvious example of sustainability in                  In addition, recent events, such as Hurricane Katrina
real estate is green building, its effects are impacting              and the Deepwater Horizon catastrophes, have illuminated
vir tually the entire built environment. As individuals and           the limits and risks of modern technology and intensified
corporations continue to adopt sustainability principles              public awareness of the true costs of the Western lifestyle.
and practices, land use and location preferences will be                  These costs, as well as the unintended and unantici-
affected. This ubiquitous impact flows from real estate’s             pated water crisis caused by the Green Revolution, are
unique characteristics: it is location-specific and immobile;         examples of what economists call externalities—the effects
difficult to cost-effectively alter; and created to house human       of an activity not anticipated or paid for at the time of the
activity, personal and work-related. If green building is an          event. In 1989, the Exxon Valdez prompted the formation
indication, market conditions can change rapidly. Last year           of Ceres, whose initial goal was ensuring that companies
alone, the square footage of San Francisco office space               be held more accountable for the environmental and social
certified under the Leadership in Energy and Environmental            impacts of their businesses. For Lee Scott, the former
Design grew by more than 800 percent. Quickly-changing                chief executive of Wal-Mar t, Hurricane Katrina was the
conditions add to real estate risk of obsolescence.                   defining moment that precipitated the well-documented
     Real estate is resource -intensive to construct and              transformation in the retailer’s business model to embrace
operate. Some estimates peg buildings for 40 percent of               sustainability.
energy consumption in the United States and 73 percent of                 It is difficult not to draw parallels between Katrina in
carbon-dioxide emissions due to electricity consumption.              2005 and the Deepwater Horizon disaster in 2010 but the
Ceres, a nonprofit aimed at integrating sustainability into
capital markets, and its United Nations par tner are about                                                ➤ Sustainable?, page 11
Return to page 1                                                                                             July-August 2010   11

Sustainable?                               ment capital, and Katrina prompted the
                                           largest global retailer to fundamentally     A Peek at
from page 10                               change its business model to embrace
                                           sustainability, what changes will occur      Fall
differences illuminate more. Even con-
sidering human contribution to climate
                                           due to Deepwater Horizon? Cer tainly,
                                           we will see increased interest and           Conference
change and the inadequacies of the
New Orleans levy system, Katrina was
                                           financial suppor t for clean technology
                                           and alternative-energy sources. But          2010
a disaster of primarily natural origin.    the strongest — and most lasting —                nder the leadership of Erik Woodhouse,
The Deepwater Horizon catastrophe is       effects may derive from the individual            the 2010 Annual Fall Conference
of purely human origin. It is impossible   consumers who realize that we, as a          Commit tee is put ting the f inishing
to deny the externalities of our current   society, cannot continue viewing and         touches on this year’s 60th consecu-
way of life when we see 24/7 stream-       using our resources — people and             tive conference. Plan to join over 40
ing video of the gushing oil and image     planet — in the way we have had.             top-notch speakers, 450+ of your peers
after image of devastated marshland,       Whether today’s corporations follow          and allied real estate professionals,
coastline and wildlife.                    suit and hasten adoption of sustain-         and onsite vendors on Wednesday,
    Deepwater Horizon prompts larger       ability principles with a focus on the       October 20th. Once again, we are
questions about the real costs of oil      three bottom lines is unknown. For           pleased to present this dynamic event
exploration and exploitation. Even to      those of us betting on the power of          at the San Francisco Hilton.
those not sympathetic to environmental     human sensibility and the collective
advocacy, the link from the horrific       effect of consumers and businesses           Jon Haveman to
damage to the gulf ’s ecosystem to         betting with their feet, the smart money
                                           would seem to be on sustainability.
                                                                                        Deliver the Keynote
the assault on the economic system
is over whelming. Jobs have been and                                                    Address
                                           Timothy P. Runde, MAI, LEED AP, is a

will be lost; local economies will be      par tner with Carneghi- Blum & Par tners          on Haveman is a founding partner of
crushed; shareholders face significant     and has been appraising commercial real           Beacon Economics. Dr. Haveman is
losses. The Exxon Valdez experience        estate in the San Francisco Bay Area         an expert in goods movement, interna-
suggests years, more likely decades,       since 1989. Stacey Thoyre, a published       tional trade
for recovery.                              writer who is educated in risk manage-
                                           ment and finance, has worked in the Risk     policy, and
    From a business standpoint, it makes                                                labor market
                                           Management accounts division of Marsh
sense to ponder: If the Valdez spill       & McLennan. They have been married           issues. He
launched the creation of Ceres, which      for more than 20 years.                      has authored
via its Investor Network on Climate Risk   Article reprinted with permission from The   a number
now encompasses $9.8 trillion of invest-   Registry, July/August 2010.                  of special
                                                                                        rep or t s on
                                                                                        t at i o n a n d
                                                                                        issues at
                                                                                        business out-          Jon Haveman

              print                        events
                                                                                        sourcing, and
                                                                                        trade in technology products. He has
                                                                                        a lengthy record of publishing ar ticles
                                                                                        in the areas of labor and international
                                                                                        economics. He also has a histor y of
                                    online                                              work related to private asset accumula-
                                                                                        tion in the United States. Dr. Haveman
                                                                                        is routinely contacted by the press to
                                                                                        discuss his work and has testified at
                                                                                        numerous Federal and State government
                                                                                        hearings on issues related to seapor t
                                                                                        activity and security, technology trade,
                                                                                        and l o c al e c o no mic deve l o pment .
      we are your source for bay area                                                   Prior to launching Beacon, he was the
      real estate coverage.                                                             Director of the Economy Program at
                                                                                        the Public Policy Institute of Califor-
                                                                                        nia. He received his Ph.D and M.S.
                                                                                        in Economics from The University of
                                                                                        Michigan (1992) and his B.S. in Econom-
              Subscribe to our monthly, print journal online at                         ics from the University of Wisconsin.
                                                                                               ➤ Fall Conference 2010, page 21
12   Newsletter of the Northern California Chapter of the Appraisal Institute                              Return to page 1

President’s                                           We have a dedicated leadership team
Message                                                  that is working tirelessly to try to
from page 1                                      solve that problem. Now is not the time to
document. The posted mater ial is                         let rumors, innuendo, or personal
available for any AI member to review;
log into “ My AI” via the Appraisal                          politics compromise that work.
Institute’s national website – w w w. .

I  n summary, TAF’s pending suspension
   of the AI relates to our communications
with Congressional representatives and
                                               have been considered contradictor y
                                               to TAF’s interests, had it passed and
                                               had TAF intended to pursue additional
                                                                                           against the AI. It has expressed its
                                                                                           desire to remain a proud and productive
                                                                                           sponsor, in accord with the heritage
allied appraisal organizations. Those          educational of ferings in the future,       established since the creation of TAF,
communications per tained to work on           was defeated. Interestingly, despite        and believes that the missions of the
then-pending legislation that was part of      TAF’s reaction to the education limi-       organizations are compatible. However,
the recently passed Financial Services         tation language, it has also said that      the AI has also been clear in that it
Reform Bill (H.R. 4173), and stemmed           our “dissent and disagreement are           must remain able to discuss matters that
from requests originally made to the           welcomed and encouraged, and that           are impor tant to our organization, the
AI from Congressman Paul Kanjorski’s           the Institute to discuss ideas    profession, and/or the public interest,
office. Discussions occurred between           as it sees fit.” I have difficulty under-   without fear of reprisal from TAF. Our
our GRC and the congressman’s staff,           standing how the AI can be punished         GRC studies and develops positions on
as well with representatives of the            for communication, while also being         many pieces of proposed government
American Society of Appraisers (ASA),          “ free to discuss ideas”.                   legislation, making regular proposals
the American Society of Farm Manag-                 Many of our members have expressed     to our Board of Directors regarding
ers and Rural Appraisers (ASFMR A),            opinions similar to mine. They are con-     its rec ommendations. It frequently
and the National Association of Inde-          fused in that the punishment doesn’t        discusses issues with Congress and
pendent Fee Appraisers (NAIFA). They           seem to fit the crime. Some feel that       allied industr y groups to express its
related to language that might have            there must be something else involved       thoughts and positions, and cannot
restr icted The Foundation’s abilit y          in TAF’s recent decision. Based on          for feit that right out of concern for
to offer education beyond that which           what I have learned over the past few       TAF retaliation.
they already provide (the 7-hour and
15 -hour USPAP programs). The lan-
guage that was being considered was
                                               months, I agree. Like many disputes,
                                               this one appears to involve a mix of
                                               politics, power, and personality con-
                                                                                           T    he Appraisal Institute’s leadership
                                                                                                has been very interested in obtain-
                                                                                           ing the views of its members regarding
not entirely new. It had precedence in         flicts. The suppor ting documentation       this matter. It has heard from many
existing legislation (the SAFE Act) that       available on the AI website explains        in our organization, and continues
already affected the mortgage industry,        some of this, through additional details    to solicit input. I personally appreci-
and was being considered by the GRC            regarding historical communication          ate the feedback from those of our
as to its applicability to TAF. While          problems between the AI and TAF,            Chapter members who have expressed
our GRC ultimately repor ted to the AI         as well as related, but independent         their opinions and concerns to me in
Board of Directors that it suppor ted          disputes which may have played a part       telephone calls, emails, and through
the inclusion of the education limitation      in the current circumstances. Concerns      questions submitted via the webinar we
language, the Board decided to exclude         over fair competition between educa-        held at the end of July. Be assured that
that component from the proposed               tion ser vice providers appear to be a      ever y one of those points of view has
legislative appraisal amendments to            factor, as does the recognition of the      been delivered directly to our national
the Financial Ser vices Reform Bill.           substantial investment made by the          leadership, and (per a confirmation I
    TAF considers these actions by the         AI to restructure its educational offer-    received from President Sellers) passed
AI to represent “conduct materially and        ings to conform with the 2008 USPAP         onto the Board of Directors. They are
seriously prejudicial to the purposes          changes. However, from what I have          thankful for the information and invite
and interests of the Foundation” and           gathered through discussions with           additional communication regarding
therefore in violation of its Code of          national leadership; the documents          this and any other issues that are of
Conduct for Sponsors. This is the reason       posted to the website; and conversa-        concern to the membership.
given for the proposed suspension.             tions with cer tain of our members who          While many of our members have
It is impor tant to again note that the        have close connections to the events        expressed suppor t for the AI’s posi-
proposal the GRC made to our Board             of the past few months, the AI has          tion regarding the TAF situation, some
of Directors, regarding the education          done an honorable and respectable           have suggested that there might be
limitation issue, was ultimately not sup-      job in attempting to resolve the matter     c onnec tions bet ween our pending
por ted by the Board and therefore not         at hand. Unfor tunately, the effor t has    suspension and that of the previously
forwarded to Congressman Kanjorski’s           so far fallen on deaf ears.                 failed attempt of unification with the
office. The discussions stopped at the
level of the GRC’s recommendation
to the AI Board and the Board’s sub-
                                               O     ur organization has stated its
                                                     opinion that nothing it has done
                                               has prejudiced TAF, and that there is
                                                                                           ASA and ASFMRA. Others have alluded
                                                                                           to repercussions from decisions made

sequent vote. A proposal that might            no basis for TAF to take any action              ➤ President ’s Message , page 13
Return to page 1                                                                                           July-August 2010   13

President’s                                          In keeping with
                                                                                       the public. The Appraisal Institute will
                                                                                       remain the independent voice for the

Message                                                 the Appraisal
                                                                                       appraisal profession.
                                                                                           While our leadership has indicated
from page 12                                     Institute’s mission,                  its desire is to work directly with TAF to
                                                                                       fix the problem at hand and to establish
by prior AI leadership regarding other
                                                   we will speak out                   new communication arrangements so
issues (see the IMHO ar ticle by John                 to advance the                   that similar issues do not arise in the
Hillas, SR A, included in this newslet-                                                future, the AI has also stated that it
ter). As I previously indicated, I believe
                                                     interests of our                  will vigorously defend itself and its
that politics and personality conflicts                members, our                    reputation with regard to this matter.
may be an ingredient in the current                                                    I am confident that our leadership will
crisis; however, I also believe it is
                                                      profession and                   ultimately make the best decisions.
impor tant to study the logic behind the
proposed suspension from TAF on its
independent merits, and to recognize
                                                      the public. The
                                                  Appraisal Institute                  I  encourage all of our Chapter mem-
                                                                                          bers to learn more about this issue
                                                                                       and to ask the difficult questions. The
our very competent national leadership                will remain the                  information is available to all of us via
in its current composition. We have a                                                  the AI website. The amount of material
problem, and need to find a solution.
                                                  independent voice                    is substantial, but one can gain a fairly
We have a dedicated leadership team                 for the appraisal                  clear understanding of the AI’s posi-
that is working tirelessly to tr y to solve                                            tion by reviewing the June 15th letter
that problem. Now is not the time to let
                                                          profession.                  from President Sellers to TAF (item
rumors, innuendo, or personal politics                                                 12 on the list of downloads available
compromise that work or other wise            the USPAP document at a discount         on the website; you must log into My
divide our organization.                      for 21.5 months. Our ability to offer    AI). Additionally, Chapter members are
    The AI is clearly at a crossroads         education, including USPAP, will not     always welcome to call me directly, or
with respect to its relationship with TAF.    be affected, nor will our obligations    to send me your thoughts via email. I
As the situation currently stands, we         to comply with USPAP.                    will answer what questions I can, and
are to be suspended as a sponsoring               The AI’s Board of Directors has      will pass along your remaining concerns
member in mid-September. We have              studied and will continue to study all   to national leadership. Alternatively,
a right to a final hearing regarding          of its options regarding the proposed    you can communicate directly with any
the proposed suspension (beyond               suspension. On September 1, it plans     other members of your Chapter Board
the presentation already made by our          to present the facts regarding what      of Directors; the Chapter or National
national leadership to TAF, in June).         the TAF Board of Trustees has deter-     office; and/or National Director and
That is tentatively set to take place         mined to be the Appraisal Institute’s    Chapter member Claudia Carleton, MAI.
on September 1. If the suspension             violation of The Foundation’s Bylaws.    Contact information for each of these
holds, the AI will lose the privilege         The Board has fur thermore said that,    individuals/resources is contained in
of identifying itself as a sponsor of         in keeping with AI’s mission, it will    this newsletter.
TAF for seven months, along with              speak out to advance the interests                             — Jeff Enright, MAI
the right to reproduce and/or obtain          of our members, our profession, and                        2010 Chapter President

Award Nominations                                                                               FREE Copy
from page 9
                                                                                                 of USPAP
                                                                                                               d ay!
tion to ensure a specific program or
effor t is implemented at the chapter,
                                              stitute/Nominate/Default .aspx .
                                                                                           O rd e r Yo u rs To
region, national and/or international                                                        Appraisal Institute
level. This Appraisal Institute member                                                   members may receive a
must be instrumental in the success            A r e you a m em b e r o f th e           complimentar y copy of
of the program or effor t, which also                                                     USPAP sent directly to
must be far enough along to measure                 App r ais al Ins titute?
                                                                                         them from the National
and provide proof of success. Addi-                If not, join today and start         Of fice. Appraisal Institute
tionally, the program or effor t must
be beneficial to chapters, regions,               enjoying all the benefits                  members may call
national or international members or
                                                that membership can offer,                312/335- 4469 or email
the profession.                                                                         uspap@appraisalinstitute.
   The Appraisal Institute’s Awards               including discounts on all                org to request their
Selection Panel will select the win-
ners. Those selected will be asked to             Appraisal Institute books.                     free copy.
attend the awards luncheon at their                                                           Another benefit…
own expense. For more information,
                                                          Questions?                        of Appraisal Institute
visit the members-only section of the
Appraisal Institute’s website at: w w w.
                                                  Call us at 888-7JOINAI.                        Membership
14   Newsletter of the Northern California Chapter of the Appraisal Institute                                Return to page 1

                                                                                            Submitted by:
                                                      A Closer Look                         John A. Hillas, SRA
                                                      at Unification                        Appraisal Institute
                                                                                            Board of Directors, 2007-08

IMHO (In my humble opinion) is a column in which our members have
an opportunity to share their opinions and ideas. If you have an opinion                          The AI is huge
that you would like to share, please for ward it to .
                                                                                                   in real estate,
                                                                                              while the ASA is a
Is This All About Unification?                                                                leader in personal
What Do You Really Know?                                                                            property and

A                                                                                            business valuation,
       ll of this talk about suspension        Although the AI membership and staff
       of the AI from The Appraisal            dwar fs the combined numbers of the
       F oundati o n has d r ed g ed u p       ASA and ASFMR A, ever y effor t was              and the ASFMRA
some old stuff that I think needs to           made to keep ever yone feeling as
be talked about. Some facts need to            equals, so there were an equal number                is a leader in
replace rumors and some dots need              from each organization that comprised          farm management.
to be connected.                               the Unification team. In the spirit of
A Primer on Unification                        unity, I am told that the team members       Everyone recognized
    Unification of the valuation pro -         all took off their separate association
                                               pins, and each instead wore US flags
                                                                                                the benefits, and
fession is something that the AI has
worked on and discussed for a ver y            when they met in person.                             everyone had
                                                   There were numerous meetings, in
long time. A major step was taken in
joining the AIREA and SREA to form             person and via conference calls. There        something to bring
the AI in the early 1990s, but it is not       were many phone calls and emails.
                                               There were joint meetings, where the
                                                                                                     to the table.
yet finished.
    Unification, or what we used to call       leaders of the three organizations got
“ the umbrella,” is consistent with the        together and discussed the benefits of       new organization would be formed.
vision of the AI. Unification of the valu-     a unified profession, with disciplines for   There was to be lots of legal and
ation profession is part of the Appraisal      real estate, personal property, business     human resources issues involving an
Institute’s Long                               valuation and management. The AI is          estimated 140 or so employees, and
Range Plan.                                    huge in real estate, while the ASA is a      some employees would not be retained.
    There have              ...facts           leader in personal proper ty and busi-          The new organization would have
b e en, an d to                                ness valuation, and the ASFMR A is a         three officers and a board of governors.
some ex tent              need to              leader in farm management. Ever yone         The governance would acknowledge
continue to be             replace             recognized the benefits, and everyone
                                               had something to bring to the table.
                                                                                            the four primar y disciplines of real
                                                                                            estate, personal proper ty, business
m a ny c o l l a b -
orative effor ts,        rumors...             Hundreds of thousands of dollars were        valuation and management. That all
par ticularly in                               invested.                                    sounded f ine and reasonable, and
the areas of gover nment relations                 It all culminated in a plan to create    consistent with where we all knew that
and the body of knowledge. ASA and             the “ABC Organization.” The real name        we wanted to end up: a truly multi-
ASFMR A members were unilaterally              would come later.                            disciplinary organization for all valuers,
given AI member rates for attendance
at AI courses, seminars and workshops.
This practice continues today in many
                                               A    lthough the AI had five members on
                                                    the team, and one of those team
                                               members was actually also on the AI
                                                                                            with discipline-specific criterion in the
                                                                                            governance structure to assure proper
areas, including offerings sponsored           Board at the time, the plan details          Devil in the Details
by the Nor thern California Chapter.           communicated to the AI Board during              From the perspective of the AI,
    Nonetheless, the most recent major         the process were scant. We got the           however, the devil was in the details.
ef for ts toward Unification ended in          plan as an almost-final document. The        At that time, the AI had 24,000 mem-
late 2007. The AI, ASA and ASFMR A             plan was presented to the AI Board of        bers, the new combined organization
had invested much time, effor t and            Directors via email, along with all of       would have had about 30,000. The
money to that point, all split 50/35/15%       the other materials normally provided        vast majority of the organization would
because the ASA and ASFMR A are                prior to a BOD meeting. We had more          have been made up of AI members.
nowhere near the size of the AI and            than a couple of days, but not quite             The AI had 115 -120 employees and
just don’t have the financial strength.        a week to review it all, as I recall. I      a full corporate structure. The ASA
    In a manner sensitive to the proud         remember being troubled by the plan,         and ASFMRA combined had something
heritage of each of these three organi-        as the details became clear.                 like 20 -30 employees, and I think they
zations, a Unification project team was            The plan called for completely dis-      were in multiple locations.
assembled consisting of five members           mantling the Appraisal Institute, the
from each of the AI, ASA and ASFMRA.           ASA and the ASFMR A. An entirely                      ➤ IMHO: Unification, page 15
Return to page 1                                                                                                 July-August 2010   15

IMHO:                                          substantial amount in any case. It
                                               would have essentially depleted the           H    ow did things get so awr y? How
                                                                                                  did the AI members of the Unifi-

Unification                                    reser ves of the Appraisal Institute.
                                                   There was no way the AI Board could
                                                                                             cation team justify expending vir tually
                                                                                             all of our reser ves and making a new
from page 14                                   agree to this. It was not a responsible       organization comprised in vir tually all
                                               thing to do with the members’ money,          facets of a vast majority of AI members,
     The AI had about $5 - 6,000,000 in        and the new organization governance           yet be only roughly a quar ter of the
reser ves, the ASA and ASFMR A had             did not recognize the over whelming           governance? I don’t know what they
ver y small reser ves in comparison.           contribution to be made by the AI as          were thinking, and they were not talk-
Historically, the AI had absorbed 50%          compared to the ASA and ASFMR A.              ing about it. Ever yone was/is angr y at

of all costs associated with this effor t,          he AI board convened and discussed       the AI over it. Cries of “do it for the
the ASA 35% and the ASFMR A 15%.                    this at great length. Many of us were    good of the profession” were the only
This was not commensurate with the             deeply committed to Unification and           replies to requests for explanation.
actual breakdowns, but acknowledged            we tried to come up with ways to make         Fast Forward to the
the disparities.                               this work. We discussed modifications         2007 VP Election
     The plan described how the three          to the plan that, for instance, gave the          It is possible that another series of
officers would be selected, one from           AI at least 51% of the governance at          events in 2007 had negative impacts
each organization.                             the outset, adjusted over time as the         on the unification ef for ts, and that
     It also described how the Board of        different disciplines grew. After some        was the 2007 election of the AI Vice
Directors/Governors would be struc-            time of discussion, we were told by the       President. A petition came from the
tured. It involved a formula that was          AI Unification team member who was            AI Board that all five VP candidates
comprised in par t by discipline and           also on the AI BOD that the plan had          be considered by the Board of Direc-
in par t by predecessor organization.          already been worked out and agreed            tors, instead of only the one that was
     The Appraisal Institute would con-        upon by the teams, and it was basically       nominated by the nominating commit-
tribute 80% of the members, 80% of the         a take it or leave it deal. Unfor tunately,   tee. This so angered the committee,
funds, and 80% of the staff, but would         the AI Board had to then vote it down.        and emotions boiled and accusations
comprise only 26% of the governance.               Emotions ran high and the whole           flew. The vitriol continued and grew.

I  t was readily apparent that this was
   not going to work. It was understood
that eventually the relative sizes of
                                               Unification team and the folks from the
                                               ASA and ASFMR A were deeply disap-
                                                                                             Nasty letters and emails, and scream-
                                                                                             ing phone calls ensued.
                                               pointed, as were we all. We actually              Although the AI Board hears com-
the disciplines would change over              never voted down “Unification”, but the       mittee recommendations all of the time,
time, but in the meanwhile it would            effor t was essentially killed when we        and agrees with some and disagrees
be over whelmingly the real estate             voted not to fund our 50% share of the        with others, never had a committee
discipline, and over whelmingly the            $200,000 requested by the Unification         whose recommendation not been fol-
Appraisal Institute membership. The                                                          lowed acted out in such a manner.
                                               team to continue their meetings to
plan was just not consistent with the                                                        A ngr y slanderous c omments were
                                               finalize this unacceptable plan. There
f iduciar y responsibilit y that the AI                                                      thrown about in meetings and emails,
                                               was nothing that could be done at that
Board members had to the member-                                                             tear ful presentations were made in
                                               point. Hard feelings ensued, mostly
ship of the AI.                                                                              front of a confused membership. Wild
                                               directed at the AI Board and Officers.
                                                                                             rumors of misdeeds flew like wildfire.
                                               We were told that we “ failed,” but I
     The plan called                           personally think that there is no way
                                               that such a plan should have been put
                                                                                             A    ll of this angst and anger during
                                                                                                  the months leading up to the date
      for completely                           for th in the first place.
                                                                                             when the Unification decision was to be
                                                                                             made resulted in strained relationships.
     dismantling the                               The governance disparity aside for
                                                                                             Following the demise of the “ take it
                                               a moment, the idea of completely dis-
 Appraisal Institute,                          mantling three organizations to star t a
                                                                                             or leave it” Unification plan, and the
                                                                                             board election of someone other than
    the ASA and the                            new one was unrealistic. Mergers and
                                               acquisitions happen all of the time in
                                                                                             the committee recommendation, things
                                                                                             continued to get more and more ugly.
ASFMRA. An entirely                            the private sector, and no business           This at a time when the economy was
                                               would have done what was proposed in
   new organization                            this case. The only appropriate course
                                                                                             failing, markets were crashing, gov-
                                                                                             ernment issues were growing, and all
   would be formed.                            would have been to initially assimilate       attention should have been focused
                                               the 4- 6,000 ASA and ASFMR A mem-             on external problems.
                                               bers into the organization of 24,000              Instead, the unrest was so great
    Literally at the meeting where we          AI members; and to initially assimilate       about the rumors of misdeeds that
were to vote on approving additional           the staf f of the ASA and ASFMR A             some past leaders star ted a grass
funds ($200,000) to continue final-            into the AI staff. The Unification team       roots campaign to tr y and diminish the
izing this, we were provided with the          insisted that the ASA and ASFMR A             integrity of the AI leadership. Some of
financial details of how the plan would        people would not just “join the AI”           these angry people were very influential,
be put into action.                            even if the name was subsequently             and before long there were members
    The cost of the plan was loosely           changed. The Unification team said            badmouthing the very organization that
estimated in the millions of dollars,          that the only way it would work was
$2- 4,0 0 0,0 0 0 or $ 4 - 6,0 0 0,0 0 0 – a   to star t completely from scratch.                     ➤ IMHO: Unification, page 20
16   Newsletter of the Northern California Chapter of the Appraisal Institute                         Return to page 1

      “My   Appra
                    isal                 Appraisal Institute                                           WO W
                 u te
          Instit hip
              ers                          Membership                                                Tha !
        Memb that
             es                                                                                      G r e ’s
       includ ? ”                            Benefits                                                     at!
            to o

My Appraisal Institute Membership includes that too?”
W    hy did you join the Appraisal Institute? Professional recognition? Personal growth? Career advancement? Network-
     ing oppor tunities? Discounts on education and ser vices? The Appraisal Institute offers a variety of membership
benefits that are sure to help in many areas of your real estate appraisal career.
   Each month we will highlight some of the benefits available to Appraisal Institute members. Read below to find
out how your membership quickly pays for itself! To review all the member benefits available to you, click here .

Er rors & Omissions Insurance. To help safeguard your practice, obtain errors and omissions insurance through
the Appraisers Liability Insurance Program. For more information, contact:
   LIA Administrators & Insurance Ser vices, P.O. Box 1319, Santa Barbara, CA 93102, 800/334- 0652; or at their
website: w w w.liabilit .

Comprehensive Protection Plans and Medical Insurance Ser vices . A wide selection of protection plans
as well as medical insurance ser vices are available to members through the Real Estate Appraisers Group Insurance
Trust (REAGIT). For more information, members can login and click here .
   ■ Major and Limited Medical Insurance Ser vices
   ■ 10 -Year Level Term-Life Insurance
   ■ Disability Income Protection Insurance
   ■ Professional Overhead Expense Plan
   ■ Medicare Supplement Insurance Plan
   ■ Dental Insurance Plan
   ■ Hospital Indemnity Plan

Please note, the benefits discussed in the program(s) above are for informational purposes only and may be subject to separate
terms and conditions ef fective at the time the member signs up to par ticipate with the company administering the respective
program(s). Members may be required to agree to separate terms and conditions by the company administering the respective
program(s) prior to par ticipating in the program.

                                           MAI and SRA
                                           N      eed a way to dif ferentiate and
                                                  d i s t i n g u i s h yo u r s e l f i n t h i s
                                           hi g h ly c o m p et it i ve m a r ket p lac e?
                                           The Appraisal Institute of fers the
                                           most prestigious designations in
                                           the appraisal profession. For more
                                           information on designations, visit
Return to page 1                                                                                July-August 2010   17

           Branch Chapter                                                               Coming
             Happenings                                                                 This Fall

 A   ccessible, af fordable and informative! Our Branch Chapters provide
     a variety of resources to help you succeed. Watch for programs                 Vineyard
 throughout the geographic areas ser viced by the Nor thern California
 Chapter. Take a quick peek at what’s on the horizon:

                  Fresno Area Appraisers to Gather                                  November 5
 Sept. 28         — For t Washington Countr y Club, Fresno
                  Joint EBBC / IRWA Networking Lunch
 Nov. 17          Presenter: Les Hausrath, Attorney
                  — Wendel Rosen Conference Center, Oakland

 F  or information/registration on Fresno offerings please call 559/433 -
    9257. For all other programs, please visit ht tp://w w /
 event .html or contact the Chapter Office at 925/932-7753.
    We are always looking for topics that interest and can benefit you! If
 you have an idea for a workshop that would be of value, please contact
 your local Branch Chapter Chair (see list, page 4).

                                                                           What is the
          Advertise With Us!                                            Appraisal Institute?
      T   he Appraisal News offers a fabulous opportunity
          to get your name, company, products or
      services in front of over 3,700 appraisers and
                                                                        T    he Appraisal Institute is a global
                                                                             membership association of profes-
                                                                        sional real estate appraisers, with more
      real estate-related professionals. Simply send                    than 25,000 members and 91 chapters
      us a PDF of your ad designed to fit one of the                    throughout the world. Its mission is to
      formats in the table below. Fonts used in the                     advance professionalism and ethics,
      ad must be embedded when the PDF is created;                      global standards, methodologies, and
      colors used should be RGB. Photographs and                        practices through the professional
      graphics should be rendered at highest quality.                   development of property economics
                                                                        worldwide. Organized in 1932, the
                   Available Ad Sizes                                   Appraisal Institute advocates equal
              Full page = $500        1/4 page = $150                   opportunity and nondiscrimination in
                10"h x 7.5"w          4.75"h x 3.75"w
                                                                        the appraisal profession and conducts
              1/2 page = $275       Business Card = $75                 its activities in accordance with appli-
               4.75"h x 7.5"w         2.38"h x 3.75"h                   cable federal, state and local laws.
           We also offer banner ads on our Web site — for               Members of the Appraisal Institute
     NEW! $100! Your ad will be displayed for 30 days.
        just                                                            benefit from an array of professional
            For more information, contact Lisa Estes at                 education and advocacy programs,
         925/932-7753 or e-mail .                    and may hold the prestigious MAI,
                                                                        SRPA and SRA designations. Learn
                                                                        more at w w .
18   Newsletter of the Northern California Chapter of the Appraisal Institute                         Return to page 1

                             Agenda for Associates
                                                                                     New Courses
     Let Us Help Pay for Your Tuition!                                               for those
    2010 Scholarship Deadline Fast Approaching
                                                                                     Seeking the MAI
    T   he Nor thern California Chapter is currently accepting applications
        for the George and Alber ta Stauss Scholarship, and the Nor thern
    California Chapter Residential Education Scholarship. Whether you are
    just star ting a career as a real estate appraiser or nearing completion
    of your designation requirements, one of these scholarships may be just          T    he Appraisal Institute is in the final
                                                                                          phases of the development for the
                                                                                     new Advanced Education for the MAI
    right for you.
       The Stauss Scholarship gives preference to those seeking the MAI              designation. New releases include:
                                                                                         ■ Advanced Income Capitalization
    designation while the Northern California Residential Education Scholarship
                                                                                         ■ Advanced Market Analysis & HBU
    gives preference to those specializing in residential real estate rather
                                                                                         ■ Advanced Concepts & Case Studies
    than commercial (general).
                                                                                         ■ Qualitative Analysis (to premiere
       Act Now ! Click here to download your application today! The
                                                                                            in 2011)
     application deadline is September 15, 2010.
                                                                                         Each of these new AE course has
                                                                                     been designed with an online compo-
                                                                                     nent. The pre-class, online session
New Requirements Affect                                                              gives par ticipants the f lexibilit y to

AI Associate Members’                                                                complete two of the 35 (or 40) hours of
                                                                                     the course when it is most convenient
Appraisal Reports                                                                    for them. The online session provides a
                                                                                     blended approach to learning, enabling

I n conjunction with the Appraisal Institute’s new continuing education require-
  ments, which took effect July 1, Associate members now must include a
cer tification statement in each of their repor ts that indicates their continuing
                                                                                     par ticipants to complete the first par t
                                                                                     of the course at their own speed.
                                                                                         For more information on these new
education status.                                                                    of ferings, click here . If you have
   Although some Associate members might not yet be aware, their written             specific questions on how these new
repor ts now must include a cer tification statement that says either “As of         courses might affect you, contact the
the date of this repor t, I (Associate Member’s name) have/has completed             Appraisal Institute Ser vice Center.
the Standards and Ethics Education Requirement of the Appraisal Institute            These knowledgeable counselors are
for Associate Members” or “As of the date of this repor t, I (Associate Mem-         available to help you c ho ose t he
ber’s name) have not /has not completed the Standards and Ethics Education           education path that’s best for you,
Requirement of the Appraisal Institute for Associate Members.”                       suppor t you through the designation
   To assist members in understanding the changes, view the downloadable             process and much more. The Appraisal
PDF for Associate Members: Click here . In addition, a separate webinar              Institute Ser vice Center is now open
presentation geared toward members has also been recorded. Members can               Monday through Friday, 7:00 a.m. to
access the recording by simply clicking here . For comprehensive information         6:00 p.m. central time. E-mail: aiser-
on CE requirements, visit w w /ce or contact the AI . Phone:
Ser vice Center at 312/335 - 4111.                                                   888 -7JOINAI (888/756 - 4624).

                                       ot Q ue
                                  v e G For s t i o                                  Stay in Touch:
                             u’     questions
                                                                                     Associate has New Email


                                 about designa-                                       Patti Gorman
                               tion requirements,                            
                            contact the Admissions
                            Depar tment at 312/335 -
                          4111 or e-mail admissions@
                            dedicated professionals

                             are here to assist you

                              achieve your goal of

                                 ve                       s

                                        Got An
Return to page 1                                                                                                              July-August 2010   19

Looking for                                                                    Education
New Business                                                2010 Upcoming Educational Offerings
Opportunities?                                ❑ Seminar : “ Yellow Book ” Unifor m Standards Sept 13 -14
                                                    For Federal Land Acquisitions
Litigation Appraising:                              Instructor(s): David Lennhof f, MAI, SR A
Specialized Topics and                                  Location: University of Phoenix, San Jose
Applications                                  ❑ Wor kshop: Wrestling with Uncer taint y                                              Sept 16
                                                    New Laws – New Economics
September 23-24 / Oakland
                                                    Instructor(s): Panelists including Bob Clark, OREA

P    lan now to join Harr y Holzhauer,
     MAI, SR A, when he presents this
two-day course on business opportuni-
                                                        Location: Four Points by Sheraton, Pleasanton
                                              ❑ Course: National USPAP Update (7- Hour)                   Sept 30
                                                    Instructor(s): Stephanie Coleman, MAI, SR A
ties in specialized types of litigation
                                                        Location: Carr America Conference Center, Pleasanton
other than eminent domain in which the
valuation of real estate is frequently        ❑ Course: Business Practices & Ethics                                                     Oct 1
an issue. Examples of topics covered                Instructor(s): Stephanie Coleman, MAI, SR A
include environmental contamination,                    Location: Carr America Conference Center, Pleasanton
ad valorem tax assessments, construc-         ❑ Course: General Site Valuation & Cost                                                Oct 5 - 8
tion defects, bankruptcies, fraud and               Instructor(s): Arlen C. Mills, MAI, SR A
misrepresentation cases, income and                     Location: University of Phoenix, Oakland
estate ta x disputes, and divorc es.          ❑ 2010 Annual Fall Conference                                                           Oct 20
Through problem-solving activities,                 Opening Keynote: John Haveman, Beacon Economics
participants will apply new concepts and            16 Informative Breakout Sessions
address how to best handle valuation                   Location: Hilton, San Francisco
and repor ting issues in a professional
legal setting. Par ticipants will gain an
                                              ❑ Seminar : Vineyard Valuation                                                            Nov 5
understanding of the terminology and                Instructor(s): Panelists
concepts involved in litigation valuation               Location: Monterey
ser vices in specialty areas and will         ❑ Seminar : SF Bay Area Green Panel                                                      Dec 6
learn about the many oppor tunities                 Instructor(s): Panelists
available for expanding their practices                 Location: TBA
in litigation valuation.
    Interested in attending? Hurr y to                   Yes, please provide me with pre- registration information
take advantage of early registration                      on the above checked education programs.
discounts and to secure your spot!
Since this is the only remaining offering           Name                                                     Phone
of this course on the west coast for the
remainder of 2010, it is expected to                FA X                                                   Email
sell-out. Remaining seats are limited.
                                                    There are three ways to receive advanced notification of
Click here for additional details and
                                                    these upcoming education of ferings: u visit our website at
to register.
    Note: In addition to earning CE                 w w ; v call us at 925/932-7753; or, w fax this
hours for Litigation Appraising: Spe-               page back to 925/932-7754. We reser ve the right to cancel
cialized Topics and Applications, you               or substitute dates, locations and/or instructors as necessar y.
may earn a Cer tificate of Completion               Interested attendees are encouraged to register at least one
in Litigation. For more information on              month prior to the of fering to help avoid possible cancellation.
the cer tificate program, click here .

Requesting a Duplicate Attendance Certificate
I f your renewal cycle is about to come
  due, don’t wait to start gathering your
attendance cer tificates and getting all
                                            Center at ht t p: //w w w. a p pr ais alin -
                                            s t i t u t e . o r g /e d u c a t i o n /d ow n l o a d s /
                                            Cer tif icate _ Request _ Form. PDF or
                                                                                                           sure to include the date (month/year)
                                                                                                           and the name of the program. Due to
                                                                                                           the amount of back-up documentation
of your continuing education records in     312/335 - 4140.                                                stored in the archives, allow a mini-
order. The Chapter Office only maintains        To request a duplicate attendance                          mum of three weeks for your request
records for seminars and workshops,         cer tificate for a conference, seminar                         to be processed. Non-members of the
while the National Office maintains         or workshop offered by the Nor thern                           Nor thern California Chapter should
the records for courses (regardless if      California Chapter, submit your request                        include a $15 processing fee with their
the course was sponsored by a local         to the Chapter Office in writing. Due                          written request. This research will be
chapter). For course transcripts contact    to the volume of requests, only written                        provided to members of the Nor thern
the Appraisal Institute’s Information       requests/faxes can be handled. Be                              California Chapter at no charge.
20   Newsletter of the Northern California Chapter of the Appraisal Institute                                       Return to page 1

IMHO:                                              It is past time to                        I  t is past time to get over all this
                                                                                                old histor y and move for ward. The

Unification                                         get over all this
                                                                                             Appraisal Foundation needs to drop
                                                                                             this nonsense of suspension of the AI.
from page 15                                         old history and                             This Foundation thing is personal,
                                                                                             political and shameful in my opinion.
through all of this, was still working                move for ward.                         They are talking about suspending
to continue what they always have                                                            the AI from the Appraisal Foundation
done, speak for the valuation profes-                  The Appraisal                         from September 2010 to April 2011.
sion when and where such speaking               Foundation needs to                          What purpose will that ser ve? Will
needed to be done. Still angr y, many                                                        it all suddenly be better after April
looked outside and star ted joining a            drop this nonsense                          2011? Will the pesky AI have learned
European-based organization trying to
make inroads into the US market. It
                                                       of suspension                         its lesson? It sounds punitive to me,
                                                                                             and for ver y weak apparent reasons.
was like the “I hate the AI” club. These                    of the AI.                           It sounds to me just like the “aware”
angr y members have been ver y useful                                                        communications from a year or two
in tr ying to diminish their own AI while                                                    ago that was well - intentioned but
escor ting in another organization. I              I h ear c o mp laint s ab out t r ave l   misguided/uninformed. The AI invested
frown whenever I see an AI member              expenses, and in par ticular, I hear          lots of time and your dues dollars (over
with those letters behind their name.          complaints about the AI involvement           $100,000) refuting all of that, and will

I s it a coincidence that the AI members
  of the unification team included a few
members of the nominating committee
                                               in the International Conference held
                                               in Cancun. Some called it a spending
                                                                                             fight this as well.
                                                                                                 Ironic that The Foundation is claiming
                                                                                             that the AI secretly acted in a manner
                                               spree and a folly or boondoggle. I can
that acted so scorned? That nominat-           say that the AI Board approved the            that would harm them (a claim that was
ing committee had been in effect for           motion to join in that conference and         totally disproven), while at the same
4-5 years – repeatedly selecting the           hold the AI Board meeting there only          time, bringing in an outsider to be The
nominee for the future VP of the AI.           if the costs were less than or equal          Foundation’s “international” body. The
One member of that committee actually          to the cost of holding the meetings           AI, a founding and sponsoring orga-
told me with fer vor that “ this is where      in Chicago. The Board was sensitive           nization, is already an international
the REAL power of the AI resides.”             to the concerns of appearances, and           organization. Some at The Foundation
    I think that the nominating committee      we took it upon ourselves to make             seem to have a personal dislike of the
was together too long and there were           sure that the members knew about              Appraisal Institute. Maybe it is time for
personal dislikes and views, some of           the comparative costs. In hindsight,          some fresh faces in The Foundation.
which were rooted in the differences           we did not do a ver y good job of com-            Put egos aside and get the emo-
of opinion that arose in 2003 - 05 when        municating that.                              tions in check. If unification was ever a
the governance of the AI was restruc-              We ARE an International organiza-         good idea, it is still a good idea. That
tured. Notable is that in all other levels     tion, and we HAVE a growing member            is how I see it. Remember, I was there.
of governance in the AI, nominating            base in Mexico as well as in Cen-                                — John A. Hillas, SRA
committees roll over at 1 or 2 year            tral and South America. With costs                                   Appraisal Institute
inter vals. There is wisdom in that.           addressed, it was a no-brainer. We                          Board of Directors, 2007-08
The nominating process should result           par ticipated with pride. As a side note
in the ver y best candidate ever y year        I will say that I voted in favor of the AI
without regard to personal differences.        Board par ticipating in the conference,
A First Hand Account                           but my Region chose (wisely in my
   I write this IMHO ar ticle in frustra-      opinion) that it was unnecessar y to
tion as I see it all erupting again now        hold our Regional Meeting there. The
with the rumors and comments going             costs were just too great coming from         Advertising Guidelines
around due to the announcement of              the Pacific Nor thwest. Where the AI              & Deadlines
the possible suspension of the AI from         Board par ticipation was cost neutral,
The Appraisal Foundation. It is time for       the Region’s costs would have been            ■   The newsletter submission deadline is
the details of the Unification Plan to be      significantly higher. Hence, Region I             noon on the 5th of the preceding month. All
known. People need to know why the             did not go to Cancun.                             submissions for the September/October issue
AI Board voted not to continue down                                                              must be received by noon on September 5. We
the path of unification. It was just not                                                         reserve the right to reject or edit advertisements
acceptable. The 2007 election is long               If unification was                           submitted for publication. Classified ads are lim-
over and the VP ultimately elected by
the AI Board has per formed admira-
                                                 ever a good idea, it                            ited to 40 words and a $40 publishing fee must
                                                                                                 accompany submissions from non-affiliates.
bly. Contrar y to slanderous rumors,             is still a good idea.                           Classified advertising is complimentary for AI
there was no nefarious plot or back                                                              members. All ads will be printed on a space
room deals. Ever ything was done in                      That is how I                           available basis. The Appraisal Institute does not
accordance with the AI Bylaws and
impor tantly, with the best interest of
                                                   see it. Remember,                             endorse any of the ads that appear and assumes
                                                                                                 no responsibility for the reliability of ads other
the AI in mind.                                            I was there.                          than to publish them. Submit ads via email to
   I know because I was there.                                                         
Return to page 1                                                                                         July-August 2010   21

Fall Conference 2010                                            been damaged from a detrimental condition, such as a
                                                                hurricane, oil spill, soil subsidence problems, ear thquake
from page 11                                                    damage, and environmental contamination fur ther compli-
                                                                cates the appraisal process. In this session, we will hear
He specializes in International and Labor Economics. He         from an exper t who wrote, among other titles, the book
has been a senior economist with the President’s Council        Real Estate Damages: Applied Economics and Detrimental
of Economic Advisers, and held a faculty position in the        Conditions (2008). This session is intended to provide a
business school at Purdue University.                           basic over view of key concepts (including the Detrimental
    But wait, there is plenty more! Here is a glimpse at some   Condition Model and Detrimental Condition Matrix), and
of the 16 breakout sessions that will be featured this year:    will focus on case studies.
                Residential Hot Topics                          Focus on FHA Financing: Three
              Industrial Market Update                          Perspectives on Residential Lending
           Bay Area Office Market Update                           With the dramatic price adjustments in Bay Area resi-
          Trends in Residential Real Estate                     dential real estate, the changes in conforming loan amounts
        State of the Local Multifamily Market                   and borrower qualifications and with the increased risk
       Understanding the Foreclosure Process                    involved in the purchase of ‘problematic’ proper ties (shor t
                                                                sales, REOs and distressed proper ties), FHA financing has
      Using Technology to Maximize Efficiency
                                                                become an increasingly dominant share of the residential
    Valuation Issues: Hotels & Shopping Centers
                                                                real estate market, both nationwide and in the Bay Area.
 FHA Financing: Perspectives on Residential Lending             This session will offer three perspectives on the current
 Where Have All the Commercial Foreclosures Gone?               and future state of FHA financing. It will offer both an
  Detrimental Conditions and Real Estate Damages                over view of the current and future state of FHA lending as
      Case Studies in Green Building Valuation                  well as a nuts and bolts practical guide for the residential
        Sustainability: Beyond Green Building                   appraiser on how to stay on top of this rapidly changing
           Bay Area Retail Market Update                        but increasingly impor tant source of residential financing
                Repor t Writing Today                           Case Studies in Green Building Valuation
                   Capital Markets                                 Valuing green or high per formance buildings involves
                                                                more than just tweaking a DCF or finding the right set of
Valuation Issues: Hotels and                                    comparables. More than ever, appraisers need to know
Shopping Centers                                                their market and understand the degree to which the market

W     e asked many Assessors in California about problem-       has adopted sustainability and green building principles.
      atic valuation issues they are facing. Two topics came    This session provides real-world examples from various
to the forefront. They are the valuation for real estate tax    perspectives to show how green building features are
assessment of Hotels and Shopping Centers. Hotels have          seen and valued in today’s marketplace. Get abreast of
the unique issue of attempting to isolate real estate from      this cutting-edge trend and hear how these professionals
business value since California does not assess business        are dealing with this growing sector of the market.
value. Anchored shopping centers have the complicated           Residential Hot Topics

element of the valuation of in-line space versus anchor                hile our industr y is constantly changing, in the last
space. Suzanne Mellen, MAI, and Linda Congleton will                   few years we have seen a significant increase in the
discuss typical issues brought in assessment appeals and        pace of changes — from the HVCC to FHA requiring the
share interesting cases recently argued in California. This     use of Cer tified Appraisers to the raising of the education
session will give insight into the viewpoint of the assessor    and experience bars for appraisal licensing. This session
and that of the taxpayer and should provide some tools          will touch on these changes and also cover the impact of
to help in your valuations.                                     recently passed HR4173. In addition, we will examine other
Where Have all the                                              potential state and federal regulations regarding issues
                                                                such as BPO’s. Lastly the session will discuss the Uniform
Commercial Foreclosures Gone?
                                                                Mor tgage Data Program and how it will impact appraisers.
   Since the beginning of the recent credit crisis, we have
been hearing about a “ tsunami” of commercial foreclo-          Plan Now and Save!
sures on the horizon, yet a seemingly small percentage             Early and group discounts are available. The confer-
of distressed commercial proper ties actually make to the       ence is being submitted for 6 -hours of Appraisal Institute,
auction block. One repor t notes that over 50% of the           OREA and SBE CEC. For more information, visit ht tp://
institutional-grade real estate in the U.S. changed hands       w w /event .html .
from 2004 to 2007 and most of these proper ties were
over-leveraged. So where are all the commercial foreclo-
sures? This panel will seek to explain the mechanics of
defaults in commercial proper ties and address the process
by which banks handle non- and under-per forming loans.
Detrimental Conditions and
Real Estate Damages
   Appraising a proper ty under “normal circumstances”
always presents a set of challenges. A proper ty that has
22                            Newsletter of the Northern California Chapter of the Appraisal Institute                                                    Return to page 1

                                                   Upcoming Programs & Events at a Glance
                               Sun                Mon                Tu e                     We d                   Th u                   Fr i                   S at
                               AUG 2 9            30                 31                       SEP 1                  2                      3                      4
                                                                     Net working
                                                                     — Fresno
August 31 – October 1, 2010

                               5                  6                  7                        8                      9                      10                     11

                               12                 13                 14                       15                     16                     17                     18
                                                  Yellow Book Seminar                                                BOD Meeting
                                                  — San Jose                                                         Workshop
                                                                                                                     & Chapter
                                                                                                                     — Pleasanton

                               19                 20                 21                       22                     23                     24                     25
                                                                                                                     Litigation Appraising
                                                                                                                     — Oakland

                               26                 27                 28                       29                     30                     OCT 1                  2
                                                                     Net working                                     USPAP Update           Bus Practices
                                                                     — Fresno                                        (7- Hour)              — Pleasanton
                                                                                                                     — Pleasanton

                                                                          Appraisers Wanted
■     Stanislaus County: Appraiser II. The Appraiser                         Assessment Appeals team. Requires a BA                    org/portal/site/bnc and click on “Apply online
      II performs office and field duties in the appraisal                   degree and 8 years of specialized experience.             with our Application for Advisory Appointment.”
      of real and personal property for tax assessment                       For more information and to apply, please visit:      ■   Appraiser Trainee Wanted. A well-respected
      purposes. The Appraiser II classification may                                  fee firm in Chico, CA is looking for a commercial
      also be responsible for providing technical train-                     asp?R1=PEX&R2=0923&R3=056569                              appraisal trainee intent upon working toward a
      ing to appraisal staff and works under minimum                     ■   Senior Real Estate Appraiser/Real Estate                  Certified General Real Estate Appraisal license
      supervision. This position is subject to overtime,                     Advisor. This contractor position is located in the       with 1-2 years of recent production experience,
      standby, callback assignments and performs                             Department of State, Bureau of Overseas Build-            preferably under the supervision of a designated
      related duties as assigned. Commercial real                            ings Operations. We are currently seeking to fill         MAI. The qualified candidate must have strong
      estate experience is preferred, but is not required.                   vacancies in our Division to perform real estate          verbal and written communication skills and
      Closing Date/Time: Fri. 08/27/10 5:00 PM Pacific                       appraisal review and market studies associated            be proficient with Microsoft Word and Excel.
      Time. Salary: $22.75 - $27.65 Hourly; $1,820.00                        with our worldwide real estate program. The ideal         Experience with ArcView GIS or general real
      - $2,212.00 Biweekly; $3,943.33 - $4,792.67                            candidate will have a minimum of ten years of             estate experience is a plus. Programs used
      Monthly; $47,320.00 - $57,512.00 Annually. For                         experience in appraisal and/or appraisal review           in the office include Microsoft Word, Excel,
      further job details and application information                        and must be proficient in Excel, Word and Pow-            Paint Shop Pro and FileMaker Pro. Substantial
      please visit – http://agency.governmentjobs.                           erPoint. Contact David Banks at 703/728-7167.             completion of coursework toward the license
      com/stanislaus/default.cfm                                         ■   County of Santa Clara. The Office of the County           is a plus. The majority of the work is in Butte
■     Hulberg & Associates, one of the largest and                           Assessor is seeking individuals who may be                County with some in Glenn and Shasta Counties.
      most respected commercial real estate appraisal                        interested in serving on Santa Clara County’s             In-house databases of comparables provide for
      firms in the Bay Area, is accepting applications                       Assessment Appeals Board (AAB). The AAB                   report production efficiency. The work involves
      for an Appraisal Analyst in its San Ramon Office.                      has the full responsibility for equitably resolv-         challenging assignments including subdivi-
      Applicants should be detail-oriented, analyti-                         ing all assessment appeals. Candidates must               sions, apartments, industrial, office, eminent
      cal, extremely organized, and have a general                           be fair, possess a high degree of integrity free          domain, special use properties, and mixed-use
      knowledge of the Bay Area. The position requires                       from political influence, have excellent cogni-           developments. A residential licensee with some
      excellent communication skills and the ability to                      tive problem solving skills, and demonstrate              commercial experience may be considered. This
      work with minimal supervision. Strong computer                         the ability to exercise solid judgment leading to         is a great opportunity for career advancement
      skills, particularly with Word and Excel, and a                        fair and equitable conclusions, all in addition to        in an excellent work environment within a fun
      four-year college degree are required. If you                          possessing a judicial temperament. In addition to         town in a growing area with lots of recreational
      are interested in this position, send resume and                       the minimum qualifications provided by the State          opportunity. It is easy to bike to work and there
      cover letter via email to                         Revenue and Taxation Code, candidates with                is minimal traffic - get out of the rat race. Send
■     Manager II - Chief of Standards and Appeals,                           specific desirable characteristics and experience         cover letter, resume and salary requirement
      Real Property Division. City of San Francisco                          will be given preference. Interested applicants           marked “Confidential” to Scott S. Hamm, MAI
      is seeking manager of Standards Unit and                               should complete the application at www.sccgov.            P.O. Box 6160 Chico, CA 95927.

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