Mark Plourde, Maine Valuation Company

There certainly are many varieties of “opinions of value” in the marketplace but not much consistency in the written document that sets forth such an opinion. For value opinions that are not developed by a Licensed or Certified Appraiser, I often discover that there are no “Certification” statements included. To the contrary, there usually are various disclaimers included such as “…the provider makes no representations or warranties of any kind, express or implied regarding content, accuracy and reliability… all data is subject to error, omissions, or other conditions…”and so on and so forth – I am sure you get the picture. These disclaimers kind of remind me of the commercials you see on TV these days trying to sell you a new pain relief drug with a fancy name you can’t pronounce or spell, where more than half the commercial just warns you about potential adverse side effects and tells you to ask your doctor if it is safe for you!

If you intend to make an important decision based on the market value of real estate, you really should consider the difference in the source and the ingredients that go into the market value opinion if you want to avoid any unforeseen pain and suffering. Is the opinion of value based on primary or secondary information? Were the important subject and market data characteristics confirmed to be factual or simply recited from someone else?

When a Licensed or Certified Appraiser provides an Appraisal service, such work must comply with the Uniform Standards of Professional Appraisal Practice – or USPAP (1) for short. Among the many professional standards that USPAP mandates are Standards Rule 2-3 which requires the Appraiser to certify a number of statements including the following to name but a few:

• The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

• I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

• My engagement in this assignment was not contingent upon developing or reporting predetermined results.

• My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

• My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

If you pause, read, and consider the meaning and impact of just these few Professional Certification statements, I hope you would come to the realization that there is a tangible difference of an opinion of value rendered by a Licensed or Certified Appraiser who actually certifies such opinion based upon compliance with USPAP. The qualified, independent nature of such an opinion should be given due consideration when making a real estate purchase decision. This is not meant to preclude a participant choosing to make a decision above or below any value opinion or price point, only that one should proceed with the best available information, that’s all. Doesn’t that seem prudent to you?

1. The Uniform Standards of Professional Appraisal Practice, promulgated by the Appraisal Standards Board, and published by the Appraisal Foundation, www.appraisalfoundation.org

Mark Plourde, MAI, is the managing partner of Maine Valuation Company, Gorham, ME.