Chapter 539-3 STANDARDS FOR APPRAISALS
| (1) |
A federally related transaction is any
real estate related financial transaction that (A) a federal financial
institutions regulatory agency or the Resolution Trust Corporation engages in,
contracts for, or regulates; and (B) requires the services of an
appraiser. |
| (2) |
In developing and
reporting an appraisal of real property in a federally related transaction, an
appraiser must comply with the standards required by the federal financial
institutions regulatory agency that regulates the financial transaction for
which the appraisal assignment was undertaken. For each appraisal assignment,
it is the responsibility of the appraiser to determine what standards a federal
financial institutions regulatory agency requires. |
| (3) |
In developing and reporting an appraisal
of real property in a federally related transaction,an appraiser must take
reasonable efforts to identify and report (a) the identity of the current owner
of the property, (b) whether the property is listed for sale and identify and
state in the appraisal report all list prices within the preceding year
reported by reliable sources, (c) whether the property is under contract for
sale, and (d) whether the property has sold or had deed transfer within the
last three years prior to the effective date of the appraisal. |
| (4) |
While documenting compliance with this
requirement may be met in a variety of ways, an appraiser who attaches to the
appraisal report the following items, obtained contemporaneously with the
appraisal, shall be deemed to have met the requirements of this rule:
| (a) |
a copy of the most recently recorded deed
transferring ownership of the property or county tax records showing the
name(s) of the property's current owner(s) of record; |
| (b) |
a copy of any existing listing agreements
or documentation from a multiple listing service that reflects any listing
periods and list prices of the property and its owner(s). (The appraiser must
also identify and state in the appraisal report all list prices within the
preceding year reported by reliable sources); and |
| (c) |
a written statement signed by the party
ordering the appraisal that such party has disclosed to the appraiser all
pending agreements to sell the property of which it is aware and has supplied
to the appraiser all written agreements to sell the property of which it is
aware. |
|
| (1) |
In developing and reporting an appraisal
of real property, an appraiser shall not:
| (a) |
perform any appraisal assignment beyond the scope of authority granted in the
appraiser classification held; |
| (b) |
fail to disclose clearly and accurately the appraiser classification and number
granted to the appraiser by the state; |
| (c) |
fail to employ correctly methods and
techniques that are necessary to produce a credible appraisal. Unless the
appraiser expressly provides a credible real estate appraisal justification in
the appraisal report, the appraiser may not vary from the following guidelines:
| 1. |
appraisers reaching a conclusion of value
for a real property must:
| a. |
Obtain all data
used in every appraisal from a reliable source and verify that data from at
least one additional reliable source. For purposes of this Chapter a reliable
source shall be one typically utilized by appraisers in the area and includes,
but is not limited to, a personal inspection by the appraiser; publicly filed
records; property tax records; an appropriate local multiple listing service;
and commercially available data based and publications reasonably relied upon
by appraisers in the ordinary course of their business.
An appraiser may also rely upon information obtained from real
estate appraisers, brokers, closing attorneys, sellers, and buyers provided
that the appraiser maintains (1) documentation of any information obtained from
appraisers, brokers, closing attorneys, sellers, and buyers and (2) the name
and telephone number and/or address of each source in the appraiser's file for
at least five years; |
| b. |
Obtain for the appraiser's file the Tax Assessor's 100% market value; |
| c. |
identify and state in the appraisal report
any list prices of the property if listed within the preceding year reported by
reliable sources; and |
| d. |
comment
on the impact on the market value of the subject of foreclosure activity in the
market area of the subject property. |
|
| 2. |
appraisers utilizing the market approach
for reaching a conclusion of value for a real property must:
| a. |
identify and describe the market area as a
geographic location; |
| b. |
select
comparable properties that are the most recent sales and that reflect current
market conditions for valuation of the subject property. Absent a credible real
estate appraisal explanation for a different definition of most recent sales,
most recent sales shall be within one year and in the market area. The most
recent sales shall be presumed to be properties that have sold within the
preceding year of the effective date of the
appraisal; |
| c. |
select comparable
properties for valuation of a residential property that require the net total
of any adjustments to the sales price of a comparable sale not to exceed 15%
and the gross total of all adjustments (whether positive or negative) not to
exceed 25%, absent a credible real estate appraisal explanation for differing
adjustments; |
| d. |
select comparable
properties for valuation of a property that are located within the market area
of the subject. Absent a credible real estate appraisal explanation for a
different market area, the market area for residential properties shall be
presumed to be comparable properties located first within the same subdivision
as the subject and second located within one mile of the subject; |
| e. |
list in the appraisal report any sale of
the subject property held within the preceding three (3) years of the
appraisal's effective date including the date of sale and sales price. In
addition, comment on or explain if any sale occurred within six (6) months of a
previous sale within said three (3) year period when the sales price increased
more than 25% of the previous sales price; |
| f. |
list in the appraisal report any sales of
comparable properties used in said report held within the preceding one (1)
year of the comparable properties last date of sale including the previous date
of sale and sales prices. In addition, comment on or explain if any sale
occurred within six (6) months of a previous sale within said one (1) year
period when the sales price increased more than 25% of the previous sales
price. |
| g. |
state the exposure time
indicated by the market. |
|
| 3. |
appraisers utilizing the cost approach for
reaching a conclusion of value for a real property must include in the
appraisal report the relevant replacement cost data from a source reasonably
relied upon by appraisers in the ordinary course of their business. Said source
must be identified by title on the appraisal report; |
| 4. |
appraisers utilizing the income approach
for reaching a conclusion of value for a real property shall identify in the
appraisal report the source of any income data used in the appraisal report;
identify any ownership or other interest which such source has in the subject
property; and maintain in the appraiser's file for a period of five years
written verification of such income data. |
|
| (d) |
commit a substantial error of omission or
commission that significantly affects the appraisal; |
| (e) |
render appraisal services in a careless
or negligent manner; |
| (f) |
communicate the appraiser's analyses, opinions, or advice in a manner that is
misleading to the client; |
| (g) |
fail
to include in a report of an appraisal sufficient information to enable the
person(s) who are expected to receive or rely on the report to understand it
properly; |
| (h) |
perform an
independent appraisal assignment with partiality or an accommodation of
personal interest; |
| (i) |
accept an
independent appraisal assignment when the employment itself is contingent upon
the appraiser's reporting a predetermined estimate, analysis, valuation, or
opinion or where the fee to be paid is contingent upon the opinion,
conclusions, analysis, or valuation reached or upon the consequences resulting
from the appraisal assignment; |
| (j) |
perform any appraisal assignment without (1) disclosing any lack of knowledge
and/or experience to the client before accepting the assignment; (2) taking all
steps necessary to complete the assignment competently; (3) describing the lack
of knowledge and/or experience and the steps taken to complete the assignment
competently in the appraisal report; and (4) having the client expressly
identify any other persons or entities that the client expects to rely on the
appraisal report; |
| (k) |
report the
results of a real property appraisal without disclosing the nature, extent, and
detail of the appraisal processes undertaken; |
| (l) |
fail to disclose clearly and accurately
in the appraisal report any assumption or any limiting condition that directly
affects the appraisal and to indicate its impact on value; |
| (m) |
fail to include in an appraisal report a
certification that includes the following items in language substantially
similar to the following:
I certify that, to the best of my knowledge and belief: - the statements of fact contained in this report are true and
correct. - the reported analyses, opinions, and conclusions are limited
only by the reported assumptions and limiting conditions, and are my personal,
unbiased professional analyses, opinions, and conclusions. - I have no (or the specified) present or prospective interest
in the property that is the subject of this report, and I have no (or the
specified) personal interest or bias with respect to the parties
involved. - I have performed no (or the specified) services, as an
appraiser or in any other capacity, regarding the property that is the subject
of this report within the three year period immediately preceding acceptance of
this assignment. - I have no bias with respect to the property that is the
subject of this report or to the parties involved in this assignment. - my engagement in this assignment or in any future assignment
is not contingent upon developing or reporting predetermined results. - my compensation is not contingent upon the reporting of a
predetermined value or direction in value that favors the cause of the client,
the amount of the value estimate, the attainment of a stipulated result, or the
occurrence of a subsequent event. - my analyses, opinions, and conclusions were developed, and
this report has been prepared, in conformity with the Georgia Real Estate
Appraiser Classification and Regulation Act and the Rules and Regulations of
the Georgia Real Estate Appraisers Board. - I have (or have not) made a personal inspection of the
property that is the subject of this report. (If more than one person signs the
report, this certification must clearly specify which individuals did and which
individuals did not make a personal inspection of the appraised
property.) - no one provided significant professional assistance to the
person signing this report. (If there are exceptions, the name of each individual providing
significant professional assistance must be stated and the professional
assistance provided must be disclosed.); |
| (n) |
falsify any part of an appraisal
report; |
| (o) |
fail to maintain at all
times direct control of the appraiser's signature and the method by which that
signature is affixed to an appraisal report. An appraiser may grant permission
to another to affix the appraiser's signature to an appraisal report provided
that the permission is in writing, the permission extends to only one specific
appraisal report, the writing identifies the report and the amount of the
opinion of value, and the appraiser maintains a copy of the written permission
in the appraiser's work file. An appraiser shall not grant blanket authority to
another person to affix the appraiser's signature to an appraisal report or
reports; and |
| (p) |
use any uniform
residential appraisal report form for reporting appraisal work for any purpose
other than to report an appraisal. |
| (q) |
Submit or transmit an appraisal report
without taking reasonable steps to ensure that the report cannot be altered,
modified or otherwise facilitate unlicensed appraisal activity as addressed in
O.C.G.A. § 43-39A-24. Such unlicensed
activity may include the alteration or modification of the report by the
client, liaison of the recipient, or appraisal management company. |
| (r) |
if paid by a third party, fail to include
the fee paid for the appraisal assignment and; if ordered by an appraisal
management company, the registration number of that appraisal management
company. |
|
| (2) |
An appraiser
who signs a real property appraisal report prepared by another accepts full
responsibility for the appraisal and the contents of the appraisal
report. |
| (3) |
On the effective date
of this Rule amendment and in anticipation of a change in USPAP published as
the Fourth Exposure Draft of proposed changes to the 2016-2017 Edition of it by
the Appraisal Standards Board to become effective January 1, 2016, the physical
characteristics of real estate appraised shall not be considered assignment
results. Examples of the physical characteristics include size, functional
utility, physical conditions, and quality of the real estate appraised. An
appraiser shall not disclose appraisal assignment results or confidential
information found in an appraisal to anyone other than:
| (a) |
the client and parties specifically
authorized by the client; |
| (b) |
state
appraiser regulatory agencies and third parties as may be authorized by due
process of law; |
| (c) |
a duly
authorized professional peer review committee except when such disclosure to a
committee would violate applicable law or regulation; and |
| (d) |
the appraiser's legal counsel or
professional expert representing the appraiser in an existing criminal, civil,
or administrative law investigation or proceeding involving the
appraiser. |
|
| (4) |
In
developing and reporting an appraisal of real property in a non-federally
related transaction; an appraiser must take reasonable steps to identify and
report (a) the identity of the current owner of the property, (b) whether the
property is listed for sale and identify and state in the appraisal report all
list prices within the preceding year, (c) whether the property is under
contract for sale, and (d) whether the property has sold within the last three
years prior to the effective date of the appraisal. |
| (5) |
While documenting compliance with the
requirements of paragraph (4) above may be accomplished in a variety of ways,
an appraiser who attaches to the appraisal report the following items, obtained
contemporaneously with the appraisal, shall be deemed to have met the
requirements of this rule:
| (a) |
a copy of the
most recently recorded deed transferring ownership of the property or county
tax records showing the name(s) of the property's current owner(s) of
record, |
| (b) |
a copy of any existing
listing agreement or documentation from a multiple listing service that
reflects a listing period of the property and its owner(s); and |
| (c) |
a written statement signed by the party
ordering the appraisal that such party has disclosed to the appraiser all
pending agreements to sell the property of which it is aware and has supplied
to the appraiser all written agreements to sell the property of which it is
aware. |
|
| (6) |
When a client
of an appraiser requests an appraisal of a property that was the subject of an
appraisal performed by that appraiser for a different client and intended
user(s) with a new effective date and if the appraiser uses any data from the
original appraisal in the appraisal for the new client, then, unless the
appraiser expressly provides a credible real estate appraisal justification in
the appraisal report, the appraiser must, at a minimum:
| (a) |
perform an inspection of the subject
property sufficient in scope to provide a credible appraisal; |
| (b) |
re-verify any data from the first
appraisal that is being re-used in the new appraisal; |
| (c) |
review the comparable sales that were
used in the original appraisal and analyze any comparable sales that have
occurred or on which information has become available since the date of the
original; and |
| (d) |
identify the new
client and intended user(s). |
|
| (1) |
An
appraisal review assignment shall consist of developing and reporting an
opinion of the quality of another appraiser's work. |
| (2) |
In undertaking an appraisal review
assignment, the appraiser must:
| (a) |
identify
for the appraisal review assignment the client, the intended users, the
subject, the effective date, the purpose of the assignment, and the scope of
work to be performed; |
| (b) |
develop
and report a credible opinion of the quality of another appraiser's work
including, but not limited to, an opinion as to whether the data is adequate
and relevant, the appraisal methods used are appropriate, and the analyses,
opinions, and conclusions in the work being reviewed are reasonable and
appropriate; and |
| (c) |
disclose in
the appraiser's report the nature, extent, and detail of the review process
undertaken and include all known pertinent information. |
|
| (3) |
Anytime an appraiser develops and reports
an opinion of value that agrees or disagrees with the opinion of value
developed and reported in an appraisal assignment performed by another
appraiser, that opinion is an appraisal, not a review of an appraisal. When the
purpose of an appraisal review assignment also requires that the appraiser
develop an opinion of value of the subject of the review assignment, that
requirement must be identified in the purpose and scope of work of the
appraisal review assignment and the appraiser must comply with the applicable
standards for developing an appraisal. |
In lieu of and notwithstanding anything to the contrary found
in Rules 539-3-.01 and
539-3-.02 herein, if an appraiser
performs an Evaluation Appraisal, as hereinafter defined, the appraiser shall
perform such appraisal subject to the following requirements:
| (1) |
An "Evaluation Appraisal" is defined as
follows:
An appraisal which is limited in its scope and development to
the requirements for Evaluations as set forth for a lender by a federal
financial institutions regulatory agency or any nonfederal financial
institutions regulatory agency as the case may be and as defined in and
consistent with the Interagency Appraisal and Evaluation Guidelines
("Evaluation Guidelines") promulgated by the Office of the Comptroller of the
Currency, et al., effective December 10, 2010. |
| (2) |
Transactions for which an Evaluation
Appraisal is permitted:
| (a) |
The transaction
has a value equal to or less than the threshold amount of
$250,000.00; |
| (b) |
The transaction
involves a business loan with a transaction value equal to or less than a
business loan threshold of $1,000,000.00 and is not dependent on the sale of,
or rental income derived from, real estate as the primary source of repayment;
or |
| (c) |
The transaction involves an
existing extension of credit at a lending institution provided that:
| (1) |
There has been no obvious and material
change in market conditions or physical aspects of the property that threaten
the adequacy of the institution's real estate collateral protection after the
transaction, even with the advancement of new monies; or, |
| (2) |
There is no advancement of new monies
other than funds necessary to cover reasonable closing costs; |
|
|
| (3) |
Development of
Evaluation Appraisals:
At a minimum, the Evaluation Appraisal shall contain the
following:
| (a) |
Location of the real
property; |
| (b) |
Description of the
real property and its current and projected use; |
| (c) |
An estimate of the property's market
value in its actual physical condition, use and zoning designation as of the
effective date of the evaluation, with any limiting conditions; A valuation
method that does not provide a property's market value or sufficient
information and analysis to support the value conclusion is not acceptable as
an Evaluation Appraisal. While a broker price opinion (BPO), a competitive
market analysis (CMA), an automated valuation model (AVM), and a tax assessment
value (TAV) may be useful in developing an Evaluation Appraisal, the
information obtained from these methods of valuation is insufficient standing
alone to meet all of the criteria necessary to be an Evaluation
Appraisal. |
| (d) |
A description of the
method used to confirm the property's actual physical condition and the extent
to which an inspection was performed; |
| (e) |
A description of the analysis that was
performed and the supporting information that was used in valuing the
property; |
| (f) |
A description of any
supplemental information that was used in the development of the Evaluation
Appraisal when using an analytical method, such as an automated valuation
model, or technological tool; |
| (g) |
A
list of all sources of information used in the development of the Evaluation
Appraisal including the following:
| (1) |
External data sources such as market sales databases and public tax and land
records; |
| (2) |
Property-specific data
such as previous sales data for the subject property, tax assessment data, and
comparable sales information; |
| (3) |
Evidence of a property inspection; |
| (4) |
Photos of the property; |
| (5) |
A description of the
neighborhood; |
| (6) |
Local market
conditions; |
| (7) |
Name and contact
information for the appraiser who prepares the Evaluation Appraisal; |
| (8) |
A signature for the appraiser who
prepares the Evaluation Appraisal; |
| (9) |
Factors setting forth the transaction
conditions consistent with
539-3-.04 (2). |
|
|
| (4) |
If the Evaluation Appraisal is
prepared for a nonfederal financial institution and said institution is not
regulated by a federal financial institutions regulatory agency, and if USPAP
compliance is not required by said institution for the appraisal reporting
format, then the Evaluation Appraisal may be prepared in any reporting format,
such as, but not limited to a self-contained appraisal report, a summary
appraisal report, and a restricted use appraisal report if the reporting format
meets the requirements of the nonfederal financial institution. |
| (5) |
Certification. The Evaluation Appraisal
report shall include the following items in language substantially similar to
the following: I certify that, to the best of my knowledge and belief:
- the statements of fact contained in this report are true and
correct. - the reported analyses, opinions, and conclusions are limited
only by the reported assumptions and limiting conditions, and are my personal,
unbiased professional analyses, opinions, and conclusions. - I have no (or the specified) present or prospective interest
in the property that is the subject of this report, and I have no (or the
specified) personal interest or bias with respect to the parties
involved. - I have no bias with respect to the property that is the
subject of this report or to the parties involved in this assignment. - my engagement in this assignment or in any future assignment
is not contingent upon developing or reporting predetermined results. - my compensation is not contingent upon the reporting of a
predetermined value or direction in value that favors the cause of the client,
the amount of the value estimate, the attainment of a stipulated result, or the
occurrence of a subsequent event. - my analyses, opinions, and conclusions were developed, and
this report has been prepared, in conformity with the Georgia Real Estate
Appraiser Classification and Regulation Act and the Rules and Regulations of
the Georgia Real Estate Appraisers Board. - I have (or have not) made a personal inspection of the
property that is the subject of this report. (If more than one person signs the
report, this certification must clearly specify which individuals did and which
individuals did not make a personal inspection of the appraised
property.) - no one provided significant professional assistance to the
person signing this report. (If there are exceptions, the name of each
individual providing significant professional assistance must be stated and the
professional assistance provided must be
disclosed.) |
