What s an Appraiser t d? Life Beynd Fannie/Freddie Frms Presented by: Craig M. Capilla 181 Waukegan Rad, Suite 205 Nrthfield, IL 60093 Phne: 847-716-2380 ICAP Summer Seminars - Lisle August 20, 2018 1
Appraisal Chice? Reprting Optins via USPAP SR2-2(a): Appraisal Reprt cntent described SR2-2(b): Restricted Appraisal Reprt cntent described Oral Reprts USPAP Standard 2 still applies Hybrids? Limited? Summary? STOP IT! ICAP Summer Seminars - Lisle August 20, 2018 2
USPAP 2018 Definitin f REPORT Changes t whm the written/ral cmmunicatin may be transmitted r a party authrized by the client ETHICS RULE Nw explicitly references cmmunicatin f assignment results in misleading r fraudulent by appraiser r ther persn RECORD KEEPING RULE Incrprates cmmunicatin f assignment results WORKFILE Wrkfile fr Restricted Appraisal Reprt r ral appraisal reprt must be sufficient ICAP Summer Seminars - Lisle August 20, 2018 3
What is a Hybrid? An Appraisal Reprt!!! Opinin f Value Typically Sales Cmparisn Apprach Reliance n 3 rd Party Data Otherwise simplified Why Hybrids? Presumably less detailed/less expensive Sufficient fr sphisticated clients Risks? N mre than nrmal! Hybrids? ICAP Summer Seminars - Lisle August 20, 2018 4
Hybrids Cnt d Extrardinary Assumptin: reliance n 3 rd Party data and the appraiser has n reasn t believe it is untrue/incrrect! Restricted Appraisal Reprt? When pssible/apprpriate. New USPAP ideas? Hybrid Wrkfile requirements Still an Appraisal Dn t get cmplacent here ICAP Summer Seminars - Lisle August 20, 2018 5
USPAP AO21 What hat are yu wearing? Appraisal r acting as an appraiser USPAP applies. Can yu take ff that hat? Client expectatins. ICAP Summer Seminars - Lisle August 20, 2018 6
BPO/CMA (225 ILCS 458/5-5): (c) This Act des nt apply t a persn wh hlds a valid license as a real estate brker r managing brker pursuant t the Real Estate License Act f 2000 wh prepares r prvides a brker price pinin r cmparative market analysis in cmpliance with Sectin 10-45 f the Real Estate License Act f 2000. Must turn t Real Estate License Act language fr permitted actins Unintended cnsequences? ICAP Summer Seminars - Lisle August 20, 2018 7
BPO - Act Language (225 ILCS 454/10-45) (7) a statement in substantially the fllwing frm: "This is a brker price pinin/cmparative market analysis, nt an appraisal f the market value f the real estate, and was prepared by a licensed real estate brker r managing brker, nt by a State certified real estate appraiser. Appraisers CANNOT perfrm BPOs/CMAs? Nt the intent pssibly the effect Language amendment t Real Estate License Act? Remve the clause? Other changes? ICAP Summer Seminars - Lisle August 20, 2018 8
Waiver (225 ILCS 458/5-5) (e-5) Fr the purpses f this Act, valuatin waivers may be prepared by a licensed appraiser ntwithstanding any ther prvisin f this Act, and the fllwing types f valuatins are nt appraisals and may nt be represented t be appraisals, and a license is nt required under this Act t perfrm such valuatins if the valuatins are perfrmed by IDOT frms Lngstanding exemptin t Act ICAP Summer Seminars - Lisle August 20, 2018 9
(225 ILCS 458/5-5) Assessment (e) This Act des nt apply t a cunty assessr, twnship assessr, multitwnship assessr, cunty supervisr f assessments, r any deputy r emplyee f any cunty assessr, twnship assessr, multi-twnship assessr, r cunty supervisr f assessments wh is perfrming his r her respective duties in accrdance with the prvisins f the Prperty Tax Cde. Prpsed expansin f this language: (h) This Act des nt apply t an Illinis licensed attrney at law when perfrming an evaluatin f real prperty r filing f dcumentatin in cnjunctin with a real estate tax assessment challenge r appeal f real prperty under the Prperty Tax Cde as the representative f the prperty wner/taxpayer. This amendatry act f 2017 shall be cnstrued as declarative f existing law and nt as a new enactment. ICAP Summer Seminars - Lisle August 20, 2018 10
Evaluatins Interagency Guidelines Threshld increased t $500,000 n cmmercial prperties (as f 4/9/18) First increase since creatin in 1994 Cmmercial nly State Licensed r State Certified appraisers permitted t perfrm Evaluatins by Rule Cntents f Evaluatin established by Rule ICAP Summer Seminars - Lisle August 20, 2018 11
Evaluatins Act change? (225 ILCS 458/5-5) (g) This Act des nt apply t an emplyee, fficer, directr, r member f a credit r lan cmmittee f a financial institutin r any ther persn engaged by a financial institutin when perfrming an evaluatin f real prperty fr the sle use f the financial institutin in a transactin fr which the financial institutin wuld nt be required t use the services f a State licensed r State certified appraiser pursuant t federal regulatins adpted under Title XI f the federal Financial Institutins Refrm, Recvery, and Enfrcement Act f 1989 (a) It is unlawful fr a persn t (i) act, ffer services, r advertise services as a State certified general real estate appraiser, State certified residential real estate appraiser, r assciate real estate trainee appraiser, (ii) develp a real estate appraisal, (iii) practice as a real estate appraiser, r (iv) advertise r hld himself r herself ut t be a real estate appraiser withut a license issued under this Act Acting as = AO21 ICAP Summer Seminars - Lisle August 20, 2018 12
Bi-Cntact Infrmatin Craig Capilla is a trial lawyer, cncentrating his practice in a wide range f civil litigatin, including prfessinal liability and cmmercial claims. He has successfully defended residential and cmmercial appraisers and appraisal firms accused f negligence r imprper activity in their valuatin services. Craig has als represented numerus licensed prfessinals in Illinis state licensing matters including real estate brkers, real estate appraisers, and medical dctrs, prcess servers, mrtgage lan riginatrs and brkers. He has represented clients in bth state and federal lawsuits and has appeared in varius judicial circuits acrss Illinis and in Wiscnsin. He has als assisted prfessinals with licensing prceedings in Wiscnsin, Iwa, Minnesta, Suth Dakta, and Missuri. Craig earned a B.A. frm the University f Michigan in 2004, majring in Histry and Plitical Science. He then earned a Juris Dctr frm the DePaul University Cllege f Law in 2007. Craig is authrized t practice law in Illinis, Wiscnsin, and is a member f the trial bar f the United States District Curt fr the Nrthern District f Illinis. Craig can be reached at ccapilla@charlesfranklinlaw.cm ICAP Summer Seminars - Lisle August 20, 2018 13