In 2018, I had the opportunity to speak about USPAP and the Workfile at the Annual Conference of the American Society of Farm Managers and Rural Appraisers (ASFMRA). While the Uniform Standards of Professional Appraisal Practice (USPAP) has a lot to say about maintaining and retention of the workfile, there is also a lot left up to the Appraiser’s discretion. Where there are a few specific inclusions for what the workfile must include, the one requirement subject to the most interpretation is “All other data, information, and documentation necessary to support appraiser’s opinions and conclusions”.
One appraiser noted that he keeps a copy of every instance of an excel grid create for the Sales Comparison Approach, while another appraiser tosses any drafts (that weren’t submitted to the client) and only keeps the final copies.
One keeps a copy of every comp she considered – even if it was never developed, and another only keeps the sales used.
Workfiles may be entirely electronic, stored in banker boxes full of paper, or scattered around the office on paper, emails, texts, and reference books.
USPAP does not dictate the location or the format of a workfile, just that it needs to be “in existence” prior to submitting the report or communication of results; and that it is accessible to all appraisers with workfile obligations.
Maintaining a proper workfile can be hindered by busyness, disorganization, or complacency, but while the format and substance of a workfile could all be debated, we all agreed that having an adequate workfile could minimize your liability if you ever get challenged by an agency or licensing board.
Beyond complying with the Ethics Rule, your license and reputation as an appraiser may depend on the adequacy of your workfile.
Points to Ponder
- Is the current state of your workfiles defensible?
- Would your state regulator or clients agree?
- How could you strengthen the content/accessibility of your workfile?
Certified General Appraiser at Value Midwest (Mary@valuemidwest.com)
Current Michigan Chapter President and Associate Member of the ASFMRA (asfmra.org)
Beyond appraisal projects, her typical responsibilities include creating project bids and proposals, client communication, project coordination, and training interns. Her primary area of focus is the coordination of large-scale appraisal and data collection projects throughout the United States, including market research, data compilation, and analysis, and report writing.