ADVISORY OPINIONS
This communication by the Appraisal Standards Board (ASB) does not establish new standards or interpret existing standards. Advisory Opinions are issued to illustrate the applicability of appraisal standards in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems
SUBJECT: Normal Course of Business
APPLICATION: Real Property, Personal Property
THE ISSUE:
Standards Rules 1-5 and 7-5 require an appraiser to analyze certain information about the subject property if the information is available to the appraiser in the normal course of business. How does one determine the “normal course of business” for a given assignment?
BACKGROUND:
The analysis that is required in Standards Rules 1-5 and 7-5 promotes a certain degree of due diligence on the part of the appraiser. Appropriate due diligence increases public trust in the appraisal profession. The intent is to ensure that the research of past sales and current listings, options, or agreements of sale of the subject property is sufficient to promote public trust, without creating undue hardship on the appraiser.
The availability of the data necessary to comply with the requirements in Standards Rules 1-5 and 7-5 varies greatly. In some situations, this data is available from multiple sources. In other instances, sales and listing data is not readily available.
The “normal course of business” is controlled to a large degree by the scope of work in a specific assignment. Differences in intended use, intended users, the type and definition of value, or other factors can dramatically alter the scope of work. Therefore, the “normal course of business” for one assignment might not be the “normal course of business” for a seemingly similar assignment.
ADVICE FROM THE ASB ON THE ISSUE:
Relevant USPAP & Advisory References
USPAP 2008–2009 Edition
©The Appraisal Foundation