Proposed Appraisal Selection Process

1
Proposed Appraisal Selection Process

• General Services Department Public Works and
  Engineering Real Estate Divisions

2
Charter, Art. VII, Section 9

• The City Council shall enact by a vote of
  two-thirds of the Council, such ordinances
  governing the sale, lease or disposal of said
  real estate or interest therein as it deems to be
  in the best interest of the City which shall
  establish the minimum monetary value of the real
  estate or interest therein at which the Council
  must appoint two qualified appraisers for the
  purpose of determining fair market value prior
  to completion of the transaction which may
  define and identify authorized transactions
  involving the sale, lease or disposal of said
  real estate of interests therein and which may
  outline the procedures for and the manner in
  which such transactions shall be administered.

3
City Ordinance (Code 2-240)

• Under the current City Ordinance we are required
  to obtain two independent appraisals for property
  sales and leases where the value of the City
  property is expected to exceed 25,000.

4
Who Orders Appraisals

• General Services Department
• Acquisitions
• Dispositions
• Leasing

• Public Works Engineering
• CIP/ Acquisitions
• JRC Abandonment/ Dispositions
• Dangerous Buildings

Appraisers receive assignments on a revolving
basis depending on which council district the
property is located.
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Policies Procedures for Real Property Appraisals
6
These Policies and Procedures are
governed by and within the guidelines of Article
VII, Section 9 of the City Charter, and Sections
2-240 and 2-241 of the Code of Ordinances.
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Purpose

• As part of an ongoing effort to expedite the sale
  of surplus City real property, these Policies and
  Procedures will guide the Citys Public Works
  Engineering and General Services Department real
  estate divisions as to when and how real estate
  appraisers will be selected.

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Objective

• Develop a list of qualified real estate
  appraisers
  
• Invite current list of approved appraisers by
  Council district
  
• Send to local appraisal organizations such as,
  Appraisal Institute American
  
• Society of Appraisers Appraisers
  Association of America Foundation of Real
  
• Estate Appraisers National
  Association of Independent Fee Appraisers
  National
  
• Association of Real Estate
  Appraisers.
  
• Establish City standards for real estate
  appraisers
  
• Establish the Citys minimum specifications for
  an appraisal report
  
• Encourage MWBE participation
• Utilize industry firm list of MBE and WBE
  organizations.
  
• Define events of non-compliance
• Obtain one appraisal for surplus real property
  when value is expected to be less than 1
  million and
  
• Obtain two appraisals when the value is expected
  to exceed 1 million. When the subject property
  is of a special nature the departments may order
  two appraisals.

9
Real Estate Appraiser Appointments

• The City will employ rigorous guidelines for
  appointing appraisers to ensure the highest
  quality work product and make certain that the
  City is receiving an accurate valuation

10
Real Estate Appraiser Appointments

• The appraisals and appraiser must be in
  compliance with the Uniform Standards of
  Professional Appraisal Practices (U.S.P.A.P), to
  include the Competency Rule with respect to sales
  of government-owned (City of Houston)
  properties
• Qualifications Experience General or
  Residential, i. e. work history, resume,
  credentials, and references
  
• Size of firm
• Area experience whether prior appraisal work
  conducted in certain areas of City or throughout
  City
  
• State certification and active practicing license
  of each appraiser within firm
  
• Affidavit of Ownership or Control completed and
  notarized
  
• Must apply within the stated deadline (30- day
  period after close of thee-week advertisement
  policy)
  
• Must have no disciplinary history within the past
  five years with the State of Texas Appraiser and
  Licensing Certification Board, and must be in
  good standing with the ACS Appraisal
  Subcommittee of the Federal Financial
  Institutions Examination Council
• Minimum of 5 years experience appraising similar
  properties and
  
• Work within the Houston Metropolitan area.

NOTE Members of the same company are not
eligible for separate assignments,
but will be considered as one company.
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Performance Standards for Appraisers

• Establishing City standards will define the
  minimum requirements for appraisers

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Performance Standards for Appraisers

• Real property specialty of appraiser matches the
  Citys real property to be appraised
  
• Adherence to the City of Houstons policies
  regarding vendors doing business with the City
  
• Timely adherence to agreed delivery date
• Minimal errors in report
• Adherence to Scope of Services Guidelines
• Compliance with the Uniform Standards of
  Professional Appraisal Practices (U.S.P.A.P)
  
• Timely respond to questions and or errors to be
  corrected and
  
• Competitive pricing.

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Establish City Specifications for Appraisals

• Minimum standards the City requires in an
  appraisal report

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Establish City Specifications for Appraisals

• Identification of public and private utilities
  affecting property
  
• Identification of flood plain and easements
• Standard City appraisal summary page
• Accurate calculations of appraised value with use
  of appropriate discounts for easements
  
• Adherence to the Citys appraisal format
• Signed Certification of Value and
• Electronic (PDF) version of appraisal report on
  CD along with four signed original reports.

15
MWBE Participation
The City will make affirmative efforts to
encourage minority or women-owned appraisal
companies or appraisers to apply for City
appraisal assignments. The City will send its
letter requesting qualifications for appraisal
services to all minority or women-owned
appraisers who are on the Citys prior list of
approved appraisers. In addition, the Appraisal
Institute has a directory of minority and
women-owned appraisal companies or appraisers,
and the City will also send its letter to Houston
appraisers on that Directory. If minority or
women-owned appraisal companies or appraisers are
not City MWBE certified, they will be encouraged
to apply for certification. Appraisal
assignments will be made to the next qualified
appraiser on the list without regard to whether
that person or entity is MWBE certified.

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Definition of Non-Compliance Events

• Missed delivery date
• Misrepresentation of qualifications and ethical
  violations
  
• Misrepresentation of facts
• Fraudulent or misleading values and/or
  comparables
  
• Failure to communicate with appropriate City
  personnel
  
• Failure to satisfactorily respond to or correct
  appraisal deficiencies
  
• Failure to provide required information on
  comparable sales
  
• Failure to identify correct flood plains and
  recorded easements
  
• Grammatical mathematical errors that effect the
  appraisal
  
• Failure to provide plat of public utilities
  affecting property
  
• Failure to provide signed Certification of Value,
  four signed original appraisals with color
  photographs and an electronic (PDF) version on CD
  of the appraisal report
• Any and all U.S.P.A.P compliance issues and
• Failure to comply with the City of Houstons
  appraisal format.

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Failure to Comply

• If an appraiser has been notified three times of
  non-compliance issues, or has three or more
  violations, as noted above within a single
  appraisal report, they may be removed from the
  Citys approved appraisal list for at least one
  year.

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Removal from Approved Appraiser List

• Criteria by which appraisers are removed form the
  approved appraiser list

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Removal from Approved Appraiser List

• Appraiser is no longer available to perform
• Request by the appraiser for removal
• Failure to comply with the City of Houston
  procedural guidelines and
  
• Issues, such as continued lateness of appraisal
  reports, submission of appraisals with
  incorrectly calculated opinions of value, late
  appraisal corrections or failure to respond to
  questions regarding appraisal procedure.

20
Annual Report to Council

• The Public Works Engineering and General
  Services Department real estate divisions will
  provide a list of qualified appraisers to Council
  Members annually.

21
Appraisal Report Assessment

• The Appraisal Review Procedures Administrative
  Appraisal Review Checklist will serve as an
  internal process for evaluating appraisal reports
  for accuracy in compliance with the established
  policies and procedures for real property
  appraisals.