`USPAP Q&A
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`June 2007
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`Vol. 9, No. 6
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`This communication by the Appraisal Standards Board (ASB) does not establish new standards
`or interpret existing standards. The ASB USPAP Q&A is issued to inform appraisers, regulators,
`and users of appraisal services of the ASB responses to questions raised by regulators and
`individuals; to illustrate the applicability of the Uniform Standards of Professional Appraisal
`Practice (USPAP) in specific situations; and to offer advice from the ASB for the resolution of
`appraisal issues and problems.
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`Is an AVM an Appraisal?
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`Question:
`Are the results from an Automated Valuation Model (AVM) an appraisal?
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`Response:
`No. Advisory Opinion 18, Use of an Automated Valuation Model (AVM), states:
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`An AVM’s output is not, by itself, an appraisal, and communication of an AVM’s
`output is not, in itself, an appraisal report.
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`An AVM is a tool that delivers an estimation or calculation, whereas an appraiser arrives
`at a value opinion by applying his or her judgment and experience. An appraisal is
`defined as “an opinion of value,” which is distinctly different from an estimate or
`calculation of value. An AVM uses automated processes and cannot produce an opinion
`of value because only individuals can exercise judgment and form opinions. An AVM is
`just one tool among many that an appraiser might use to arrive at an opinion of value.
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`Appraisers are cautioned that this response is based on the USPAP definition of
`“appraisal.” Jurisdictions that use a different definition of “appraisal” may reach a
`different conclusion.
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`Appraiser’s USPAP Obligations When Using an AVM
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`Question:
`What are an appraiser’s USPAP obligations when using an Automated Valuation Model
`(AVM)?
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`Vol. 9, No. 6
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`June 2007
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`MICROSTRATEGY 1018
`Microstrategy, Inc. v. Zillow, Inc.
`IPR2013-00034
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`

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`Page 2
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`USPAP Q&A
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`Response:
`Many appraisers use calculators, spreadsheets, analytic software, and similar tools to
`analyze market data and calculate assignment results. The nature of the appraiser’s
`service and how these tools are used are important factors in recognizing USPAP
`obligations. When appraisers use an AVM it can be as part of an appraisal assignment
`that provides value opinions to the client, or it may be for an assignment to run the AVM
`and provide the output to the client.
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`Advisory Opinion 18, Use of an Automated Valuation Model (AVM), provides advice to
`help appraisers properly distinguish among the uses of an AVM.
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`An appraiser who uses an AVM for any purpose is subject to the requirements of USPAP
`that apply to all appraisal practice: the DEFINITIONS, the PREAMBLE, the Conduct,
`Management, and Confidentiality sections of the ETHICS RULE, the COMPETENCY
`RULE, the JURISDICTIONAL EXCEPTION RULE and the SUPPLEMENTAL
`STANDARDS RULE.
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`When the assignment includes providing an opinion of value for real property, the
`assignment is an appraisal and STANDARDS 1 and 2 also apply.
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`Each year the ASB compiles the monthly USPAP Q&A into a publication entitled Frequently
`Asked Questions, or FAQ’s. In addition to compiling the new FAQ’s for the year, all of the
`FAQ’s in the publication are reviewed and updated, if necessary, to ensure they represent the
`most recent guidance from the Board. Frequently Asked Questions is published as an adjunct to
`each edition of USPAP, and has become a valuable reference for appraisers, users of appraisal
`services, and regulators. The Frequently Asked Questions publication can be purchased for
`$20.00 by visiting the “Foundation Store” page on The Appraisal Foundation website
`(https://commerce.appraisalfoundation.org ).
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`For further information regarding
`USPAP Q&A, please contact:
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`John S. Brenan, Director of
`Research and Technical Issues
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`The Appraisal Foundation
`1155 15th Street, NW, Suite 1111
`Washington, DC 20005
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`(202) 624-3044
`(202) 347-7727 fax
`john@appraisalfoundation.org
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`June 2007
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`Vol. 9, No. 6
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