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September 19th, 2005

Complaint / Real Estate Appraiser

Filed against Mark W Hiss

Colorado Board of Real Estate Appraisers
1900 Grant St, #600
Denver, CO 80203

Attn: Enforcement

Re: My File Number -- 5045
Subject Property: 6366 Wolff St, Arvada, CO 80003

This is a complaint against Mark W Hiss, License Number AR01313206.

I have not contacted the appraiser. This matter is not under litigation.

Statement Section:

Mark Hiss has/is:

Violated the USPAP ethics rule.

Violated a standard(s) for the development or communication of a real estate appraisal, specifically standards 1 and 2.

Guilty of breech of trust in a business transaction.


There is no scope of work statement – this is a violation of USPAP Standards Rule 2-2(b)(vii)

The report does not address “reasonable exposure time” – this is a violation of USPAP Standards Rule 1-2(c) comment, SMT-6, AO-7, AO-8, and item (3) in the definition of market value.

The appraisal report does not state the identity of the intended users, by name or type -- this is a violation of USPAP Standards Rule 2-2(b)(i) and SMT-9. Specifically, the following intended users should have been mentioned in the report: HUD

Each of the comp photos is lifted from MLS.

The report says the subject is in Jefferson County. This is factually incorrect. The subject is in Adams County.

The report says the basement is 90% finished with drywall ceiling. This is factually incorrect. There is no drywall on the basement ceiling (see attached photo).

The report says laundry in on the first floor. This is factually incorrect, should be basement.

Comp Selection: Sale at 6355 Winona (MLS attached) is a model match, sale less than 6 months old. I cannot think of any justification for not using this sale.

USPAP Ethics Rule: An appraiser must perform assignments ethically. An appraiser must perform assignments with impartiality, objectivity, and independence, without accommodation of personal interests.

An appraiser must not accept an assignment that includes the reporting of predetermined opinions and conclusions.

An appraiser must not communicate assignment results in a misleading or fraudulent manner. [Note: Fraud = Intentional deception to cause a person to give up money. Something said or done to deceive.]

It is unethical for an appraiser to accept compensation for performing an assignment when it is contingent upon:

  1. the reporting of a predetermined result (e.g., opinion of value);
  2. a direction in assignment results that favor the cause of the client;
  3. the amount of a value opinion;
  4. the attainment of a stipulated result; or
  5. the occurrence of a subsequent event (i.e., loan approval)

It is readily apparent that Mark Hiss violated all of the above cited portions of the USPAP Ethics Rule. Mark Hiss is a competent appraiser. Mark Hiss is also an unethical appraiser. He set out to produce a report that allowed the loan to close. He began the process with a requested minimum value, and worked backwards to support that figure. He did so in a manner that was as competent and as unethical as necessary to accomplish the primary objective – allow the loan to close.

Prior Sale: USPAP Standards Rule 1-5 (a) and (b) require an appraiser to analyze all sales of the subject property that occurred within three (3) years prior to the effective date of the appraisal. USPAP Standards Rule 2-2(a)(ix), (b)(ix), and (c)(ix) call for the written appraisal report to contain sufficient information to indicate compliance with the sales history requirement.

In this case, the subject property sold 2/20/03 (about 19 months before the appraisal date). The sale is disclosed, but there is no analysis.  For example: Based on my inspection of the property on or about 5/12/05 and my interview with the homeowner on the same day, there were no significant changes to the subject property from Feb 2003 to May 2005.  This was confirmed by my telephone conversation with Cliff Hancock, the listing agent when the property sold in February 2003.  It is my opinion that the overall market has been flat during the time period of February 2003 to the date of the appraisal (Sept 2004).

The subject sold on 02/20/03 with contract price of $240,000 and a $10,000 seller concession (per listing agent).  Therefore, the market indication of the prior sale is $230,000 plus or minus changes to the property and/or market appreciation.  If the market has been flat, and the property has not changed, it means the market indication of the prior sale is $230,000.  There is no analysis of this issue in the report. This is a violation of USPAP Standards Rule 2-2(b)(ix) and USPAP AO-1.  There is nothing to indicate a good faith effort to comply.

Pending Sale:  Pursuant to USPAP Standards Rule 1-5(a) and 2-2(b)(ix), the appraiser is required to review and analyze the contract and the listing (market exposure) and to “summarize the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions and conclusions.”

Pursuant to USPAP AO-1, the appraiser must take into account the listing [market exposure], the agreed price, and the pending sale of the subject. The appraiser’s failure to analyze these facts may exclude important information....(See AO-1, lines 32-39).

Pursuant to USPAP Standards Rule 1-5(a) and 2-2(b)(ix), if a copy of the contract was unobtainable, a statement on the efforts undertaken by the appraiser to obtain a copy of the contract is required. If the contract is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required. It is unclear if the appraiser (Mark Hiss) reviewed a copy of the contract. If he did not review a copy of the contract, the required statement is not in the report.

If he did review a copy of the contract, the report violates the USPAP requirement to “summarize the information analyzed and appraisal procedures followed”, i.e., clearly state that he did review a copy of the contract.

In the analysis section (URAR page 2), the report says:

“The subject property is currently under contract to sell for $255,500 on 9/16/04 and is currently listed for $244,000.”

In my opinion, this is a reasonable attempt at disclosure. This is not analysis. Per my dictionary: Analysis = An examination of the parts to find out their nature, proportion, interrelationship, etc. A detailed examination. A statement of the results of this process.

What is the interrelationship of the asking price to the market value? The report does not examine this issue. How could Mark Hiss conclude that the market value was $256,000 when it was obvious that you, I, or anyone else could have bought the property for $244,000? The report does not answer to this question.

The report says (URAR page #1) the seller concession is $14,500 and the sales price is $255,500. If we accept these figures at face value, it means the buyer agreed to pay $241,000. It means the seller agreed to accept $241,000. It means that the “agreed price” (USPAP AO-1 terminology) is $241,000. How could Mark Hiss conclude that market value was $256,000 when it was obvious the agreed price was $241,000? USPAP AO-1 requires the appraiser to consider the agreed price. There is nothing in the report to suggest compliance with AO-1.

The plain meaning of USPAP Standards Rule 2-2(b)(ix) requires the report to provide sufficient detail for the intended user(s) to understand the reasoning and the rationale for how the market value could be higher than the publicly stated asking price.

In the appraisal report, there is no mention of the appraisal procedures followed with regard to analysis of the sales contract, market exposure, the agreed price, and the pending sale of the subject – this is a violation of USPAP Standards Rule 1-5(a) and 2-2(b)(ix), and AO-1.

USPAP dictates the report must include a reconciliation of the difference between the asking price and the appraised value, i.e., a stated and plausible reason. There is no reasoning and there is no rationale – this is a violation of USPAP Standards Rule 1-5(a) and 2-2(b)(ix).


I certify that the statements and information supplied by me in this complaint including the attachments are true and correct to the best of my knowledge and belief.




Philip G Rice
11268 E Linvale Dr
Aurora, CO 80014



Appraisal Report (6 pages)

Subject Photos

MLS Data:


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