There’s been a lot of buzz about the “Yellow Book” lately in the appraisal industry. If you are new to the profession, or if you’ve simply never performed a Yellow Book appraisal, you may be curious about what it is and why it’s important. Here are answers to some common questions, including key things to keep in mind when it comes to Yellow Book appraisal assignments.
Take a deep dive into the appraisal process with our new Yellow Book course: Uniform Appraisal Standards for Federal Land Acquisitions.
What is the Yellow Book?
It is the Uniform Appraisal Standards for Federal Land Acquisitions, which is sometimes referred to as UASFLA or the Yellow Book. It is a set of standards for appraisals and appraisal reviews performed on properties that are being acquired by the federal government. (The government has the power, known as eminent domain, to take private property for the public good, as long as just compensation is paid to the property owner.)
What is the history of the Yellow Book?
The current edition of the Uniform Appraisal Standards for Federal Land Acquisitions (published in 2016) is the Sixth Edition. The Fifth Edition was published in 2000, hence this is the first new edition of the Yellow Book in 16 years. It was originally published in 1971. The stated purpose of the Yellow Book is “to promote fairness, uniformity, and efficiency in the appraisal of real property in federal acquisitions.”
Who can complete a Yellow Book appraisal?
The Yellow Book does not specify who may complete appraisals for federal land acquisitions. The appraiser’s qualifications would be a matter to be determined by the agency that is engaging the appraiser. Federal agencies that would engage appraisers for these types of assignments would include (among others) the General Services Administration, the U.S. Army Corps of Engineers, the U.S. Forest Service, the U.S. Department of the Interior, and the U.S. Department of the Navy.
Why are Yellow Book appraisals important?
These appraisals are intended to protect the property owner by requiring that the government pay just (i.e., fair) compensation for property being acquired. They also protect the government (and by extension, taxpayers) by ensuring that the government does not overpay for the property being acquired.
What are 3 key things to keep in mind when it comes to these appraisals?
Here are 3 key considerations for Yellow Book appraisals:
- The structure of the Yellow Book has been revised to be more consistent with USPAP. For example, Section 1 of the Yellow Book addresses appraisal development, and Section 2 addresses appraisal reporting.
- The Yellow Book Standards can be modified by the agency that is engaging the appraiser. As a result, the appraiser may need to work closely with agency counsel and receive legal instructions regarding modifications to the Yellow Book Standards that might be applicable to a specific assignment.
- Appraisers do not develop estimates of just compensation. Appraisers are responsible for developing and reporting fair market value, which is used by courts to make a determination of just compensation. Fair market value is just one step along the way to determining just compensation.
Where can I go to learn more about doing these types of appraisals?
Check out our free webinar, A Brief Introduction to the 2016 Yellow Book. Or take our brand new Yellow Book course, Uniform Appraisal Standards for Federal Land Acquisitions, available now. Copies of the Yellow Book are available in both print and electronic formats on The Appraisal Foundation’s website, AppraisalFoundation.org.