Reviewer's Corner

Creating a better appraisal report

  1. Review your templates and make sure they are current to the assignment and industry expectations
    1. Is the USPAP identification page current or are you still utilizing the one that has Summary and Restricted Use appraisal report on it?
    2. Are the correct USPAP years being referenced in the addendums?
    3. The Departure Rule should not be referenced anywhere as it has not applied now for many years.
    4. Is the specific intended use applicable to the assignment being performed?
      1. FHA vs. Conventional
      2. Estate
      3. Property disposition
      4. Divorce
  2. Does the appraisal report include the following analysis?
    1. Detailed neighborhood description (painting a picture of the defined neighborhood and housing trends)?
    2. Is H&B Use include comments whether the improvements were physically possible, legally permissible, financially feasible and maximally productive both for vacant and as improved?
    3. Does the report contain detailed reasoning why any approach to value was excluded?
      1. Simply stating the cost approach and income approach to value are not applicable is not appropriate.
      2. State the specific reason why each approach was not applicable and necessary to reach a credible result.
    4. Is the value conclusion supported before and after adjustments?
    5. Is the sales and LISTING history of the subject fully disclosed and analyzed in relationship to the appraised value?
    6. Is the value conclusion reconciled?
    7. Are the approaches to value reconciled?
  3. Read, review and proof the appraisal report before it is delivered to the client. Pretend you are the toughest underwriter or review appraiser in the world and if anything remotely is questionable or missing further explanation, revise the report accordingly.

Thomas M. Munizzo, IFA, CAR, DAR