Portland, Oregon area homeowners, real estate agents, and attorneys often contact A Quality Appraisal, LLC wanting to know the value of a home, but not needing (nor desiring to pay for) an appraisal with the same level of
research that is included in a “full” appraisal (like those required by banks for an 80% home loan). As an appraiser, if I provide an opinion of value or even a range of value, I am furnishing an appraisal and I must be able to document research and report
findings in a manner that is consistent with the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP states that appraisers, “…must determine and perform the scope
of work necessary to develop credible assignment results.”
Appraisers are licensed professionals held to high standards. Appraisal clients may not know what level of research is necessary for credible results, so the appraiser must learn how the client plans to use the appraisal
and assist with deciding on a product that produces results appropriate for the intended use. USPAP states that, “Appraisers have broad flexibility and significant responsibility in determining the appropriate scope of work....” USPAP further states, “The
credibility of assignment results is always measured in the context of the intended use.” For this reason, A Quality Appraisal, LLC offers multiple residential appraisal products featuring scopes of work that specifically target a range of intended use.
Desktop Appraisals: We offer several desktop appraisal report options that do not include an interior inspection or even an onsite viewing of the subject property. The desktop appraisal report looks
the same as other appraisal reports, just without a measurement sketch or photos of the subject property. A desktop appraisal
might produce credible results for a property that has significant information available online or through other sources, and the appraiser can make reasonable assumptions about features and condition. A good time to use a desktop appraisal might be soon
after a property has sold on the area multiple listing service and there are adequate interior photos and descriptions available. We will not offer a desktop appraisal if the property is very unique and requires a personal viewing by the appraiser to understand
Minimum Scope Appraisal: We offer a proprietary product called a “Minimum Scope Appraisal Report.” This appraisal can be produced from a desktop alone or it can also be done with an interior or exterior
inspection. This is a short USPAP compliant narrative report product that we developed for clients who just want the unbiased opinions of an appraiser without the cost. In this appraisal report, there is less verification of data and more assumptions are
made than in a typical full appraisal. The analysis of comparable sales is usually qualitative rather than the dollar (quantitative) adjustments more commonly found in residential appraisal reports. A good time to use a minimum scope appraisal might be for
consulting or planning purposes. Minimum scope appraisals can later be upgraded to a full appraisal if necessary, when the client understands that additional research can produce different value conclusions or recommendations.
Did I leave anything out or do you want to join in the conversation? Let me know in the comments below.
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Thanks for reading,
Because I am a real estate appraiser, a friend or family member will often ask, “What do you think my home is worth?” I usually reply with something like, “That would take some
research to figure out” and then move the conversation away from value. An appraiser cannot just give an opinion off the top of their head, even if they are certain of accuracy, because appraisers are professionals who are required to maintain detailed work
files anytime they offer an opinion of value.
An appraiser’s value opinion can be in the form of a range, a single number, or even as seemingly innocuous as providing some home sales that we think are “comparable.” The
Uniform Standards of Professional Appraisal Practice (USPAP)
says that appraiser work files must contain information about the client and users, copies of the appraisal reports, summaries of oral reports, signed certifications, and, “…all other data, information, and documentation necessary to support the appraiser’s
opinions.” Here is a list of some items that are important for an appraiser to have in their work file:
A copy of the signed engagement letter.
Appraisal inspection notes and photos.
Documentation of correspondence with the client.
Support for highest and best use.
Comparable search results, including land sales.
Documentation of data verification or other correspondence.
Support for or lack of adjustments, including market conditions.
Cost estimate data.
Copies of public and other data accessed online.
A copy of the completed written appraisal report or summary of oral report and certifications.
An appraiser’s work file (electronic
or paper) should have sufficient documents that a peer could review the appraisal report and work file, follow the appraiser’s steps, and reasonably come to the same value conclusions. Having a sound work file keeps appraisers out of trouble with regulators,
helps to defend appraisers in court, and encourages a high level of public trust as a profession. Without a detailed professional work file, appraisers would merely be fortunetellers.
Above is exactly what the 2014 thru 2015 USPAP Ethics says about the appraiser’s work file in the Record Keeping Rule.
If you find this information interesting or useful, please
to our blog and like us on Facebook.
Also, please support us by making Portland real estate appraisal related comments on our blogs and YouTube
videos. If you need
Portland, Oregon area residential real estate appraisal services for any reason, please
request appraisal fee quote
or book Gary F. Kristensen to speak
at your next event. We will do everything possible to assist you.