Colorado Appraisal Consultants provides commercial and residential appraisal reviews throughout Colorado.
What is a Review Appraisal?
Review appraisals, also referred to as appraisal reviews, are most commonly done for the following purposes:
- USPAP compliance
- Valuation accuracy
- A combination of the above
Review appraisals are most commonly performed to evaluate the accuracy, compliance and/or completeness of an appraisal in question.
1. USPAP Compliance
USPAP is the governing state and federal standard setting forth minimum appraisal reporting criteria.
USPAP generally sets forth minimum required report contents such as:
- Intended use and intended user;
- Client identification;
- Proper identification of the value problem and developing a report for that use;
- Sales history for the subject and comparable sales;
- Other contents that must be included in an appraisal report.
A USPAP-compliant appraisal report meets or exceeds the minimum reporting standards of USPAP.
A Non-compliant USPAP appraisal could lack proper reporting contents meaning that the appraiser did not develop the report to required appraisal standards.
Most USPAP compliance issues tends to be pretty straight forward. For example, if the appraiser did not include 3-year sale history for the comparable sales, that is a USPAP violation.
There are other appraisal standards that might require adherence in addition to USPAP depending on what the original appraisal was for. These could relate to FIRREA (federal banking), IRS (income tax, estate tax or gift tax) or yellow book (federal acquisitions).
2. Valuation Accuracy
An appraisal report could be USPAP compliant but not accurate in terms of the value, and vice versa.
Valuation accuracy generally refers to:
- Whether the appraisal was performed pursuant to reasonable and/or accepted valuation methodology;
- Whether the cost, sales and/or income approaches have reasonable and/or supported value conclusions;
- Whether the comparable sales utilized were reasonable and/or accurate;
- If adjustments are reasonable and/or supported;
- If the final value conclusion is credible and supported, or not.
The most common valuation problems are typically related to adjustments and/or the appraiser picking a final value without reasoning and/or support.
3. Combination of Above
Review appraisals can be used to evaluate both USPAP compliance as well as valuation accuracy.
Scope of Work
The most important scope of work consideration for an appraisal review is defining whether or not the reviewer is expected to develop their own opinion of value if they do not agree with the value set forth in the appraisal under review.
Including an opinion of value by the reviewer requires the reviewer to do their own appraisal on the property and is charged accordingly.
It is also important to relate to the appraiser whether you expect them to math check the report and verify the comparable sales data in the report.
It is helpful to inform the appraiser if you are looking for a detailed or basic review.
Residential Appraisal Review Report Types
The most common residential review appraisal report types are:
1. Desk Review
A desk review is an appraisal review done without a personal inspection of the subject or comparable sales.
2. Field Review
A field review is an appraisal review typically done with a personal interior inspection of the subject and personal exterior inspection of the comparable sales from the street.
Commercial Appraisal Review Report Types
We offer the following commercial appraisal review report types:
- Basic Oral Report
- Desk Review
- Desk Review + Value Opinion
- Field Review
- Field Review + Value Opinion
1. Basic Oral Report
This option is strictly an oral report phone consultation summarizing our review of the appraisal in question. This includes no written review or comments whatsoever, not even a ‘quick email summary’. We do not include a new opinion of value.
2. Desk Review
A desk review is an appraisal review done without a personal inspection of the subject or comparable sales. We do not include a new opinion of value (appraisal) with this option. The deliverable report is a basic appraisal review document of the appraisal in question.
3. Desk Review + Value Opinion
With this option we include a desk review report + our value opinion which is expressed in a new, freestanding appraisal report.
4. Field Review
For the field review option, we inspect the interior and exterior of the subject property and the comparable sales/rentals from the street. We do not include a new opinion of value (appraisal) with this option. The deliverable report is an appraisal review document of the appraisal in question.
5. Field Review + Value Opinion
This is a field review report + our value opinion which is expressed in a new, freestanding appraisal report.
Typical review appraisals do not include substantial math checks on adjustments, adjusted values and final value conclusions.
It is the client’s responsibility to inform the appraiser that they would like the report math-checked prior to engagement.
2. Data Verification
Typical review appraisals do not include substantial data verification such as whether or not the comparables are true and/or accurate.
It is the client’s responsibility to inform the appraiser that they would like the data verified in the report prior to engagement.
Pricing and Turn-Around Time
Pricing is highly dependent on the level of review and report type requested.
When using our pricing form please be sure to indicate what level of review you are looking for and also what the use is related to (litigation, lending, etc).