Colorado's #1 Rated Appraisal Company

Colorado’s #1 Rated Appraisal Company



Real property appraisal involves the development and reporting of a particular value, for a particular property. This post briefly explains the reporting aspect of appraisal assignments.

Why would you be interested in this seemingly boring topic?

Because the type of report you order will directly impact:

1.) Pricing

2.) Time to Complete

3.) The amount of detail presented

Report Style

Real property valuation must be reported in some way, otherwise, only the appraiser would be left with the information pertaining to the assignment. Technically, an appraisal can be reported verbally, though this is seldom, if ever, done on purpose. Before getting into the three most common Report Types, it is useful to distinguish the way in which the report is generated, also known as the report style.

Form Reports

A Form Report looks and feels like a property report card: It has blank boxes and various categories  and check boxes which are filled in by the appraiser. Most of the form report formats were developed by large quasi-governmental institutions like Fannie and Freddie to allow for a “standardized” look and feel of an appraisal.

Here are some examples of the most common Form Reports:

URAR 1004 (Uniform Residential Appraisal Report)

Drive-by Report 2055 (Exterior Only)

Fannie Mae’s Complete Form List can be easily accessed to view all their available forms (Note: Not all pertain to appraisal).

Now days, Form Reports are usually the output of a software program which was written to allow for a standardized reporting format. There are several software providers out there with varying levels of functionality, Colorado Appraisal Consultants utilizes a la mode software which allows for a high degree of integrated output options.

Pros & Cons of the Form Report

Pros: Form Reports can be generated relatively quickly and are standardized. This makes them cheaper and easier to produce, as well as easier to read if you are familiar with reading lots of them.

Cons: Form Reports are standardized. This is a double edged sword because in straight forward situations in which the property and use of the report fall under “normal” circumstances, the standardization is a benefit. However, if the property is abnormal in some way, or the use is not for a typical lending situation, a majority of the language specific to the report cannot be changed, even with software: Fannie Mae restricts altering the report, due to the fact that the intention is for a standardized format.

Most Common Use

A Form Report is most commonly used within residential appraisals. This is because they are typically more straightforward than commercial properties which can have huge differences in use and property type. Though most commercial properties can be appraised via a Form Report, this is seldom done.

Narrative Reports

A Narrative Report looks like an offering memorandum, or essay of sorts: It is written out (typed) usually in Word or Works and generally has an Executive Summary, followed by a Table of Contents, Summary of Salient Facts, and then the Body of the report which is mostly in descriptive format, with pictures, maps and an Addendum.

Appraisers are generally free to develop the look and feel of the report as they wish, however, the minimum requirements of USPAP must still be met. That is, the report must present a “minimal level of detail” depending on which Report Type is selected.

Pros & Cons of the Narrative Report

Pros: Narrative reports contain a high level of detail and provide a “step by step” walk-through of the process and reasoning utilized by the appraiser. In contrast with the Form Report which has defined boxes, some which allow for additional descriptions while others do not, the Narrative Report is very flexible. If the appriaser needs to add additional information, whether it is clarification or simply property specific characteristics, it is easy to do so. Appraisers are not bound by a standardized template, though the report will still report on the same categories.

Cons: Time to produce. The time it takes to write a multi-page (usually 60-150 pages), highly specific document with photos, maps, descriptions, calculations, exhibits, etc. is substantially longer than simply filling in the boxes. This  is directly related to pricing, as appraisers generally charge based on the amount of time it will take to produce the report.

Most Common Use

A Narrative Report is most commonly used for commercial appraisals. This trend is largely due to the historical nature of appraisal assignments being ordered by lending institutions preferring this type of report. A Narrative Report on a residential is seldom performed.

Report Types

Three Report Types are possible. While all appraisals require a complete appraisal analysis done by the appraiser, the degree in which the details are presented to the client is dictated by the report type.

Restricted Use Report

A Restricted Use Appraisal Report contains minimal detail and is intended to be relied upon by the client only, not any other party.

Our Restricted Use appraisals are done in a form format using Alamode appraisal software. This is the least common appraisal report type because it does not satisfy the needs of most lenders. However, when a client does not have time to read a lengthy, detailed analysis, this can be an excellent solution.

A common situation would be if an owner is about to list a property or enter into a contract for sale and they just want the “number”, but don’t want to see all the “other stuff”.

Additional information on the Restricted Use Report…

Summary Report

A Summary Appraisal Report contains a moderate level of detail.

This is the most common appraisal report within the industry because it satisfies the needs of lenders and large institutions, without getting into a high level of detail. Summary Appraisal Reports can have one, two, or three approaches, depending on the situation of the property and use of the appraisal.

Additional information on the Summary Report…

Self-Contained Report

A Self-Contained Appraisal Report contains an extensive level of detail.

This is the second most common appraisal report within the industry because it satisfies the needs of lenders and large institutions, but can sometimes be arduous to read due to the amount of information. Self-Contained Appraisal Reports can have one, two, or three approaches, depending on the situation of the property and use of the appraisal.

Additional information on the Self-Contained Report…

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