The most impactful changes for most appraisers and clients are the written report options. Formerly in USPAP, there were three written report options for real and personal property appraisers to use: Commercial Self-Contained Appraisal Report, Commercial Summary Appraisal Report and Commercial Restricted Use Appraisal Report. Now there are only two written report options: Commercial Appraisal Report and Commercial Restricted Appraisal Report.
The minimum content requirements for an Appraisal Report are similar to those of the prior Summary Appraisal Report. The Restricted Appraisal Report is the same as the prior Restricted Use Appraisal Report. The only thing that has changed is the name. The Self-Contained Appraisal Report option, which was poorly understood and of limited use to appraisers and clients, will be obsolete as of January 1, 2014.
The general shift in the mindset is from attempting to closely define the content required for multiple report options and shift the emphasis and responsibility to the appraiser in making a decision and writing an appraisal report, considering the users’ experience and knowledge with appraisal reports, with detail sufficient for them to understand and follow the logic and reasoning and not be misled by the report. While it appears this requirement for appraisers may be less strict, it is actually placing significantly more responsibility on the appraiser for carefully deciding how much detail should be in an appraisal report. Appraisers will need to be very careful in gaining and understanding the client’s expectations up front regarding what they expect to see in an appraisal report. Clients and their agents will also need to assume a little responsibility for communicating their expectations now that there is no longer a “menu” of report options from which to choose.
Valuation Management Group is a national, full service appraisal management company that manages the appraisal process for community banks, mortgage bankers and credit unions. We take the process from ordinary to extraordinary.