Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
CHAPTER 16
REPORTING APPRAISAL OPINIONS
STUDENT LEARNING OUTCOMES
The appraisal report is a formal communication that details the investigation the appraiser has made on
behalf of the client. Our task here is to cover:
16.1
16.2
16.3
16.4
Appraisal Reports: The Format Choices
The Legal Reporting Requirements
Form Reports: A Closer Look
Content of the Narrative Appraisal Report
Class Activities
[Instructor: Complete as needed.]
Lecture [ ] Discussion [ ] Breakout Groups [ ] Other _____________[ ]
16.1 APPRAISAL REPORTS: THE FORMAT CHOICES
Practical Considerations
1.
Appraisal reports should be concise, well organized, and easy to read. They should seek to be
clearly understandable by the client and the intended users.
2. Reports should present all pertinent data in a logical order, and define any necessary non-technical
terms. Extraneous data should be omitted.
3. The report must clearly identify who is the appraiser.
Intended Use and Intended User(s) of the Appraisal and Report
Reporting requirements differ from one client to another, depending on the intended use and intended
user(s). The form and content of appraisal reports should be agreed upon in advance between the
appraiser and the client. Reporting requirements also vary from one type of property to another.
Method of Transmittal
The appraisal conclusions nearly always must be transmitted to the client. Most often, this will be written,
rather than oral. Technology now permits appraisal reports to be transmitted to the client by electronic
means, rather than by the familiar hand-delivered or mailed report.
An electronically-transmitted appraisal report is considered by USPAP to be a written report and must
comply with USPAP written report requirements.
One option is an Internet service allowing the report to be “uploaded” to a website and translated into a
form compatible with the clients’ software, called “Electronic Data Interchange” or EDI. Mortgage
lenders promise to benefit the most from the use of EDI appraisal reporting.
16-1
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
Some clients now request that reports be e-mailed as “PDF” files, sometimes without exhibits in order to
reduce file size. If so, a complete printed report should also be provided.
The Uniform Mortgage Data Program (adopted in 2010 by FNMA) established a new content standard for
appraisals reported on the Uniform Residential Appraisal Form (URAR) as of September 2011, called the
Uniform Appraisal Dataset (UAD). It has also been adopted by the FHA, VA and others.
Types of Written Report Formats
1.
The choice of format depends mainly on whether a Self-Contained, Summary, or Restricted Use
report is to be used, as agreed upon with the client.
2.
Three formats are traditional.
The Letter Report
1.
Historically, a short business letter, now the letter report must meet the content requirements of
one of the reporting options of USPAP, and contain all the essential elements.
2.
It is best adapted to the content requirements of the Restricted Use report option.
3.
The letter report often contains the following parts:
a.
b.
c.
d.
An abbreviated description of the subject
A brief statement of the factual data researched and the analyses performed
Supporting data by reference to the appraiser’s files
Assumptions, limiting conditions, and appraiser’s certification
The Form Report
1.
Is regularly used by institutions and agencies that frequently contract for appraisal services.
2.
Is best suited to be a Summary Appraisal Report; however, additions or supplements are often
necessary to comply with USPAP.
3.
Provides a standard checklist format, adapted to personal computer completion.
4.
Versions are available for both residential and non-residential property. Most are intended for
loan transactions. There are also forms for employee relocation appraisals, and for general use.
[Instructor: The Bradford ClickFORMS CD provided with the textbook produces the URAR.]
The Narrative Appraisal Report
1.
The narrative appraisal report is the most formal of written reports. In-depth discussion is
provided in Section 16.4.
2.
It is the ideal format for Self-Contained appraisal reports, but is also suitable for Summary
reports, especially of unusual properties.
3.
Narrative reports are often required by lending institutions for larger commercial properties, and
by large corporations and government agencies.
16-2
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
4.
They are often used to demonstrate the appraiser’s competence in qualifying for a
professional designation.
5. Requirements differ; government agencies and lenders have specific and sometimes unique form
and content preferences.
6. Appraisal societies and institutes offer recommended outlines.
Format Variations
1.
In practice, reporting formats often mix the features of the letter, form, and narrative reports.
2.
Many appraisal offices have developed their own forms and formats.
3.
When reports are prepared on a personal computer or word processor, a master model or template
of the preferred version is often stored in memory.
16.2 THE LEGAL REPORTING REQUIREMENTS
1.
The type of report should be decided in advance by the appraiser and the client, based on:
a.
b.
c.
d.
e.
2.
The intended use and user(s) of the appraisal and report
Understanding of the report option differences
Any legal requirements
Whether detailed or concise disclosure of the appraisal process is needed
Level of knowledge of the intended user(s)
The report must comply with USPAP
a.
For all non-exempt federally related transactions
b.
If the contract with the client requires it
c.
If performed by a state licensed or certified appraiser
d.
If performed by an appraiser who belongs to a professional organization
mandating compliance with USPAP
USPAP Reporting Standard
Standard 2 of USPAP is the real estate reporting standard. It requires that each written or oral report:
a.
b.
c.
“Clearly and accurately set forth the appraisal in a manner that will not be misleading.”
“Contain sufficient information to enable the intended users of the appraisal to
understand the report properly”, and
“Clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical
conditions, and limiting conditions used in the assignment.”
Written Appraisal Reporting Options
Standard 2 of USPAP provides for three different levels of appraisal reporting detail in written reports:
1.
2.
Self-Contained Appraisal Report: A written report that describes and presents the required
information with comprehensive detail.
Summary Appraisal Report: A written report that summarizes its required information.
16-3
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
3.
Restricted Use Appraisal Report: A written report that states the required information with the
least detail.
Note that USPAP is a dynamic standard, reviewed and updated every two years (starting with the 2008
standard). The reporting options and requirements were being examined by the Appraisal Standards
Board at the time of publication for possible changes in the 2014-2015 edition. Appraisers need to try
hard to follow these and other regulatory changes!
Required Elements of Self-Contained Appraisal Reports
Each written Self-Contained Appraisal Report is required to:
1.
State the identity of the client and any intended users, by name or type.
2.
State the intended use of the appraisal.
3.
Describe information sufficient to identify the real estate involved in the appraisal,
including the physical and economic property characteristics relevant to the assignment.
4.
State the real property interest appraised.
5.
State the type and definition of value and the source of the definition.
6.
State the effective date of the appraisal and the date of the report.
7.
Describe the scope of work used to develop the appraisal.
8.
Describe the information analyzed, the appraisal methods and techniques employed, and
the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales
comparison approach, cost approach, or income approach must be explained.
9.
State the use of the real estate existing as of the date of value, and the use of the real
estate reflected in the appraisal; and, when an opinion of the highest and best use was
developed by the appraiser, describe the support and rationale for that opinion.
10.
Clearly and conspicuously:


11.
state all extraordinary assumptions and hypothetical conditions, and
state that their use might have affected the assignment results
Include a signed certification in accordance with Standards Rule 2-3
Summary and Restricted Use Appraisal Reports
All appraisal reports must define the appraisal problem, present the factual data revealed by the study, and
indicate the analysis that supports the stated opinion of value.
1.
The Summary and Restricted Use appraisal reports contain less comprehensive detail than the
Self-Contained report.
a.
b.
The URAR form is often a Summary Appraisal Report.
The letter format is often used for a Restricted Use Appraisal Report.
16-4
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
2.
A Restricted Use Appraisal Report must include the following:
a.
b.
A use restriction that restricts the use of the report to the client.
A clear notice that the report cannot be understood without information available in the
workfile of the appraiser.
Federally Related Appraisals
Title XI of FIRREA requires that all “federally related” appraisals (with exceptions) conform to
USPAP, and to standards adopted in federal regulations pursuant to FIRREA.
Requirements under FIRREA
1.
These apply to appraisals performed for:
a.
b.
2.
Transactions insured by a federal agency (VA and FHA/HUD)
Transactions made by a financial institution or company regulated or insured by a federal
agency (banks, savings banks, and credit unions).
The federal regulatory agencies require that certain real estate appraisals used in connection with
federally related transactions be performed in writing, and in accordance with standards that may
go beyond the requirements of USPAP. Such appraisals must
a.
b.
c.
d.
e.
Conform to generally accepted appraisal standards, as evidenced by USPAP, unless
principles of safe and sound banking require compliance with stricter standards;
Be written and contain sufficient information and analysis to support the institution’s
decision to engage in the transaction;
Analyze and report appropriate deductions and discounts for proposed construction or
renovation, partially leased buildings, non-market lease terms, and tract developments
with unsold units;
Be based upon the definition of market value set forth in the regulation; and
Be performed by State licensed or certified appraisers.
3.
Some federally-related transactions are exempt from USPAP standards. Certain collateral loans
use evaluations instead of appraisals. Note that any evaluation that renders an opinion of value is
still an appraisal under USPAP.
4.
The appraiser must try to determine, prior to agreeing to perform an assignment, if this involves a
“federally related” transaction. If so, what are the relevant regulatory requirements and what are
the specific conditions and requirements the clients institution has.
[Instructor: Included on the CD provided with the textbook are Supplemental Reference
Documents such as Interagency Appraisal Guidelines, as well as those specific to FHA and
FNMA transactions.]
The Uniform Appraisal Dataset (UAD)
The UAD was started by Fannie Mae (FNMA) and Freddie Mac to allow them to receive (and retrieve)
all home loan documents in digital format. To do so, standardization of the content in each blank or field
in various forms was necessary.
16-5
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
1.
The UAD attempts to define the allowable content and format for roughly 62 of the 200 fields in
the URAR to transfer the data through the Uniform Collateral Data Portal.
2.
The UAD currently applies to only certain forms. Copies of four forms are in the Forms Library,
Fannie Mae section, of the Bradford ClickFORMS program on the CD provided with the
textbook.
3.
It is important to understand that with the UAD, condition and quality ratings are now absolutes,
and no longer relative to particular submarkets or neighborhoods as applied by appraisers in the
past.
4.
Describing remodeled properties has also changed with the UAD:
a.
b.
c.
d.
5.
Other changes affect the reporting of the following:
a.
b
c.
d.
e.
6.
Descriptions of kitchens and bathrooms must be separated;
If applicable, describe Updating within the past 15 years by selecting not updated, updated,
or remodeled.
Specify when the work was performed (less than 1 year, 1-5, 6-10, 11-15, or unknown).
Some clients are now requiring photographs of the kitchen and baths.
Days on market
Type of sale
Address
Basements (below-grade areas)
Design or Style
The UAD specifications also increase the emphasis on reporting and analyzing the affect on prices
of sales concessions, favorable financing, included personal property, and other terms.
[Instructor: CD provided with the text includes Supplemental Reference Documents on the UAD.]
16.3 FORM REPORTS: A CLOSER LOOK
The URAR Form
1.
The URAR form is the most common report format for home loans. Also known as the Fannie
Mae Form 1004 and the Freddie Mac Form 70.
2.
It is required by the Federal Home Loan Mortgage Corporation and other federal agencies for
most single-family loan appraisals.
3.
It is clearly labeled as a Summary Appraisal Report, and can satisfy the form and content
requirements of USPAP, and federally-related appraisals, if properly completed.
4.
Attachments to the URAR form typically include:
a.
A complete legal description
b.
Location and plat maps; sketch of improvements
c.
Photographs of the subject property and the comparables
5.
Fannie Mae, HUD, and many institutions publish detailed requirements, and specific handbooks
have been published as well.
16-6
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
[Instructor: A completed URAR appraisal report is shown in Figures 16.6 through 16.10 in
the text.]
6.
Until January 1, 2006, HUD required the completion of a “Valuation Condition” (or “VC”) form,
showing a detailed review of the property’s condition, code conformity, and any safety problems
observed. It is no longer required. Now condition is reported on the URAR.
FNMA Desktop Underwriter Forms 2055 and 2075
1.
Lenders are now using the 2055 short version of the URAR form, originally developed in
conjunction with a FNMA risk analysis program called the Desktop Underwriter, for certain
single family homes.
2.
Form 2075 is not an appraisal, but reports an exterior-only inspection of the subject property.
[Instructor: A copy of the first two pages of the 2055 form is shown as Figure 16.11, at the end
of the chapter, and both are available on-line and on the Bradford ClickFORMS CD.]
Other Report Forms


Intended to be flexible enough for a variety of intended uses.
Included in the forms library of many appraisal form software programs.
[Instructor: A copy of the form can be viewed at www.appraisalinstitute.com, or in the Forms
Library of the Bradford ClickFORMS CD included with the text. It is good to contrast this form
with the URAR, in order to highlight occasions when it provides greater flexibility.]
16.4 CONTENT OF THE NARRATIVE APPRAISAL REPORT
The appearance should be formal and professional. Most are printed and bound in a durable cover.
The content of a self-contained narrative should communicate to the client what the appraiser has done,
describing the key data researched, and the analysis and conclusions.
Outline of the Narrative Report
One common format for narrative appraisal reports divides the report into four main sections:
Introduction, Description, Analyses and Conclusion, and Addenda. Some appraisers combine the two
middle sections into one.
A.
Introduction
1.
2.
3.
4.
5.
6.
7.
Title page
Letter of transmittal
Table of contents
Photograph of the subject
Summary of salient facts and conclusions
Standard and special limiting conditions and assumptions
Scope of work of the appraisal
16-7
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
B.
Description
1.
2.
3.
4.
5.
C.
Identification of the property
Description of neighborhood and community; current market conditions
Description of land, zoning, community services, and taxes
Description of improvements
Sales history of the subject property, including any leases
Analyses and Conclusion
1.
2.
3.
4.
5.
6.
D.
Highest and best use analysis
Explain and support excluding any value approaches
Estimate of site value, here or in the cost approach
Analysis of data by the value approaches
a.
The Cost Approach
b.
The Sales Comparison Approach
c.
The Income Approach
Reconciliation and final conclusion of value
Certification, with the signature of the appraiser(s)
Addenda or Supporting Material
1.
2.
3.
4.
5.
6.
7.
8.
Location and plat maps
Plot plan of the subject property
Legal description
Floor plan of the improvements
Photographs of the subject property
Sales data sheets, photographs and aerials, and location maps
Any relevant cost income and market study exhibits
Qualifications of all appraisers signing the report
Introductory Material
Title Page
This typically includes: 1) Property address, 2) Date of value, and 3) Name of the appraiser(s).
Letter of Transmittal
This letter formally presents the appraisal report and its conclusions to the client. The following elements
should be included:
1.
Date of the letter
2.
Acknowledgment of the person requesting the appraisal
3.
Identification of the property being appraised and the type of value estimated
4.
The intended use of the appraisal
5.
Identification of the client and intended user(s), by name or type
16-8
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
6.
A statement of the property rights being appraised
7.
A statement that the appraiser has made an investigation and analysis to arrive at an opinion of
value, and that the latter is transmitting the appraisal report
8.
Clear statement of any unusual assumptions or limiting conditions
9.
Type of appraisal report, whether Self-Contained, Summary, or Restricted Use
10.
The effective date of value
11.
The amount of the value opinion (some appraisers do not include the opinion)
12.
The signature of the appraiser(s), and the appraiser’s state license or certification number and
expiration date
[Instructor: See Figure 16.1 in your text for a sample letter of transmittal.]
Table of Contents
This lists the major topics in the report and their page numbers.
Photograph of the Subject
A photograph or aerial photo of the subject property, and/or a location map may appear here.
Summary of Relevant Facts and Conclusions
The introductory material next presents a summary of key facts and conclusions, as relevant to the
particular assignment. Here is an outlined example:
1.
Location of the property
2.
Present ownership of the property
3.
Short history of the subject property: any recent construction, rents, or sales
4.
Intended use and user(s)
5.
The effective date of value
6.
The property rights appraised
7.
Type of report (Self-Contained, Summary, or Restricted Use)
8.
Any Extraordinary Assumptions or Hypothetical Conditions
9.
Type of property
10.
Land size
11.
Improvement size
16-9
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
12
Age of improvements
13.
Zoning
14.
Present use
15.
Highest and best use
16.
Site value
17.
Value indicated by the cost approach
18.
Value indicated by the sales comparison approach
19.
Value indicated by the income approach
20.
Market value estimate
Scope of Work of the Appraisal
1.
Property rights appraised
2.
Intended use of the report and the intended user(s)
3.
Definition of value and definition source. (For market value appraisals, the exposure time should
be presented here.)
4.
The effective date of value
5.
The extent of the process of collecting, confirming, and reporting date
6.
Type of report
[Instructor: It is desirable to point out that 1) Scope of Work is a relatively new concept, still
evolving; 2) how it should be reported is relatively unclear; and 3) it is clearly unnecessary to
repeat material here that is adequately defined and reported elsewhere in the report.]
Qualifying and Limiting Conditions
The statement serves several important functions: 1) clarify the appraiser’s assumptions; 2) indicate the
limits of the appraiser’s expertise, and thus liability; 3) define the rights of publication of the report and
information in it. A typical statement includes provisions as follows:
1.
The appraiser assumes no responsibility for any legal issues affecting the property.
2.
Any sketch in the report is solely for illustration and shows approximate dimensions; the
appraiser has made no survey of the property.
3.
The appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil,
or structures that would render it more or less valuable. This is not a review of the property’s
compliance with building or other codes. The appraiser is not a property inspector.
16-10
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
4.
Information, estimates, and opinions furnished by others were obtained from sources considered
reliable and believed to be true and correct, but no responsibility for the accuracy of such items is
assumed by the appraiser.
5.
Any distribution of values in the report between land and improvements applies only to the
valuation analysis here and may not apply in other contexts.
6.
The appraiser is not required to give testimony or appear in court regarding the appraisal unless
arrangements have been previously made.
7.
Disclosure of the contents of the appraisal report is governed by the Uniform Standards of
Professional Appraisal Practice and the bylaws and regulations of the professional appraisal
organizations with which the appraiser is affiliated.
8.
Neither all nor any part of the content of the report, or copy thereof, shall be used for any purpose
other than the purpose specified in the report without the previous written consent of the
appraiser.
[Instructor: It may be desirable to have the class discuss the reason(s) for each limiting
condition. Students may also suggest others. This is not a definitive list!]
Description
This section contains the main descriptive section of the report, but stops before any conclusions are
presented.
Identification of the Property
1.
2.
Includes the street address and legal description. (Lengthy legal descriptions may be included in
the addendum.)
May include a map of the subject property if needed.
Description of Neighborhood and Community; Current Market Conditions
1.
Present a brief history and economic profile of the area, to include:
a.
b.
c.
d.
e.
f.
g.
The type of neighborhood
Its growth rate
The trend of property values
Analysis of supply and demand
factors
The typical marketing time
Present land uses and land-use
change
Predominant occupancies and
vacancies
h.
i.
j.
k.
l.
m.
Typical housing prices
The quality and general
appearance of the properties
Main community interests
Sources of employment
Nearby land uses
Convenience to shopping
2.
The appraisal report should address additional market factors when an income property is
under appraisal.
3.
A reasonable exposure time for the subject property should be stated, when market value is the
definition used.
16-11
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
Description of Land, Zoning, Community Services, and Taxes
The following site data should be presented and analyzed:
1.
Physical characteristics:
a.
Lot size and shape, topography, and soil conditions
b.
Street improvements
2.
Site location elements
3.
Private restrictions and easements
4.
Public restrictions
a.
Zoning classification, permitted uses, jurisdiction
b.
Building restrictions
5.
Public and private utilities available to the property
6.
Present and projected property tax information
Description of Improvements
1.
Note the main physical features; describe the condition, general marketability, and appeal of
improvements (See Chapter 7).
2.
Detail any deferred maintenance, and any problems or defects noted.
Sales History of the Subject Property
1.
The sales history should detail the price and terms of any known sales or transfers of the subject
property that have occurred within three years of the date of value.
2.
Any option, listing, and/or offer around the date of value should also be included.
3.
The sales history should be analyzed and its relevance to the appraisal conclusion must be
addressed in the report.
Analyses and Conclusion
This section contains the bulk of the analysis, and the series of conclusions and opinions that end with the
final estimate of value.
Highest and Best Use
1.
The appraiser’s opinion of the highest and best use of the land as if vacant must be presented
here.
2.
Supporting evidence and analysis should be provided, particularly if any use other than the
present use is suggested.
16-12
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
3.
The highest and best use statement should cover both the highest and best use as if vacant, and as
presently improved.
Methodology
Introduce the value approaches applied, their general strengths and weaknesses, and their applicability in
this appraisal.
Estimate of Land or Site Value
1.
The appraiser’s estimate of land or site value should be presented here, or within the cost
approach.
2.
The value should be based on recognized methods of appraisal (See Chapter 10).
The Cost Approach
1.
Land value should be supported with competent market data (within this section or above).
2.
Improvement value should reflect cost new, less value loss from all causes. Explain the selection
of reproduction or replacement cost. Explain any deferred maintenance or obsolescence
deductions.
The Sales Comparison Approach
1.
In single family residential appraisals, the following information usually is included for each
comparable used:
a.
b.
c.
d.
e.
2.
Names of buyer and seller and property address
Date of sale, date of recordation, and document number. Give source, type, and pertinent
detail of any listings used.
Sales price, and terms of sale or listing
Lot size and shape
Description of residence: number of stories, above-grade S.F. size, number of rooms,
bedrooms, baths, basement or below-grade size and finish, age and condition; type of
construction, extent of remodeling, and outside improvements
Also to be included:
a.
b.
Consider and analyze any agreement of sale, option or listing of the subject property
around the date of value; also, any prior sales history as required by USPAP
Comparable sales chart, usually in abbreviated form
[Instructor: Example 16.1 in your text shows an abbreviated sales chart from a narrative
appraisal report.]
3.
In multiple-family residential appraisals, the following additional data is normally included:
a.
b.
c.
d.
e.
Number, type, and size of units
Sale price per unit, per room, and/or per square foot
Gross scheduled rent, average rent per unit, and per square foot
Gross income multiplier
Expense ratio
16-13
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
The Income Approach
1.
Analyze and report historical and current revenues, expenses, and vacancies of the subject
property.
2.
Summarize market rent and capitalization rate studies made, and explain conclusions reached.
3.
Provide a reconstructed operating statement based on market studies.
4.
Application of relevant capitalization method(s) to arrive at indicated value.
Reconciliation and Final Conclusion of Value
1.
Describe the process of collecting, confirming, and reporting data.
2.
Set forth the information, procedures, and reasoning used.
3.
Review each value approach explored, and describe its relevance to the appraisal.
4.
Explain and support the exclusion of any of the usual approaches.
5.
Discuss the reliability of the data used in each approach.
6.
Provide an argument to justify the final conclusion of value.
7.
Reference an estimate of exposure time allowed for the subject.
Certification
In order to comply with good appraisal practice and USPAP, each written appraisal report (and appraisal
file for each oral report) must contain a signed certification such as the following:
-I certify that, to the best of my knowledge and belief:
-The statements of fact contained in this report are true and correct.
-The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
-I have no (or the specified) present or prospective interest in the property that is the
subject of this report, and I have no (or the specified) personal interest with respect to the
parties involved.
-I have performed no (or the specified) services, as an appraiser or in any other capacity,
regarding the property that is the subject of this report within the three-year period
immediately preceding acceptance of this assignment.
-I have no bias with respect to the property that is the subject of this report or the parties involved
with this assignment.
16-14
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
-My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
-My compensation for completing this assignment is not contingent upon the developing or
reporting of a predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
-My analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice
in effect on the date of this report.
-I have (or have not) made a personal inspection of the property that is the subject of this
report. (If more than one person signs the certification, it must clearly specify which
individuals did, and which individuals did not, make a personal inspection of the
appraised property.)
-No one provided significant real property appraisal assistance to the person signing this
report. (If there are exceptions, the name of each individual providing significant real
property appraisal assistance must be stated, along with a description of each one’s
contribution.)
Addenda or Supporting Material
The following is normally included in the back of the report:
1.
Location and plat maps
2.
Plot plan of the subject property
3.
Legal description, as required
4.
Floor plan of the improvements
5.
Photographs of the subject property
6.
Sales data sheets, sales photographs, and sale location maps
7.
Relevant cost, income, and market-study exhibits
8.
Qualifications of the Appraiser(s)
[Instructor: Several Figures in your text provide examples of the above.]
Qualifications of the Appraiser(s)
This part of the appraisal report:
1
Outlines the appraiser’s credentials, education and experience.
2.
Describes any state appraiser license or certification, as well as professional designations held.
16-15
Instructor’s Manual: Basic Real Estate Appraisal, 8th. Edition
Chapter 16
3.
Cites important appraisals made (subject to confidentiality limits), and lists other notable
experience.
[Instructor: A Sample Qualifications Sheet is shown in Figure 16.5 of your textbook.]
SUMMARY
[Instructor: The following list of important terms may be used in an informal summary of
material covered in this session.]
Important Terms and Concepts
Assumptions
Certification
Fannie Mae Form 1004
Fannie Mae Forms 2055
and 2075
FNMA Desktop Underwriter
Form appraisal report
Freddie Mac Form 70
Letter of Transmittal
Limiting
Letter
conditions
of transmittal
Narrative appraisal report
Professional appraisal
standards
Qualifications
of the appraiser
Restricted Use
Appraisal Report
Sales history
Self-Contained
Appraisal Report
Summary Appraisal Report
Uniform Appraisal Dataset
(UAD)
URAR
Qualifications of the appraiser
REVIEWING YOUR UNDERSTANDING
[Instructor: See the end of your text chapter for student review questions. Answers are in the
back of the book.]
STUDENT EXERCISES
[Instructor: Suggested Multiple Choice and True/False questions are available to use for Chapter
16.]
16-16