Understanding Appraisal Review for Real Estate Success
Appraisal reviewers meticulously assess appraisal reports to authenticate completeness and accuracy, aligning with one of three goals: ensuring compliance, confirming value estimates, or validating technical adherence.
- Desk Review: A thorough assessment where reviewers validate available data, sometimes without physically re-examining the property.
- Field Review: Physical examination of the property and assessment of the appraisal completion.
- Full Review: Comprehensive evaluation where reviewers gather independent data.
Reviewers, ideally holding the equivalent or higher qualifications than the original appraisers, follow guidelines such as those outlined by USPAP Standard 3.
Example: To affirm proper valuation and USPAP compliance, OceanSide Bank had a prime real estate asset appraised. Subsequently, they employed a senior valuation consultant with AI-GRS credentials for an appraisal review.
Types of Appraisal Reviews
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Desk Review A desk review is conducted by analyzing the data presented within the original appraisal report and may not involve physical reassessment of the property.
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Field Review A field review involves physical inspection of the property, providing a hands-on approach to verifying the information.
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Full Review A full review requires the reviewer to independently collect and verify data about the property, ensuring a comprehensive assessment.
Qualifications of a Reviewer
Ideally, the qualifications of the reviewer should match or exceed those of the appraiser being reviewed, following the guidance provided by USPAP’s Standard 3.
Benefits of an Appraisal Review
- Ensures compliance with technical standards.
- Validates the accuracy of value estimates.
- Provides confidence to stakeholders.
Frequently Asked Questions
1. Why is an appraisal review important in real estate transactions? An appraisal review helps verify the accuracy and completeness of property appraisals, ensuring stakeholders can make informed decisions.
2. What qualifications should an appraisal reviewer have? The reviewer should have qualifications equivalent to or greater than the original appraiser, often guided by USPAP standards.
3. What are the main types of appraisal reviews? The primary types include desk reviews, field reviews, and full reviews. Each varies based on the level of data verification and physical inspection involved.
4. Can an appraisal review dispute the original appraisal report? Yes, an appraisal reviewer may disagree or concur with the original appraisal report, highlighting discrepancies based on their review.
5. What is the role of USPAP in appraisal reviews? USPAP provides standards for conducting appraisals and appraisal reviews to ensure consistent quality and compliance in the field.
Related Terms: Appraisal Report, Desk Review, Field Review, Full Review, USPAP, AI-GRS.
