The Evolution of Appraisal Reports
In recent years, the term narrative report has seen a decline in its use due to evolving standards in the appraisal industry. The Uniform Standards of Professional Appraisal Practices (USPAP) now endorse two primary formats for appraisal reporting: the Restricted Appraisal Report and the Appraisal Report.
While narrative reports present information through detailed expository and descriptive paragraphs, adhering to USPAP’s formats allows for standardized, clear, and concise reporting that meets extensive professional and legal requisites.
Understanding Narrative Reports
A narrative report is a thoroughly written account used in professional appraisals. This form of reporting is structured in expository and descriptive paragraphs rather than tables, forms, or simple data summaries.
Here’s an example to illustrate:
Example:
Imagine assessing the value of a historic mansion. A narrative report would describe the mansion’s architectural significance, the condition of various historical elements, the comparative market analysis based on similar historical properties, and an in-depth discussion of the market’s likely reaction to the property.
The Influence of USPAP on Reporting Formats
The pursuit of standardization led to the Uniform Standards of Professional Appraisal Practices (USPAP), dictating appraisal reporting formats into two categories:
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Restricted Appraisal Report: Primarily for the client’s internal use. It includes a useful but concise level of detail.
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Appraisal Report: Provides an authoritative, comprehensive body of information suitable for legal, financial, and various stakeholder reviews.
How to Excel in Writing Narrative Reports
- Details and Clarity: Provide exhaustive and clear detail about the subject property, comparable properties, market analysis, and value conclusions.
- Structure and Flow: Ensure that your report flows logically, offering information coherently and progressively.
- Adherence to Standards: Follow USPAP standards to ensure your reports meet professional appraisal requirements.
Real-World Examples of Successful Narrative Reports
Residential Property Narrative: You’re appraising a colonial-style home in the suburbs. The narrative report thoroughly discusses the property’s charm, age, architectural style, recent renovations, local real estate trends, and comparable recent sales.
Commercial Property Narrative: Evaluating a newly constructed office space in a bustling city. The narrative emphasizes high-tech building systems, access to transportation hubs, potential rental income, regional competition, and economic forecasts.
Frequently Asked Questions (FAQs)
Q: What differentiates a narrative report from other appraisal formats?
A: While other formats such as the Restricted Appraisal Report emphasize brevity, narrative reports focus on detailed descriptive and expository paragraphs for an expanded examination of the property.
Q: Why has the use of narrative reports declined?
A: Industry standards such as USPAP favor standardized formats like Restricted Appraisal Report and Appraisal Report for clarity, consistency, and compliance with legal and professional guidelines.
Q: How can I ensure my narrative report meets USPAP standards?
A: Consult the latest USPAP guidelines, structure your report clearly, and ensure thorough, accurate, and verifiable information.
Conclusion
Transitioning to USPAP-compliant reports does not diminish the value of a well-crafted narrative. Instead, it emphasizes standardized quality, ensuring your professional reputation remains impeccable.
Related Terms: Appraisal, Uniform Standards of Professional Appraisal Practices, Restricted Report, Descriptive Paragraphs, Expository Paragraphs.
