Appraisal Review
Independent evaluation of whether an appraisal defines the assignment correctly and supports its methodology, analysis, and conclusions.
Review the work—not the person who prepared it
An appraisal review asks whether the work is credible for its intended use. It may address the identified property interest, effective date, scope of work, highest and best use, market data, comparable selection, adjustments, assumptions, and reconciliation.
The objective is not to count imperfections or criticize reasonable professional judgment. The relevant question is whether material conclusions follow from adequate analysis and support.
The assignment determines the answer
A review evaluates another appraiser’s work. Depending on its scope, it may also include the reviewer’s own opinion of value. A separate appraisal develops a value opinion under its own assignment conditions and scope of work.
Bailey Valuation helps the client define which service is needed before the work begins.
Four questions usually control the assignment
A review is a separate assignment
The reviewer’s client, intended users, intended use, scope, effective date, and assignment conditions may differ from those of the appraisal under review. The review must therefore be defined independently.
Depending on the intended use, relevant requirements may include USPAP, law or regulation, client instructions, and conditions imposed by Fannie Mae, Freddie Mac, FHA, VA, SBA, or another agency or institution. A review may need to determine whether those requirements were applicable, properly applied, and adequately disclosed.