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2055 Why limited appraisal?

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Jeff Horton

Thread Starter
Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
What is missing from the 2055 form that make it a limited appraisal besides the lack of Cost Approach? I have always felt that if you did a 2055 and did a cost approach and put it in you file you're not preforming a limited appraisal? Is there something else that makes is limited?
 

Travis McGee

Senior Member
Joined
Sep 18, 2004
:D It is my understanding that a limited appraisal is limited in the scope of the appraisal process such as not doing a full inspection. It is my opinion that a 2055 with a complete inspection and a cost approach in file is a complete appraisal - summary report. :?
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Except read the certification and limiting conditions. They are a bit different. Using the 2055 as a full scope, summary appraisal is not the intended use of the form. When doing a 2055, I don't give them more than they ask for, that is all they are paying for. If you have a client that wants a full scope appraisal on the 2055, I would charge for a full report and provide a URAR.
Mell.
 

Ray Ohler

Sophomore Member
Joined
Jan 15, 2002
although I know that it may be taken that way. but from all the different opinions out there what this is and what that is, it is no wonder that the appraisers are being pre-empted. The 2055 is a REPORTING FORM. NOT AN APPRAISAL. Sometimes, standardized forms have to be "customized" to fit what the writer intends. As far as "limited scope", that does not make it a "limited appraisal". Not doing a cost approach on an 80 year old property is not a departure necessarily. In fact, more times than not the cost approach has no bearing or usefulness and doesn't apply.
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
The lack of the cost and income approaches makes its a limited appraisal. However, if those approaches are not 'applicable' (see USPAP Departure) then it's possible that a 2055 report could be a full appraisal.

The level of inspection (interior, drive by, etc.) has no relevance to the report type (full, limited.)

The confusion arises because full & limited have nothing to do with the reprorting of an appraisal, but rather with the development of the appraisal. However, when a client asks you to use the 2055 Form they are basically directing your 'development' of that appraisal by telling you what items they want you to consider.

Pat
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Jeff,
There are more theories on the meaning of the Departure Rule then there are about who killed JFK. While theories abound, pertinent quotes are rare.

One of the reasons that you don't see quotes, is that there is no specific requirement (or binding requirement) in USPAP calling for the development one, two or three approaches on every or any property type The standards are not, and cannot, be that speciic. USPAP requires that the scope of work not omit something that causes the results to be less than credible given the intended use of the appraisal. If you leave something out that might APPEAR to be applicable, you need sound reasons to support that. (For some of us the historical disrepute of the Cost Approach as a method of finding market value is a sufficently sound reason by itself)

Jeff, if you feel that your sales comparison approach does not get the job done, then maybe you have a situation where something else is applicable (althought that is hard to imagine). Just remember, a 2055 is a report form (SR 2), not an appraisal (SR 1). Anything that you consider to be necessary can be added. No form, in and of itself, 2055 or narrative, is by defition, a limited or complete appraisal.
 
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