Appraisal Letter

[William K]

The chart in AO-12 is INVALUABLE ... copy it and put it on your desk .. you will always know whats necessary to be USPAP compliant if you will simply do that ...

Good advice Danny.

Do you mean AO-11?

 

[incognito]

Three reporting options. A restricted use appraisal report could be a letter.

Correct. It does not matter what the intended use of the appraisal is. (Keep in mind that it DOES matter who the intended user is though! You can not give a restricted use report to an intended user who is not knowledgeable and experienced enough to clearly understand it. IE, you could do a restricted use report for a real estate attorney, a banker familiar with appraisals, or a savvy real estate investor. However, you could NOT do one for a little old lady with no real estate knowledge!)

You can deliver the restricted use report on the proverbial cocktail napkin, if you wish, as long as it is SR2 compliant!

 

[Richard Carlsen]

The only restriction on the use of a Restricted Use Report is that the client understands the report they are being provided as the results of your appraisal and they must agree to it. The little old lady could be informed enough to make the use of a Restricted Use Report acceptable (but it would probably not be advisable).

Remember that when you provide the letter, it must be accompanied with the required Certifications and your limiting conditions if any (they are highly advisable)

 

[incognito]

The only restriction on the use of a Restricted Use Report is that the client understands the report they are being provided as the results of your appraisal and they must agree to it. The little old lady could be informed enough to make the use of a Restricted Use Report acceptable (but it would probably not be advisable).

Richard, you are correct. I stated

you could NOT do one for a little old lady with no real estate knowledge

I should have stated "should not".

The 2006 USPAP FAQ #153 states that the client is presumed to have a sufficient level of knowledge to enable him or her to understand a report of this type (restricted use).

It is clearly a scope issue (as are most things these days), and we should not agree to a scope which would include delivery of a restricted use report if we knew the intended user (there can ONLY be one with a restricted use report) did not have sufficient knowledge to understand it.

 

[Richard Carlsen]

Richard, you are correct.

Score: 1-nil