Desk Review Form 2006

[The Nightfly]

I received an order for a desk review on the 2006 form - its a whopper of an appraisal. GLA was 1,800 sq. ft., appraiser used 1 comp at 2,300 sq. ft. and all others (7 more) were well over 3,000 sq. ft. The appraiser stated that she understood that the size was not bracketed, however, it's not always possible, blah, blah, blah these are the best comparables available.

I'm checking the box: "have another appraisal prepared by someone else." and giving the reasons for it. My question is in regards to the "reveiwers recommendation" field concerning value. I could not come close to rendering a value opinion unless I perform a whole new appraisal on this property, which I don't think is in the scope of review, which I quote in full:

"The scope of this review is limited to the information being provided by the original appraiser; form an opinion as to the apparent adequacy and relevance of the data and the propriety of any adjustments to the data; form an opinion as the appropriateness of the appraisal methods and techniques used and develop the reasons for any disagreement; form an opnion as the whether the analyses, opinions, and conclusions in the report under review are appropriate and reasonable, and develop the reasons for any disagreement."

I don't read that I am supposed to render an opinion (or recommendation) of value...am I missing something?

 

[Mr Rex]

Read USPAP Standard 3 and then re-state your question. Everybody gets one mulligan.

 

[Hamlet]

This is something that you will need to clarify with your client.

(c)
determine the scope of work necessary to produce credible assignment results in accordance with the SCOPE OF WORK RULE; (note44)



Comment: In making the scope of work decision, the reviewer must identify any extraordinary assumptions necessary in the assignment. An extraordinary assumption may be used in an appraisal review assignment only if:

it is required to properly develop credible opinions and conclusions;

the reviewer has a reasonable basis for the extraordinary assumption;

use of the extraordinary assumption results in a credible analysis; and

the reviewer complies with the disclosure requirements set forth in Standards Rule 3-2(d) for extraordinary assumptions.

The appraisal review must be conducted in the context of market conditions as of the effective date of the opinion in the work being reviewed. Information available to the reviewer that could not have been available to the appraiser as of or subsequent to the date of the work being reviewed must not be used by a reviewer in the development of an opinion as to the quality of the work under review.



When the reviewer’s scope of work includes developing his or her own opinion of value, the following apply:

The reviewer’s scope of work in developing his or her own opinion of value may be different from that of the work under review.

The effective date of the reviewer’s opinion of value may be the same or different from the date of the work under review.

The reviewer is not required to replicate the steps completed by the original appraiser. Those items in the work under review that the reviewer concludes are credible and in compliance with the applicable development Standard (STANDARD 1, 3, 4, 6, 7, or 9) can be extended to the reviewer’s value opinion development process on the basis of an extraordinary assumption by the reviewer. Those items not deemed to be credible or in compliance must be replaced with information or analysis by the reviewer, developed in conformance with STANDARD 1, 3, 4, 6, 7, or 9, as applicable, to produce a credible value opinion.

The reviewer may use additional information available to him or her that was not available to the original appraiser in the development of his or her value opinion; however, the reviewer must not use such information as the basis to discredit the original appraiser’s opinion of value.

(d)
develop an opinion as to the completeness of the material under review

 

[The Nightfly]

Thank you Mr. Rex and Hamlet...this is my first review on the 2006 form so I think that is where my confusion is coming from. My main question is in regards to the scope of review detailed on the form. On the 2000 form part of the scope of work is "determine the accuracy of the opinion of value," easy enough to understand. There is no such instruction on the 2006 form. Standard 3 indicates that there are review appraisals without rendering an opinion of value. The 2006 form is vague, asking for "reviewer's recommendation," not do you agree/disagree, if you disagree grid new comparables, complete appraisal, report new opinion.

Also...the SOW on the 2006 states, "The scope of this review is limited to the information being provided by the original appraiser." Does this indicate that further research into the appropriateness of the comparables is not to be performed? (I forgot to mention in my first post that I found approximately 20 comparables that were within 10% GLA of the subject). How do I form an opinion as to the apprarent adequacy and relevance of the data..." by limiting myself to the information being provided by the original appraiser? Or am I being too focused on the verbage while missing the purpose?

Thank you for your (hopefully kind) responses.

 

[Hamlet]

Swann,

Check with your client if they want you to opine your own opinion of value. That would entail your own appraisal.

“Limited to the information being provided by the original appraiser” is talking about the information you have under review, the appraisal you are reviewing. I think you are focusing too hard on the verbiage.

 

[AnonApprsr]

Read USPAP Standard 3 and then re-state your question. Everybody gets one mulligan.

Pffft, I didn't get a mulligan!

 

[The Nightfly]

Actually I usually take one on the front and one on the back.

 

[Metamorphic]

My question is in regards to the "reveiwers recommendation" field concerning value. I could not come close to rendering a value opinion unless I perform a whole new appraisal on this property, which I don't think is in the scope of review, which I quote in full:

If you're looking for a middle ground between working up a fully developed opinion and saying nothing, perhaps you could write up some statements that would provide bracketing on the upper and lower limits of a reasonable opinion by describing value considerations of the comps relative to the subject.

"1234 Smith St. which sold for $zzz on x/x/x, with superior GLA and similar quality, condition, age and amenities suggests an upper limit of value. 2345 Jones St. with inferior GLA, lower quality and condition suggests a lower limit of value of $zzz based on its sale on x/x/x."

Lately I've been writing up similar statements for my apraisals (not always included in the final report), as a way of focusing my rationale and concept of the appraisal. I find if you spend a few minutes and wite a few coherent sentances about he role of each comaprable in the appraisal it sometimes clarifies your own thoughts about the valuation sufficiently that the rest of the process seems pro-forma. In the case of your problem, it might be the necessary basis for a "non-value-opinion" reviews recommendation.

 

[NC Appraising]

Swann,

I'm just about to finish the AI course on appraisal review, and I highly recommend it. It's availiable on-line, and you can take it at anytime.

http://www.appraisalinstitute.org/education/seminar_descrb/Default.aspx?sem_nbr=OL-778&key_type=SO

 

[Bamba]

I have a question about the same form but I didn't want to open another thread...hope somebody will answer...

From what I understand, reviewer's opinion of value is USPAP compliant if SOW included that...but this form itself, in the letter of trasmittal states something else...and I'm gonna quote it:

"The reviewer has not been asked to arrive at a value conclusion, nor is any opinion of value rendered in connection with this review."​

So how can one complete a desk review and reported on this particular form AND develop his/her own opinion of value (included in SOW)?

Thanks!