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Review and SOW

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john snyder

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Senior Member
Joined
Jul 27, 2002
Professional Status
Certified General Appraiser
State
Michigan
Commercial Review appraiser finds original appraisal to be lacking in the choosing of comparables -citing better comps were available , analysis of the comparables used is faulty, and disagrees with Cost Approach.

Later finds that value is not correct.

If the original appraiser used Cost and Sales Comparison Approaches does the review appraiser likewise have to use at least the same SOW and approaches in the reviewers new appraisal?

john
 

CANative

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Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Use the data which was credible and replace the data which was not found to be credible.
 

Fred

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Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
does the review appraiser likewise have to use at least the same SOW and approaches in the reviewers new appraisal?
Not necessarily. The reviewer's scope is based to some degree on the agreement with client and the client's expectations about what the scope of review will be.

I think it may take some practice writing review reports that communicate criticism and give an alternative opinions that are based on a lesser scope - without making it souind too much like mine is more credible than yours.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
If the reviewer finds that the value is not correct they have to perform an appraisal to discover the correct value. USPAP Standard 3 includes the following:

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

The reviewers 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 reviewers 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 reviewers 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 appraisers opinion of value.

If the reviewer doesn't follow this, they in turn are in violation of USPAP
 

john snyder

Thread Starter
Senior Member
Joined
Jul 27, 2002
Professional Status
Certified General Appraiser
State
Michigan
Thanks for the comments so far.

One more on SOW - if the original appraiser writes a complete report in the old days pre 2005 and the reviewer writes a limited new report after the review is it the same scope of work if the reviewer drops one of the approaches whether the approach is applicable or not? Departure invoked.

How about today. If the original report is a self contained should the new report by the reviewer also be a self contained or can it be less?


jbs
 

alex gilbert

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Joined
Feb 21, 2003
Professional Status
Certified Residential Appraiser
State
California
Thanks for the comments so far.

One more on SOW - if the original appraiser writes a complete report in the old days pre 2005 and the reviewer writes a limited new report after the review is it the same scope of work if the reviewer drops one of the approaches whether the approach is applicable or not? Departure invoked.

How about today. If the original report is a self contained should the new report by the reviewer also be a self contained or can it be less?


jbs

2008 USPAP Standard 3 lines 974 - 975 "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." That seems pretty clear.

The reporting requiments are also pretty clear. A review of a self-contained report does not need to be self-contained, however when a reviewer expresses their own opinion of value the reviewer must, at a minimum, (SR 3 (d) (2)) summarize any additional information relied on and he reasoning and basis for the reviewer's opinion of value".
 
Last edited:

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Thanks for the comments so far.

One more on SOW - if the original appraiser writes a complete report in the old days pre 2005 and the reviewer writes a limited new report after the review is it the same scope of work if the reviewer drops one of the approaches whether the approach is applicable or not? Departure invoked.

How about today. If the original report is a self contained should the new report by the reviewer also be a self contained or can it be less?


jbs

This is SOW also. It can be less.
Your current work needs to be compliant with current USPAP.
However, your review of the original report needs to be done in the context of USPAP in effect as of the original effective date (assuming the original report was completed contemporaneously with the effective date).
 
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