The Uniform Standards of Professional Appraisal Practice (USPAP) has at least one major change for the 2014-2015 Edition. The changes are effective January 1, 2014. The change that is most important to appraisal consumers is the change to available report types.
We have had, in the past, three report types: the Restricted Use Report; the Summary Report; and the Self-Contained Report. The Self-Contained Report was the most detailed of the reports and was mostly used for court purposes and some lending clients. The Summary Report included summary discussions of the appraisal process and was the most used and asked for report format. The Restricted Use Report contained little explanation of the appraisal process employed and was used in cases where the intended user had detailed knowledge of the appraisal process and the subject property.
The report options in 2014 are trimmed to two report types: an Appraisal Report and the very brief Restricted Appraisal Report.
The Appraisal Report report type is used when there may be multiple intended users of the report who may not have detailed knowledge of the subject property or the appraisal process. The level of detail in the report will range from the old Summary Report standards (minimum) to that of the old Self-Contained Report and is tailored to the needs of the client by the appraiser. The Restricted Appraisal Report option is used only when the intended user(s) are knowledgeable about the subject property and the appraisal process.
One part of USPAP has not changed: no matter the report option selected, the appraiser must still perform the appraisal according to a scope-of-work decision which will result in a credible report. Therefore, the Restricted Appraisal Report option may not result in a considerably lower appraisal fee, because the appraisal process must be performed regardless of the report length and level of detail. Those appraisers using commercial appraisal software to produce the report generally allocate little of their fee to the report, because it is much easier to let the software generate the report than to produce the report separately.
Here’s an excellent video explanation of the USPAP changes from Christopher A. Rolly, MAI, with Commercial Investment Appraisers in Orlando, Florida.
I’m happy to discuss the appropriate appraisal process and appraisal report options with you. Call me at 518-227-0011 or email me at firstname.lastname@example.org.