The Uniform Standards of Professional Appraisal Practice defines Appraisal Review as:
“The act or process of developing ... an opinion about the quality of another appraiser’s work...”
This is not a critical process, nor should it be an attack on the appraiser. It is a professionally developed analysis and reporting of whether or not an appraisal report was developed using proper methodology and reported in compliance with the requirements for doing so.
This is a valuable service used in due diligence by investors, lenders, for both new loans or portfolio review, attorneys, and other market participants who need some assurance that the opinion of value upon which they are relying is worthy of belief. A review report does not necessarily tell you if the final opinion of value is “correct”, but rather answers three questions:
1. Does the report demonstrate an understanding of, and properly applies appropriate appraisal methods & techniques?
2. Does the report demonstrate an understanding of, and properly applies USPAP’s requirements for developing and reporting an appraisal?
3. Does the value estimate appear reasonable and credible based on the data and analysis contained in the report?
A Reviewer does not have to be “local”. They need only be competent with that property type and familiar with the requirements and guidelines relative to that assignment. There are exceptions of course, such as when the Reviewer is asked by their client to render their own opinion of value, or when the scope of the review assignment requires the Reviewer to comment on the appropriateness of the sales, income, or cost data in the report.
After extensive training, Steven was awarded the designation General Review Specialist (AI-GRS) by the Appraisal Institute. The Appraisal Institute established a professional appraisal review designation program in early 2014 in response to the growing and critically important role that appraisal review plays in due diligence and risk management and mitigation for many clients/users of appraisal services. The AI-GRS membership designation is held by professionals who can provide reviews of appraisals of a wide range of property types, including commercial, industrial, agricultural, residential, vacant land and others.
Steven has reviewed over a thousand appraisals in the past 10 years and can easily provide samples or references. Please review his qualifications and discussion of the requirements for membership in the Appraisal Institute; there is no doubt that you will want to discuss your appraisal review needs with him.