Yes

No

N/A

General

Was the appraiser provided with a complete and detailed list of bank requirements in addition to compliance with USPAP?

Does the written appraisal report contain BOTH the effective date of value conclusion and the date when the report was prepared?

Bank understanding of property rights is the same as per the appraisal?

All appraisal data is current (most cases, less than 6 months)?

Have all math calculations been checked for accuracy?

SCOPE OF WORK

Does the appraiser disclose the scope of work necessary to develop credible assignment results and identify the problem to be solved?  Are the following disclosed:

Client and any other intended users;

Intended use of the appraiser’s opinions and conclusions;

Type and definition of value;

Effective date of the appraiser’s opinions and conclusions;

Subject of the assignment and its relevant characteristics; and

Assignment conditions.

Neighborhood and Site

Does the report provide adequate description of the property relative to:

Growth trends

Convenience to amenities and employment centers

Property compatibility

Detrimental conditions vs. marketability

Desirability of property relative to its area

Drainage, flooding, easements etc.

Zoning requirements

Size or dimensions relative to marketability

In general, describe all noticeable features of the subject property.

Improvements

Has the appraiser commented on favorable or unfavorable improvement factors such as:

Physical condition and needed repairs;

Age, construction, utility, size, equipment;

Structural problems, settling, wetness;

Effect of the above on marketability?

Market Analysis (Comp Sales) Approach

Did the appraiser discuss the following in arriving at the highest and best use of the subject property:

Existing land use regulations (zoning)

Market demand

Physical adaptability of the subject

Neighborhood trends

Optimum uses or alternative uses explored

Anticipated public projects discussed

Any outside feasibility studies?

Do the comparables used have the same highest and best use as the subject property?

Are the comparables physically and economically similar?

Do the comparables used appear to be appropriate overall?

Can the reviewer follow the appraisers logic, reasoning and judgment- iii arriving at a final Comp Sales valuation?

Cost Approach

Has the Cost Approach been extensively relied upon in the final valuation estimate?

If so, is this appropriate?

Has appraiser used cost figures that are reasonable based on local market conditions or contractor estimates?

Do numbers for physical, functional and economic depreciation appear reasonable relative to:

Age

Condition

Location

Size

State of modernization

Utility

Is land value estimate reasonable?

Income Approach

Is there adequate support for reported income information and vacancy data?

Is income, expense and vacancy information current - less than three months old?

Have pro forma income statements been prepared on a reasonable basis, other than straight line increases?

Does the appraiser use and justify a reasonable Cap Rate?

Can YOU follow the logic and reasoning used by the appraiser in determining the Income Approach to valuation?

Does the logic, reasoning and judgment of the appraiser appear to be reasonable?

Reconciliation

Does it appear that the appraiser “backed into’ any of the approaches to value?

If the appraiser uses computer generated data (canned in a word processor ), do the comments in the report appear reasonable and accurate?

Are the appraisers comments and final Reconciliation of value adequate and does the appraisal give insight into the value and marketability of the subject property?

IS THE APPRAISER’S VALUE CONCLUSION REASONABLE?

Regulatory Compliance (14 Minimum Standards)

Conform to US PAP and appraisal should contain a certificate to that effect.

Disclose any steps necessary to comply with Competency Provision of USPAP-should

be none!

Appraisal is based on regulatory definition of market value.

Appraisal is written in narrative format or on forms, is sufficiently descriptive to enable reader to ascertain estimated market value AND the rationale for the estimate, and contains enough data and analysis to reflect complexity of the subject property.

Appraisal reports and analyzes all sales of subject property for the past three years.

If property is income producing, appraisal must be based on current revenues, expenses, and vacancies for subject.

Report and analyze a reasonable marketing period for subject property

For income producing property, appraisal must report and analyze current market conditions and trends which will affect projected income or the absorption period as these factors might affect value of the subject property.

The appraisal must analyze and report deductions and discounts for any proposed construction, OR completed properties that are partially leased OR leased at other than market rates, or any tract developments with unsold units.

The appraisal report must include a certification by the appraiser that (he appraisal assignment was not based on a requested minimum valuation, specific valuation or approval of a loan.

The appraisal report should contain sufficient supporting documentation presented so that the appraiser’s logic, reasoning, judgment and analysis in arriving at a final valuation indicates to the reader the reasonableness of the final market value.  The appraisal must include the legal description of the subject property.

The appraisal must identify and separately value any personal property or fixtures that are not real property BUT are included in the appraisal and discuss impact of their inclusion OR exclusion on the final estimate of market value.

The appraisal report should address the Comparable Sales, Income and Cost Approaches to market value, RECONCILE the three approaches and explain elimination of each approach not used.