The Bank will engage the appraiser to complete the appraisal according to an agreed-upon Scope of Work. In accordance with USPAP, the “scope of work” needs to be sufficient to produce “credible” “assignment results” within the context of their “intended use”. (Note: words in quotations are defined in USPAP.)
The Bank and appraiser must concur regarding the scope of work to be performed. Banks should have written policies they will provide the appraiser regarding what the Bank believes is the appropriate scope of work. But it is the appraiser’s responsibility to ensure that the scope of work was sufficient, based on communications with the Bank. The Bank and the appraiser should agree on the scope of work in advance, consistent with USPAP and with the agencies’ appraisal regulations and interagency guidelines.
The report must contain sufficient information to allow the Bank and other “intended users” to understand the scope of work performed. The appraiser must ensure that the resulting appraisal will not mislead the Bank or other intended users of the appraisal report.
The Restricted Report format is not appropriate to underwrite most transactions due to the lack of sufficient supporting information and analysis. It may be appropriate for ongoing collateral monitoring of the Bank’s real estate portfolio.