Differences in the Appraisal Report Options
Each of the appraisal report options has 11 reporting rules that serve as a content outline. The reporting rules for the Self-Contained Appraisal Report are Standards Rules 2-2(a)(i)-(xii) and 8-2(a)(i)-(xii). The reporting rules for the Summary Appraisal Report are Standards Rules 2-2(b)(i)-(xii) and 8-2(b)(i)-(xii). The reporting rules for the Restricted Use Appraisal Report are Standards Rules 2-2(c)(i)-(xii) and 8-2 (c)(i)-(xii).
The chart below displays a rule-by-rule comparison of the reporting rules for the three types of reports. Space does not permit inclusion of the Comment to the reporting rules in the chart. The Comments contain important distinctions that must be considered in the preparation of each type of appraisal report, and the reader of this Advisory Opinion should refer to the full text of Standards Rules 2-2 and 8-2.
The essential difference among the three options is in the use and application of the terms “describe,” “summarize,” and “state.” “Describe” is used to connote a comprehensive level of detail in the presentation of information. “Summarize” is used to connote a more concise presentation of information. “State” is used to connote the minimal presentation of information.
Standard Rules 2-2 & 8-2 Comparison Chart
| Self-Contained Appraisal Report | Summary Appraisal Report | Restricted Use Appraisal Report | |||
|---|---|---|---|---|---|
| i. | “state the identity of the client and any intended users, by name or type;” | i. | “state the identity of the client and any intended users, by name or type;” | i. | state the identity of the intended client by name or type; and state a prominent use restriction that limits use of the report to the client and warns that the appraiser’s opinions and conclusions set forth in the report may not be understood properly without additional information in the appraiser’s workfile; |
| ii. | state the intended use of the appraisal; | ii. | state the intended use of the appraisal; | ii. | state the intended use of the appraisal; |
| iii. | “describe information sufficient to identify the real estate or personal property involved in the appraisal, including the physical and economic property characteristics relevant to the assignment;” | iii. | “summarize information sufficient to identify the real estate or personal property involved in the appraisal, including the physical and economic property characteristics relevant to the assignment;” | iii. | state information sufficient to identify the real estate or personal property involved in the appraisal; |
| iv. | state the property interest appraised; | iv. | state the property interest appraised; | iv. | state the property interest appraised; |
| v. | state the type and definition of value and cite the source of the definition; | v. | state the type and definition of value and cite the source of the definition; | v. | state the type and definition of value and cite the source of the definition; |
| vi. | state the effective date of the appraisal and he date of the report; | vi. | state the effective date of the appraisal and the date of the report; | vi. | state the effective date of the appraisal and the date of the report; |
| vii. | describe the scope of work used to develop the appraisal; | vii. | summarize the scope of work used to develop the appraisal; | vii. | state the scope of work used to develop the appraisal; |
| viii. | “describe the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained;” | viii. | “summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained;” | viii. | “state the appraisal methods and techniques employed, state the value opinion(s) and conclusion(s) reached and reference the workfile; exclusion of the sales comparison approach, cost approach, or income approach must be explained;” |
| ix. | “state the use of the property existing as of the date of value and the use of the real estate or personal property reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, describe the support and rationale for that opinion;” | ix. | “state the use of the property existing as of the date of value and the use of the real estate or personal property reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, summarize the support and rationale for that opinion;” | ix. | “state the use of the property existing as of the date of value and the use of the real estate or personal property reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, state that opinion;” |
| x. | clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and that their use might have affected the assignment results; and | x. | clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and that their use might have affected the assignment results; and | x. | clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and that their use might have affected the assignment results; and |
| xi. | include a signed certification in accordance with Standards Rule 2-3 or 8-3 | xi. | include a signed certification in accordance with Standards Rule 2-3 or 8-3 | xi. | include a signed certification in accordance with Standards Rule 2-3 or 8-3 |
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