Appraisal reviews in real estate serve many important purposes. Sometimes the review process is more time consuming and requires research and analysis well beyond the original assignment, while other times the process is very smooth. If you are a professional appraiser, your work will be reviewed from time to time. It may be helpful to remember that it is your work product—not you—that is being reviewed.
In this article, we take a look at the definition of an appraisal review, why reviews are needed, the most common types of review reports, and who can perform an appraisal review.
Want to become an appraisal reviewer? Check out our CE courses on this topic, including, “Evaluating Today’s Residential Appraisal: Reliable Review.”
What is an appraisal review?
An appraisal review in real estate is when one appraiser reviews the work of another. USPAP defines appraisal review as, “The act or process of developing an opinion about the quality of another appraiser’s work (i.e., a report, part of a report, a workfile, or some combination of these), that was performed as part of an appraisal or appraisal review assignment.”
Why are appraisal reviews needed?
Real estate appraisal reviews are useful and necessary because they can they serve as a tool for:
Providing a second opinion
A professional review of an appraiser’s work often makes sense as a prudent business practice for users of appraisal services. It is not unusual for clients in other professions to seek second opinions, and the appraisal profession is no different.
A review serves as a tool for measuring the credibility of the appraisal report by determining whether it supports a relevant development process. The review serves as a test of reasonableness to see if the methods and techniques used are appropriate to the assignment.
Boosting client confidence
A review can reinforce a client’s confidence in the appraisal report. The reviewer ascertains whether…