Services
Complete Appraisal
Technically, a complete appraisal is one that does not invoke the "Departure Provision" of USPAP. Departure is the tool that allows the appraiser to complete an assignment that is something less than or different from work that would otherwise be performed for a complete appraisal. From the perspective of the user of appraiser reports, a complete appraisal is an assignment where the appraiser does not invoke one of the many departure provisions of USPAP to produce a product that is something less than a complete appraisal, has all the materials necessary to prepare a credible analysis, and no approaches to value that a typical appraiser would use have been excluded. Complete reports are needed for most loan transactions and court cases.
Limited Use Appraisal
Limited use appraisals invoke one or more USPAP Departure Provisions. The most frequent use of limited use appraisals is to exclude one or more applicable approaches. Limited use appraisals are generally used internally by owners or for quick purchase decisions. The level of reliability of a limited report can vary, but most users of limited use appraisals believe them to be less reliable than a complete appraisal. USPAP also implies this (Statement on Appraisal Standards No. 7), although they can be very appropriate for a particular client needs. If the client is familiar with the property, ordering a limited use appraisal will result in a lower fee and sometimes a faster turnaround time. For third parties such as banks that have not lent on the property, appraisers are rightly hesitant providing a limited use appraisal, but for internal valuations or those for the property owner, limited use appraisals are very appropriate to order.
In addition to these two types of appraisals, there are three types of report formats: self-contained, summary and restricted.
Self-Contained
In this report option, the appraiser provides all of his/her data and rationale that was used in the development of the appraisal. All conclusions and data sources are fully disclosed and discussed. Two practical tests can be used to determine if a report is a self-contained document:
1. The content of the report fully describes the data, reasoning and each conclusion to such a degree that there is no need to consult other data sources or to inquire how the appraiser reached a conclusion.
2. Information sources cited within the report are included in the document, within reason. Citing a book does not require the inclusion of the book in the addenda, but market studies or other material articles cited in a report should be included, especially if the appraiser relied upon them for supporting important conclusions. This is the type of report most often needed for commercial property lending.
Summary
In the summary report, the appraiser summarizes his/her findings rather than fully describing them. This is a much shorter report than a self contained and many lenders accept this reporting type. Most residential appraisals are done on forms that are summary reports along with non-complex commercial assignments. The appraiser may summarize the data and his/her conclusions without explaining the full reasoning behind them.
Restricted Report
This is the shortest type of report. A restricted report only states the conclusions of the appraiser with no explanation on how they were derived. Restricted reports are generally used internally or when a value must be reported quickly. Many clients order restricted reports when time is of the essence and then have them upgraded to a summary or self contained in the future. An important caveat is that USPAP does not allow a restricted report to be used by anyone other than the client or someone intimately familiar with the property, so if the appraisal will be viewed by other third parties, a summary or self-contained must be prepared. Appraisers cannot "recertify" this type of report to any other lender.
