Restricted Appraisal Reports
The real estate appraisal process concludes with the appraiser’s opinion of value. Development of an appraisal includes the gathering of facts and evidence, using recognized methods and techniques of analysis, and applying reasoning and judgement. An Appraisal Report is a summary communication of this process and includes the data, relevant evidence, and an explanation of the reasoning and judgement used to support a credible value opinion.
As a stand-alone document an Appraisal Report can be read and understood by users and be the subject of an Appraisal Review by other appraisers. The Appraisal Reviewer’s role is often an essential part of the business process to establish a level of confidence in an appraisal, given the wide variety of skills, knowledge and experience existing among appraisers.
A new law recently enacted in California makes changes to the reporting requirements for licensed appraisers. During 2019 Licensed Appraisers can for the first time provide broadly circulated brief reports for users other than the client; reports that do not summarize the data, evidence, or reasoning used to develop the value opinion. Similar brief reports labeled for users other than a client could previously only be prepared by un-licensed appraisers.
These reports are known as Restricted Appraisal Reports and do not contain sufficient information to be read and understood as a stand-alone document. Restricted Appraisal Reports may not contain enough information for independent verification of facts, analysis or conclusions without access to important additional information.
If you, as a consumer, are considering a significant financial decision that relies upon the services of a licensed real estate appraiser in 2019, be aware that this change may affect you. The Bureau recommends that you do not rely on a Restricted Appraisal Report. Instead, ask for an Appraisal Report; a report that contains written support for the credibility of the value opinion.