The typical appraisal process begins with the Scope of Work.
For each appraisal, appraisal review, and appraisal consulting assignment, an appraiser must:
- identify the problem to be solved;
- determine and perform the scope of work necessary to develop credible assignment results; and
- disclose the scope of work in the report.
An appraiser must properly identify the problem to be solved in order to determine the appropriate scope of work. The appraiser must be prepared to demonstrate that the scope of work is sufficient to produce credible assignment results.
Comment: Scope of work includes, but is not limited to:
- the extent to which the property is identified;
- the extent to which tangible property is inspected;
- the type and extent of data researched; and
- the type and extent of analyses applied to arrive at opinions or conclusions.
Appraisers have broad flexibility and significant responsibility in determining the appropriate scope of work for an appraisal, appraisal review, and appraisal consulting assignment. Credible assignment results require support by relevant evidence and logic. The credibility of assignment results is always measured in the context of the intended use.
An appraiser must gather and analyze information about those assignment elements that are necessary to properly identify the appraisal, appraisal review or appraisal consulting problem to be solved.
In an appraisal assignment, for example, identification of the problem to be solved requires the appraiser to identify the following assignment elements:
- client and any other intended users;
- intended use of the appraiser’s opinions and conclusions;
- type and definition of value;
- effective date of the appraiser’s opinions and conclusions;
- subject of the assignment and its relevant characteristics; and
- assignment conditions.
This information provides the appraiser with the basis for determining the type and extent of research and analyses to include in the development of an appraisal. Similar information is necessary for problem identification in appraisal review and appraisal consulting assignments.
Communication with the client is required to establish most of the information necessary for problem identification. However, the identification of relevant characteristics is a judgment made by the appraiser that requires competency in that type of assignment. Assignment conditions include assumptions, extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional exceptions, and other conditions that affect the scope of work.
Scope of Work Acceptability
The scope of work must include the research and analyses that are necessary to develop credible assignment results.
Comment: The scope of work is acceptable when it meets or exceeds:
- the expectations of parties who are regularly intended users for similar assignments; and
- what an appraiser’s peers’ actions would be in performing the same or a similar assignment.
Determining the scope of work is an ongoing process in an assignment. Information or conditions discovered during the course of an assignment might cause the appraiser to reconsider the scope of work.
An appraiser must be prepared to support the decision to exclude any investigation, information, method, or technique that would appear relevant to the client, another intended user, or the appraiser’s peers.
(UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE, 2010-2011 ed.)
After determining the Scope of Work, the appraiser begins the research and resource compilation process.
The culmination of the appraisal process is the delivery of opinion and conclusions. This can be done in multiple formats including oral, written, and digital media.
This is a synopsis of the typical appraisal process. Many specific steps have not been mentioned or highlighted for summary purposes.