McKissock - General Report Writing and Case Studies

McKissock - General Report Writing and Case Studies Appraisal -Answer-"(noun) The act or process of developing an opinion of value. an opinion of value; (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services."1 Report -Answer-any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client or a party authorized by the client upon completion of an assignment. 2 Client -Answer-"The party or parties who engage, by employment or contract, an appraiser in a specific assignment.Comment: The client may be an individual, group, or entity, and may engage and communicate with the appraiser directly or through an agent."3 Date of the Report -Answer-The date that the appraiser completed and transmitted the appraisal report to the client. It is usually - but not always - different from the effective date of value stated in the appraisal report. Effective Date -Answer-The date to which the value applies. It can be current, prospective, or retrospective. The effective date of value establishes the viewpoint from which the appraiser viewed the appraisal problem. Intended use -Answer-"the use(s) of an appraiser's reported appraisal or appraisal review assignment results, as identified by the appraiser based on communication with the client at the time of the assignment."4 Intended User -Answer-"the client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser, based on communication with the client at the time of the assignment."5 Personal Property -Answer-"Identifiable tangible objects that are considered by the general public as being 'personal' (e.g., furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; all tangible property that is not classified as real estate."6 Real Estate -Answer-"An identified parcel or tract of land, including improvements, if any."7 Real Property -Answer-"The interests, benefits and rights inherent in the ownership of real estate".8 This often is referred to as the "bundle of rights" associated with owning real estate. These rights include: -Answer-The right to sell the property; The right to lease or rent the property; The right to use the property; The right to give the property away; The right to enter or leave the property; and The right to refuse to do anything with the property. To determine the appropriate scope of work for the individual assignment, the appraiser must: -Answer--Rely on the information gained in the first step of the appraisal process. Proper identification of the problem is essential. -Ensure that he or she has the knowledge, experience, and competency to accomplish this assignment. -Determine the client's expectations for this type of assignment. -Not allow the assignment conditions to limit his or her ability to arrive at a credible opinion of value, given the intended use of the appraisal. -Be able to support the decision for the level of work to be accomplished. -Be prepared to defend the research and analysis he or she decided was not required for this assignment's credible opinion of value. Ethics Rule of USPAP -Answer-"An appraiser must promote and preserve the public trust inherent in appraisal practice by observing the highest standards of professional ethics. An appraiser must comply with USPAP when obligated by law or regulation, or by agreement with the client or intended users. In addition to these requirements, an individual should comply any time that individual represents that he or she is performing the service as an appraiser."1 Among the requirements, USPAP states: -Answer-"In reporting the results of a real property appraisal, an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading. Comment: STANDARD 2 addresses the content and level of information required in a report that communicates the results of a real property appraisal. STANDARD 2 does not dictate the form, format, or style of real property appraisal reports. The form, format, and style of a report are functions of the needs of intended users and appraisers. The substantive content of a report determines its compliance. Each written or oral real property report must include: -Answer--clearly and accurately set forth the appraisal in a manner that will not be misleading; -contain sufficient information to enable the intended users of the appraisal to understand the report properly; and -clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment."2 Standard Rule 2-2 -Answer-(a) The content of an Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (i) state the identity of the client, unless the client has specifically requested otherwise; state the identity of any intended users by name or type; (ii) state the intended use of the appraisal; (iii) summarize information sufficient to identify the real estate involved in the appraisal, including the physical, legal, and economic property characteristics relevant to the assignment; (iv) state the real property interest appraised; (v) state the type and definition of value and cite the source of the definition; Standard Rule 2-2 Cont: -Answer-(vi) state the effective date of the appraisal and the date of the report; (vii) summarize the scope of work used to develop the appraisal; (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, (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; (x) when an opinion of highest and best use was developed by the appraiser, summarize the support and rationale for that opinion; Standard Rule 2-2 Cont II: -Answer-(xi) clearly and conspicuously: state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and