1. ACCOUNTABILITY: We have prepared ourselves in advance to be competent and accountable. The State of Florida (DBPR) and The Appraisal Institute, both adhering to the Uniform Standards of Professional Appraisal Practice (“USPAP”), govern everything we do within a mandated regulatory structure. When audited or investigated we must demonstrate that we have not violated the public trust. As a result, our engagement and appraisal process is very well defined.
2. CONTRACT & ACCEPTANCE: Nothing happens until an appraisal engagement letter (contract) is signed and accepted, with payment if required.
Acceptance is on the next business day unless otherwise specified in the contract, and at this time the delivery clock begins ticking.
The assignment is placed in a Que with other assignments called an “appraisal pipeline.”
Under USPAP an appraiser must reject an assignment when they learn of a conflict of interest, they find they don’t have the necessary expertise, or the scope of the assignment will result in a misleading appraisal. In rare cases this can occur even after an assignment has been accepted. Naturally, costs (less damages if applicable) are returned immediately.
3. INTAKE: The appraiser begins to assemble legal and general market information. This is often done in the report document itself (MS Word and Excel) and includes:
Detailed legal situs and property tax for each tax parcel.
Property listing and sale history (required by USPAP).
Location, parcel, FEMA flood, zoning and aerial map(s), etc.
Demographics, market studies (rent, expense and sales data, etc.).
4. INFORMATION REQUEST: Now that the appraiser has a good idea of what is being appraised, they will request information.
Complex properties require a great deal of information (i.e., financial income and expense history, rent roll, leases, etc.) while simple properties require very little. When information is slow in coming, incomplete, unclear or conflicting this can be quite a process.
Delays create “train-wrecks” within the appraisal pipeline and frequently require a delivery “reset” so other appraisal assignments will not be effected. Information delays can double the contract turn-around during busy periods. Responsiveness is essential.
5. ANALYSIS: The appraiser assesses the information and outlines most of the analysis.
6. INSPECTION APPOINTMENT: An appraiser typically sees two to three properties on a field day, plus all of the comparables for these assignments. We try to give at least 48-hours’ notice, and more for apartments or other complex occupancy-situations. Inspections are not as detailed as property inspection companies, and any known issues they would find should be revealed to the appraiser. An appraisal inspection is only to obtain a general idea of marketability.
7. COMPLETING THE DRAFT: Now everything comes together – there may be more questions for the property contact, and perhaps another inspection of sales or rent comparables on the next day in the field.
8. PROOFREADING: This is often done on the next office day following the draft so the appraiser looks at the analysis with fresh eyes. Peers may be asked to review an appraisal report as well for quality control. Any issues must be addressed quickly to ensure timely delivery.
9. PUBLISHING: The report is finalized in a PDF file and delivered online (e-mail, dropbox, etc.).
10. FOLLOW UP: Many of our clients have stringent appraisal review procedures and we give all inquiries priority to avoid disrupting their pipeline. Our report has been written to anticipate questions, keeping inquiries to a minimum. Some of our clients arrange for printed copies, and we send them express delivery once the review is completed and the appraisal is “accepted” to avoid costly printing and delivery fees.
It takes about 30 hours of administrative and professional time to complete an average appraisal report, but less for restricted appraisal reports and much more for complex assignments. You can read more about commercial appraisal reports here: Nine Things You Should Know about Commercial Appraisals.