An appraisal review is a process where an expert is called to evaluate an appraisal completed by another party. USPAP defines an appraisal review as “the act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment.” (The Appraisal Foundation, “Uniform Standards of Professional Appraisal Practice”)
New Jersey Realty Advisory Group, LLC provides appraisal reviews services to banks, appraisal management companies, attorney’s, federal, state and local agencies and private individuals. Al Chanese completed over 100 appraisal reviews for New Jersey Transit in the development of the Hudson-Bergen Light Rail Line. The firm provides both desktop and field reviews for various lenders and appraisal management companies.
The purpose of the review is to determine if:
- Data used is adequate and relevant
- Appropriate methods and techniques are employed
- Analyses, opinions, and conclusions are appropriate and reasonable
- Overall product presented meets or exceeds standards and the requested scope of work.
The review does not result in a new valuation conclusion; however, if the reviewer believes that the appraiser erred on arriving at an opinion of fair market value, the review can produce new sales with supporting adjustment of conclude a different value. The reviewer should not substitute his or her own judgment for that of the appraiser when the original conclusion was one that a reasonable person might have drawn based on the market information as of the effective date of valuation. A review appraiser may disagree with the final valuation conclusion or the techniques that were applied in an appraisal report, but the reviewer should not offer an opinion of value unless the reviewer as complied with USPAP. A reviewer may suggest that another appraisal be ordered.
Reviews should not be restricted to just the value conclusion and the content within the report. Many appraisal reports today are used in court. Attorneys and State Agencies should also consider having qualified appraiser critique the report for litigation purposes. It is much safer to find the flaws within a report before the expert reaches the witness stand and testifies to a report that has enough flaws to hurt your case. New Jersey Realty Advisory Group is experienced in court and is able to “pick apart” your report before your advisory has a chance to.