Technical Real Estate Appraisals: Types & Methods

Instructor: Janice Chretien
This lesson will explain the three types of technical appraisal reviews: desk review, field review, and partial field review. In addition, we'll discuss three types of appraisal review methods: detailed (narrative), exceptional, and form.

The Moving Target

Sunnytimes is an average community located in the suburbs. Property values had not changed much in ten years, but then a Fortune 500 company relocated to an area five miles north of Sunnytimes. Suddenly, there were more people moving to the area than there were homes available.

Naturally, property values increased. However, for the first two to three months of the transition, there was no data to suggest that the homes in Sunnytimes had a higher market value than they did six months ago. The type of value is called a moving target.

An appraisal is an appraiser's opinion of the value of a property that is used in a real estate decision. Much of the information that informs the appraiser's opinion comes from historical data. In times of rapid market change, there is no historical data representative of the current market conditions.

Types of Technical Appraisal Reviews

While this is not the only scenario that would warrant an appraisal review, it is very common. A technical appraisal review is an opinion of the suitability of the appraisal that provided the market value of the subject property. The mechanics of the technical review will vary depending upon the scope or nature of the assignment, the client, policy requirements, or the nature of the property appraised.

There are three types of appraisal reviews: the desk review, the field review, and the partial review.

The desk review is a seven-step process performed by a human, and it is the least comprehensive of the three reviews. The desk review process involves:

  1. identification of the problem
  2. a review of the scope of the work
  3. research and analyses
  4. a review of the appraiser's analyses, opinion, and conclusions
  5. a review of the appraiser's report
  6. development of the reviewer's own opinion of value
  7. analysis of whether the reviewer's report is consistent with the intended use.

In a field review, the reviewer conducts a physical review of the subject property and comparable properties that were used in the appraiser's report. Overall it is similar to the desk review, with the exception that the reviewer physically views the subject and comparable properties.

The partial review is a combination of the desk review and the field review.

Technical Appraisal Review Methods

There are three technical appraisal review methods as well.

In a detailed (narrative) method, the appraiser leads the reader through the processes that led to the opinion of value. This is the most extensive report, and it allows the appraiser to tell a story without the constraints of completing a form.

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