Appraisal review is an objective exercise measuring appraisal work against established standards and logic. USPAP defines 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.
A review appraiser is an appraiser who examines the reports of other appraisers to determine whether their conclusions are consistent with the data reported and other generally known information.
When reviewing the appraisal report, a review appraiser should make sure to closely examine whether the adjustments are properly supported and reasonable. Typically, the higher the value of the adjustments, or the number of adjustments made, the more likely the comparable sales might not be representative of the subject property.
Appraisal Red Flags
- Comparable sales not independently verified or recorded.
- Value not supported by the comparable sales, and/or the comparable sales are not appropriate.
- Incorrect appraisal report form or inspection type for the transaction.
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