Over the years, the appraisal review has become an essential part of the appraisal process. While the review is important for many reasons, it’s paramount because it guarantees an appraisal is complete and sound. What is an appraisal review you might ask? By definition, an appraisal review is used to investigate, analyze, and verify the logic and procedures of an appraisal. The review is comprised of a series of seven procedures which ultimately helps a reviewer formulate an opinion about an appraisal.
The USPAP appraisal review checklist breaks down each step in the process. From identification of the problem to analysis review, the appraisal review double-checks the appraisal to verify it is logical and thorough. The appraisal reviewer’s job is to discern major or minor omissions and mistakes while agreeing (or disagreeing) with an appraiser’s findings. A real estate appraisal review is completed by a qualified appraiser and is requested, in many cases, in order to reinforce a client’s confidence in an appraisal’s initial findings. Think of it as getting a second opinion from another qualified source. However, it’s important to note that the appraisal review is a review of the appraisal, not of the appraiser. Throughout appraisal review services, the reviewer is developing an opinion about the quality of another appraiser’s work, not the appraiser himself.
When are appraisal review services needed?
The short answer is an appraisal review is needed specifically as it relates to risk. That is to say, when a property or a buyer presents more risk, a lender might require an appraisal review. A review might be ordered due to red flags (like inadequate comparables or a declining market location) or due to other potential risk factors. Financially speaking, the appraisal review fee can range from $300-$500 depending on the market, the property type, and the property size.
If you have more questions about what an appraisal review is, when it’s needed, or any other nitty-gritty details, be sure to visit the appraisal review section on our blog. We’re also always just an email away. Feel free to reach out with any questions you might have whether related to appraisal reviews or not. We’re always here for you.