New AIC 2018 Appraisal Forms
Information regarding our New AIC 2018 Forms
What if a client requires a stand-alone Market Rent Report on a specific property. How do I use the 0118 Form?
If a stand-alone Market Rent report on an identifiable property is required, the Market Rent report must comply with the Real Property Appraisal Standard. To comply, AIC Members must:
Complete relevant sections of the Full Residential Appraisal Form – 0118 and a Market Rent Addendum. Comparable sales are not required, only comparable rents.
*Please note that the one-page Market Rent Addendum alone will not comply with the Real Property Appraisal Standard.
Tick off “To Estimate Market Rent” in the Assignment section of the report (do not tick off “to Estimate Market Value”)
Indicate that the Market Rent Addendum is attached in the Certification Section
Can two values be provided on the 0118 Form for an assignment that requests both an “as-is” value and “as-if-complete” value of a property? Scenario 1: RENOVATIONS- A borrower is seeking funding for renovations on an existing home. The lender asks the appraiser to provide an estimate of market value for "before and after" renovations or “purchase plus improvements”
Option 1: Use the Full Residential Appraisal Form – 0118 and Addendums
For the “as-if-complete” value, the main body of 0118 can be used along with the required hypothetical conditions and extraordinary assumptions (see CUSPAP Comment 7.11).
For the “as-is” value, use a narrative addendum and an appropriate second set of comparables, analyses or adjustments as needed. If the renovations are minor, it may be appropriate to use the same comparable sales with a minor adjustment for condition.
Tick off “To Estimate Market Value” and the check box in front of the blank space, and explain that the purpose includes two values, as indicated in the diagram below.
Option 2: Complete two separate appraisal reports
A Member can produce two separate appraisal reports; one “as-is” and one “as-if-complete”. While this creates additional work, the scope of some assignments are better managed and clearer with two separate reports.
The use of two appraisal reports can eliminate confusion between the two physical descriptions (before and after renovations), the hypothetical conditions and extraordinary assumptions that are required for an “as-if complete”, the two sets of comparables, and the two sets of adjustments or analyses required for “as-is” and “as-if-complete”.
Option 3: Narrative Report
A Member can create a narrative report that provides the two values.
What if a client requires a stand-alone Market Rent Report on a specific property. How do I use the 0118 Form?
If a stand-alone Market Rent report on an identifiable property is required, the Market Rent report must comply with the Real Property Appraisal Standard. To comply, AIC Members must:
Complete relevant sections of the Full Residential Appraisal Form – 0118 and a Market Rent Addendum. Comparable sales are not required, only comparable rents.
*Please note that the one-page Market Rent Addendum alone will not comply with the Real Property Appraisal Standard.
Tick off “To Estimate Market Rent” in the Assignment section of the report (do not tick off “to Estimate Market Value”)
Indicate that the Market Rent Addendum is attached in the Certification Section
Can two values be provided on the 0118 Form for an assignment that requests both an “as-is” value and “as-if-complete” value of a property? Scenario 1: RENOVATIONS- A borrower is seeking funding for renovations on an existing home. The lender asks the appraiser to provide an estimate of market value for "before and after" renovations or “purchase plus improvements”
Option 1: Use the Full Residential Appraisal Form – 0118 and Addendums
For the “as-if-complete” value, the main body of 0118 can be used along with the required hypothetical conditions and extraordinary assumptions (see CUSPAP Comment 7.11).
For the “as-is” value, use a narrative addendum and an appropriate second set of comparables, analyses or adjustments as needed. If the renovations are minor, it may be appropriate to use the same comparable sales with a minor adjustment for condition.
Tick off “To Estimate Market Value” and the check box in front of the blank space, and explain that the purpose includes two values, as indicated in the diagram below.
Option 2: Complete two separate appraisal reports
A Member can produce two separate appraisal reports; one “as-is” and one “as-if-complete”. While this creates additional work, the scope of some assignments are better managed and clearer with two separate reports.
The use of two appraisal reports can eliminate confusion between the two physical descriptions (before and after renovations), the hypothetical conditions and extraordinary assumptions that are required for an “as-if complete”, the two sets of comparables, and the two sets of adjustments or analyses required for “as-is” and “as-if-complete”.
Option 3: Narrative Report
A Member can create a narrative report that provides the two values.
Comments
Post a Comment