Ok, so my credibility is limited with the experience part since I have only been at TN DOT 60 days. However, I have been an appraiser under review for 27 years, and also have reviewed other projects and individual appraisals in the past. I am finding that my personal practice is certainly enhanced by these experiences and this education!
I decided today to go back to my Appraisal Institute (AI) class notes from about six weeks ago in Buffalo (thanks Western NY/Ontario AI Chapter Members for showing me a great time by the way!). I was fortunate to have Rick Borges, MAI, 2013 AI President as the instructor, and coincidentially delighted to have Tony Sevelka, MAI as my tablemate; particularly since he wrote that Larger Parcel article on which I am relying heavily for my next article on Larger Parcel or Economic Units.
This Institute class was a one-day seminar entitled "Appraising the Appraisal: Appraisal Review - General", which I heartily recommend for new reviewers and as a good refresher for long time practitioners as well. There were a number of wonderful ideas about the process of appraisal review and some great 'best practices' suggestions.
The first that jumped out at me was begin the review assuming the appraiser has done a terrific, credible job - they made a 100 on this report. From there, minor errors and inconsistencies should be just that and treated as such. Unless, of course, they pile up to create a question of credibility.
The second, checklists are a great way of checking up on ourselves as reviewers. Just like appraisers, we are human and forget items and make mistakes - often because we are so close to the data and analysis. Put the review/appraisal down, come back later, and use that handy list found on page 209 of the 2010 text, "Appraising the Appraisal, the Art of Appraisal Review," by Richard Sorenson, MAI.
Third, and I really like this one because I am such a fool for more education, consider the review a learning process. Use this process to reinforce our knowledge and understanding of USPAP, FIRREA, local agency or company appraisal guidelines, professional organization standards, or in federal eminent domain transactions, the Yellow Book.
The fourth item was a recommendation to use an Extraordinary Assumption (that is the one where you assume something to be true when you do not know for certain, and if different than assumed it may affect the credibility of the results of your report) with respect to the appraiser's factual data about the subject and comparables. What do you think? I thought it was a grand idea - more fully communicating the reviewer's reliance on that data we did not generate or verify.
The fifth, more general, idea was to evaluate the information presented by the appraiser as to its authenticity, consistency, pertinence, and sufficiency of type and documentation. Consider whether the analysis was objective or subjective; did the appraiser write about the positives and negatives for the property and market or does it read like a marketing brochure? Is this data within the subject 'market', however defined by the appraiser, and can you, as the reviewer, see the subject fitting into that market as a reasonable substitute?
Finally, my person best take away from the information, let us all remind each other about that three legged stool of appraisal methodology; the Sales Comparison Approach, the Income Approach and the Cost Approach. They are interdependent and provide good information at every turn. Let us not be afraid to use all three.
Remember a review appraisal report is an opinion about the quality of another appraiser's work. So be professional, engage in good communication, and review the appraisal report, not the appraiser. Especially remember the golden rule, to treat others as you would wish to be treated.
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