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USPAP 2018-2019 Edition

© The Appraisal Foundation

STANDARD 3: APPRAISAL REVIEW, DEVELOPMENT

In developing an appraisal review, an appraiser must identify the problem to be solved,

determine the scope of work necessary to solve the problem, and correctly complete research

and analyses necessary to produce a credible appraisal review.

Comment: STANDARD 3 is directed toward the substantive aspects of developing a credible

opinion of the quality of another appraiser’s work that was performed as part of an appraisal or appraisal

review assignment. The requirements set forth in STANDARD 3 generally follow the appraisal review

development process in the order of topics addressed and can be used by appraisers and the users of

appraisal services as a convenient checklist.

In this Standard, the term “reviewer” is used to refer to an appraiser performing an appraisal review.

STANDARDS RULE 3-1

In developing an appraisal review, the reviewer must:

(a) be aware of, understand, and correctly employ those methods and techniques that are necessary to

produce a credible appraisal review;

Comment: Changes and developments in economics, finance, law, technology, and society can have a

substantial impact on the appraisal profession. To keep abreast of these changes and developments, the

appraisal profession is constantly reviewing and revising appraisal methods and techniques and devising

new methods and techniques to meet new circumstances. Each appraiser must continuously improve his or

her skills to remain proficient in appraisal review.

The reviewer must have the knowledge and experience needed to identify and perform the scope of

work necessary to produce credible assignment results. Aspects of competency for an appraisal review,

depending on the review assignment’s scope of work, may include, without limitation, familiarity with the

specific type of property or asset, market, geographic area, analytic method, and applicable laws, regulations

and guidelines.

(b) not commit a substantial error of omission or commission that significantly affects an appraisal review;

and

Comment: A reviewer must use sufficient care to avoid errors that would significantly affect his or her

opinions and conclusions. Diligence is required to identify and analyze the factors, conditions, data, and other

information that would have a significant effect on the credibility of the assignment results.

(c) not render appraisal review services in a careless or negligent manner, such as making a series of

errors that, although individually might not significantly affect the results of an appraisal review, in the

aggregate affects the credibility of those results.

Comment: Perfection is impossible to attain, and competence does not require perfection. However, an

appraiser must not render appraisal review services in a careless or negligent manner. This Standards Rule

requires a reviewer to use due diligence and due care.

STANDARDS RULE 3-2

In developing an appraisal review, the reviewer must:

(a) identify the client and other intended users;

46

(b) identify the intended use of the reviewer’s opinions and conclusions;

47

46 See Advisory Opinion 36,

Identification and Disclosure of Client, Intended Use, and Intended Users.

47 See Advisory Opinion 36,

Identification and Disclosure of Client, Intended Use, and Intended Users.

See also

FAQ 305-

329

FAQ

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