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Think Outside the "Check" Box

Bryan S. Reynolds

Most everything changes. If you don’t believe that look in the mirror. Appraisers were very
concerned when the new Fannie Mae appraisal forms initially hit the street and now after three years most appraisers utilize them routinely without much consideration. There are times these preprinted forms are not appropriate and should be avoided.
Intended User
The Appraisal Foundation and the Association of Appraisal Regulatory Officials (AARO) have
indicated that in order to set forth the appraisal in a manner that will not be misleading; the
appraiser must provide a clarification with regard to the intended users. This needed
clarification is a result of Certification #23 which indicates a host of others that may rely on
the appraisal report. 
Although Fannie Mae indicates you can not add, change, delete or modify their certification orlimiting conditions, they don’t mention clarifying. In Fannie Mae’s Revised Appraisal and
Property Report Forms – FAQs dated 11/1/05 they indicate that they would accept the
following statement when the appraiser believes the client is the only intended user.

“The Intended User of this appraisal report is the Lender/Client. The Intended Use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated Scope of Work, purpose of the appraisal, reporting requirements of this appraisal report form, and Definition of Market Value. No additional Intended Users are identified by the appraiser.”

Intended Use
The preprinted forms also indicate the intended use is for mortgage finance transactions, so
without any change to this form, utilizing it for any other reason would create a misleading
report. How many of you appraise real property for owners thinking of selling their property,
pending divorces, estates, etc? THERE IS NOT A MORTGAGE FINANCE TRANSACTION as you are stating by signing the certification and limiting conditions. Use a different form, anarrative report format, a brown paper bag, just not the Fannie Mae preprinted 1004 form!

Most software companies offer a substitute form such as ACI’s General Purpose Appraisal
Report commonly known as the GPAR.

Keep an open mind for a moment. Think outside the “check” box. If you have been hired by a
homeowner thinking of marketing their home, do they really need a picture of their own
home? Do they need a floor plan they walk every day, a copy of a map, or a copy of their
deed? They probably have the original deed. How about providing them what they need - a
credible, ethical, unbiased professional opinion. Think for a minute about when you go to the
doctor with an ailment. What happens? Perhaps there is a discussion of the problem, an
examination, maybe an x-ray? Then it’s off to the lab for some blood work. Then you go
home and wait by the telephone. When the doctor calls with the results do you say, “Wait! I
want a 43 page written report!” Of course not, you accept their professional diagnosis or
opinion via the phone.
Remember the appraisal and the appraisal reports are two different things. The Appraisal Development is covered under Standard 1 while the Appraisal Report is under Standard 2.
There are four report options consisting of three written and one oral. Whether you
prepared a Self-Contained, Summary or Restricted Use they can be narrative or form reports.

A Restricted Use report option is most often overlooked by appraisers but very often is the
perfect option for many clients. Consider providing options for different clients who have
different problems that need to be solved instead of forcing a URAR upon them.

Regardless of which option you choose, beware of using the Fannie Mae preprinted forms as a catch all. They were not intended for that reason.
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