Friday, October 9, 2015

5 WAYS TO MAKE A BETTER REPORT

ISA members are invited to send in their questions on all things appraising and education to Leon Castner, ISA CAPP. Leon will share his answers on the ISA Now Blog. Please send questions to leoncastner@comcast.net.


There are always ways to make a report better, whether in content, form, or persuasion. A better report is one that is readable, easily understood, and conveys the answer to the client’s problem in a meaningful way. Read my latest ISA Now blog post for five suggestions to consider when improving the transmission of the appraisal.

1. Clarity
A report should be clean and orderly, both in textual content and in appearance. It should clearly state the client, the intended use and users, objectives, and all the elements on the ISA checklist. Whether a report is narrative, like a letter addressed to a client, or a chart type form with repeated boxes or tables for information, it should flow in a logical and methodical way.

Any intended user of an appraisal report should be able to understand what the appraiser did and what steps were taken to reach the final value conclusion. The scope of work should be addressed sufficiently so that even the research and analysis performed will be evident.

Clarity involves the written report appearance as well. It should follow grammatical rules and be free of punctuation and spelling errors. The numbers, when given, should be plain and not confusing. Parts of the report should be labeled and follow the steps of the process from beginning to end.

2. Headers or Footers
A report can be custom tailored for every assignment. This includes a unique header and footer with specific information that identifies the report. Some use a footer to include company and client name, effective date, addresses, emails, and phone numbers. Due to the ease of word processing programs, these effects are no longer difficult or time consuming.

3. Report Segments
It is relatively easy to construct an ISA report that includes a cover section, a body, and an addendum. Although we do not normally label these segments, it is wise to differentiate between them in the text. Starting a report with the appraiser’s qualifications is usually not a good idea since it is part of the addendum. Addendums, for a very good reason, normally fall at the end.

The USPAP/ISA certification is part of the cover segment of a report. It can follow the itemization and valuation, but should be labeled to separate it from the rest. Often it is included in the narrative as the ending to a cover segment. Remember that the cover section is appraisal specific. The body is item specific.

Use the addendum in an expanded fashion. It is a great place for an item-specific glossary, a grading scale, artist biography, and supporting documentation. It would not be out of line to have an addendum that contains more pages than the rest of the report.

4. Photographs
Photographs are not a requirement for any report, even an IRS one (the taxpayer is only responsible for providing a good photograph of an item for donation if it is over $20,000). However, particularly in an age of digital photography, you should include photos whenever possible.

Learn to use your camera well. Make every attempt to deliver sharp and realistic photos, including close-ups of signatures, hallmarks, and specific identifying characteristics. Use white space to enhance the presentation and label the photographs when possible. Put them in the body, next to the item description. If one is using comparable sales and a reasoned justification, adding pictures of the comps is extremely beneficial. Do not cut corners using photography.

5. Avoid Needless Repetition
Many appraisers use templates. Some templates are not appropriate for all intended uses and may contain information not required or useful in a specific circumstance. Proofread your reports and delete unnecessary and/or duplicate information. This is particularly true when people try to follow checklists and often duplicate material to ensure it is present.

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