Monday, July 23, 2018

Tips for Writing a Great Appraisal Report

Libby Holloway, ISA CAPP
Members of ISA can give a wide range of answers when asked why they joined the organization. Popular answers are for networking, continued education, and taking advantage of name recognition. The less exciting but basic truth is that most of us joined ISA to learn how to write an appraisal report.

During the Core Course, students are instructed in what the required elements of a report are according to ISA and USPAP standards. Students practice developing the report by determining intended use and objective use, appropriate values to seek, and which markets to use. Checklists to help members include necessary information are provided, and students are required to present a successful report properly using these lessons in order to earn designations. Subsequent courses help members stay up to date on changes. Anyone with the designation of Member or above has all the information they need to write a good appraisal report - but do we all always follow through?

ISA does require that certain essential elements be included in reports created by members. After these elements are met, there is little direction in how they are expressed within the report. Here are a few common pitfalls (assuming the correct intended use, objective and approach to values are used) and how to avoid them:

  • Adding confusing extra information. State the facts. In an effort to include required elements pertinent to the appraisal assignment, extra elements not needed for the intended use are sometimes included. This extra information can be confusing and misleading to the reader.

  • Boilerplate boredom. I know it is easy to feel you've written the same report a hundred times but beware getting lazy with boilerplate text. Every assignment is individual, and nothing is more embarrassing than including information within a template that doesn't apply to the current client.

  • Presenting correct information in a confusing manner. Following the order of items as they appear in the checklist might seem to cramp your individual creativity, but in reality, following the order helps you present information in a cohesive manner which makes it less confusing to your reader.

  • Writing as if your client is a professional appraiser. Remember that your client, even if they are a collector or an attorney, is probably new to appraisal terminology. Make sure you fully define each concept within the cover document so that your reader understands what you are telling them. I suggest reading the completed report through your appraiser eyes to make sure it is compliant then through your client's eyes to make sure it is understandable.

  • Making grammar and spelling mistakes. Make sure you properly edit your work or hire someone who can. Misspelled words and poor grammar dilute your report and give your readers the idea that you don't know what you are talking about even if you are an expert.

  • Improper placement of the USPAP certification. ISA standards do not specify where the USPAP Certification must fall in the cover document. USPAP does require that it is signed by the appraiser/appraisers performing the appraisal. Put the statement in a place in your report where it is easily read and where your signature is affixed. It is fine to put the statement at the end of your cover document above the signature for the entire document. If anywhere else, it must have its own signature.

  • Incomplete descriptions of items in the body of the report. Remember the rule of thumb that the reader should be able to pick out the item by your description whether or not a photo is included. Write the descriptions so that every intended user for the report can understand what you are describing. If you include a lot of descriptive terms that may be new to your user, include a glossary.

  • Missing out on the bottom line. Your client is looking for the bottom line, don't hide it. Make sure you clearly express the values sought, markets analyzed along with their conditions, and make sure your values are easy to find.

In order to be seen as the professional you are, make sure that your report is a carefully prepared product. Never fail to check and re-check your final report no matter how anxious you are to collect the balance and move to the next project. Word of mouth is still the best advertising for your services and you want all those words said about you to be positive.

- Libby Holloway, ISA CAPP

2 comments:

  1. Libby, how wonderful of you to point out common pitfalls. Good for the new appraiser and well worth a read for seasoned appraisers to keep us on our toes!

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  2. I appreciate the direct points of interest. Clear and concise reminders and suggestions. Thank you!

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