Appraisal Report Formats

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The vast majority of our appraisal customers don’t want an appraisal simply because they are curious about the value of their property. Our appraisal customers tend to need our services because an appraisal is required by another entity. In many cases, that entity is the lender providing financing for a real estate purchase. Sometimes, that other entity is a CPA or a business partner. Around tax time, it seems many of our customers need an appraisal to present to the IRS.

Banks, mortgage companies and other large institutional users of residential appraisal reports require the use of standardized appraisal report forms. If the intended user of the appraisal report is a federally related financial institution, the use of the forms promulgated by Fannie Mae and Freddie Mac will be required. If the appraisal is for a mortgage finance transaction, the appraisal report must be reported on a Fannie Mae/Freddie Mac form. Conversely, if the intended user of the appraisal report is NOT a federally related financial institution, the use of the Fannie Mae/Freddie Mac forms, are specifically disallowed. Sound confusing? Don’t worry about it. We’ll help you.

Appraisals for commercial and industrial properties tend to be written in narrative format, as opposed to a promulgated form. Regardless of the presentation format, the actual appraisal process itself is the same. The decision as to how to present the results of the appraisal is determined on a case-by-case basis, based upon the circumstances that are specific to the needs of our clients.

The Uniform Standards of Professional Appraisal Practice (USPAP) are the standards by which all appraisers are required to comply. USPAP requires that all appraisers inquire as to the “Intended Use” of the appraisal report. Furthermore, the use that is reported to us must be reported within the body of the appraisal report. We will ask what you intend to do with the appraisal report. Let us help select the presentation format that will satisfy your appraisal needs.

 

Residential Mortgage Appraisal Report Forms

The following appraisal report forms are promulgated by two quasi-governmental agencies; Fannie Mae and Freddie Mac. A team of appraisal users and providers including Fannie and Freddie, HUD, the VA, the Mortgage Bankers Association, the Appraisal Foundation and the Appraisal Institute designed the forms. They were updated in March 2005. The completed forms are generally not considered adequate by themselves. Appraisers typically include addendum pages to supplement the forms. Photo pages including pictures of the subject and the comparable sales are common. A map showing the location of the subject and the comparable sales and a sketch of the exterior of the subject property is also included. Additional comments that do not fit on the form are attached as an addendum.

The scope of work required for these appraisal reports is consistent with the needs of a mortgage lender. The intended use of these reports is “for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction.” The intended user “is the lender/client”.

Land Appraisal Report

This form is not promulgated by Fannie Mae or Freddie Mac. This report form is designed to report an appraisal of a vacant site. This reporting format requires the appraiser visit the subject site and the comparable site sales.

Employee Relocation Council Summary Appraisal Report

Also known as the ERC Report. This report form is a highly specialized reporting format designed specifically for employee relocation. This report form is promulgated by the Employee Relocation Council.

An ”ERC” appraisal is structurally different from a typical mortgage loan appraisal. The purpose of an ERC appraisal is to develop an opinion of the “Anticipated Sales Price” of the subject property. This is an estimate of most probable sales price as of a projected date in the future. This projected date is associated with normal marketing time for the neighborhood and property type.

This report format is more highly detailed than some other appraisal report formats. The subject property is very well described and detailed. Comparable sales and comparable listings are identified and placed on comparable analysis grids. There is no provision for an Exterior-Only ERC report. Appraisers who regularly perform ERC appraisals are among the most qualified appraisers.

Appraisal Institute Summary Appraisal Report - Residential

Often referred to as the AI Form, this report form is one of the best appraisal reporting formats for general residential use. It is recognized by appraisers, attorneys, accountants and the IRS as the industry standard for non-mortgage related appraisals. This report form is promulgated by the Appraisal Institute, which is the world’s leading appraisal organization. The Appraisal Institute is the organization that confers the SRA and MAI designations.

This form provides for the orderly presentation of the appraisal analysis and logic. This report format is more highly detailed than some other appraisal report formats. Appraisals performed for estate or divorce purposes should go on this form. Other uses would be appraisals for the IRS or for protests of local appraisal district assessments. This form is the best way to present appraisals for litigation support. If you have a question how to best solve your appraisal needs, feel free to contact us.

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Mortgage Forms

Single Family
Fannie Mae 1004
Fannie Mae 2055

Condominium
Fannie Mae 1073
Fannie Mae 1075

Manufactured Home
Fannie Mae 1004C

Cooperative Project
Fannie Mae 2090
Fannie Mae 2095

Multi-Family
Fannie Mae 1025

Update/Completion
Fannie Mae 1004D

No Value Form
Fannie Mae 2075

Review Forms
Fannie Mae 2000
Fannie Mae 2000A

Non-Mortgage Forms

Land
Employee Relocation
Appraisal Institute

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Mike Brubaker