What Are Valuation Services And Appraisal Process

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What Are Valuation Services and Appraisal Process

• RE2qa.pvt.ltd

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• The property valuation is not a science, its an
  art. Appraisers always make clear that their
  valuation is only an opinion of a propertys
  value. There are so many factors involved in
  value estimation process which make it almost
  impossible to give exact value so its always an
  estimate.

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• Value of a property depends upon the following
  economic bases
• Cost at which a substitute value can be obtained
• Estimated future value growth of the property
• What factors or nearby changes can affect  the
  opinion value
• Affect of competition on profits
• How improvements can contribute to property value
• Conformity of the property with other activities
  in the area
• A simple thumb rule of supply and demand
• What the highest and best use of property

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The Appraisal Review

• During the review process the reviewer should
  follow the applicable professional standards for
  the appraisal review, development and reporting.
  In this process following standards include
• The Appraisal Foundation Uniform Standards of
  Professional Appraisal Practice (USPAP)
• The Professional Standards promulgated by
  National Association of Certified Valuators and
  Analysts (NACVA)
• The Statement on Standards for Valuation Services
  No. 1 (SSVS), promulgated by the American
  Institute of Certified Public Accountants
  (AICPA).

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Valuation Review Checklist

• The valuation required following section
• To described the business interest and the
  effective valuation date
• The actual purpose and objective of engagement
• A detail description of subject company and
  historical  an analysis of historical and
  projected financial operating results
• Basic standard of values
• Discussion of relevant industry and economic
  situation
• Description of generally accepted valuation
  approaches and methods
• The selection and application of relevant
  valuation approaches and methods
• The value conclusion, including discussion of
  relevant valuation adjustments (e.g., control
  premium or discount for lack of control, discount
  for lack of marketability.

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Appraisal Reviewer

• In appraisal process the second major responsible
  person about this process quality is appraiser
  reviewer.
• Recommended meets all appraisal requirements,
  and should be used as basis for establishing
  amount believed to be just compensation
• Accepted meets all appraisal requirements, but
  not selected as recommended or approved or,
• Not Accepted.
• The review appraiser shall also approve the
  appraisal (as basis for establishing the amount
  believed to be just compensation), and recommend
  the amount believed to be just compensation
• The review appraiser must make reasonable efforts
  to verify that the factual data within the
  appraisal is correct.

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Technical Review

• It is the major reasonable effort of the review
  appraiser to verify that the factual data within
  the appraisal is correct. If the appraisers
  opinion of the value is based on effort of fact,
  no amount of explanation, logic, or supporting
  data will result in a valid conclusion.

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Plans Reviewer

• It should be familiar with the right way and
  construction plans, and should specifically check
  whether appraiser has properly interpreted
  construction features. Appraisal reviewer should
  be verifying the conclusion about the nature of
  purposed construction and its effects on after
  condition of property being appraised. The
  reviewer must be assured that appraiser has good
  understanding effect of proposed construction
  before beginning appraisal process when working
  on complex appraisal assignments.

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Data Verification

• Math calculations must be verified, but factual
  data about items such as site size, building
  size, zoning, availability utilities, or sales
  price of a comparable property/sale can, at
  reviewers discretion, be verified on a
  spot-check basis. Example reviewer is not
  expected to verify all sales or measure all
  buildings. Reviewer should, however, randomly
  check some facts and should check any information
  appearing questionable (i.e., if appraiser says a
  property is zoned residential and it is
  surrounded by commercial development, reviewer
  should verify zoning).

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Revision Requests

• After the subjective reviewer is completed the
  reviewer is to contact the appraiser and request
  all revisions, both objective and subjective. The
  reviewer make revision request about any document
  (via email or in writing) the regional office
  that revisions have been requested.  Revisions
  made by the appraiser shall be sent to both the
  review appraiser (for final review and approval)
  and to the regional office. Questions by the
  appraiser regarding requested revisions must go
  to the reviewer. The region shall keep track of
  the time that the appraiser is taking to make the
  revisions and enforce any contract provisions
  they may have regarding timeliness of the
  appraiser. If the appraiser fails to return all
  the requested revisions, it may be necessary to
  request revisions again.

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• Revisions must be completed and returned to the
  review appraiser within ten (10) work days,
  unless other arrangements have been made. The
  reviewer appraiser may make minor change and
  correction in the report that does not affect the
  value. Examples of such minor changes are
  insignificant math error, spelling mistake and
  typographical error. Whenever a reviewer makes
  such a correction, the reviewer will initial the
  correction. The reviewer shall send a copy of any
  minor corrections to the appraiser. This informs
  the appraiser that the reports are being checked
  in detail and it notifies the appraiser of the
  change.

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Source

• This content is the property of RE2QA which is a
  tech company based in United States. They provide
  Appraisal Review Services.