The Appraisal Standards Board (ASB) has adopted its proposed revisions to Advisory Opinion 13 (AO-13), Performing Evaluations of Real Property Collateral to Conform with USPAP, The Appraisal Foundation reported. The updated AO-13 became effective upon adoption on March 27, since it applies to the 2012-13 edition of the Uniform Standards of Professional Appraisal Practice (USPAP).

The issue was how an appraiser, operating under the USPAP, can develop and communicate a valuation of real property collateral that complies with the Interagency Appraisal and Evaluation Guidelines. Among the advice given by the ASB, the board reminds appraisers that “Under STANDARD 1, in developing a real property appraisal, an appraiser must be aware of, understand and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.” 

Additionally, STANDARD 2 requires that a real property appraisal report contain sufficient information to enable intended users of the appraisal to understand the report properly.

“When reporting evaluations, appraisers need to be aware that the evaluation content, described in the Agencies’ Guidelines, may differ from the content required for appraisal reports under STANDARD 2,” the ASB wrote. “It is important that the contents of all appraisal reports satisfy the requirements of STANDARD 2 as well as all applicable assignment conditions. In many cases, a Summary Appraisal Report may be required, but in other cases, a Restricted Use Appraisal Report may be sufficient if expanded to include all of the content requirements for an evaluation.

“An evaluation, when performed by an individual acting as an appraiser, is an appraisal. In addition to complying with USPAP, the appraiser must be aware of and comply with any additional assignment conditions and reporting requirements imposed on the assignment,” the ASB concluded.

For the full opinion, visit The Appraisal Foundation.