Scope

Scope of Work, Appraisal Methods
Narrative1 combines the Scope of Work and Appraisal Methods inputs together in this section. If any information in this section does not apply, either leave it blank, or hide the information. Never delete information.

The majority of the sections are based on USPAP guidelines. Some sections have been added to accommodate international users.

The USPAP Scope of Work Rule establishes fundamental conditions for appraisal development and reporting.

The Scope of Work Rule states:
For each appraisal, appraisal review, and appraisal consulting assignment, an appraiser must:                                       
  1. identify the problem to be solved;
  2. determine and perform the scope of work necessary to develop credible appraisal results; and
  3. disclose the scope of work in the report.                             
The problem to be solved, intended use and intended user are key elements for defining the scope of work. Narrative1 uses a series of fields to guide the appraiser through the typical key elements of determining the scope and reporting, however this is a guide only and may need to be supplemented with additional information, depending on the assignment.

Problem To Be Solved:
According to USPAP identifying the problem includes the following considerations:
  • client and any other intended users;
  • intended use of the appraiser’s opinions and conclusions;
  • type and definition of value;
  • effective date of the appraiser’s opinions and conclusions;
  • subject of the assignment and its relevant characteristics; and
  • assignment conditions.
With respect to the Narrative1 system, we seek to first describe the problem to be solved in basic terms to broadly define the purpose of the appraisal. For example:
  • To estimate the current "As Is" market value for financing purposes.
  • To estimate the current "As Is" market value for asset management purposes.
  • To estimate the prospective "As Stabilized" market value as of [date] for for financing purposes.
  • To estimate the retrospective market value as of [date] for tax assessment analysis purposes.
  • To estimate the retrospective market value as of [date] for estate settlement purposes.

Determine and Perform The Scope of Work

Having defined the appraisal problem to be solved, Narrative1 further defines the scope of work through the following fields:

Intended Use:
The intended use is key to scoping analysis and report content; understanding what the client plans to do with the appraisal enables the appraiser to include or exclude data. For example, a tax abatement appraisal typically requires a thorough assessment analysis; an appraisal used to settle an estate might not. An appraisal used to determine a list price might include competitive listings whereas an appraisal used for financing might not.

Intended User:
Appraisals are written for the specific users; the scope of the appraisal content should recognize the intended user's knowledge of the property and market.

Report Type:

2014-15
  • Appraisal Report
  • Restricted Appraisal Report
Prior
  • Restricted Use
  • Summary
  • Self-Contained
See the USPAP Standards Rule 2-2

Canadian Report Definitions
  • Short Narrative
  • Narrative
Property Identification:
Describe/summarize for the reader the sources used to identify the property. Assessor's parcel number, deeds, survey, plat, etc.

Inspection:
Describe/summarize for the reader the scope of the inspection. Note site and improvement areas inspected or not accessible. It is good practice to note others that may have accompanied the appraiser on the inspection, such as property manager, owner, etc. Note the date of the inspection(s).

Zoning/Land Use Controls:
Describe/summarize for the reader the scope of the Zoning/Land Use Controls analysis.

Market Analysis:
Describe/summarize for the reader the scope of the market analysis.

HBU Analysis:
Describe/summarize for the reader the scope of the highest and best use analysis.

Information Sources:
Detail information sources used to document the subject property. This populates the property description section of the narrative.

Information Not Available:
Itemize documents or material not available for consideration. Examples:
  • An interior inspection was not available.
  • Three years of operating data was not available. 
  • A recent preliminary title report was not available.
Valuation Methods:
Describe/summarize for the reader the valuation approaches applied as well as the rationale for those excluded.
  • Cost Approach
  • Sales Comparison or Direct Comparison Approach
  • Income Approach
  • Unit Sales Approach (Subdivision/Development)
  • Canadian - Extraordinary Limiting Condition





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