What is appraisal review?
Appraisal review is the process of checking a completed appraisal for accuracy, credibility, and compliance before a lender, investor, or other party relies on it. A reviewer does not re-appraise the property; they judge whether the appraiser’s work is sound and whether the opinion of value is supported.
Checking the appraisal, not the property.
When a property is bought, refinanced, or used as collateral, an appraiser produces a report with an opinion of its value. Before that report is trusted, someone needs to confirm it holds up. That second look is the appraisal review.
The reviewer works from the report and its supporting data. They ask whether the appraiser followed the applicable standards, chose sound comparables, made defensible adjustments, and reached a conclusion the rest of the report actually supports. The output is usually a judgment about the report’s credibility and, often, a recommendation to accept it, ask for revisions, or reject it.
The questions behind a review.
Compliance
Whether the report meets the standards it is held to, such as USPAP, and the requirements of the party ordering the review.
Comparable selection
Whether the comparable sales chosen are genuinely similar to the subject, and whether better comparables were available and ignored.
Adjustments
Whether the adjustments applied to those comparables are supported and consistent, rather than reverse-engineered to reach a number.
Approaches to value
Whether the approaches the appraiser used (sales comparison, cost, or income) were applied correctly and reconciled into a defensible conclusion.
Internal consistency
Whether the report contradicts itself, and whether the math and the data carried across sections actually add up.
Credibility of the conclusion
Whether the final opinion of value is actually supported by the analysis in the report.
Residential vs. commercial: same goal, different reports.
Residential reviews center on standardized form reports, such as the Uniform Residential Appraisal Report. Because the data is gridded and consistent, review leans on the comparable grid, the adjustments, and conformance with the forms and their rules.
Commercial reviews deal with narrative reports for income producing and specialized property. There is no fixed grid, so the review turns on reasoning: cap rate support, income and expense assumptions, highest and best use, and whether the narrative justifies the value it lands on.
The limits of a review.
A review is not a new appraisal. The reviewer evaluates the work in front of them; they do not independently set a new opinion of value or inspect the property themselves.
A review also cannot manufacture data the report never contained. If a report is missing information a conclusion depends on, the honest result of a review is to flag the gap, not to fill it. The point of review is to make the quality of the underlying work visible, so the party relying on it can decide with clear eyes.
See how Valara reviews each type.
Valara applies this same review discipline automatically, with every finding cited to the page it came from.
Curious how Valara itself is checked? See our evaluation methodology and how your files are handled.
Put a review in front of your next file.
Run a sample review, or bring a commercial or residential file of your own.
5 credits included, no card required.