Executive Summary in Appraisal Reports

Dave Towne

Dave Towne

Certified Residential RE Appraiser at Towne Appraisals
AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com
Dave Towne

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Executive Summary in Appraisal Reports

Executive Summary

Appraisers,

I spent two days last week at the Appraisal Summit and Expo in Las Vegas – which was extremely well planned and presented – co-sponsored by the Columbia Institute and the National Association of Appraisers.

Over those two days, in just about every topic presentation seminar, we appraisers were cajoled and implored to improve info we provide in reports to back up our stated value.  We were told that most reports reviewed by lenders are deficient in this aspect.  I admit that my reports need improvement in that kind of presentation – although over the years many ‘official reviewers’ have said my reports are pretty thorough and well written.

A common response of appraisers is the refrain… “just read the @#$% report!” … when we get ‘stips’ or questions back from the various people who must wade through thousands of pages of reports each month – not just yours.

The information the users are looking for is often buried among the 25-35+ pages – as mine is.  Usually the comment locations are not in common places among the hundreds of appraisal reports they see.  And unfortunately, some appraisers don’t include any information that backs up what they did in the process of doing the analysis, making decisions, or in how the appraised value was determined.  So ‘we’ are not helping the end user very well, and thus we get heaps of criticism piled on – some understandably justified.

I’ve decided to add a new page to every report, which will be an Executive Summary (see sample below).  This page will be located between the Table of Contents page, and the first pre-printed report page, in other words, the 2nd report page where reviewers will likely see it!  I’m doing this on a Supplemental Addendum page from my software library of forms and pages.  I will re-name that page (as shown below) so that it is not confused with the other Addendum page, which in my reports, has much additional detailed info and comments.

Note that this Executive Summary follows the same categories along the left side of the GSE forms, with the addition of the Market Conditions Info which will enhance info from the MC Form and other applicable market trends, etc.

To incorporate this new Executive Summary, I will carefully review the already pre-written info I have in various places in my reports – both on the forms and in the Addendum – and move what I can to the Executive Summary.  The remaining Addendum, using the same category outline as the ‘form’’, will still be included and will have additional back up info I believe is necessary, including the USPAP reporting requirements and CYA junk we need to include.

The Executive Summary will contain key information, summarized, to help the end user understand my thought processes and decisions.  I will be able to add to each category of info as the report is worked on, rather than at the end of the overall report writing process – which for me is mind-numbing if done at the end.  Currently, by the time I get finished, I’m bleary-eyed. It’s tough for me to go back, re-think and put on paper why I reported what I did!  Doing this along the way should relieve the stress.

The way I write my templates is pretty simple.  include just about every statement or comment I can think of (in the form comment sections & Supplemental Addendum), or have been asked about by reviewers over the years.  Then during report prep, I can either ‘take out’ or modify anything that does not directly apply.  This Executive Summary uses that same format; details can be modified as property situations dictate.  (I find ‘taking out’ is easier than trying to remember ‘what to include.’)

Some appraisers think this extra page is unnecessary.  Why?  Because they already have such info buried within their report, multi-pages deep.

But that’s precisely why an Executive Summary can help.  It can help reviewers (and the borrower) find key items and understand why the appraiser made certain decisions… without having to wade through dozens of report pages which they typically don’t initially read.  Many ‘stips’ are generated because end users won’t take the extra time necessary to find info.

So… spoon feed it up front!

Use this sample to format your own. Give it a try and see if it cuts down on the annoying call backs you get.

Image Credit flickr - Ali from Riyadh :)
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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9 Responses

  1. Koma says:

    Dave,

    Let’s make it 40 pages, wait why not 50 pages. I’m sorry that they look at thousands of reports, but guess what, THAT’S THEIR JOB!!! Because MY report is not worded exactly like their hundreds of other appraisers on their panels is too damn bad! The information is there right in my report, so read it. Even though they want so badly to take the artistry out of appraising and make it a complete scientific process, it ain’t (yes I said ain’t) going to happen!

    Thanks for the idea, but no thanks!

    Koma

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  2. Rick says:

    You say the conference presenters called for more detailed information and support for adjustments, analysis and reasoning. However, an executive summary by definition just restates what is already in the report and thus doesn’t achieve the stated goal. It does add more work and create more opportunities for conflicting information inside the report leading to more retypes. I hope this idea never gains any traction.

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  3. BC says:

    The biggest issue I see when I review reports are 3 main Things.  Appraiser’s do not explain their adjustments and stick to canned comments such as “the appraiser utilized the best sales”  etc which are considered most similar.  (Instead of Comparable 1 warranted an adjustment of X$ due to a less updated kitchen, older baths and dated cosmetic)

    Appraiser’s which cannot read a market and just check the boxes stable, in balance and supply and demand 3-6 months, which is often contradicted by the 1004 MC and the larger sample throughout the town which in my area (Boston)  is typically INCREASING/ SHORTAGE/ UNDER 3 MONTHS, then using older sales and not accounting for the increase in market conditions which is very easy to prove. (same was true back in 2007/2008 when not adjusting the the decrease in market conditions.

    Finally failure to properly reconcile the value.  Typically something to the effect of “most weight given to the sales comparison approach as it is most applicable of the attitudes of buyers and sellers”  When you should be saying the opinion of value is reconciled towards the higher end of the rage with most weight placed on sales 1 & 2 as they are most similar in respect to condition and location also offer well renovated kitchens.

    That’s really all you need to produce a credible report, instead I’m left sifting through endless addendum’s on how the appraiser is not a home inspector, cannot certify Title and is not responsible for Septic/Wells and under ground oil tanks.  FYI, that is all covered in the limiting conditions, which I find most appraiser’s have never actually read.

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    • Bill Johnson says:

      The 2nd point you bring up BC is often very confusing for the lenders, AMC’s etc. The general neighborhood trend can and often should vary from what is reported in the MC form as one contains general neighborhood data while the other contains a narrowed down property specific search parameters. In my area prices have been stabilizing over the past 6 months (short term) but have significantly increased over the past 6 to 36 months (long term). The difficulty in understanding the data is because we can use the short term trends to justify no positive time adjustments for our comps, while at the same time use long term trends to explain the subjects increase in value within the 36 month sales history. Lenders and AMC’s don’t want the truth as they simply want everything to match so that they can check a box and move down their checklist.

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  4. bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

    i fail to see the reasoning behind regurgitating the same information over and over again.

    a few years ago i appraised a property that clearly showed in  the rear photo that there was not a built-in swimming pool in the backyard. my aerial photo clearly showed that there was not a built-in swimming pool in the back yard. i did not check the box in the report that the subject property had a pool of any kind. yet, a few days later i got a revision request from an idiot reviewer asking me among other things, to explain why i didnt mark that subject property had a built-in pool! REALLY? it was necessary that i had explain that i didnt mark that the subject property had a built-in pool because the subject property didnt have a built-in pool?

    this article reminds me of that kind of nonsense.

    lets look at a few examples.

    “Assignment is for a refinance; thus no contract.”

    WELL DUH.

    “No listings were found”.

    if the top of page two shows all ZEROS for listings found, WELL DUH.

    “Appraiser has/has not performed . . .”

    this is already covered in the required “USPAP Addendum” page. WELL DUH.

    why is it that appraisers will moan and groan about reports taking a lot longer to complete, yet want to make more work for themselves by typing in information that is already in the report? same goes for reviewers and banks – stop asking appraisers for information that is are already in the report, then seconds later moan and groan about why it takes so long to get a report.

    WELL DUH.

    all i see is a couple useful sentences in the addendum above. the rest is nothing but disclaimers and regurgitation. it makes absolutely no sense for appraisers to complain about their ever-growing and time-consuming massive reports, then turn around and spend more time adding more addendum pages full of repetitive verbal diarrhea into their reports, covering information that has already been covered in the report.

    lets face it, no matter how much appraisers explain, there will always be some knucklehead who will request more information and explanation, and most of the time, its only going to be a request to justify their existence.

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  5. JH JH says:

    Is it o.k. if I label mine as temporary day labor disposable hero addenda? /  I’ve had the addenda you’ve spoken of in reports for years, and it does not matter one iota, when it comes to middle management assignment process.

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  6. Mike Ford Mike Ford says:

    Dave, I like your posts and articles but we are 180 degrees apart on this one. Not only ‘no’, but HELL NO!

    The original appraisal report form (URAR) was INTENDED to summarize necessary information in an easy to read format and common sense flow. Those same whiney so and so’s from the lenders that you spoke with are the reason the form no longer makes any sense. Constant tinkering and demands for more over the years without changing the form and giving us a basis for contesting the additional work. THEY wanted to pretend that each new tidbit of info they required over the years “didn’t really add that much work” for us (hence no need for higher fees).

    The solution is NOT for me to increase my report size, but for the ‘whining end users’ to design a single new form that suits ALL their needs without being too complicated for them to read! Of course, once they do that; all the individual lenders will start tweaking THAT form until it makes little sense too!

    My last DESK REVIEW report that I did was 49 pages. My average SFR ranges from around 45 to 80 pages depending on complexity. I’m sorry THEY don’t want to read that much. Maybe THEY should look for other work if doing THEIR jobs is too difficult for them. I put the data I believe I need to put in order to defend myself against some silly ass at the clients, OR State Board. I do THAT in response to the ever increasing risks THEY expose me to by bad lending and appraisal management policies.

    Executive summary? No. THAT will then become a basis for even MORE stupid questions from idiots too lazy to read the entire report. Glad you had fun though!

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  7. Tom D says:

    i want an executive summary form my doctor, plumber, car mechanic, attorney, and especially from every politician.  say what, you want how much per hour for that?  say what, you fixed the problem, why should you explain what you didn’t have to do to fix it.?  say what, you can do, or say, whatever lie you need to to be elected again.  somebody get me off this cruise of the damned.

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  8. Bubba Jay / Retired Appraiser II Bubba Jay / Retired Appraiser II says:

    i have been thinking about this and i think all bloggers should start posting responses the same way the author of this article proposes appraisers write their reports.

    —————————————

    we need plenty of disclaimers and repetitive diarrhea in every post. my disclaimer:

    This product is meant for educational purposes only. Any resemblance to real persons, living or dead is purely coincidental. Void where prohibited. Some assembly required. List each check separately by bank number. Batteries not included. Contents may settle during shipment. Use only as directed. No other warranty expressed or implied. Do not use while operating a motor vehicle or heavy equipment. Postage will be paid by addressee. Subject to CAB approval. This is not an offer to sell securities. Apply only to affected area. May be too intense for some viewers. Do not stamp. Use other side for additional listings. For recreational use only. Do not disturb. All models over 18 years of age. If condition persists, consult your physician. No user-serviceable parts inside. Freshest if eaten before date on carton. Subject to change without notice. Times approximate. Simulated picture. No postage necessary if mailed in the United States. Please remain seated until the ride has come to a complete stop. Breaking seal constitutes acceptance of agreement. For off-road use only. As seen on TV. One size fits all. Many suitcases look alike. Contains a substantial amount of non-tobacco ingredients. Colors may, in time, fade. We have sent the forms which seem right for you. Slippery when wet. For office use only. Not affiliated with the American Red Cross. Drop in any mailbox. Edited for television. Keep cool; process promptly. Post office will not deliver without postage. List was current at time of printing. Return to sender, no forwarding order on file, unable to forward. Not responsible for direct, indirect, incidental or consequential damages resulting from any defect, error or failure to perform. At participating locations only. Not the Beatles. Penalty for private use. See label for sequence. Substantial penalty for early withdrawal. Do not write below this line. Falling rock. Lost ticket pays maximum rate. Nap was here. Your canceled check is your receipt. Add toner. Place stamp here. Avoid contact with skin. Sanitized for your protection. Be sure each item is properly endorsed. Sign here without admitting guilt. Slightly higher west of the Mississippi. Employees and their families are not eligible. Beware of dog. Contestants have been briefed on some questions before the show. Limited time offer, call now to ensure prompt delivery. You must be present to win. No passes accepted for this engagement. No purchase necessary. Processed at location stamped in code at top of carton. Shading within a garment may occur. Use only in a well-ventilated area. Keep away from fire or flames. Replace with same type. Approved for veterans. Booths for two or more. Check here if tax deductible. Some equipment shown is optional. Price does not include taxes. No Canadian coins. Not recommended for children. Prerecorded for this time zone. Reproduction strictly prohibited. No solicitors. No alcohol, dogs or horses. No anchovies unless otherwise specified. Restaurant package, not for resale. List at least two alternate dates. First pull up, then pull down. Call toll free number before digging. Driver does not carry cash. Some of the trademarks mentioned in this product appear for identification purposes only. Objects in mirror may be closer than they appear. Record additional transactions on back of previous stub. Unix is a registered trademark of AT&T. Do not fold, spindle or mutilate. No transfers issued until the bus comes to a complete stop. Package sold by weight, not volume. Your mileage may vary. If the flow controls supplied are not installed, this unit will not operate properly. Keep out of reach of children. When this set is used with other equipment, if the picture is not stable or the buzz sound is heard, try to change the mutual position of relevant equipment or take enough distance between them. This unit not labeled for retail sale. Phenylketonurics: contains phenylalanine. Close cover before striking. Mind the gap. No merchantability expressed or implied. Parental discretion is advised. Sold as a novelty item only. Although robust enough for general use, adventures into the esoteric periphery may reveal unexpected quirks. Not available in stores. May cause abdominal cramping and loose stools. Vitamins A, D, E, and K have been added. Not designed or intended for use in on-line control of aircraft, air traffic, aircraft navigation or aircraft communications; or in the design, construction, operation or maintenance of any nuclear facility. Container may explode if heated. May contain traces of various nuts and seeds.
    This supersedes all previous notices.

    —————————-

    FURTHERMORE, i have been thinking about this and i think all bloggers should start posting responses the same way the author of this article proposes appraisers write their reports.

    —————————————

    we need plenty of disclaimers and repetitive diarrhea in every post. my disclaimer:

    This product is meant for educational purposes only. Any resemblance to real persons, living or dead is purely coincidental. Void where prohibited. Some assembly required. List each check separately by bank number. Batteries not included. Contents may settle during shipment. Use only as directed. No other warranty expressed or implied. Do not use while operating a motor vehicle or heavy equipment. Postage will be paid by addressee. Subject to CAB approval. This is not an offer to sell securities. Apply only to affected area. May be too intense for some viewers. Do not stamp. Use other side for additional listings. For recreational use only. Do not disturb. All models over 18 years of age. If condition persists, consult your physician. No user-serviceable parts inside. Freshest if eaten before date on carton. Subject to change without notice. Times approximate. Simulated picture. No postage necessary if mailed in the United States. Please remain seated until the ride has come to a complete stop. Breaking seal constitutes acceptance of agreement. For off-road use only. As seen on TV. One size fits all. Many suitcases look alike. Contains a substantial amount of non-tobacco ingredients. Colors may, in time, fade. We have sent the forms which seem right for you. Slippery when wet. For office use only. Not affiliated with the American Red Cross. Drop in any mailbox. Edited for television. Keep cool; process promptly. Post office will not deliver without postage. List was current at time of printing. Return to sender, no forwarding order on file, unable to forward. Not responsible for direct, indirect, incidental or consequential damages resulting from any defect, error or failure to perform. At participating locations only. Not the Beatles. Penalty for private use. See label for sequence. Substantial penalty for early withdrawal. Do not write below this line. Falling rock. Lost ticket pays maximum rate. Nap was here. Your canceled check is your receipt. Add toner. Place stamp here. Avoid contact with skin. Sanitized for your protection. Be sure each item is properly endorsed. Sign here without admitting guilt. Slightly higher west of the Mississippi. Employees and their families are not eligible. Beware of dog. Contestants have been briefed on some questions before the show. Limited time offer, call now to ensure prompt delivery. You must be present to win. No passes accepted for this engagement. No purchase necessary. Processed at location stamped in code at top of carton. Shading within a garment may occur. Use only in a well-ventilated area. Keep away from fire or flames. Replace with same type. Approved for veterans. Booths for two or more. Check here if tax deductible. Some equipment shown is optional. Price does not include taxes. No Canadian coins. Not recommended for children. Prerecorded for this time zone. Reproduction strictly prohibited. No solicitors. No alcohol, dogs or horses. No anchovies unless otherwise specified. Restaurant package, not for resale. List at least two alternate dates. First pull up, then pull down. Call toll free number before digging. Driver does not carry cash. Some of the trademarks mentioned in this product appear for identification purposes only. Objects in mirror may be closer than they appear. Record additional transactions on back of previous stub. Unix is a registered trademark of AT&T. Do not fold, spindle or mutilate. No transfers issued until the bus comes to a complete stop. Package sold by weight, not volume. Your mileage may vary. If the flow controls supplied are not installed, this unit will not operate properly. Keep out of reach of children. When this set is used with other equipment, if the picture is not stable or the buzz sound is heard, try to change the mutual position of relevant equipment or take enough distance between them. This unit not labeled for retail sale. Phenylketonurics: contains phenylalanine. Close cover before striking. Mind the gap. No merchantability expressed or implied. Parental discretion is advised. Sold as a novelty item only. Although robust enough for general use, adventures into the esoteric periphery may reveal unexpected quirks. Not available in stores. May cause abdominal cramping and loose stools. Vitamins A, D, E, and K have been added. Not designed or intended for use in on-line control of aircraft, air traffic, aircraft navigation or aircraft communications; or in the design, construction, operation or maintenance of any nuclear facility. Container may explode if heated. May contain traces of various nuts and seeds.
    This supersedes all previous notices.

    ————————

    I WOULD ALSO LIKE TO ADD, i have been thinking about this and i think all bloggers should start posting responses the same way the author of this article proposes appraisers write their reports.

    —————————-

    we need plenty of disclaimers and repetitive diarrhea in every post. my disclaimer:

    This product is meant for educational purposes only. Any resemblance to real persons, living or dead is purely coincidental. Void where prohibited. Some assembly required. List each check separately by bank number. Batteries not included. Contents may settle during shipment. Use only as directed. No other warranty expressed or implied. Do not use while operating a motor vehicle or heavy equipment. Postage will be paid by addressee. Subject to CAB approval. This is not an offer to sell securities. Apply only to affected area. May be too intense for some viewers. Do not stamp. Use other side for additional listings. For recreational use only. Do not disturb. All models over 18 years of age. If condition persists, consult your physician. No user-serviceable parts inside. Freshest if eaten before date on carton. Subject to change without notice. Times approximate. Simulated picture. No postage necessary if mailed in the United States. Please remain seated until the ride has come to a complete stop. Breaking seal constitutes acceptance of agreement. For off-road use only. As seen on TV. One size fits all. Many suitcases look alike. Contains a substantial amount of non-tobacco ingredients. Colors may, in time, fade. We have sent the forms which seem right for you. Slippery when wet. For office use only. Not affiliated with the American Red Cross. Drop in any mailbox. Edited for television. Keep cool; process promptly. Post office will not deliver without postage. List was current at time of printing. Return to sender, no forwarding order on file, unable to forward. Not responsible for direct, indirect, incidental or consequential damages resulting from any defect, error or failure to perform. At participating locations only. Not the Beatles. Penalty for private use. See label for sequence. Substantial penalty for early withdrawal. Do not write below this line. Falling rock. Lost ticket pays maximum rate. Nap was here. Your canceled check is your receipt. Add toner. Place stamp here. Avoid contact with skin. Sanitized for your protection. Be sure each item is properly endorsed. Sign here without admitting guilt. Slightly higher west of the Mississippi. Employees and their families are not eligible. Beware of dog. Contestants have been briefed on some questions before the show. Limited time offer, call now to ensure prompt delivery. You must be present to win. No passes accepted for this engagement. No purchase necessary. Processed at location stamped in code at top of carton. Shading within a garment may occur. Use only in a well-ventilated area. Keep away from fire or flames. Replace with same type. Approved for veterans. Booths for two or more. Check here if tax deductible. Some equipment shown is optional. Price does not include taxes. No Canadian coins. Not recommended for children. Prerecorded for this time zone. Reproduction strictly prohibited. No solicitors. No alcohol, dogs or horses. No anchovies unless otherwise specified. Restaurant package, not for resale. List at least two alternate dates. First pull up, then pull down. Call toll free number before digging. Driver does not carry cash. Some of the trademarks mentioned in this product appear for identification purposes only. Objects in mirror may be closer than they appear. Record additional transactions on back of previous stub. Unix is a registered trademark of AT&T. Do not fold, spindle or mutilate. No transfers issued until the bus comes to a complete stop. Package sold by weight, not volume. Your mileage may vary. If the flow controls supplied are not installed, this unit will not operate properly. Keep out of reach of children. When this set is used with other equipment, if the picture is not stable or the buzz sound is heard, try to change the mutual position of relevant equipment or take enough distance between them. This unit not labeled for retail sale. Phenylketonurics: contains phenylalanine. Close cover before striking. Mind the gap. No merchantability expressed or implied. Parental discretion is advised. Sold as a novelty item only. Although robust enough for general use, adventures into the esoteric periphery may reveal unexpected quirks. Not available in stores. May cause abdominal cramping and loose stools. Vitamins A, D, E, and K have been added. Not designed or intended for use in on-line control of aircraft, air traffic, aircraft navigation or aircraft communications; or in the design, construction, operation or maintenance of any nuclear facility. Container may explode if heated. May contain traces of various nuts and seeds.
    This supersedes all previous notices.

    ———————–

    LOL.
    the bleeding continues . . . . .

    LOL.

    the bleeding continues . . . . .

    LOL.

    the bleeding continues . . . . .

    wash, rinse, repeat.

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