Executive Summary in Appraisal Reports
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.