Types of Appraisals

Real estate appraisals can be classified in several ways. Most residential appraisals are completed in a form report, where the appraiser fills in the various sections of a form that has been standardized to meet the needs of the lending community. These forms have evolved over the years and are now typically transmitted in paper, pdf or xml formats. Different forms are available for single-family residences, condominiums, cooperative apartments, drive-by residential, 2 to 4 unit apartments, 5 apartment units or more, field reviews and desk reviews.

Most commercial appraisals are completed in a narrative format, where the appraiser creates a word processing document with incorporated photographs, maps, grids and other exhibits. The narrative format is flexible and can be modified for a variety of property types. It can also be lengthened or shortened, depending upon the reporting needs of the client and the use of the report.

A common report that is utilized for commercial appraisals is the summary narrative report. This report adequately describes the geographic area, the market, the subject property, the highest and best use, and analyzes the value through the three approaches to value, the Sales Comparison Approach, the Income Approach and the Cost Approach. This type of report is typically useful to lenders, courts, government agencies and individuals and organizations that need this level of reporting.

A restricted report is a shortened report that is sometimes used for commercial appraisals. A restricted report may have an abbreviated description of the area, market, property and highest and best use. Although fully analyzed, many of the details are kept in the appraiser’s files. This type of report is typically useful for individuals who need to know the value of a property for internal decision-making purposes.