(FAQs regarding Report content is organized by Report pages 1- 7)
Answers about the contents of the Worldwide ERC® Summary Appraisal Report were provided by the following form authors during Q&A sessions of previously held webinars:
- Jay K. Delich, SCRP, SRA, IFA, Arizona Appraisal Team, LLC
- Arnold M. Schwartz, SCRP, SRA, Arnold M. Schwartz & Associates
- Alvin (Chip) Wagner, III, SCRP, SRA, A.L. Wagner Appraisal Group Inc.
Q. Regarding the Extraordinary Assumption on page 1 of the Worldwide ERC® Summary Appraisal Report, should the date of appraisal inspection and date of value opinion always be a different date?
Q. What is the purpose of the Extraordinary Assumption: “The Anticipated Sales Price assumes that no physical changes have occurred to the subject property between the Date of Appraisal Inspection and the Date of Value Opinion. The use of this assumption may affect the assignment results.”
Q. What should the appraiser do if the client requests no forecasting?
Q. Guideline 3 on page 1 of the Worldwide ERC® Summary Appraisal Report instructs the appraiser to adjust the sales prices of comparables for seller concessions to reflect a cash equivalent price. In addition, the guideline states, “These adjustments are not necessarily dollar for dollar and should reflect the impact on the sales price resulting from the concession.” How should adjustments be made for seller concessions when they are not dollar-for-dollar?
Q. If the subject property is not a condominium or a cooperative, should the appraiser leave the related section under the Subject Information section on page 2 of the report blank?
Q. Quite often in appraising condominiums, the management company of the property is either not willing to provide any information to the appraiser or, is only willing to do so if it is paid a fee. How should the appraiser address this type of situation?
Q. If the condominium management company is willing to provide the information needed by the appraiser, it might take up to 10 days for the appraiser to receive it which would adversely affect the timely transmittal of the Worldwide ERC® Summary Appraisal Report to the client. What do you suggest?
Q. What is the relevance of asking whether “market rate financing” is available for the condominium/cooperative in the Subject Information section on page 2 of the Worldwide ERC® Summary Appraisal Report? Isn’t the bigger question/concern whether the subject property has any advantageous financing available through the developer?
Q. What should the appraiser include for the subject property’s listing history within the Subject Information section on page 2 of the Worldwide ERC® Summary Appraisal Report?
Q. Within the Subject Information section on page 2 of the Worldwide ERC® Summary Appraisal Report, would “mandatory inspections” also apply to condominiums or cooperatives?
Description of Improvements
Q. Under the Description of Improvements on page 3 of the Worldwide ERC® Summary Appraisal Report, is there a difference between the subject property’s “actual age" and the "year built.”
Q. Please explain why “total room count” was eliminated from the Description of Improvements on page 3 of the 2010 version of the Worldwide ERC® Summary Appraisal Report.
Q. Under the Description of Improvements on page 3 of the Worldwide ERC® Summary Appraisal Report, the form asks if there is evidence of any apparent modifications. Why is this question included?
Q. Are decks, sheds, etc. to be considered modifications (i.e., additions) to the property?
Q. Under the Recommended Repairs and/or Improvements section on page 3 of the Worldwide ERC® Summary Appraisal Report, the appraiser is asked to indicate the priority of any recommended repairs and or improvements (i.e., “low,” “high,” or “critical”). Are the levels of priority for repairs/improvements related only to the marketability of the property or should other issues be considered?
Market Trends Analysis – Historic Trends
Q. Under Historic Trends, on page 4 of the Worldwide ERC® Summary Appraisal Report, please define “market segment” in terms of how it may differ from the "subject property’s neighborhood." What parameters do you use to arrive at subject's market segment?
Q. Under the Historic Trends section, on page 4 of the Worldwide ERC® Summary Appraisal Report, the first paragraph states, “In order to obtain a dependable quantity of data for analysis, the defined market segment may be different from the subject property’s neighborhood as defined on page 2.” What is a “dependable quantity” of data?
Q. In the Closed Sales Analysis on page 4 of the Worldwide ERC® Summary Appraisal Report, the appraiser is allowed to provide either the mean or median for the Sales Price and Days on Market for each appraiser defined time period. If one appraiser uses the mean and another uses the median, this may lead to questions when the reports are reviewed. Do you suggest one over the other?
Q. How should the “other” columns included within the Closed Sales Analysis on page 4 of the Worldwide ERC® Summary Appraisal Report be used?
Q. The Closed Sales Analysis grid on page 4 of the Worldwide ERC® Summary Appraisal Report asks the appraiser to identify the historic trend for various columns of data (e.g., “total number of closed sales,” “monthly absorption rate,” etc.). Should the appraiser check only one box (“increasing,” “decreasing,” “stable,” or “unstable”) to indicate the historic trend or, could two or more boxes be checked - e.g., decreasing and unstable, etc.?
Market Trends Analysis – Current Factors
Q. Under the Market Segment – Absorption Rate/Inventory Analysis section on page 4 of the Worldwide ERC® Summary Appraisal Report, the "no. of months supply of inventory" is good information. For the” appraiser defined time period” can appraisers consider several time periods, and give greater weight to the most recent period vs. considering only one time period?
Q. Can the appraiser consider pending sales in the Market Segment – Absorption Rate/Inventory Analysis section within the Current Trends section on page 4 of the Worldwide ERC® Summary Appraisal Report?
Market Trends Analysis – Current Factors
Q. How are we to know if a particular competing property is "realistically priced?”
Q. Many homes are over-listed and use of such listings may dilute the analysis. Should an appraiser ever consider omitting a listing if it is significantly overpriced?
Q. Some relocation appraisal providers require that appraisers show an indicated list price for each competing property by applying the same adjustments as applied to the comparable sales. Is this a recommended practice for the Worldwide ERC® Summary Appraisal Report?
Q. The Competing Properties grid on page 5 of the Worldwide ERC® Summary Appraisal Report asks only for “basement area” and not finish. How are appraisers to indicate the finish?
Q. What should the appraiser include in the report for the “assignment marketing period” if the client instructs that normal marketing time be used?
Q. How is the “market segment normal market time” determined? (This item appears on page 5 of the form under the Forecasted Trends section.)
Comparable Sales Analysis
Q. Where should the floor location for cooperatives and condominiums be shown in the Sales Comparison Analysis grid on page 6 of the form? This is important in certain market areas.
Q. How should net/gross adjustments exceeding a certain percentage be treated in the Worldwide ERC® Summary Appraisal Report?
Statement of Limiting Conditions, Extraordinary Assumption, and Appraiser Certification
Q. Where on the Worldwide ERC® Summary Appraisal Report should an appraiser address the USPAP requirement to disclose whether he or she has previously appraised the subject property?
General Questions about the Form
Q. How does the appraiser handle information that becomes available after the Date of Value Opinion?
Q. How does the 2010 Worldwide ERC® Summary Appraisal Report differ from the 2003 version?
Q. The 1004MC has an Market Research & Analysis section that I would like to attach to the Worldwide ERC® Summary Appraisal Report vs. completing the Market Trends Analysis on pages 4 and 5 of the Worldwide ERC® Summary Appraisal Report. Would this be appropriate to provide clients?
General Questions about Form and Guide Availability
How can I get a copy of The Worldwide ERC® Summary Appraisal Report?
When will the Worldwide ERC® Summary Appraisal Report be available for use?
Is the 2010 form offered by Worldwide ERC® licensed software providers?
For how long will Worldwide ERC® continue to support the 2003 version of the Summary Appraisal Report while clients and suppliers transition to the new form?
How can I get a copy of The Worldwide ERC® Relocation Appraisal Guide?
Is training available for the Worldwide ERC® Summary Appraisal Report?