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USPAP and What’s Omitted? What does that mean? Really, we mean what’s omitted from your appraisal and report. It is true, you should omit very little from the appraisal, as well as from the report. Why? A sale is not a comparable sale unless it has the same highest and best use as the subject. So, appraisers cannot omit those analyses. How about neighborhood analysis? Fannie Mae wants answers to thirty-six questions about the neighborhood. There is nothing about the neighborhood the appraiser can omit from the appraisal or the report. USPAP’s SR1-6 calls for a complete reconciliation. So, no, the appraiser cannot omit that, either. Then, just what can the appraiser omit?
USPAP and What’s Omitted refers to unnecessary stuff. What is unnecessary stuff in a real estate appraisal and report? You can probably omit the analyses of the Income Approach if you’re appraising your basic cookie-cutter house (although not always). Most assuredly, you do not need a level-C or -D market analysis to appraise credible a single family residence. According to USPAP, you can omit pictures, too, since there is nothing in that document calling for them to be part of the appraisal or the report. So, yes, there is stuff you can reliably omit from your typical GSE appraisal. But let’s also talk about omitting the really necessary stuff.
Read your report carefully, please. USPAP and What’s Omitted refers to stuff you should not omit from the appraisal or the report. When you listen to this podcast, pay attention to what the State of Alabama did. This appraiser chose to omit from the report a summary for the analyses and market support behind all the adjustments. Omission of these analyses and rendered the appraisal not credible and the report misleading. To omit something this simple violated USPAP.