Property Assessment (Evaluation Report)
Are your property valuations consistent with the most recent Interagency Appraisal and Evaluation Guidelines?
All financial institutions are advised to review appraisal and evaluation procedures.
The Interagency Appraisal and Evaluation Guidelines require financial institutions to verify the collateral suitability via a detailed property condition and evaluation report to support value conclusions on all subject properties. Automated Valuation Models (AVM), Tax Assessment Values (TAV) or a Brokers Price Opinion (BPO) are no longer acceptable alone. Institutions must have a verified physical condition of the subject premises.
According to the Guidelines, the evaluation should contain, at a minimum:
- The location of the property
- Description of the property and its current and projected use
- Estimate of the property’s market value in its actual physical condition, use and zoning designation as of the effective date of the evaluation (that is, the date that the analysis was completed), with any limiting conditions
- Description of the method(s) the institution used to confirm the property’s actual physical condition and the extent to which an inspection was performed
- Description of the analysis performed and the supporting information that was used in valuing the property
- Description of the supplemental information considered when using an analytical method or technological tool
- Indication of all source(s) of information used in the analysis, as applicable, to value the property, including:
- External data sources
- Property-specific data
- Evidence of a property’s current condition
- Photos of the property
- Description of the neighborhood
- Local market conditions