Large Bank Supervision Forum 2023

Competency: Interagency Appraisal Guidelines – Dec 10, 2010 IAG & USPAP are a Bank’s “go-to resources” on appraisal matters … Until PAREA!

Each appraisal must contain an estimate of market value, as defined by the Agencies’ appraisal regulations. The definition of market value assumes that the price is not affected by undue stimulus, which would allow the value of the real property to be increased by favorable financing or seller concessions. Value opinions such as ‘‘going concern value,’’ ‘‘value in use,’’ or a special value to a specific property user may not be used as market value for federally related transactions. An appraisal may contain separate opinions of such values so long as they are clearly identified and disclosed. The estimate of market value should consider the real property’s actual physical condition, use, and zoning as of the effective date of the appraiser’s opinion of value. For a transaction financing construction or renovation of a building, an institution would generally request an appraiser to provide the property’s current market value in its ‘‘as is’’ condition, and, as applicable, its prospective market value upon completion and/or prospective market value upon stabilization.39

https://www.federalregister.gov/documents/2010/12/10/2010 ‐ 30913/interagency ‐ appraisal ‐ and ‐ evaluation ‐ guidelines

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