THE APPRAISAL PROCESS AND METHODS
USPAP Standards 1 and 2 guide the appraiser through the appraisal process. Standard 1 covers all of the
development activities that are distinctly different from the final step, reporting, which is covered in
Standard 2.
The following summarizes the appraisal process required in Standard 1:
A. Define the appraisal problem
1. Identify the client and intended users
2. Identify the intended use
3. Identify the type and definition of value
4. Determine effective date of the opinion
5. Identify the relevant characteristics of the subject property
6. Identify assignment conditions (Extraordinary assumptions and hypothetical conditions)
B. Determine the scope of work necessary to solve the appraisal problem
C. Perform data collection and analysis
1. Market analysis (demand studies, supply studies, marketability studies)
2. Highest and best use analysis (site as though vacant, ideal improvement, property as improved)
D. Application of the approaches to value
1. Cost
2. Sales Comparison
3. Income
E. Reconciliation of value indications and final opinion of value
Standard 2 sets forth the actual reporting of the value opinion. USPAP defines the report as: “Any
communication, written or oral, of an appraisal, appraisal review, or appraisal consulting service that is
transmitted to the client upon completion of the assignment.” Standard 2 covers the final step in the appraisal
process and addresses both the reporting and communication.