Minimum Level of Inspection (A-02)

An inspection is not required by USPAP, but one is often conducted.

The extent of the inspection process is an aspect of the scope of work, and may vary based on assignment conditions and the intended use of the assignment results.(note2)  It is the appraiser’s responsibility to determine the appropriate scope of work, including the degree of inspection necessary to produce credible assignment results given the intended use.  

Every assignment is subject to conditions that limit, in one way or another, the inspection of the subject property.  Regardless of the detail one employs, it is always possible to perform an inspection that is more thorough. The appraiser’s inspection commonly is limited to those things readily observable without the use of special testing or equipment.

An appraiser may use any combination of property inspection, plans and specifications, asset records, photographs, property sketches, recorded media, etc., to gather information about the relevant characteristics of the subject property.(note3)  For some assignments, it may be necessary to rely on reports prepared by other professionals. In such cases the appraiser must comply with USPAP requirements related to reliance on work done by others.

There are many circumstances that influence the extent of the appraiser’s property inspection. In some assignments, the client may request that the appraiser perform an exterior-only inspection from the street or perform no inspection of the subject property (i.e. a “desktop appraisal”). There are situations where inspection of the subject property is not possible; for example, if the improvements have been destroyed, removed, or not yet built.  In other cases the appraiser is denied access to the property.

The appraiser must ensure that the degree of inspection is adequate to develop a credible appraisal. An appraiser cannot develop a credible appraisal if adequate information about the relevant characteristics of the subject property is not available. When adequate information about relevant characteristics is not available through a personal inspection or from sources the appraiser believes are reliable, an appraiser must withdraw from the assignment unless the appraiser can:

• modify the assignment conditions to expand the scope of work to include gathering the necessary information; or

• use an extraordinary assumption about such information, if credible assignment results can still be developed.

An inspection conducted by an appraiser is usually not the equivalent of an inspection by an inspection professional (e.g., a structural engineer, a licensed home inspector, a Renaissance art expert). An appraiser’s observations must, at the minimum, be thorough enough to properly develop the appraisal and adequately report the relevant characteristics. Regardless of how the information is gathered, it must be sufficient for the development of relevant analyses, such as highest and best use, the application of the approaches, etc.

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