Sequence and Relationship of Action Steps Required by Standards Rule 1-2 in a Real Property Appraisal (AO-22)

Competency and the Scope of Work Decision - Accomplishing the first four action steps (Standards Rules 1-2(a) and (d)) illustrated in the table provides the basis for deciding which of the property’s characteristics are relevant in the assignment. This information, together with the appraiser’s competency (knowledge and expertise) in appraising the specific type of property involved, permits the appraiser to determine whether any extraordinary assumptions or hypothetical conditions are necessary to complete the assignment and to make a reasonable and supportable scope of work decision.

It is important to note here that the appraiser’s competency in performing similar assignments is a key factor in the scope of work decision. Without competency, the appraiser is not prepared to correctly interpret the information gathered in response to Standards Rules 1-2(a) -(e) or to make well reasoned decisions based on that information in response to the requirements set forth in Standards Rules 1-2(f)-(h). Moreover, without competency, the appraiser is not aware of or capable of understanding how the information gathered in compliance with Standards Rules 1-2(a)-(e) and the conclusions formed in compliance with Standards Rules 1-2(f) and (g) affect the decision about which of the analyses steps set forth in Standards Rules 1-3 and 1-4 are necessary in an assignment.

Understanding which analyses, methods and techniques are necessary and what data are necessary to correctly complete the analyses is an integral part of the scope of work decision. This decision cannot be made competently without understanding how the “conditions” in a market value definition work together with the other factors identified in compliance with Standards Rule 1-2 to determine what kind of data are relevant and which types of analyses are applicable and necessary in the assignment.

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