Standards Rule 4-2

In developing real property appraisal consulting assignment results, an appraiser must:
 

(a)

identify the client and other intended users;(note49)
 

(b)

identify the intended use of the appraisal consulting assignment results;(note50)
 

(c)

identify:
 

(i)

the analysis, recommendation or opinion to be developed; and

(ii)

the type and definition of value developed in the appraisal(s) that is a necessary component of an analysis supporting the appraisal consulting assignment results;

Comment: If the applicable type and definition of value is market value, ascertain whether that value is to be the most probable price:

• in terms of cash; or

• in terms of financial arrangements equivalent to cash; or

• in other precisely defined terms; and

• if the opinion of value is to be based on non-market financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraiser’s opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data.

(d)

identify the effective date of the appraisal consulting assignment results;(note51)
 

(e)

identify the physical, legal, and economic characteristics of the property, properties, property type(s), or market area that are relevant(note52) to:
 

(i)

the analysis, recommendation or opinion to be developed in the appraisal consulting assignment; and

(ii)

an opinion of value that is a necessary component of an analysis supporting the appraisal consulting assignment results;

(f)

identify any extraordinary assumptions necessary in the appraisal consulting assignment and in developing the opinion(s) of value necessary to support the appraisal consulting assignment results;

Comment: An extraordinary assumption may be used in an assignment only if:

• it is required to properly develop credible opinions and conclusions;

• the  appraiser has a reasonable basis for the extraordinary assumption;

• use of the extraordinary assumption results in a credible analysis; and

• the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions.

(g)

identify any hypothetical conditions necessary in the appraisal consulting assignment and in developing the opinion(s) of value necessary to support the appraisal consulting assignment results; and

Comment: A hypothetical condition may be used in an assignment only if:

• use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison;

• use of the hypothetical condition results in a credible analysis; and

• the appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions.

(h)

determine the scope of work necessary to produce credible assignment results in accordance with the SCOPE OF WORK RULE,(note53) including:

(i)

 the appraisal consulting methods and techniques to be employed,  and

(ii)

 the research and analysis required to:

• ascertain the relevance and credibility of an opinion of value obtained from a source other than the appraiser performing the appraisal consulting assignment, or

• develop an opinion of value that is a necessary component of an analysis supporting the appraisal consulting assignment results; 

Comment: An appraiser must ensure that any opinion of value used in an appraisal consulting assignment was developed in compliance with STANDARD 1.

If an opinion of value used in a real property appraisal consulting assignment is from a source other than the consulting appraiser, the assignment may include a review, prepared in compliance with STANDARD 3, of that appraisal. Alternatively, the appraiser may accept an appraisal from another source using an extraordinary assumption in the appraisal consulting assignment, provided that all conditions necessary to use such an extraordinary assumption are fulfilled.

If the opinion of value is from an appraisal developed by the appraiser performing the real property appraisal consulting assignment, the appraiser must complete the steps set forth in STANDARD 1.