Checklist: What to Include in a Narrative Appraisal Report

Real estate appraiser writing a narrative appraisal report

Report writing is an essential step in the appraisal process. Want a quick breakdown of everything that belongs in a narrative appraisal report? Here’s an outline of the items that should appear in your report. Although you may not find it necessary to include every single item, you can use this as a checklist of topics to at least consider including in your report.

  • Title Page
  • Cover (Transmittal) Letter
  • Table of Contents
  • Appraisal Summary or Summary of Salient Facts
  • USPAP Requirements
    • Appraiser’s signed certification in accordance with USPAP Standards Rule 2-3
    • Appraisal report type (Appraisal Report or Restricted Appraisal Report)
    • Client/intended users (identify by name or type)
    • Intended use of the report (e.g., for mortgage financing purposes or tax assessment appeal purposes)
    • Identification/brief description of the property appraised
    • Real property interest appraised (e.g., fee simple, leased fee, etc.)
    • Type and definition of value (be sure to cite the source of the definition)
    • Effective date of the appraisal
    • Date of the report
    • Use of the real estate as of the effective date of value and the use of the real estate reflected in the appraisal report
    • Problem statement (i.e., the problem to be solved)
    • Scope of work (describe and explain)
    • Explanation of any significant real property appraisal assistance provided
    • Highest and best use analysis (can be included here or later)
    • All extraordinary assumptions or hypothetical conditions (remember to include a statement to the effect that their use may have affected assignment results)
    • Property sales history (summarize)
    • Confirm whether the property is currently listed for sale or not
    • Confirm if the property has been sold within the last three years (and if so, describe the impact of those sales or current listing on value)
  • Location and Surroundings
    • Macro description
    • Micro description
    • Immediate Neighborhood-Vicinity description (if not included in the micro section)
  • Site/Lot Description
  • Improvements/Building Description
  • The Three Approaches to Value
    • Explanation of what the Sales Comparison, Cost, and Income Capitalization Approaches to Value are and why and how they are used by an appraiser in developing the opinion of value (this should explain the appraisal valuation process)
    • Description of the information analyzed, the appraisal methods and techniques employed, the reasoning that supports the analyses, and opinions and conclusions as required by USPAP Standards Rule 2-2 (a) (viii)
    • If the use of one or more of the three approaches to value is not appropriate, explain the exclusion(s) as well
  • Reconciliation of Final Value
  • Value Conclusion and Final Opinion of Value
  • Appraiser’s signature
  • Addendum (not an exhaustive list); some or all of these items also may be included in the body of the report:
    • General assumptions and limiting conditions
    • Appraiser’s professional resume
    • Maps (macro and micro) of the subject location
    • Photographs:
      • Subject – aerial
      • Subject’s exterior and interior
      • Subject’s neighborhood and surroundings – aerial
      • Comparables used in the sales comparison approach and clearly labeled
      • Comparable properties surveyed and used for rent comparison purposes in the income capitalization approach and clearly labeled
    • Meaningful statistics (e.g., population, news articles, economic data, internet searches, etc.)
    • Applicable zoning map
    • Applicable pages of the zoning ordinance
    • Appropriate FEMA flood zone map
    • Legal description of the site
    • Reduced site and building plans or sketches
    • Financial statements or information of major property tenants
    • Leases and/or lease summaries

When writing a narrative appraisal report, you can use this outline as a checklist to ensure that you at least consider the appropriateness of including every topic. You may not find it necessary to include every item. Each item that you include need not be covered to the same extent. Some issues may be explained sufficiently in a paragraph or two, while others may require several pages.

Editor’s note: This post was originally published on June 23, 2020 and updated in May 2023.

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