The Alabama Real Estate Appraisers Board takes the
following position on the issue of Drive By Appraisals.
determination of the extent of inspection to be performed is the responsibility
of APPRAISER, not the CLIENT. The appraiser has the obligation and the responsibility to
determine the extent of inspection required.
Note: The Conduct Section of the
Ethics Provision states that An appraiser is required to avoid any action that
could be considered misleading or fraudulent. In particular, it is unethical for an appraiser to use or
communicate a misleading or fraudulent report, or to knowingly permit an
employee or other person to communicate a misleading or fraudulent report. USPAP, pg. 2 (1998 edition).
Standards of Professional Appraisal Practice (USPAP) Rule 2-3 requires the use
of the following statement or one similar in content. I have (or have not) made a personal inspection of the property
that is the subject of this report. (If
more than one person signs the report this certification must clearly specify
which individuals did and which individuals did not make a personal inspection
of the property). Departure from
this binding requirement is not permitted. USPAP, pg. 24 (1998 edition).
fee for the assignment of a drive-by inspection, where only an exterior
inspection is requested by the client, is often less than that for an
interior/exterior inspection based appraisal.
The fee for an appraisal should
never be the determining factor in the dept of preparation of an appraisal
report. The decision as to whether
both an interior and exterior inspection or just an exterior inspection is
necessary to properly complete an appraisal is the appraisers decision alone
and cannot be dictated by the client.
An appraiser accepting a job
from a client who only requests an exterior inspection of the subject property
must document, in the appraisal file, that an interior inspection was
unnecessary to properly complete the appraisal.
Should an exterior inspection, combined with other reliable data, failed
to provide sufficient information to perform the appraisal, the appraiser has a
duty to perform an interior inspection or to withdraw from the assignment. It is the appraisers job alone to determine
the amount of inspection necessary to properly complete an appraisal.
The Alabama Real Estate Appraisers Board will allow
appraisals completed with exterior only or drive-by type subject property
inspections, such as those reported on Fannie Mae Forms 2055 and 2065 and
Freddie Mac Form 704, as long as they comply with USPAP requirements. It is the responsibility of each individual
appraiser to decide if the scope of the appraisal assignment can be performed
without an interior inspection of the property and still meet the USPAP
that the documentation and market data requirements, as well as the liability
incurred in the preparation of these reports is not lessened with the use of
these forms. Complete documentation
must be maintained in the appraisers file if not reported on the forms
used. For this reason, the Board strongly suggests that all
appraisers include a written statement of their rationale for the omission of
an interior inspection in each appraisal file where only an exterior or
drive-by inspection was completed.
Each appraiser should read and understand the Advisory
Opinion AO-2 found on page 97 of the 1998 addition of USPAP.