Posted 12-3-07

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Disclosures When Making Use of the Online Appraisal

• A disclosure in the USPAP certification statement that the property was not personally inspected by the appraiser. As an example:

I have not made a personal inspection of the property that is the subject of this report.

• An explanation within the appraisal report's scope of work of why the property was not inspected, a description of the assumptions that therefore had to be made by the appraiser, and a disclosure of the possible impact on value conclusions should those assumptions later prove to have been inaccurate. Below are three typical scenarios in which online Internet appraisals are commonly used. Each is accompanied with an example of an appraiser’s disclosure statement. The statements are very similar — varying only in the method they address the specific scenario.
  • Scenario 1: Restricted use report. The client needs an appraisal of property that is in his possession for personal reasons. Perhaps he wants to sell the property to a private party, or maybe he wants to determine property values in order to make an equitable distribution amongst heirs. The client might instruct the appraiser to limit his scope of work. For example, the client might instruct the appraiser to forgo detailed descriptions or authentication processes as the client is already aware of that information and only needs the appraiser to document value. The client feels that such a limiting of the scope of work will save time and expense.

    This appraisal was conducted making use of digital images and written descriptions provided by the client. I did not make a personal inspection of the property that is the subject of this report. Should certain views of the subject property not be visible in the client-provided photographs, I made the assumption that there existed no significant condition problems in those unseen areas unless otherwise commented on by the client in the descriptions he provided. I have also made the assumption that the descriptive information provided by the client was accurate. Due to this assignment's restricted use nature and associated limited scope of work (including the client's concurrence that a personal inspection was not required) and due to my familiarity with the type of item being appraised, I consider an appraisal based on the use of client-provided images and descriptions of the property as adequate for me to arrive at a credible opinion of fair market value. Assignment results could vary should the assumptions made be inaccurate.

  • Scenario 2: Summary appraisal report. An insurance company states that they will accept an online appraisal for the purpose of the client obtaining insurance coverage for items currently in his possession.

    This appraisal was conducted making use of digital images and written descriptions provided by the client. I did not make a personal inspection of the property that is the subject of this report. The client reports that his insurance company stated that they will accept an online replacement value appraisal (which is without a personal inspection by the appraiser and which is based only on client-provided digital photographs and written descriptions of the property) as proof of worth for obtaining insurance coverage for the items listed herein. Should certain views of the subject property not be visible in the client-provided photographs, I made the assumption that there existed no significant condition problems in those unseen areas unless otherwise commented on by the client in the descriptions he provided. I have also made the assumption that the descriptive information provided by the client was accurate. Due to my familiarity with the type of property being appraised, I consider an appraisal based on the use of client-provided images and descriptions as adequate for me to arrive at a credible opinion of value. Assignment results could vary should the assumptions made be inaccurate.

  • Scenario 3: Summary appraisal report. An item is damaged or lost. The client requires a replacement value appraisal for claims settlement purposes. The insurance or moving company claims adjuster agrees to accept an online appraisal report as proof of worth.

    This appraisal was conducted making use of digital images and written descriptions provided by the client. I did not make a personal inspection of the damaged (lost) property that is the subject of this report. The client stated that his insurance company will accept a replacement value appraisal (which is without a personal inspection by the appraiser and which is based only on client-provided digital photographs and written descriptions of the property) as proof of worth for the items listed herein for assisting in the insurance claims process. Should certain views of the subject property not be visible in the client-provided photographs, I made the assumption that there existed no significant condition problems in those unseen areas unless otherwise commented on by the client in the descriptions he provided. I have also made the assumption that the descriptive information provided by the client was accurate. Due to my familiarity with the type of property being appraised, I consider an appraisal based on the use of client-provided images and descriptions as adequate for me to arrive at a credible opinion of value. Assignment results could vary should the assumptions made be inaccurate.