AI Reports™
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AI Reports™ is a series of appraisal report forms being developed by the Appraisal Institute for use in a wide array of appraisal assignments, including insurance purposes, probate, litigation, and valuation for estate and financial planning. The first of these forms, the AI Reports™ Summary Appraisal Report • Residential, has been completed. The Appraisal Institute has arranged distribution of the form through a number of appraisal software companies, which have agreed to include the form in their product lines. Since early 2006, the AI Reports™ Summary Appraisal Report • Residential has been available via the software vendors listed on this page.
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AI Reports™ Summary Appraisal Report • Residential
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Available to all appraisers, the form is designed around the assignment parameters and the scope of work, which better defines to the client and reader of the report what factors the appraiser considered during the valuation process. These include:
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- Clear identification of intended use and intended user(s)
- Prominent incorporation of hypothetical conditions and extraordinary assumptions – concepts often omitted or understated in many residential assignments
- Stronger emphasis and clarity for scope of work
- Disclosure of persons inspecting
- Clear description of valuation methodologies used
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Highlights of the new AI Reports™ Summary Appraisal Report • Residential include:
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- Letter-size format – professional vs. legal look
- Focus on segmenting report sections to be included as relevant to the assignment
- Single-page sales comparison analysis, cost analysis and income analysis
- Refined limiting conditions and certification allowing for additional input
- Clear identification of the appraisal company in addition to the specific appraiser(s)
- E-mail and Web addresses of the appraiser and appraisal company
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The format allows the appraiser to tailor the report to fit the needs of the client. The core of the report is contained in the first and last two pages of the document. Pages 1 and 2 cover appraiser and property identification, reconciliation and conclusions, assignment parameters and scope of work. The last two pages cover the statement of assumptions and limiting conditions, value definition, certifications and signatures.
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Each section of the AI Reports™ Summary Appraisal Report • Residential includes an increased range of data elements collected and also provides ample space for the appraiser to add comments applicable to the assignment.
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Beyond AI Reports™ Summary Appraisal Report • Residential
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The AI Reports™ Project Team has identified the following additional types of report formats that will be addressed by their efforts:
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- Restricted Use Appraisal Report • Residential
- Summary Appraisal Report • Multifamily
- Summary Appraisal Report • Land
- Appraisal Review • Residential
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Having successfully completed this first report format, the AI Reports™ Project Team is preparing to move forward with the remaining project goals:
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- Release the AI Reports™ Guidebook
- Involve potential users for ongoing development and faster adoption in the marketplace
- Develop ‘Use/User Specific’ addenda so each AI Reports™ format can be customized for each assignment
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In addition, during the spring of 2006, the Appraisal Institute will introduce a new seminar titled "Appraising for Alternate Uses — Life Beyond Lending," which will focus on case studies in the real-world application of the AI Reports™ forms.
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According to Project Chair Leland B. Trice, SRA, "Our team is anxious to finalize the remaining reports and addenda so that a comprehensive suite of AI Reports™ forms are available to the appraisal profession. We view this as work in progress that will constantly evolve based on continued input from appraisers and those that use our services."
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Project Background
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Residential appraisers have been accustomed to using the familiar Uniform Residential Appraisal Report (URAR) for their residential reporting assignment needs. Appraisers would use the URAR form for both mortgage lending and non-mortgage lending assignments, supplementing these forms with other non-standard narrative reports as necessary. However, recent revisions by Fannie Mae and Freddie Mac have altered the design of the URAR form, changing the form so that it better meets the needs of the mortgage lending industry. This makes the use of the URAR form on a variety of residential appraisal assignments more problematic.
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In July of 2004, the Appraisal Institute assembled a project team composed of AI members holding the SRA designation as well as associate members to develop the AI Reports™ concept. Designed to be modular and flexible while enabling the appraiser to provide comprehensive and professional reports to clients, the project team’s first task was to create a report that is consumer-centric, appraiser-friendly and USPAP compliant.
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In June of 2005 an exposure draft of the proposed AI Reports™ Summary Appraisal Report • Residential was sent to the Appraisal Institute’s full membership for review. The feedback received by the project team was analyzed and changes were incorporated into the form as seen fit. In late summer the project team turned the report over to several major software vendors for programming. Since early 2006, the AI Reports™ Summary Appraisal Report • Residential has been available via the software vendors listed on this page.
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To learn more about the progress of various AI Reports™ projects, e-mail: aireports@appraisalinstitute.org.
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