Restricted Appraisal/ Scope of Work?
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A restricted appraisal report is most often commonly requested as a Drive-by or Desktop. Although a lender may request a Restricted Appraisal Report, it is the appraiser's obligation to determine if a reasonably probable value can be provided based on the information available. With the exception of the actual physical site visit the research and analysis required does not change with a Restricted Appraisal Report. For lending purposes your lender may have determined that they have sufficient security possibly due to a low ratio mortgage where they are only lending on a small percentage of the estimated value however, the appraiser must determine the actual value which is not based on the loan amount. ,,,.Continued...
In some cases the lender may be able to rely on a less detailed report and in many cases the value provided by this form of report is a range of value. This range is based on the appraiser's analysis of the probable variation due to the limited Scope of Work and the lack of verification of the actual physical condition plus a variety of other factors including determination of the actual size, percentage of finished floor area, basement finish and any other extras not visible from the street or available from reliable third party data.
What is "Scope of Work"? In short the scope of work is the level of analysis and reporting the appraiser deems required to produce a credible opinion of value and report sufficient for its intended purpose. Although clients or lenders may set minimum or maximum levels of analysis and reporting, it is the appraiser's final judgment to determine what is required and sufficient to produce credible and reliable results. For an average borrower/ applicant this may not mean much except in cases where it is possible that the agent or mortgage broker etc. told you that they have ordered a certain type of appraisal only to find out the appraiser's they approached would not complete the assignment based on the restricted report type. Example: You may have been told they have ordered a drive-by or desktop appraisal. Often times this is perfectly acceptable provided that the appraiser is able to gather sufficient data on the subject however, there are many cases where there is simply not enough information or that the range of possible outcomes resulting from the limitation on the data is too great to provide a conclusion sufficient for the intended use of the report. In these cases the appraiser must either request to modify the scope ie. upgrade the appraisal type or decline the assignment. This may also be the case often with Market Rent reports.