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| Appraisals for foreclosure and real estate-owned (REO) purposes are reported on the same group of forms as previously noted, typically the 1004 form for single family residential properties, the 1073 form for condominiums, and the 1025 form for two-to-four unit properties. REO reports generally have multiple objectives.
These include:
- to determine estimates of market value based on the present condition of the subject improvements, frequently under normal and restricted marketing times. Marketing time assumptions will be clearly defined in the limiting conditions incorporated into the final report and may not match the standard definition of market value included in USPAP and the statement of limiting condition.
- to develop and report a detailed list of those repairs,
and their respective costs, necessary to bring the subject
improvements into an overall condition that will optimize
marketability and value.
- to determine estimates of value based on the assumption of completion of the recommended repairs to the improvements as described in the repair list. These estimates of market value may also be based on normal market conditions existing as of the effective date of appraisal, as well as a value estimate made under a restricted marketing period, as defined in the final report.
Standard REO appraisals include the following attachments: interior and exterior photographs of the subject improvements, photographs detailing areas of special concern with the subject improvements, standard front, rear, and street scene photographs of the subject property, photographs of all sales utilized within the report, a floor plan sketch with exterior dimensions and gross living area calculations, an itemized list of recommended repairs, with estimated costs to complete each item, a map detailing the location of the subject and all sales utilized in the report, appropriate certifications and limiting conditions.
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