Companion Post to Just Give 'em an Appraisal—NOT

The GPAR™ Single Family 2006—Compared to the URAR 2005

The Purpose section of the GPAR form, with the exception of a single sentence at the top, does not exist on the URAR. The first line states that the purpose of the report is to provide a credible opinion of the defined value, given the intended use. This contrasts with the URAR’s statement that the purpose is to provide an accurate opinion of the market value. The reason for credible versus accurate is that USPAP requires an appraisal to be credible within the context of its intended use. USPAP does not speak to accuracy. The reason for defined value versus market value is that the GPAR was designed to be used for a variety of different intended uses where the value type and definition might involve something other than market value.

The lines for identifying the intended use and intended user(s) are really what the GPAR is all about. That is to say, reporting appraisals where the use is something other than a mortgage finance transaction and the intended user is not necessarily a lender.

The Subject section of the GPAR is much shorter than that of the URAR, as a number of data fields were eliminated. Much of the information that the appraiser is expected to discover and report on the URAR is for the lender/client’s own use. For example, data fields like “Occupant” and “Census Tract” are not relevant property characteristics in most assignments and therefore were not included in the GPAR forms.

The GPAR has a separate Sales History section, as opposed to the URAR, which includes the sales history as part of the Sales Comparison Approach. Since reporting of the sales history of the comparables is not a USPAP requirement, it is not given a separate grid on the GPAR although the appraiser is free to report this information if he or she feels it is applicable.

Since most non-lending transactions do not involve the sale of the subject property, no Contract section is included in the GPAR. If the assignment does involve a sales contract, the appraiser’s analysis can be summarized at the bottom of the Sales History section.

The Neighborhood section of the GPAR is essentially the same as that of the URAR.

The Site section of the GPAR is very much like that of the URAR with the following exceptions:

• The data fields related to Flood Hazard area are not present
• There is no question related to utilities and off-site improvements being typical for the area
• The URAR asks the appraiser if there are any adverse site conditions or external issues. Questions like this create liability issues for appraisers, so this question is not asked on the GPAR. Rather, a simple Site Comments header is used.

The Improvements section of the GPAR is much like that of the URAR. However, to avoid creating liability issues for the appraiser, the GPAR, unlike the URAR, does not require the appraiser to comment on items like needed repairs, livability, soundness or structural integrity.

The grid in the Sales Comparison Approach section of the GPAR is identical to that of the URAR. It is followed by a simple comments section. The sales history information found on the URAR is given its own section on the first page of the GPAR.

The Cost Approach section of the GPAR is much like that of the URAR, although the GPAR does not dictate that the appraiser provide information to allow the client to replicate the cost figures.

The Income Approach section of the GPAR is the same as that of the URAR.

The Reconciliation section of the GPAR looks much like that of the URAR, although there are two key differences. Check box #4 on the URAR ties the “subject to” to an inspection and goes on to state the appraiser assumes the condition that triggered the inspection request does not require alteration or repair. Check box #4 on the GPAR is more versatile in that is simply reads “subject to the following.” The second key difference between the two forms is that the GPAR does not tie the effective date to the date of inspection, allowing the form to be used for prospective and retrospective assignments.

In the next installment of Compliance Corner, we’ll look at pages 3 and 4 of the GPAR and pay special attention to how GPAR’s limiting conditions are designed to protect the appraiser from unwanted liability.