Are Your Appraisal Reports Checking All The Boxes?

by | May 5, 2022 | Appraisal articles

As an appraiser, your job consists of a number of key tasks and responsibilities such as performing a walkthrough of the property, showcasing your due diligence, and ultimately, providing a final report. The valuation and supporting information on the final report are really what matter the most to clients; ensuring that they’re getting a truly fair assessment of the property. 

Let’s begin with the very basics – What is an appraisal report and why is it important?

According to an article from MasterClass, “An appraisal report is a detailed document that outlines a property’s value based on its quality, condition, location, and surrounding market conditions… An appraisal and the corresponding report are one of the key final steps in a home sale, usually ordered by the mortgage lender to ensure they’re offering the correct home loan amount to the prospective homeowner.” In other words, the appraisal is in place to provide an accurate valuation on the property and to protect those involved in the following real estate transactions:

    • Buying and selling a property
    • Refinancing your home
    • Acquiring a loan
    • Tax assessment purposes

Now that we’ve discussed what an appraisal report is and what they’re primarily used for, let’s dive deeper into the specific elements you should incorporate into your reports to make them valuable and meaningful. Showcase professionalism and dedication to your clients by building relevant, detailed, accurate appraisal reports including the following types of information:

Chosen Approach to Valuation

There are three approaches you can take when it comes to determining the value of a property:

  • Direct or Sales Comparison Approach
    Determine the value of the property based on comparable sales in similar markets/locations, with similar conditions and quality assessments. Most commonly used for residential properties.

  • Cost Approach
    According to the Appraisal Institute, “In the cost approach, the value of a property is derived by adding the estimated value of the land to the current cost of constructing a reproduction or replacement for the improvements and then subtracting the amount of depreciation in the structures from all causes.” Industrial buildings and warehouses are examples of properties valued using this approach. 

  • Income Approach
    Value of the property is determined based on an analysis of the property’s income and expenses compared to data from similar properties. The value is ultimately determined based on how much income a property could potentially generate. This approach is often used for retail locations, hotels, and office buildings. 


Create a sketch to help anyone reading the report visualize the square footage and layout of the property. You can make your sketch as detailed or simple as you’d like, but try to add information such as room labels, floor labels, and the overall square footage of each area. The Nexus report writer comes with an intuitive sketching tool that automatically calculates the area and perimeter on your behalf as you draw, reducing the risk for errors in calculations and ultimately saving you time.

UAD Requirements

Depending on the report type used, there may be a specific set of Uniform Appraisal Dataset (UAD) conditions that have to be met in order for your report to be considered compliant. For example, 1004 – Single Family Residential UAD and 1004 Desktop – Single Family Residential UAD are two very commonly used report types that both require additional checks.  

Did you know that Anow’s Nexus report writer comes with a UAD Assistant Panel that automatically checks your reports in real-time to help reduce revisions? Click here to learn more!

Property Overview 

This section generally makes up the bulk of the report. Add as much detail as you can to this section, but make sure the info you are adding is valuable and relevant.  Data found in the Property Overview section includes, but is certainly not limited to:

    • Location
    • Zoning
    • Quality
    • Conditions of sale
    • Square footage
    • Number of bedrooms
    • Number of bathrooms
    • Financing details
    • HOA fee
    • Tax records
    • Local market trends
    • Notable issues or damage

Property Photos

When it comes to property photos, the more the merrier! The basic requirements described by Fannie Mae for photographs in real estate appraisal reports are as follows:

For exterior photos, “clear, descriptive color photographs showing the front, back, and a street scene of the subject property and the front of each comparable. The subject and all comparables must be appropriately identified.”

For interior photos, “at a minimum, the report must include photographs of the following:

    • the kitchen;
    • all bathrooms;
    • main living area;
    • examples of physical deterioration, if present; and
    • examples of recent updates, such as restoration, remodeling, and renovation, if present.”

When you use Nexus for your report writing solution, you also get access to the Anow Mobile Inspection platform. As you perform a property walkthrough or inspection, you can make notes and take photos using the mobile app in real-time, and they will automatically upload into your Nexus report on your laptop or desktop computer. If you want to see this tool in action, click here to sign up for a free 30-minute Nexus webinar. 


For the sales comparison approach a minimum of at least three (3) comparable properties must be included in the final report, but regardless of report type, it certainly doesn’t hurt to provide this type of supporting information. The more prior sales data you can provide to back up your final valuation of the property, the better. 

Nexus makes building reports easier than ever before with CompVault! CompVault pre-fills data in your reports if you’ve used a sale before, and allows you to share your comparables with your colleagues. Plus, you can rest assured that your data is safe and securely stored.


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