by Pam Zubeck
An appraisal review process is required any time the fair market value determined by the City’s appraiser and the fair market value determined by the property owner’s appraiser are so far apart as to have a negative impact effect on negotiations.The manual also describes how an appraisal review is conducted:
The review appraiser will review the City’s and property owner’s appraisers’ computations, the nature and quality of the interest being appraised, deeds or option contracts when provided, size, maps, legal descriptions or construction plans when applicable. The review appraiser must: evaluate the City’s and owner’s appraisers’ qualifications; identify any legal matters needing resolution; study the information, data and analyses presented for qualitative and quantitative adequacy; and determine whether the appraisal reports conform to law, regulations....And here's the rest of the description of what the appraisal reviewer, in this case Muegge and Associations, Inc., will look at:
The review appraiser must determine whether the facts cited in the original appraisal reports are correct, if the assumptions are valid and necessary, the analyses and approaches are properly processed and the appraisers conducted thorough appraisals. The review appraiser must determine that the appraisers’ documentation, including valuation data and analyses of the data, demonstrates the soundness of the appraisers’ opinion of value. Recognizing that appraisal is not an exact science, there may be more than one acceptable appraisal of a
The review appraiser shall identify each appraisal report reviewed as:
a. Recommended. The recommended appraisal shall be used to establish the fair market value for the transaction.
b. Acceptable. An acceptable appraisal meets all technical requirements, but should not be used to establish fair market value.
c. Not acceptable.
If the review appraiser is unable to identify an appraisal as “recommended”, as an adequate basis for the establishment of the fair market value, the City may obtain another appraisal or ask the review appraiser to present and analyze market information in conformity with 49 C.F.R. § 24.103 and USPAP Standard 3 to determine fair market value.
The City of Colorado Springs has followed the requirements of the Real Estate Manual by obtaining appraisals for all property proposed for the exchange in the City’s ownership. The Broadmoor has also had its property appraised by an independent certified appraiser. Pursuant to the provisions of the Real Estate Manual, all appraisals of the property proposed for exchange have been submitted for an appraisal review in which an independent third party appraiser will review the appraisals to determine whether the reports conform to the law, regulations and the Uniform Standards of Professional Appraisal Practices.Mayor John Suthers' Chief of Staff Jeff Greene said the appraisal review and both batches of appraisals to be studied in the review will ultimately be released to the public, and the city's news release said the appraisal review will be completed "by the end of April."