Appraisal report standards.

§ 2201.3–3 Appraisal report standards. Appraisals prepared for exchange purposes shall contain, at a minimum, the following information: (a) A summary of facts and conclusions; (b) The purpose and/or the function of the appraisal, a definition of the estate being appraised, and a statement of the assumptions and limiting conditions affecting the appraisal assignment, if any; (c) An explanation of the extent of the appraiser's research and actions taken to collect and confirm information relied upon in estimating value; (d) An adequate description of the physical characteristics of the lands being appraised; a statement of all encumbrances; title information, location, zoning, and present use; an analysis of highest and best use; and at least a 5-year sales history of the property; (e) A disclosure of any condition that is observed during the inspection of the property or becomes known to the appraiser through normal research that would lead the appraiser to believe that hazardous substances may be present on the property being appraised; (f) A comparative market analysis and, if more than one method of valuation is used, an analysis and reconciliation of the methods used to support the appraiser's estimate of value; (g) A description of comparable sales, including a description of all relevant physical, legal, and economic factors such as parties to the transaction, source and method of financing, effect of any favorable financing on sale price, and verification by a party involved in the transaction; (h) An estimate of market value; (i) The effective date of valuation, date of appraisal, signature, and certification of the appraiser; (j) A certification by the appraiser signing the report to the following: (1) The appraiser personally contacted the property owner or designated representative and offered the owner an opportunity to be present during inspection of the property; (2) The appraiser personally examined the subject property and all comparable sale properties relied upon in the report; (3) The appraiser has no present or prospective interest in the appraised property; and (4) The appraiser has not, and will not, receive compensation that was contingent on the analysis, opinions, or conclusions contained in the appraisal report; and (k) Copies of relevant written reports, studies, or summary conclusions prepared by others in association with the appraisal assignment that were relied upon by the appraiser to estimate value, which may include but is not limited to current title reports, mineral reports, or timber cruises prepared by qualified specialists.