AI-GRS key terms

A professional analysis of another appraiser's work to judge whether the analyses, opinions, and conclusions are credible, reasonable, and compliant with applicable standards. The reviewer forms an independent opinion rather than merely editing or restating the original report.

A review that examines the substance of an appraisal: the data, reasoning, methodology, and conclusions. The reviewer independently tests whether the value opinion is supported, rather than checking only format or completeness.

A review limited to checking that a report is complete, internally consistent, and properly formatted, without independently re-analyzing the market or testing the value conclusion. It is narrower than a technical review.

The quality of being worthy of belief, judged by whether the analyses and conclusions are supported by the data and reasoning presented. Credibility is the central test a reviewer applies to an appraiser's work.

A judgment that a conclusion falls within a range that informed, competent peers would accept given the available evidence. Reviewers test reasonableness rather than requiring a single correct number.

The type and extent of research and analysis an appraiser or reviewer performs for an assignment. It must be sufficient to produce credible results and is shaped by the intended use, problem, and reporting requirements.

The purpose for which a valuation or review is performed and for which the report will be relied upon, such as lending, litigation, or portfolio monitoring. It drives the required scope of work and reporting detail.

The party or parties the appraiser or reviewer identifies as the expected recipients and reliance parties of the report. Identifying them correctly prevents unintended reliance and shapes the report's content.

A stated assumption about a fact that, if found to be false, could change the value opinion or review conclusion. It must be clearly disclosed and is used only when the uncertainty is material and unavoidable.

A condition that is contrary to what actually exists as of the effective date, assumed for purposes of analysis. It must be clearly disclosed because the resulting opinion depends on a state of facts that is not real.

The date as of which the value opinion or review conclusion applies, which may differ from the date the report is written. Reviewers verify the analysis uses data appropriate to that date.

A value opinion expressed as of a date earlier than the date the assignment is performed. Reviewers check that only information available as of that earlier date was relied upon, absent disclosure to the contrary.

The tendency to judge a past valuation using information that was not available when it was made. Reviewers must separate genuine analytical errors from outcomes that merely became known later.

The sales comparison, income, and cost approaches used to estimate market value. A reviewer assesses whether the approaches chosen and weighted suit the property type and available data.

A method that estimates value by comparing the subject to similar properties that sold, adjusting for differences. Reviewers test comparability, adjustment support, and the reconciliation of the indicated range.

A method that converts anticipated income into a value indication, typically through direct capitalization or discounted cash flow analysis. Reviewers check rent, vacancy, expense, and rate assumptions for market support.

A method that estimates value as the cost to replace or reproduce improvements new, less depreciation, plus land value. Reviewers test cost sources, depreciation estimates, and land value support.

A single-year income method that divides a stabilized net operating income by a capitalization rate to indicate value. Reviewers examine whether the income and rate are drawn from comparable market evidence.

A ratio expressing the relationship between a single year's net operating income and value or sale price. Reviewers test whether the selected rate is supported by comparable transactions and risk characteristics.

An income method that projects future cash flows and discounts them to present value at a rate reflecting risk and return. Reviewers scrutinize projection assumptions, discount rate derivation, and reversion treatment.

Effective gross income less operating expenses, before debt service and income taxes. It is the income figure capitalized in direct capitalization and projected in cash flow analysis.

A dollar or percentage modification applied to a comparable's price to reflect a difference from the subject. Reviewers test whether each adjustment is market-derived, reasonable in size, and applied consistently.

A technique that isolates the effect of a single characteristic by comparing two otherwise similar sales that differ on that feature. It provides market support for adjustments in the sales comparison approach.

A transaction used as a benchmark because it is similar to the subject and occurred under arm's-length conditions near the effective date. Reviewers verify its comparability, terms, and data reliability.

The process of weighing the value indications from the approaches used and arriving at a final opinion. Reviewers assess whether the weighting is reasoned and consistent with the quality of each indication.

The reasonably probable, legally permissible, physically possible, and financially feasible use that produces the highest value. Reviewers test whether the concluded use is supported and consistently applied throughout the analysis.

In appraisal, the loss in improvement value from any cause, grouped as physical deterioration, functional obsolescence, and external obsolescence. Reviewers check that the amounts and causes are supported.

A loss in value caused by inadequacies or superadequacies in a property's design, layout, or features relative to market expectations. It may be curable or incurable and must be quantified with support.

The market-derived incentive a developer expects for taking on the risk of a project, often included in the cost approach. Reviewers test whether the profit allowance reflects market evidence rather than an arbitrary figure.

The requirement that an appraiser or reviewer accept an assignment only when able to perform it competently, or disclose the lack of knowledge and take steps to gain it. It protects the credibility of the resulting opinion.

The principles governing professional conduct, including independence, objectivity, confidentiality, and avoidance of conflicts of interest. Reviewers must be free of bias and must disclose any interest that could impair impartiality.

The state of being free from influence by parties with an interest in the outcome of a valuation or review. It requires both actual impartiality and the appearance of impartiality.

A situation in which a personal, financial, or other interest could improperly influence professional judgment. It must be avoided or fully disclosed so that reliance parties can assess impartiality.

Promoting or defending a client's position in a way that compromises objectivity. Appraisers and reviewers must avoid advocacy that would undermine the impartiality of their analyses and conclusions.

A fee arrangement that depends on the outcome of the assignment, such as a value threshold or a favorable review. Such arrangements are prohibited because they create bias and undermine independence.

The Uniform Standards of Professional Appraisal Practice, which set minimum requirements for appraisal and review assignments in the United States. They govern ethics, competency, scope of work, and reporting.

A specific USPAP provision that states binding requirements for a category of assignment, such as development or reporting. Reviewers check compliance with the rules applicable to the reviewed assignment.

The structured process of reading and evaluating a valuation report for completeness, internal consistency, compliance with standards, and support for its conclusions. It produces documented findings and a review opinion.

The written communication of a reviewer's findings and conclusions, stating the scope, the review opinion, and the reasons supporting it. It must be clear enough for the intended user to understand the basis.

The documentation an appraiser or reviewer retains to support the analyses, opinions, and conclusions in the report. Reviewers may examine the workfile to verify data sources and reasoning behind the report.