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Short Answer
A Restricted Appraisal Report contains an extremely limited amount of detail and may not be fully understood without the workfile or additional data from the appraiser.
USPAP 2020-2021 Update: Restricted Appraisal Reports can now be used by multiple parties besides the client, as long as they are specifically named as an “intended user” in the appraisal. Prior to 2020, Restricted Appraisal Reports could only be relied upon by one party- the client.
Detailed Answer
A Restricted Appraisal Report contains minimal detail and content. This type of report is not appropriate for most appraisal situations due to the fact that it contains minimal details and content. Further, this report type may not be understood without additional information contained in the workfile that is not transmitted in the report.
This is the least common appraisal report type because it does not satisfy the needs of most lenders or appraisal users. However, when a very abbreviated appraisal report that is consistent with the intended use of the appraisal is desired, and the users of the appraisal do not desire to see details regarding the subject or the valuation, this can be a good solution.
The primary benefit of this report type is the price of the appraisal- due to the fact that only minimal details are presented in the report, it takes less time for an appraiser to develop, and conversely, costs less than a full Appraisal Report.
The primary con of this report type is that it typically does not contain enough detail for most appraisal uses.
The minimum reporting requirements of the Restricted Appraisal Report are as follows:
State the identity of the client and any intended users, by name or type;
And state a prominent use restriction that limits use of the report to the client and warns that the rationale for how the appraiser arrived at the opinions and conclusions set forth in the report may not be understood properly without additional information contained in the appraiser’s workfile.
State the intended use of the appraisal
State information sufficient to identify the real estate involved in the appraisal.
State the real property interest being appraised.
State the type and definition of value and cite the source of the definition.
State the effective date of the appraisal and the date of the report.
State the scope of work used to develop the appraisal.
State the appraisal methods and techniques employed, state the value opinion(s) and conclusion(s) reached, and reference the workfile; exclusion of the sales comparison approach, cost approach, or income approach must be explained.
State the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal.
When an opinion of highest and best use was developed by the appraiser, state that opinion.
Clearly and conspicuously state all extraordinary assumptions and hypothetical conditions, and, state that their use might have affected the assignment results.
Include a signed certification in accordance with Standards Rule 2-3.