What an appraisal review is — and when you need one

An appraisal review is not a second appraisal. It is an assignment in which an appraiser develops an opinion about the quality of another appraiser's work: whether the scope was adequate, the data appropriate, the adjustments supported, and the conclusion credible.

In litigation this is frequently the right first step. Before commissioning a competing appraisal at full cost, a review establishes whether the opposing report has defects worth attacking — and sometimes establishes that it does not, which is equally valuable information for counsel.

Lenders and AMCs use review for quality control and compliance. Insurers use it to test a claim valuation. Fiduciaries use it to satisfy themselves that a report they are relying on will withstand challenge.

NextPhase has performed more than 2,500 appraisal reviews, and its principal spent years running quality control and compliance for an appraisal management company overseeing roughly 5,000 appraisers — which is a different vantage point from having only ever written reports.