The Scope of Work Rule Addresses the Type and Extent of

Once you have identified the objective and the intended users, reviewed the assignment conditions, you know that you know the market sector of the subject, that you have sufficient data resources, that you have identified the appropriate scope of work, that you know the task and that you believe you can carry it out with credible results, You can accept the assignment with a limited scope and continue the evaluation process. To learn more about the scope of work rule, see the links above as well as: Advisory Opinion 28, Link: here; Expert opinion 29, Link: here; and a question and answer document from the SBA (PDF format) on the new rule, link: here. The exit rule required your client to agree to conduct a limited assessment. Under the scope of work rule, you are solely responsible for determining the appropriate level of research and analysis. You use the client as needed to identify the problem and determine the scope of work based on their requirements, but there is no customer acceptance for your determination. (As a bonus, they`ll eventually stop using “limited valuation” as a synonym for “cheap valuation.”) What does all this mean in the context of the services you are allowed to offer your clients? It`s obvious that removing rigid definitions such as “limited assessment” and “specific requirements” and replacing them with a greater emphasis on your decision on the type of analysis required for a job opens up more possibilities for USPAP-compliant work. Report 19 (link: here), usually on comp checks and conditions for assignments, returns you from 1. July (among others) to the new scope of work rule, “with particular attention to the evaluator`s responsibility with respect to the scope of the work decision and disclosure obligations.” As a member of the appraisal profession, you will have a clearly defined roadmap to help you navigate through all stages of an engagement. This is called the evaluation process. It works universally for all types of real estate in all areas of the market.

If you faithfully follow the evaluation process step by step and make a conscientious effort, you can solve any evaluation problem. Get answers to your limited scope questions in our new CE course: Assessments, Desktops and Other Limited-Volume Assessments. Limited valuation engagements require knowledge of the market area and a high degree of familiarity with the property type. Experience in assessing similar characteristics in close proximity to the subject and additional considerations and decisions are required to establish hypotheses for the subject – more than in a full assessment, where the evaluator can perform any additional research and analysis needed. If you don`t have the knowledge and experience to do the job competently, you may want to refuse. Can you then perform comp checks as long as you disclose the extent to which you have researched the subject and recent sales, make your client aware of the risk of the requested analysis and the superficial nature (compared to 1004 or 2055) of your analysis? AO-19 has always said that you can do this, as long as you make it clear that you are conducting an assessment and reject all unacceptable conditions and maintain your objectivity. However, it`s easy to see that a scope of work rule could lubricate runners to provide such services with a fee schedule, standard reporting form, and other formalities that don`t really exist today. Once you have identified the problem and know who, what, when, where and why, how do you answer the evaluation question? The second step in the assessment process is to define the scope of work for your limited scope allocation. According to the rule, the scope of an evaluator`s work is acceptable if it meets or exceeds: (1) the expectations of the parties regularly considered for similar engagements; and (2) what would be the actions of an examiner`s colleagues in performing the same or a similar task. Your reporting requirements don`t change. You have to report the amount of work done, but you`ve always had to do it.

The rules are simply meant to give you more flexibility in providing the services customers need. A comment on the work scope rule, which you can see link here, defines the scope of work as follows: Remember: Only you (the examiner) can determine the scope of work. The client may have special assignment conditions and needs for the intended use, and therefore the client may have some influence on the scope of work. You must uniquely identify these assignment conditions in the association problem identification phase. For example, if a client still requires a cost-based approach, regardless of the age or condition of the property improvements in question, this would be an allocation condition that should be considered when determining the scope of work. After step 2, it`s a good idea to stop and really think about whether or not you should accept the task. Limited assessment requires additional care in this decision. The needs of the purpose and intended use help determine the scope of work.

However, you should not accept the assignment if any of the following prevent you from providing credible results: Download your free copy of the evaluation process roadmap – and prepare it. Follow it step by step in each task, whether “traditional” or “limited in scope”. Reviewers have considerable flexibility and responsibility in determining the appropriate scope of evaluation, review and evaluation consultation work. The scope of work rule is perhaps best understood as a new focus on the analysis process and its requirements, rather than tailoring your work`s report to specific labels. (In fact, concepts such as binding and specific requirements are also absent from the new USPAP.) The new standards address your decision to conduct a certain level of analysis and the amount of research and care that should be devoted to what you choose.