The DS Murphy Newsletter

By Mark Durden, CRA & USPAP Instructor

As you may or may not know, appraisers must prepare a workfile for each appraisal or appraisal review assignment. Are you aware of what must be included in the workfile? Or how long the workfile must be maintained? What about when you give testimony in court? Or when you give an oral report?

USPAP is clear as to what is required. The workfile must include the following:

The name of the client and the identity, either by name or type, any other intended user.

True copies of all written reports. This can be any type of media (physical or electronic) but it must be an exact replica of what was sent to the client.

Summaries of all oral reports or testimony, or a transcript of testimony, including the appraiser’s signed and dated certification.

All other data, information, and documentation necessary to support the appraiser’s opinions and conclusions and show compliance with USPAP. This part of the Record Keeping Rule goes on to say that it is sufficient to keep references to the location(s) of the data, information, and documentation.

But be careful if you rely on referring to the data, information, and documentation used. You need to make sure that all of the data you relied on will be available for the length of time required by USPAP. For example, if a listing agent removes the photos from a listing that you used as a comparable, you will not have documentation concerning the condition of that comparable.

It’s important to remember that the workfile must be retained for five years, but if an appraiser provides testimony related to the assignment, the workfile must be retained for at least two years after the final disposition of the court proceeding. Fast math, an appraiser could possibly be required to retain the workfile for seven years.

For those that have testified, how many asked the court reporter for the transcript of your testimony? And did you create a signed and dated certification? Those are both required to be in the workfile. This is also true if you give an oral report.

Another stipulation in the Record Keeping Rule says that a workfile in support of a Restricted Appraisal Report or an Oral Report must be sufficient for the appraiser to produce an Appraisal Report.

And what about your conversations with agents concerning a comparable? It is a best practice to take notes and include that in the wotkfile also.

It is always better to have too much in your workfile than to leave something out. Let’s hope it never happens, but if you are ever required to provide a workfile to the state board, you always want to have all of the data, information, and documentation ready.