GENERAL SERVICES ADMINISTRATION Washington, DC 20405

PBS 1005.7 February 1, 2017

GSA ORDER

SUBJECT: Appraisal of Excess and Surplus Real Property 1. Purpose. This Order issues and transmits the revised policy on Appraisal of Excess and Surplus Real Property.

2. Background. This handbook updates and supplements information contained in GSA handbook, PBS P 1005.6 Appraisal of Excess and Surplus Real Property, May 27, 1994. In addition to the appraisal of excess and surplus real property, this program guidance includes policy and procedures related to appraisals and appraisal-related services involving all types of real estate, related personal property, underutilized property, property under the custody of other Federal agencies, and property to be acquired. This guidance may extend to work performed for other Federal agencies on a reimbursable basis unless the reimbursing agency’s policies are to be followed.

The real property utilization and disposal functions of GSA require an efficient, competent, and reliable appraisal program. GSA must use the most capable and professional appraisers available, with due consideration to cost and time, for all real property and related personal property transactions requiring appraisals. The general policies and requirements for work products and services provided by staff and contract appraisers for the real property utilization and disposal functions of GSA are included in this handbook.

The policies and procedures outlined in this handbook are intended to comply with the provisions of various laws and regulations applicable to the Office of Real Property Utilization and Disposal’s appraisal program, including 40 U.S.C. § 101 and 501, et. seq. (Property Act), CFR 102-75.300-320, Office of Management and Budget (OMB) Bulletin No. 92-06, and guidance on real estate appraisal standards and practices such as the Uniform Standards for Professional Appraisal Practice (USPAP) and the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA).

3. Scope and applicability. This handbook provides policy guidance for the valuation and appraisal of excess and surplus real and related personal property. The primary users of this guidance are appraisers, realty specialists and others involved in the utilization and disposal of excess and surplus real and related personal property

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pursuant to the statutory authority contained in Chapter 5 of Title 40 of the U.S. Code (Property Act). The Office of Real Property Utilization and Disposal (RPUD) provides utilization, asset management and disposal services for all Federal landholding agencies, even those which have disposal authority separate from that contained in the Property Act. In such cases, RPUD provides real estate and related services on a reimbursable basis using that agency’s separate authority.

4. Cancellation. GSA handbook, PBS P 1005.6 Appraisal of Excess and Surplus Real Property, dated May 27, 1994; Program Memorandum 13-03, April 22, 2013 entitled, Guidance for Appraisal of Excess and Surplus Real Property, and Program Memorandum 11-1, dated February 3, 2011 entitled, Guidance for Real Property Value Documentation for PTZ.

5. Forms. This Order provides for the use of the following form which can be found on GSA InSite: GSA Form 66, Request for Valuation Service.

6. Signature. /S/ NORMAN DONG PBS Commissioner Public Buildings Service

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APPRAISAL OF EXCESS AND SURPLUS REAL PROPERTY

GENERAL TABLE OF CONTENTS CHAPTER 1. INTRODUCTION 1 CHAPTER 2. DEFINITION OF TERMS 4 CHAPTER 3. QUALIFICATIONS OF APPRAISERS 8 CHAPTER 4. PROCEDURES 11 CHAPTER 5. APPRAISAL METHODS AND TECHNIQUES 16 CHAPTER 6. APPRAISAL ASSIGNMENTS 19 CHAPTER 7. APPRAISAL REVIEW ASSIGNMENTS 24 CHAPTER 8. CONSULTING AND OTHER ASSIGNMENTS 26 CHAPTER 9. QUALITY CONTROL 27 CHAPTER 10. THE APPRAISAL TEAM 28 APPENDIX A. GSA FORM 66 – REQUEST FOR VALUATION SERVICE A-1 APPENDIX B. THE VALUATION PROCESS B-1 APPENDIX C. APPRAISAL NON-DISCLOSURE AGREEMENT. C-1 APPENDIX D. APPRAISAL THRESHOLD AND VALIDITY TABLE D-1

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CHAPTER 1. INTRODUCTION

1. General. The real property utilization and disposal functions of the General Services Administration (GSA) require an efficient, competent, and reliable appraisal program. GSA must use the most capable and professional appraisers available, with due consideration to cost and time, for all real property and related personal property transactions requiring appraisals. a. The Office of Real Property Utilization and Disposal (RPUD) appraisal personnel are responsible for providing appraisal and related services under established policies and procedures; however, highly complex and unusual assignments frequently require the development and application of new appraisal procedures that are unique to individual appraisal problems. General appraisal policy and guidance is established by RPUD management and is maintained and supported by the RPUD Appraisal Team.

b. The policies and procedures outlined in this handbook are intended to comply with the provisions of various laws and regulations applicable to the RPUD appraisal program, including:

(1) 40 USC § 101 and 501, et seq. (Property Act).

(2) CFR 102-75.300-320.

(3) Office of Management and Budget (OMB) Bulletin No. 92-06.

(4) Guidance on Real Estate Appraisal Standards and Practices such as, Uniform Standards of Professional Appraisal Practice (USPAP), and Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA).

c. RPUD requires appraisal and appraisal-related services to assist in the planning and disposition of a wide variety of real property and related personal property, including special purpose property. The valuation of special purpose property requires unique knowledge and experience due to the complex and diverse nature of assignments. Special purpose properties include, but are not limited to: environmentally contaminated properties, historic properties, industrial plants, Government-owned contractor operated (GOCO) plants, Department of Defense installations (including airfield operations, utilities and utility systems, fuel distribution/storage facilities, and weapons manufacturing/storage facilities), munitions manufacturing facilities and related personal property, plant equipment, mines, quarries, oil refineries, salt domes, nuclear energy facilities, aircraft factories, shipyards, easements, artwork integral to a building, rights of way, mineral rights, water rights, air rights, partial interests and intangible property (emission reduction credits, renewable energy credits, carbon credits, wetland mitigation and habitat conservation banking credits, etc.). d. Historically, the Administrator of GSA delegated the authority to determine a property’s Fair Market Value to the Public Buildings Service (PBS) Commissioner who

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in turn delegated this authority to RPUD regional directors, regional appraisers, and realty specialists. However, the current delegation contained in the March 4, 2015 revision to Chapter 5 of the PBS delegations from the Administrator authorizes only the RPUD Assistant Commissioner, the Assistant Commissioner for the Office of Real Property Asset Management and the regional commissioners of the RPUD zones to determine the ‘fair value’ of excess real property. A regional appraiser is responsible for approving the appraisal that establishes the Appraised Fair Market Value (AFMV). In instances in which an appraisal is not required or the circumstances of a transaction are different from those considered in the appraisal, the realty specialist may establish an Estimated Value (EV). Guidance for determining and documenting EV is contained in the GSA Handbook for Excess and Surplus Real Property and/or related program memos. 2. Scope. In addition to the appraisal of excess and surplus real property, these instructions include policies and procedures related to appraisals and appraisal-related services involving all types of real estate, related personal property, underutilized property, property under the custody of other Federal agencies, and property to be acquired. This guidance may extend to work performed for other Federal agencies on a reimbursable basis unless the reimbursing agency’s policies are to be followed.

a. For property disposal purposes, an appraisal may be required for the following transactions depending on the circumstances and thresholds identified in this handbook:

(1) Negotiated sales to a public body or private party.

(2) Competitive sales. (3) Federal transfers. (4) Public benefit conveyances. (5) Exchanges. (6) Leases. (7) Abrogations. (8) Relocations. (9) Transactions involving related personal property. (10) Other disposal actions. (11) Acquisitions.

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b. A Certified General staff or contract appraiser must conduct all appraisals. All contract appraisers must be a Certified General appraiser in the state in which the property is located or obtain a temporary certification during the course of the assignment. Note that the terms “General Certification”, “Certified General”, or “state certified” used in this document refer to the state licensing and certification appraiser classification of “Certified General” as established by each state and monitored by the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC).

c. The ASC was created pursuant to Title XI of the Financial Institutions Reform,

Recovery, and Enforcement Act of 1989 for the purpose of protecting Federal financial and public policy interests in real estate transactions and requiring that real estate appraisals utilized in connection with Federally related transactions are performed in writing, in accordance with uniform standards, by individuals whose competency has been demonstrated and whose professional conduct will be subject to effective supervision. The ASC monitors the requirements for the certification and licensing of appraisers established by the states, maintains a national registry of state licensed and certified appraisers who may perform appraisals in connection with Federally related transactions; and monitors and reviews the practices, procedures, activities, and organizational structure of the Appraisal Foundation. OMB Bulletin No. 92-06 established that state licensed or certified appraisers are qualified to prepare and review real estate appraisal reports for Federal agency programs. In addition, Federal employees who choose to become state licensed or certified real estate appraisers need only be licensed or certified in one state or territory to perform real estate appraisal duties as Federal employees in all states and territories.

d. As authorized, RPUD may provide services to other Federal agencies on a

reimbursable basis and the work may be completed using that agency’s authority and policies. These services may include, but are not limited to, appraisal, appraisal review, and consulting in support of planning, utilization, disposition, and acquisition of real property and related personal property. The determination of which authority to use depends on current agency policy, customer needs, and case-specific circumstances. In accordance with current GSA policy, appropriate funding documents must be obtained prior to awarding contract services. A Memorandum of Agreement (MOA) or other written documentation of the requested service is desirable to ensure that both parties agree to the scope of work, costs, and other details of the assignment. 3. Applicability. These instructions apply to the appraisal program for the real property utilization and disposal functions of GSA. The general policies and requirements for work products and services provided by staff and contract appraisers for RPUD are included in this guidance. More specific details related to appraisal procedures and practices will be developed and maintained by the Appraisal Team in a website-based Appraisal Desk Reference.

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CHAPTER 2. DEFINITION OF TERMS

1. General. The following definitions apply to RPUD assignments. Most definitions are from industry accepted standards, such as the Uniform Standards of Professional Appraisal Practice (USPAP), the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA), and The Dictionary of Real Estate Appraisal, while a few have been developed by RPUD for internal use. As industry and government standards are updated, any revised definitions should be reviewed for RPUD use. Assignments prepared under the UASFLA standard require specific definitions of Market Value and Highest and Best Use.

a. Appraisal. The act or process of developing an opinion of value; an opinion of value. 1

b. Appraisal report or appraisal review report. A written communication to the client transmitting an appraisal or appraisal review upon completion of an assignment. 2

c. Appraisal review. The act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal or appraisal review assignment. 3

d. Appraised Fair Market Value (AFMV). A term developed by RPUD to describe the value established by an appraisal and approved by the RPUD regional appraiser.

e. Consulting. The act or process of providing information, analysis of real estate data, and recommendations or conclusions on diversified problems in real estate other than estimating value.

f. Disposition Value (DV). The most probable price that a specified interest in real property should bring under the following conditions:

(1) Consummation of a sale within a future exposure time specified by the client. (2) The property is subjected to market conditions prevailing as of the date of

valuation. (3) Both the buyer and the seller are acting prudently and knowledgably. (4) The seller is under compulsion to sell.

1 Uniform Standards of Professional Appraisal Practice (2014-2015 Edition) 2 Uniform Standards of Professional Appraisal Practice (2014-2015 Edition) 3 Uniform Standards of Professional Appraisal Practice (2014-2015 Edition)

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(5) The buyer is typically motivated. (6) Both parties are acting in what they consider to be their best interests. (7) An adequate marketing effort will be made during the exposure time specified

by the client. (8) Payment will be made in cash in U.S. dollars or in terms of financial

arrangements comparable thereto. (9) The price represents the normal consideration for the property sold, unaffected

by special or creative financing or sales concessions granted by anyone associated with the sale. 4 Note: Disposition Value is never to be used in an appraisal assignment for a negotiated sale.

g. Estimated Value (EV). A term developed by RPUD to describe the value determined by the RPUD realty specialist in instances in which no appraisal is required or if circumstances of the transaction are different from those considered in the appraisal or additional information becomes available after the AFMV is determined.

h. Fair Annual Rent (Market Rent). The most probable rent that a property should

bring in a competitive and open market reflecting all conditions and restrictions of the lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements. 5 Note: In some instances it may be appropriate to add to the definition a statement that if sufficient market information is unavailable, the Fair Annual Rent will be determined by applying an appropriate rate of return to the Fair Market Value.

i. Fair Market Value (Market Value). The most probable price which a property

should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

(1) Buyer and seller are typically motivated;

4 Dictionary of Real Estate Appraisal (Fifth Edition) 5 Dictionary of Real Estate Appraisal (Fifth Edition)

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(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;

(3) A reasonable time is allowed for exposure in the open market; (4) Payment is made in terms of cash in United States dollars or in terms of

financial arrangements comparable thereto; and

(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 6

j. Feasibility analysis. A study of the cost-benefit relationship of an economic endeavor. 7

k. Highest and best use. The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. 8

l. Insurable value. A type of value for insurance purposes. 9

Note: For property disposal purposes, insurable value is the replacement cost less depreciation, excluding non-insurable items. This definition is typically utilized to determine the property insurance requirements of a sale involving credit terms.

m. Marketability study. A microeconomic study that examines the marketability of a given property or class of properties, usually focusing on the market segment(s) in which the property is likely to generate demand. Marketability studies are useful in determining a specific highest and best use, testing development proposals, and projecting an appropriate tenant mix. 10

n. Salvage value. The price expected for a whole property (e.g., a house) or a part of a property (e.g., a plumbing fixture) that is removed from the premises usually for use elsewhere. 11

o. Scrap value. The price expected for a part of a property that is sold and removed from the premises to reclaim the value of the material of which it is made, e.g., plumbing

6 12 CFR Part 34.42(g), as amended. 7 Uniform Standards of Professional Appraisal Practice (2014-2015 Edition) 8 Dictionary of Real Estate Appraisal (Fifth Edition) 9 Dictionary of Real Estate Appraisal (Fifth Edition) 10 Dictionary of Real Estate Appraisal (Fifth Edition) 11 Dictionary of Real Estate Appraisal (Fifth Edition)

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fixtures sold for their metal content. 12

p. Use value. The value a specific property has for a specific use; may be the highest and best use of the property or some other use specified as a condition of the appraisal. 13

Note: It may be appropriate to add a statement to the definition identifying the specific user, for example “In this assignment, the Use Value represents the value of the subject property to (specify user) for continued use”.

q. Other terms. Unless defined in this guidance or specified in USPAP or UASFLA, all other terms, words, and processes will have the same definition as contained in the current edition of the Dictionary of Real Estate Appraisal, prepared and distributed by the Appraisal Institute.

2. UASFLA definitions. The following definitions apply to assignments prepared under the UASFLA standard.

a. Highest and best use. The highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. 14

b. Market Value. Market Value is the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal. 15

12 Dictionary of Real Estate Appraisal (Fifth Edition) 13 Dictionary of Real Estate Appraisal (Fifth Edition) 14 Uniform Appraisal Standards for Federal Land Acquisitions (Washington, DC 2000) 15 Uniform Appraisal Standards for Federal Land Acquisitions (Washington, DC 2000)

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CHAPTER 3. QUALIFICATIONS OF APPRAISERS

1. Qualifications of RPUD appraisers. The RPUD appraisal program is represented by appraisal positions in each region and central office, all of which are members of the Appraisal Team. RPUD appraisers must have the knowledge and experience necessary to perform the duties of the position competently. Although an appraiser may initially enter the position at a trainee level with only basic appraisal education and experience, the appraiser must ultimately achieve the required minimum education and experience necessary for the level of duties performed in the position. Appraisal positions in the regional office may consist of appraiser trainee, review appraiser, and/or regional appraiser. Note that the nomenclature of these organizational titles may vary based on regional practices.

a. A regional appraiser is responsible for the RPUD appraisal program in his/her respective region and has the authority to conduct a review, write a review report, and approve or disapprove all appraisal reports and appraisal-related work products prepared for GSA or Federal Government use. A regional appraiser also serves as a mentor to other RPUD appraisers and a technical advisor on policy, requirements, and other matters to both staff and contract appraisers. Additionally, a regional appraiser provides technical advice on appraisal matters to realty specialists, management, and officials of GSA and other agencies.

b. Review appraisers must possess both appraisal technical abilities and the ability to communicate the agency’s real property valuation needs to the appraiser. Review appraisers typically perform a role greater than technical appraisal review as they are often involved in early project development, devising a statement of work and technical contract specifications, and appraiser selection. A review appraiser may prepare an appraisal review report and make a recommendation of whether or not to approve the appraisal report being reviewed, but it is the responsibility of a regional appraiser to accept and approve the report for Federal Government use.

c. An appraiser trainee may assist in appraisal review and other appraisal functions and must work directly with a review appraiser or a regional appraiser.

d. Appraisal positions in central office may include a national appraiser for RPUD.

In addition to responsibilities similar to that of a regional appraiser, the RPUD national appraiser is responsible for coordinating national appraisal-related activities and issues with management and the Appraisal Team.

e. The basic job classification of RPUD appraisers is the GS-1171 Series. In limited circumstances other series may be acceptable, as long as appraisal duties represent a majority of the required duties, and other duties do not present conflicts of interest. To safeguard the impartiality required of appraisers, it is best for regional-appraisal positions to report to the regional director of Real Property Utilization and Disposal. However, it is acceptable to report to a manager not directly involved in the transaction of properties being appraised. In addition, the appraiser may not have non-appraisal

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responsibilities that could be perceived as a conflict of interest. Duties for any specific appraisal assignment must clearly delineate the role of the appraiser as an unbiased party and not an advocate for any position.

f. RPUD appraisers at all levels will in due course have sufficient and relevant work

experience, education, and General Certification16. In order for trainee appraisers to meet requirements for state certification, qualifying education should be taken each year, subject to budgetary constraints. This should consist of one to two weeks of core professional-level appraisal courses required for the state certification. Certified appraisers and professionally designated appraisers should maintain credentials and proficiency by taking relevant seminars and pertinent courses for continuing education. A National USPAP 7-Hour Update course will be required every two years or immediately after substantial change to the standards, consistent with state continuing education requirements. Supplemental courses may be needed from time to time for the appraisers to maintain competency and proficiency in their work.

g. Experience at the national appraiser and regional appraiser level should consist

of at least five years of credible appraisal experience of which a majority deals with special purpose properties. Review appraisers will have experience to demonstrate competency in the review assignments required of the position, but appraiser trainees need only basic appraisal experience. Recognizing that competency is achieved through experience and education, tasks should be assigned in a manner that allows the appraiser to gain experience required for advancement while maintaining competency for the task assigned. This may require association with a qualified appraiser to assist in the assignment.

h. The national appraiser, regional appraisers, and review appraisers will be

Certified General appraisers in any state. Appraisers in a regional appraiser or review appraiser position at the time this guidance is issued are not compelled to achieve the experience and state certification requirements (referenced above) in order to maintain their present position. However, appraisers that have not yet achieved the Certified General classification status must be working toward that certification, with a development plan approved by the RPUD regional director, in consultation with the RPUD national appraiser. OMB Bulletin N0. 92-06 states that Federal employees who choose to become state licensed or certified real estate appraisers need only be licensed in one state or territory to perform real estate appraisal duties as Federal employees in all states and territories. RPUD appraisers are encouraged to belong to and become designated by recognized professional appraisal associations issuing rigorous professional designation programs. Note: Appraisal licensing authorities limit the time a trainee can hold a license. If the trainee’s license expires, the trainee is no longer considered to be “working toward”

16 The terms “General Certification”, “Certified General”, or “state certified” used in this document refer to the state licensing and certification appraiser classification of “Certified General” as established by each state and monitored by the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC).

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certification. 2. Qualifications of contract appraisers. RPUD will only contract with appraisers meeting state licensing and certification requirements for a Certified General appraiser, and will seek to engage those appraisers most qualified for the problem at hand. Contract appraisers will meet the highest professional standards and be competent in the area of expertise required to produce credible results for the property type being appraised or evaluated. Because of the wide variety of assignments and property types, and the large geographic coverage, it is unlikely that any one appraiser will be the best qualified for all assignments. In selecting a contract appraiser, the knowledge and experience of potential contractors must be evaluated and matched to the requirements for a specific project. RPUD requires a variety of appraisal disciplines, diversity of knowledge, and experience in multiple categories including agricultural, commercial, industrial, Federal, military, minerals, machinery and equipment, personal property, utility systems, environmental, and others.

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CHAPTER 4. PROCEDURES

1. Requests for appraisals. Appraisals and related services will be requested in writing by regional directors, realty specialists, or other authorized personnel within GSA or other Federal agencies. The requester will determine, in consultation with the appraiser, if and when an appraisal is necessary based on current agency policy and applicable requirements. Discussion should include program authorities for the appraisal and funding sources, as appropriate. If an appraisal is needed, the requester will forward an appraisal request (using GSA Form 66 Request for Valuation Service, or via memorandum or email) to a regional appraiser providing all relevant project data. A copy of GSA Form 66 is included in Appendix A.

a. The appraisal request should include the following to the extent that this information is available:

Note: If a GSA Form 66 is used, it should be supplemented with the additional information listed below

(1) GSA Control Number. (2) Real Property Unique Identifier (3) Identification of the property (legal description if available). (4) Property rights to be appraised (fee, easement, leased fee, leasehold, etc.). (5) Title report or legal counsel’s Opinion of Disposable Interest. (6) Purpose of the appraisal (negotiated sale, competitive sale, public benefit

conveyance, Federal transfer, exchange, special legislation, planning purposes, etc.). (7) Type of value required (Fair Market Value, Use Value, Disposition Value, Fair

Annual Rent, etc.). (8) Description and inventory of the improvements (size, type, age, condition,

floor plans, pictures, etc.). (9) Description of the site (size, shape, access, topography, floodplain, wetlands,

availability of utilities, zoning, and a survey or plat, if available). (10) Known encumbrances (leases, easements, reservations, restrictions,

covenants, etc.). (11) Environmental issues (existing reports, characterization, remediation plans,

cost estimates, etc.)

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(12) Historic status. (13) Agency contact for inspection and additional property data. (14) Required delivery time.

b. Upon receipt of sufficient information, a regional appraiser will accept the

appraisal request and log the project into the tracking system. Vague or incomplete requests require immediate coordination with the requester to obtain sufficient data before the appraisal process can be initiated. 2. Utilization of staff or contract resources. Regional appraisers have the authority to determine whether to use staff or contract resources to provide appraisal and related services. Negotiated sales with an anticipated value of $100,000 or greater and real property exchanges regardless of value are an exception to the aforementioned authority as both require a contract appraisal which is made available for review by GSA’s congressional oversight committees. The determination to utilize contract or staff resources is based on potential conflict of interest issues, workload requirements and available resources. For negotiated sales under $100,000, and Federal transfers in which GSA is a party in the transaction, a contract appraisal is preferred. 3. Assignment scope. One of the more important steps in providing credible and reliable valuation and consulting services is to properly identify the scope of the assignment. In some instances, the solution to the problem may include varying degrees of valuation, consultation, or a combination of services. The appraiser will consult with the requester to determine the appropriate services for the problem at hand. 4. Determination of the scope of work. The scope of work - the extent of research and processes necessary to complete the appraisal - is always the appraiser’s responsibility. GSA’s assignment scope, or statement of work, for contracting purposes, provides the minimum contractual obligations, but does not limit or define the specific work the appraiser must do to complete the appraisal competently. The appraiser must describe the scope of work necessary for the appraisal problem at hand, including the extent to which the appraiser collects, verifies, and analyzes all information necessary for credible assignment results. Typical disposal assignments require a complete in depth appraisal analysis. Depending on the appraisal problem, an abbreviated scope may provide the results sought by GSA. Limited or abbreviated scope appraisals may be appropriate in the case of preliminary estimates for planning purposes, quick responses to management or congressional inquiries, or the valuation of low-value or low-risk property. In addition, appraisals prepared primarily for recordkeeping purposes, such as appraisals for public benefit conveyances, may not require a complete appraisal analysis if the analysis leads to a credible assignment result. If the intended use of the report is for recording purposes and not to assist in evaluating whether a transaction is acceptable, a limited

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scope of work may be suitable. 5. Contracting. Contracting for appraisal and appraisal-related services will be conducted in a manner consistent with policy established by the contracting office responsible for the procurement. The following is presented as a general guideline to help ensure that a quality product is obtained. When allowed by contracting policy, the contract will be based on the best value to the Government. This concept provides that technical quality is more important than cost or price, which is consistent with the goal of the Appraisal Team to deliver credible and reliable services and products.

a. Appraisers selected for contract assignments must be well qualified and capable of producing a credible result for the task required. The contract appraiser must be a Certified General appraiser in the state in which the property is located or obtain a temporary certification during the course of the assignment. The potential contractors’ qualifications (education and experience), past performance, and other relevant factors will be evaluated in order to select the most qualified appraiser for the assignment.

b. The contract statement of work will be customized to each assignment to address

the unique issues related to that particular appraisal problem. Typically, the RPUD appraiser assigned the project prepares the Independent Government Estimate (IGE) for contracting purposes and is involved with developing the technical evaluation factors for contract award. Factors may include the contract appraiser’s qualifications (education and experience), past performance, management plan (proposed analysis and treatment of the appraisal problem), and other factors related to the contract appraiser’s ability to deliver a credible and reliable product or service. If allowed by the contracting officer, the RPUD appraiser is involved in the evaluation of proposals and recommendation of the most qualified proposal. Upon completion of the contract assignment, the RPUD appraiser determines whether the work product complies with the terms and conditions of the contract from a technical perspective, and recommends payment for contract services if the work product is acceptable. In addition, the RPUD appraiser provides an evaluation of the contractor’s performance, if requested by the contracting officer.

6. General procedure. The regional appraiser is responsible for completing appraisal and appraisal-related assignments in RPUD The following is a generic procedure for a contract appraisal assignment:

a. Appraisal requests. Evaluate the appraisal request to ensure all necessary elements have been provided. Consult with the realty specialist and review the case file to obtain missing information. Determine whether a contract or staff appraisal is most appropriate.

b. Initiate tracking system. Enter initial project data into automated reporting and

tracking system (and update through completion).

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c. Statement of work. Determine the scope of the assignment and develop

appropriate contracting documentation which may include a draft contract specification, Independent Government Estimate (IGE), and technical evaluation factors.

d. Type of contract. Determine type of contract (IDIQ, Competitive, Sole Source, Federal Supply Schedule, etc.) that is to be utilized. Match the potential appraisers with the knowledge and experience needed for the assignment.

e. Property inspection. To the extent possible and practical, considering budget and other limitations, all appraised property as well as comparable sales and rentals will be inspected by a review appraiser prior to completing the appraisal review. For unusual, complex, or high visibility property, an inspection of the subject property may be necessary prior to preparing contract specifications.

f. Initiate contracting. Request certification of availability of funds from the regional budget analyst or responsible associate. At the same time forward the contracting documentation which may include the draft contract specification, IGE, contractor(s) contact information, and technical evaluation factors to the appropriate procurement official for contracting.

g. Contracting Officer’s Representative. Participate in evaluation of proposals and act as the contracting officer’s representative (COR) to the extent coordinated with and authorized by the contracting officer.

h. Periodic progress assessments. To the extent authorized by the contracting officer, keep in contact with the contract appraiser and conduct progress reviews as necessary. For the more complex assignments, it may be necessary to perform one or more progress reviews at various stages of the assignment (property description/market analysis, preliminary Highest and Best Use, draft appraisal, etc). To the extent possible, resolve issues with the contract appraiser prior to completion of the final report.

i. Evaluate final appraisal. Upon receipt of the final report, evaluate it to determine whether the product is acceptable for contract payment. If not previously performed, inspect the subject property and comparable sales and rentals, as appropriate. Prepare a written appraisal review. If accepted, a regional appraiser will approve the appraisal report and deliver it to the requester.

j. Complete project tracking. Make appropriate entries in automated systems and reports.

k. Complete project file. Filing will be performed in accordance with current agency records maintenance and disposition policy, and the file retention requirements contained in USPAP.

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7. Valuation process. While the procedure for each appraisal assignment will vary depending on circumstances, complexity, and other factors, a generic model has been developed that can be adapted or modified for a variety of valuation uses. The valuation process is a systematic procedure involving a series of steps to perform market research, analyze data, apply appraisal techniques, and develop an opinion of the defined value. A copy of The Valuation Process from the Appraisal of Real Estate, 13th edition is included in Appendix B.

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CHAPTER 5. APPRAISAL METHODS AND TECHNIQUES

1. General. Methodology, procedures, and definitions may vary depending on the standard being followed (Uniform Standards of Professional Appraisal Practice or Uniform Appraisal Standards for Federal Land Acquisitions), the type of property being appraised (real property versus related personal property), and the purpose of the appraisal. The value definition selected for use in any individual assignment should reflect the conditions and situations of the appraisal problem. When valuing related personal property, real estate definitions may not be applicable. A source for personal property definitions is the current edition of Valuing Machinery and Equipment published by the American Society of Appraisers.

2. Uniform standards. GSA appraisal methods and techniques must be in accordance with established and commonly accepted uniform standards. The Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Standards Board of the Appraisal Foundation is established and has achieved wide acceptance by the appraisal community. OMB Bulletin No. 92-06 provides that Federal agencies prepare real estate appraisal and appraisal review reports in accordance with written and approved agency standards consistent with USPAP. The guidance presented in this handbook is intended to be consistent with USPAP; all appraisals and appraisal review assignments conducted in support of disposition actions are required, to the extent practical, to conform to USPAP. In addition, assignments that involve an acquisition component or are being prepared for certain military purposes must incorporate the supplemental requirements of the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA). For example, the current Department of Defense implementation guidelines of the Base Realignment and Closure (BRAC) Act require the use of the UASFLA standard for BRAC-related appraisals. In some instances, the UASFLA may be modified to fit the appraisal problem. For reimbursable work performed for other Federal agencies, it is acceptable to follow the laws, regulations, and policies applicable to that agency.

3. Approaches to value. The appraiser must consider the Sales Comparison, Income and Cost Approaches to value, and develop each approach appropriate to the appraisal problem. Although general guidance is provided in USPAP and UASFLA, it is incumbent upon the appraiser to ensure that appropriate methodologies and techniques are utilized. For some highly complex assignments, it may be necessary for the appraiser to modify or adapt the traditional approaches to value for application to a unique appraisal problem. 4. Special valuation assignments. Assignments may involve unique properties or circumstances, and include the appraisal, review, or consultation involving partial interest such as easements, leases, air rights, water rights, minerals or mineral rights. Assignments may include special purpose properties, historic buildings, plant equipment, timber, and environmentally contaminated property. In many instances, specialized appraisal professionals are needed for the assignment and specific

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procedures are required. 5. Assumptions and limiting conditions. Appraisal reports and appraisal review reports must describe the assumptions and limiting conditions. Extraordinary assumptions and hypothetical conditions must be clearly stated and conspicuously presented in the document. An extraordinary assumption presumes as fact otherwise uncertain information. A hypothetical condition is contrary to what is known to exist, but is supposed for the purpose of analysis. Use of an extraordinary assumption or a hypothetical condition must be fully disclosed, justified and result in a credible analysis. 6. Certification. Appraisal reports and appraisal review reports must contain a signed certification similar to the example contained in the most recent version of USPAP or UASFLA, whichever standard is being used for the assignment. Any appraiser signing the certification accepts responsibility for all elements of the certification, assignment results, and contents of the report or review being certified. Certifications must identify all other parties that contributed substantially to developing the report, and their roles. 7. Confidentiality. Appraisals, appraisal reports, appraisal analyses, and other pre-decisional appraisal documents are confidential and can only be used by authorized Federal Government personnel who can substantiate the need to know this information. Release of appraisal information can compromise the Government’s position and may not be divulged to anyone other than authorized Federal Government personnel who can substantiate the need to know this information. The validity of the need to know will be determined by the regional director of Real Property Utilization and Disposal. Any Federal Government personnel outside the Office of Real Property Utilization and Disposal authorized to view confidential appraisal information because of their substantiated need to know must sign appropriate non-disclosure agreements limiting or prohibiting further dissemination of information contained in the appraisal product or analysis. An example of a non-disclosure agreement is contained in Appendix C. Any correspondence containing confidential appraisal and/or appraisal-related information to a substantiated person must include the following statement:

USE AND DISCLOSURE OF DATA

The appraisal attached to this correspondence is the property of the United States. The valuation, supporting data, and analyses contained herein are confidential and the recipient of this report agrees not to duplicate, use, or disclose in whole or in part any of the information except for the express purpose of evaluating a potential conveyance or repositioning of the appraised property. 8. Freedom of Information Act. Because of the confidentiality of appraisal assignments, appraisals and appraisal-related documents are not generally releasable under the Freedom of Information Act (FOIA). Requests for appraisal-related documents are typically denied pursuant to the fourth exemption under FOIA which permits an agency to withhold documents that contain proprietary information the release of which would be harmful to the agency (5 U.S.C. § 552(b)(4)), and the fifth statutory exception under FOIA which permits an agency to withhold interagency or intra-agency memoranda or

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letters which would not be available to a party other than an agency in litigation with the agency (5 U.S.C. § 552(b)(5)). The agency’s legal and proprietary interests to be protected (i.e., agency pre-decisional deliberative process privilege/proprietary information privilege) outweighs the right of public disclosure of the specific items. Appraisals are pre-decisional, and their release would compromise the integrity of the GSA’s internal decision-making process by inhibiting the free flow of candid analysis and opinions. These documents are not merely fixed facts that can be segregated from opinion. Rather, this information is derived from the type of complex judgments and internal pre-decisional exchanges that 5 U.S.C. 552(b)(5) is intended to protect. Furthermore, the release of appraisals at a later date could compromise the Government’s position on future actions. In determining if a request to release an appraisal is warranted, the request should be denied to the extent allowable by current law and regulations. In instances where a FOIA request is granted though an appeal, consideration should be given to redacting any information deemed proprietary or confidential by the appraiser. Any denial must be reviewed by the Office of General Counsel.

.

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CHAPTER 6. APPRAISAL ASSIGNMENTS

1. Conditions requiring an appraisal. 41 CFR 102-75.300 of the Code of Federal Regulations states that appraisals are required for all real property disposal transactions, except when:

• An appraisal will serve no useful purpose (e.g., legislation authorizes conveyance without monetary consideration or at a fixed price). This exception does not apply to negotiated sales to public agencies intending to use the property for a public purpose not covered by any of the special disposal provisions in subpart C of this part (disposal regulation 102-75); or

• The estimated Fair Market Value of property to be offered on a competitive sale basis does not exceed $300,000.

a. For property disposal purposes, an appraisal will be obtained in the following circumstances:

(1) For a negotiated sale to a public body or private party unless the cost of an

appraisal exceeds the property’s anticipated value. A contract appraisal is required for a negotiated sale with an anticipated value over $100,000. However, if the circumstances of a transaction differ from those considered in the contract appraisal or additional information becomes available after the AFMV is determined, it is acceptable for a RPUD regional appraiser to provide additional documentation supporting any adjustments to the AFMV in full compliance with USPAP standards.

(2) For competitive sales with an anticipated value of $100,000 or greater. This anticipated value threshold may be raised to $300,000 (FMR § 102-75.300) with the RPUD director’s concurrence.

(3) For Federal transfers with an anticipated value of $100,000 or greater. However, an appraisal is optional if GSA is supporting a “no cost” Federal transfer .

(4) For public benefit conveyances with an anticipated value of $100,000 or greater.

(5) For exchanges, unless the cost of an appraisal exceeds the property’s anticipated value.

(6) For real property disposed of by lease with a term of not more than 5 years, if the anticipated fair annual rent is more than $100,000 for any year, or leases with a term of more than 5 years if the total anticipated rent over the term of the lease is more than $100,000.

(7) For abrogations (appraisal report is typically provided by the grantee), unless the cost of an appraisal exceeds the property’s anticipated value. The appraisal should be as of a current effective date and reflect the property’s “as is” condition disregarding the impact of the use restrictions specified in the conveyance document.

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(8) For relocations, unless the cost of an appraisal exceeds the property’s anticipated value.

(9) For all other disposal actions with an anticipated value of $100,000 or greater.

b. The Appraisal Threshold and Validity Table contained in Appendix D summarize

the circumstances requiring an appraisal.

2. Conditions not requiring an appraisal. An appraisal is not required if:

a. The appraisal serves no useful purpose, (e.g., legislation authorizes conveyance without monetary consideration or at a fixed price - FMR § 102-75.300).

b. The anticipated value of the property is below $100,000 except for negotiated sales, exchanges, abrogations, and relocations.

c. The cost of acquiring an appraisal exceeds the property’s anticipated value.

d. GSA is supporting a waiver of reimbursement for a Federal transfer.

e. The landholding agency submits, or agrees to submit, an appraisal that complies with GSA’s appraisal standards, and the appraisal is reviewed and approved by the RPUD regional appraiser.

f. With the exception of transactions requiring review by RPUD’s congressional oversight committees (negotiated sales of property with AFMV ≥ $100,000, real property exchanges regardless of value), the requirement to obtain an appraisal may be waived with the approval of the RPUD Assistant Commissioner.

3. Appraisal report type. A regional appraiser may exercise discretion as to what report type is sufficient for each assignment. Appraisal reports for real property disposal will typically be appraisal reports rather than restricted appraisal reports17 as described in USPAP. However, certain circumstances may not require a detailed report and a restricted appraisal report may be appropriate. The appraisal report type should be consistent with the intended use and the intended user of the report. If the appraisal report may need to be viewed by persons not party to the transaction (such as congressional staff in the case of negotiated sales or exchanges), an appraisal report is generally required to provide sufficient detail to enable the intended user to understand the report. A restricted appraisal report should be avoided except in limited circumstances. For appraisals prepared primarily for recordkeeping purposes, such as appraisals for public benefit conveyances, and are not prepared to assist in evaluating whether a transaction is acceptable, a restricted appraisal report may be acceptable if the report leads to a credible assignment result. In all cases, contract and staff appraisals must present sufficient information in the report or the appraisal file to enable a review of the data and the analyses supporting the conclusions of the appraisal. 17 As defined by the Uniform Standards of Professional Appraisal Practice (2014-2015 Edition)

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4. Appraisals supporting transactions requiring congressional oversight committee review. Appraisals need to adhere to the highest quality standards and reports must be clearly understood and free of any errors. An appraisal report as described by USPAP is required and shall contain sufficient information to enable the committee to understand the report. It is essential that the RPUD appraiser provides documentation that supports the Appraised Fair Market Value (AFMV) which is the basis for the transaction. In most instances, the documentation will consist of the approved appraisal report, the appraisal review report (conducted by a RPUD appraiser), and any additional information requested by congressional oversight committees.

a. If the circumstances of a transaction differ from those considered in the appraisal or if additional information became available after the AFMV was determined, the appraiser must provide additional documentation supporting any adjustments to the AFMV. This is most likely to occur if environmentally contaminated property initially appraised “as if clean” (due to a lack of environmental characterization and/or defined remediation efforts), is being sold “as is”.

b. To account for these differences, the appraiser must consult with the realty specialists to gather current environmental information such as the Government’s share of environmental restoration costs (provided by the landholding agency or an independent third party) and proposed use restrictions. Any information not considered in the original AFMV determination must be analyzed by the appraiser and adjustments must be documented in an updated appraisal, appraisal review report, or in a separate document prepared by the appraiser. 5. Value concepts. Valuation assignments may call for various value concepts depending on circumstances. Most assignments require an estimate of the Fair Market Value, which is synonymous with the appraisal profession’s standard term of Market Value. Some assignments may require a value concept other than Fair Market Value, such as Use Value, Disposition Value, Fair Annual Rent, Salvage Value, Scrap Value, etc. When an assignment requires an estimate of value other than Fair Market Value, it is generally best to include an estimate of Fair Market Value as well, to avoid producing a misleading report.

a. Use Value may be necessary to determine the value to a specific user. Examples include: a negotiated sale of a property to a tenant in possession; to an adjacent property owner; or to determine the value of a special use type property to a specific user.

b. For transactions involving a competitive sale, the Disposition Value may be requested in addition to Fair Market Value to establish a lower end reference point in the market.

c. Other value concepts that may be required include Fair Annual Rent (Market

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Rent), Salvage Value, Scrap Value, Insurable Value, etc.

d. In certain circumstances, it may be necessary to estimate a retrospective value or a prospective value in addition to the current value.

e. It may be necessary to base the value on extraordinary assumptions and/or hypothetical conditions, as in cases involving environmental and other issues. Any assumptions and conditions must always be clearly spelled out in the report.

f. In appraisal assignments involving related personal property such as plant equipment, value concepts may also include assumptions of whether the equipment is to remain in place or be sold for offsite removal. 6. Historic properties. Appraisers are authorized to consider the effect of historic covenants on the FMV, if the real property is on the National Register of Historic Places, or eligible for listing on the register. See FMR §102-75.315. The proposed deed covenant or sample language should be considered in the appraisal. 7. Environmentally contaminated properties. Consult with the requestor about available information related to the property’s environmental characterization, remediation plan, and remediation costs. Depending on the environmental information available at the time of the appraisal, a property can be appraised in its “as is” condition, “as if clean” condition, or somewhere in between. When sufficient environmental characterization is available, the appraiser can consider the applicable use restrictions, environmental stigma (if any), and remediation costs. It is common for an appraisal to be requested before the environmental condition of the property has been fully characterized. 8. Encumbrances. In addition to historic and environmental encumbrances, all characteristics, conditions, and covenants that affect the value of the property are to be considered in the valuation unless otherwise instructed by the requestor and subject to a hypothetical condition or extraordinary assumption. This includes, but is not limited to, leases, easements, reservations, restrictions, covenants, and special agency requirements. An example of a special agency requirement is the consideration of the value of artwork that is an integral part of the building (not personal property) as it contributes to the value of the real property. Any existing or proposed encumbrances should be identified in the appraisal, and the appraiser should consider the encumbrances’ impact on value. Hypothetical conditions and extraordinary assumptions must be identified and their use must be consistent with the scope of work necessary to produce results that are credible and that are not misleading. 9. Appraisal validity time span. An appraisal’s effective date is inherently tied to a specific point in time, but real estate professionals rely on appraisal results for an extended period of time. Generally, an appraisal can be used to support business decisions for approximately one year (from the effective date of the appraisal) unless significant changes to the property or the real estate market occur. For property disposal purposes, appraisals remain valid as follows:

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a. For negotiated sales, appraisals are considered valid if the elapsed time from the effective date of the appraisal to the date the buyer signs the Offer to Purchase is less than one year. The appraisal report provides a measure for determining the sufficiency of the Offer to Purchase.

b. For transactions requiring an explanatory statement, appraisals are valid for one year from the effective date of the appraisal.

c. For all other transactions, appraisals are generally valid for one year, unless changes in market or property conditions make the current appraisal unreliable. The age of an appraisal may not be as critical for a competitive transaction (such as a public sale) as it is for a non-competitive transaction that will not be exposed to an open market environment (such as a Federal transfer, public benefit conveyance, exchange, abrogation). Also, the purpose of the appraisal may have some bearing on the acceptable age of an appraisal. Appraisals prepared primarily for recordkeeping purposes may not be as time sensitive as those prepared for sale or exchange purposes. Except for appraisals prepared for negotiated sales and exchanges requiring an explanatory statement, the acceptable age of the appraisal is left to the discretion of the RPUD regional director in consultation with a regional appraiser and the realty specialist responsible for the project.

d. The Appraisal Threshold and Validity Table contained in Appendix D summarizes the general length of time an appraisal is valid.

e. If the transaction cannot be completed while the appraisal is still valid, the realty specialist or requester of the original appraisal is responsible for requesting a new or updated appraisal. Consultation with a regional appraiser can determine whether there have been significant changes in the market, property, or assumptions that warrant a new appraisal. A regional appraiser can provide input on the lead time necessary to complete the new appraisal. 10. Appraisal updates. When an appraisal is no longer valid and the value requires updating, an appraisal update may be performed, which is essentially a subsequent appraisal assignment and a new appraisal report.

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CHAPTER 7. APPRAISAL REVIEW ASSIGNMENTS

1. Appraisal review reports. All appraisals reviewed by a RPUD appraiser require a written appraisal review unless a reimbursable services agreement provides otherwise. An appraisal review will be delivered to the requester attached to all copies of the appraisal report. The review may be formatted either as a narrative or checklist, or a combination of the two, but must be compliant with the version of USPAP or UASFLA valid at the time of the review. 2. Review appraiser competency. A review appraiser must be competent to perform the review. If a review appraiser is lacking the knowledge or experience to perform the review competently, he or she must disclose the lack of knowledge and/or experience and take all steps necessary to appropriately complete the assignment competently and document the steps taken in the appraisal review report. The required knowledge and experience may be gained by personal study, association with a qualified appraiser, or retention of others who possess the required knowledge and/or experience. 3. Contract reviews. Acceptance of appraisal products and approval of values are inherently governmental functions. Preferably, appraisal reviews should be performed by RPUD appraisers. However, if it is necessary to contract for assistance in the review process due to resource issues, the contract review appraiser must be well qualified, knowledgeable of GSA’s review process, and given the freedom to interact with the contract appraiser to correct deficiencies, provide additional support, resolve any issues, and recommend approval or disapproval of the report to a RPUD regional appraiser. Ultimately it is a RPUD regional appraiser who is responsible for the approval or disapproval of the report. 4. Appraisal review type. Generally, a field review (inspection of the subject property and comparable market data) is required. In addition, it may be necessary to inspect the property prior to developing contract specifications for unusual, complex, or high-profile property. For some low-valued, noncomplex properties, desk reviews (subject property not inspected) may be appropriate under certain circumstances involving time or budgetary constraints. Both field and desk reviews require written appraisal review reports. 5. Overwrite procedure. During the review process, a review appraiser should make every effort to work with the appraiser to resolve appraisal deficiencies. If the corrections and/or substantiations are not satisfactory and the appraisal is determined to be unacceptable for Government use, a review appraiser may develop his or her own opinion of value (appraisal). In this case, a review appraiser must meet the requirements of preparing an appraisal (Standard 1 of USPAP) and report the conclusion in the appraisal review (Standard 3 of USPAP). Elements of the original appraisal that were found to be acceptable can be incorporated by reference. Any additional information relied upon and the reasoning and basis of the reviewer’s opinion of value must be summarized. USPAP Advisory Opinion 20 (AO-20) addresses the issue of appraisal review assignments that include the reviewer’s own opinion of value.

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When a regional appraiser has developed his or her own opinion of value in a review, it may be appropriate to have a qualified peer review the documentation supporting the new opinion of value. This secondary review process is at the discretion of the regional appraiser involved, may include the National RPUD appraiser; and is conducted in consideration of the complexity and sensitivity of the assignment and the additional time required. 6. Approval process. A regional appraiser has the authority to approve appraisal and appraisal-related work products for GSA or Federal Government use. If an appraiser without approval authority has reviewed an appraisal, that appraiser may make a recommendation whether or not to approve the appraisal, but it is the responsibility of a regional appraiser to accept and approve the report for Federal Government use. Upon approval by a regional appraiser, the appraisal becomes the “GSA Approved Appraisal” and the Appraised Fair Market Value (AFMV) is established. In recommending approval and/or approving an appraisal, reviewers and regional appraisers should carefully state their opinions and conclusions. Approving a different value or concurring with the concluded value constitutes the development of a review appraiser’s own opinion of value which must meet the requirements of an appraisal. Acceptable approval language includes “The appraisal report and value are approved for Federal Government use.”

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CHAPTER 8. CONSULTING AND OTHER ASSIGNMENTS

1. General. In addition to appraisal assignments, RPUD appraisers (or their contract appraisers) also provide consulting and other real estate services. 2. Consulting services. Real property consulting services that include opinions of value or the quality of another appraiser’s work as a component of the assignment must be prepared in accordance with Standards 1 and 2, or Standard 3 of USPAP. This type of consulting assignment should be impartial and not advocate a particular position. Consulting services performed by an appraiser that do not include opinions of value or the quality of another appraiser’s work must comply with the USPAP requirements for ethical and competent performance. 3. Other related services. Other studies or services performed by RPUD and/or their contract appraisers can include market analysis, feasibility studies, Highest and Best Use studies, marketability studies, parcelization recommendations, rent studies, and other real estate-related studies. These assignments must provide adequate supporting data and analysis sufficient to produce credible assignment results and, these assignments must comply with applicable sections of USPAP, such as the Ethics Rule and Competency Rule.

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CHAPTER 9. QUALITY CONTROL

1. General. To ensure quality valuation services, quality control must be performed on multiple levels. 2. Contract work. Quality control of contract work is performed by a review appraiser and documented in the written appraisal review and acceptance of the work product for contract payment. 3. Staff work. The quality of the staff work is controlled by means of periodic work product evaluations by other senior RPUD appraisers. The purpose of evaluating work product is to ensure quality and consistency in the RPUD appraisal program. Sharing of work product and knowledge supports the overall goal of providing credible and reliable valuation services. Appraisals and related appraisal services will be evaluated to determine whether they are USPAP compliant and in accordance with RPUD appraisal policies and guidelines. Work product includes contract statements of work, appraisal reports, appraisal review reports, consulting reports, and other appraisal and appraisal-related reports and studies. The evaluation process will be structured in a manner that provides an adequate sampling of work product and file content, a reasonable evaluation cycle, and a written summary of the evaluation findings with recommendations for improvement if applicable. 4. Nontechnical service. The quality of the nontechnical nature of the service (timeliness, responsiveness, etc.) will be provided in the course of management reviews and customer feedback.

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CHAPTER 10. THE APPRAISAL TEAM

1. General. The Appraisal Team is principally a self-directed work group consisting of the RPUD appraisers, a variety of multi-discipline technical advisors, and management representatives. Within the framework of the policy and guidance established in this document and with the approval of RPUD management, the Appraisal Team is responsible for developing, disseminating, and maintaining detailed policy and guidance for routine use by RPUD appraisers. In addition, the Appraisal Team is responsible for assembling sample work products, databases, general guidelines, and other pertinent information to assist RPUD appraisers in the performance of their jobs. 2. RPUD appraisal database. A shared and controlled file system or repository for electronic appraisal files was established as a resource for the Appraisal Team. The resource portion provides ready access to current laws, regulations, and policies as well as sample work products and lessons learned. This portion of the database is accessible to all RPUD appraisers. The repository portion is a secure site with limited access to archived electronic project files including appraisal reports, reviews, contract specifications, and other supporting documents. 3. Appraisal Desk Reference. The Appraisal Team will maintain a website-based Appraisal Desk Reference that provides detailed instructions, examples, and suggestions related to appraisal procedures and practices. 4. Disposal inventory database. The current real property disposal inventory database will be maintained to track appraisal projects and collect national statistics.

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Appendix A. GSA Form 66, Request for Valuation Service

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Appendix B. The Valuation Process Step 1 Identification of the Problem

Identify client and intended

users

Identify the

intended use

Identify the purpose of the

assignment (type of value)

Identify the effective

date of the opinion

Identify the relevant

characteristics of the property

Assignment conditions

Extraordinary Assumptions

Hypothetical Conditions

Step 2 Scope of Work Determination

Step 3 Data Collection and Property Description Market Area Data

General characteristics of region, city, and neighborhood

Subject Property Data Subject characteristics of land

use and improvements, personal property, business assets, etc.

Comparable Property Data Sales, listings, offerings

vacancies, cost and depreciation, income and expenses, capitalization rates, etc.

Step 4 Data Analysis Market Analysis Demand studies Supply studies

Marketability studies

Highest and Best Use Analysis Site as though vacant

Ideal improvement Property as improved

Step 5 Site Value Opinion

Step 6 Application of the Approaches to Value

Sales Comparison Cost Income Capitalization

Step 7 Reconciliation of Value Indications and Final Opinion of Value

Step 8 Report of Defined Value Reprinted with permission from “The Appraisal of Real Estate, 13th edition (Chicago: Appraisal Institute, 2008, 131. ©2013 Reprinted with permission from the Appraisal Institute, Chicago, Illinois. All Rights Reserved.

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Appendix C. Appraisal Non-Disclosure Agreement

FOR OFFICIAL USE ONLY

APPRAISAL NON-DISCLOSURE AGREEMENT

Name:

Grade: Job Title:

Federal Organization:

Acknowledgment

1. I acknowledge that in the performance of my official duties I have the need to access the appraisal report and/or appraisal related information for the property and any information pertaining to the negotiations regarding the transfer of the property. I am aware that unauthorized disclosure of such information could damage the integrity of the sale and transfer, because such unauthorized disclosure would provide an unfair advantage to persons obtaining such confidential financial and contractual information, and the transmission or revelation of such information to unauthorized persons could subject me to prosecution under the Procurement Integrity Laws or under other applicable laws.

2. I acknowledge that I will not divulge, publish, or reveal by word, conduct, or any other means, such information or knowledge, except as necessary to do so in the performance of my official duties and in accordance with the laws of the United States, unless specifically authorized in writing in each and every case by a duly authorized representative of the United States Government. I take this obligation freely, without any mental reservation or purpose of evasion and in the absence of duress.

3. I acknowledge that the information I receive will be given only to persons specifically granted access to such information and may not be further divulged without specific prior written approval from an authorized individual.

4. If, at any time during the period for which I have access to such information, there may be circumstances that could result in a real, apparent, possible, or potential conflict of interest, I will immediately report the circumstances to the Agency Counselor.

5. All personnel are requested to check the applicable block:

I have submitted a current OGE Form 450, Executive Branch Personnel Confidential Financial Disclosure Report, as required by 5 CFR 2634.

I am not required to submit an OGE Form 450.

SIGNATURE:

DATE:

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Appendix D. Appraisal Threshold and Validity Table

Disposal Action Anticipated value threshold

requiring an appraisal

Length of time an appraisal is valid

Competitive Sale Property value ≥ $100,000

CFR threshold: Property value > $300,000 regional director’s concurrence required

Generally one year

Negotiated Sale Appraisal required for all negotiated sales unless the cost of the appraisal exceeds the property’s anticipated value

Appraisal effective date to signed OTP date < one year

Federal Transfer ≥ $100,000 unless GSA is supporting a waiver of reimbursement

Generally one year

Public Benefit Conveyance

≥ $100,000 Generally one year

Exchange Appraisal required for all exchanges unless the cost of the appraisal exceeds the property’s anticipated value

If explanatory statement required, appraisal effective date must be < one year old.

Lease Term of the lease is not more than 5 years and the annual rent for any year is > $100,000; or term is more than 5 years and the rent over the term of the lease is > $100,000

Generally one year

Abrogation Appraisal required for all abrogations unless the cost of the appraisal exceeds the property’s anticipated value

Generally one year

Relocation Appraisal required for all relocations unless the cost of the appraisal exceeds the property’s anticipated value

Generally one year

Other Disposal Actions ≥ $100,000 Generally one year

Note: With the exception of transactions requiring Congressional oversight committee review, the requirement to obtain an appraisal may be waived with proper justification and the approval of the Assistant Commissioner, Office of Real Property Utilization and Disposal.