Property Valuation
An appraisal review in Utah may be required by lenders to:
AAutomatically increase the appraised value to match the purchase price
BEnsure the original appraisal meets professional standards and is supported by market data✓ Correct
CReplace the original appraisal with a different value
DIdentify properties for property tax reassessment
Explanation
Appraisal reviews (USPAP Standard 3) evaluate whether an original appraisal meets professional standards, is well-supported, and is reasonable. Lenders may order reviews when they have concerns about an appraisal's quality or supportability—not to change the value arbitrarily.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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