1.1. Introduction. These Standards reflect the application of the appraisal process to valuation assignments for federal property acquisitions. The goal of every appraisal prepared under these Standards is a well-supported opinion of market value that is credible, reliable, and accurate. These requirements and rules are set forth to ensure that the appraiser’s opinion of market value can be used for purposes of just compensation under the United States Constitution. The appraisal process provides a logical framework for the identification and proper solution of an appraisal problem. The general steps of the appraisal process are: 

• Problem identification 

• Scope of work 

• Data collection 

• Data analysis 

• Application of approaches to value 

• Reconciliation and final opinion of market value 

• Report of opinion of market value 

The first step in the appraisal process is to identify the appraisal problem to be solved. To do so, the appraiser and the client9 must address seven critical assignment elements presented in Section 1.2. This discussion summarizes each of the seven elements and in particular addresses the assignment conditions associated with appraisals prepared for federal property acquisitions. The special legal rules and methods required under these Standards are identified and briefly addressed. This section is intended to assist appraisers and agencies in determining the appropriate scope of work for each appraisal assignment. 

Section 1 also addresses the next four steps in the appraisal process. Section 1.3 addresses data collection concerning the subject property and the market, respectively. Section 1.4 addresses data analysis, including highest and best use, and larger parcel and market analysis. Section 1.5 addresses the application of the approaches to value including land valuation, the sales comparison approach, the income capitalization approach, and the cost approach. Section 1.6 addresses the reconciliation process and the final opinion of market value. Section 1 also contains appraisal development requirements specific to certain types of federal acquisitions including partial acquisitions, leasehold acquisitions, temporary acquisitions, natural resources acquisitions, inverse takings, and federal land exchanges. Finally, Section 1 provides guidance concerning the use of reports by other experts and the appraiser’s responsibilities in litigation. 

Section 1 is generally consistent with Standard 1 of USPAP, but provides more in-depth discussion of each topic to address the heightened requirements for appraisals prepared for just compensation purposes. These Standards do not cover all of the valuation problems that might be encountered in the appraisal of real property for government acquisitions. Instead, the Standards address the fundamental scope of work issues associated with preparing sound appraisals for federal agencies. Proper application of the scope of work will ensure that federal agencies obtain appraisals that are credible, reliable, and accurate and result in uniform, fair treatment of property owners during the acquisition process. 

The acquisition of private property by government agencies can create difficult and complex valuation problems, the solutions to which must be developed with great care. It is critical that in those instances when proposed acquisitions are complex, high value, sensitive, or controversial or when the matter must be referred to the Department of Justice for litigation, the full scope of work described in these Standards must be applied. In other assignments, it is appropriate to modify the scope of work when the acquisition is noncomplex and/or to ensure the cost of the appraisal is consistent with the requirements of the client agency. Under no circumstances may the scope of work result in an appraisal that does not meet the minimum requirements under the Uniform Act. 

9 See Section 1.2.1 for discussion concerning the client.