Which type of appraisal report is typically used by lending institutions?

The Short Form Appraisal Report is commonly used by lending institutions due to its concise and efficient nature. This type of report provides the essential information that lenders need to make informed decisions regarding mortgage loans. It typically includes a summary of the property’s characteristics, an analysis of comparable sales, and a valuation estimate. The format is streamlined, making it quicker to prepare and review compared to more detailed reports.

Lenders appreciate this format because it effectively balances thoroughness with brevity, allowing them to evaluate the property and assess risk without being overwhelmed by excessive detail. The Short Form Appraisal Report often helps accelerate the lending process, which benefits both the financial institution and the borrower, especially in a fast-paced real estate environment.

In contrast, other types of reports like the Letter Form and Narrative Appraisal reports tend to be more detailed or could be less structured, making them less preferable for quick decision-making in lending scenarios. A Comparative Market Analysis, while useful for establishing a property's market value, is not an official appraisal and does not meet the standards typically required by lenders in their due diligence process.