Reporting Unfavorable Conditions
The lender must ensure that the appraiser comments on unfavorable conditions, such as the existence of an adverse environmental or economic factor, discusses how the condition affects the value or marketability of the property being appraised and explains how the condition was taken into consideration in the valuation process.
In such cases, the appraiser’s analysis must reflect and include comparable sales that are similarly affected whenever possible. The appraiser must address the impact these factors may have, if any, on the value and marketability of the subject property. (See B4-1.3-06, Property Condition and Quality of Construction of the Improvements, for further information).
See also, B4-1.1-02, Lender Responsibilities for additional information.