Commercial Appraisal Review - Focus on the Tough Ones

Duration: 90 Minutes
flat 50% off on this webinar
This webinar examines the problems that can arise in the valuation and appraisal review of some of the more complex and challenging commercial property types. Greater insight into the appraisal review process, as it differs for each of the complex property types, is provided. This is a more advanced level webinar that assumes the attendees have education, exposure, and experience with the general appraisal process and typical expectations of reviewers when reviewing a commercial appraisal report.
Commercial Appraisal Review
Instructor: Heidi Lee
Product ID: 507165
Objectives of the Presentation
  • Provides key terms and definitions for the various elements of complex property type operation and valuation
  • Examines the operational processes of property types that sell as a going concern
  • Discusses risk to the institution of different methods for measuring and deducting intangible assets that can have an impact on the real estate value component of properties that sell as going concerns
  • Examines the regulatory constraints that apply for the appraisal and review of complex property types
  • Examines relevant approaches to value for each property type and how those methods differ in their application from the valuation of less complex property types
Why Should you Attend
  • The interagency appraisal and evaluation guidelines require banks to ensure appraisal quality and review each appraisal report prior to the final credit decision
  • The regulations additionally mandate that all reviewers have specific competency to review each specific appraisal report he/she is assigned
  • Reviewer competency is a combination of education, expertise, and proficiency
  • Reviewers given appraisals of complex properties to review must therefore first be educated on how the valuation of such properties differs from a non-complex property
  • Many of these complex property types are high-value properties with associated large loan amounts. Deficiencies in reviewer understanding is more likely to increase the operational risk of the institution (impair safety and soundness) than loans collateralized by less complex property types
Areas Covered
  • Review of hotel appraisal reports
  • Review of restaurant appraisal reports
  • Review of convenience stores (c-stores) and truck stop appraisal reports
  • Review of mixed-use property appraisal reports
Who will Benefit
  • Appraisal department managers
  • Commercial appraisal reviewers
  • Credit administration officers
Topic Background
Financial institutions (banks and credit unions) make loans of all sizes. Collateral is obtained to provide the institution with some form of repayment in the event of borrower default. As such, collateralized loans are considered to have lower risk than unsecured loans and longer amortization periods are made available when long-lasting real estate collateral is provided. But just having collateral does not necessarily ensure lower risk for the institution. Real estate values shift, due to market forces and specific property issues. Thus, bank regulators have embedded the valuation process within all real estate loan production. Further, institutions are mandated to install processes and personnel that can identify risk levels and effectively manage the appraisal program with greater due diligence when risk is higher. But real estate appraising is a different industry than banking, so institutions often face a steep learning curve in efforts to comply with appraisal regulations. This webinar provides introductory information for banks and credit unions to work toward meeting the regulator's appraisal program requirements.
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  • Please click on the link to access the Recorded Session
  • Presentation handouts in downloadable PDF format will be updated on your OCP Account within 24 hours of the purchase of the product
  • Download the Certificate of Attendance and Purchase Invoice from your OCP Account after 48 hours of the product Purchase
  • Please share your valuable Feedback at the end of the session
Instructor Profile:
Heidi Lee is a commercial review appraiser with 18 years' experience at Whitney National Bank, a mid-sized financial institution. Since retiring from Whitney Bank in 2011, Ms. Lee has founded Appraisal Review & Consultation to share her skills and appraisal regulatory knowledge base with other financial institutions. Her firm offers commercial review services and appraisal policy/procedures assistance to small- and medium-sized banks across the country.

Ms. Lee has earned the MAI and the AI-GRS designations issued by the Appraisal Institute and the MRICS designation issued by the Royal Institution of Chartered Surveyors. She holds a general appraiser certification in Louisiana and Texas and was appointed by two governors to serve on the Louisiana Real Estate Appraisers Board. Additionally, she is a member of RMA (Risk Management Associates), with special interest in credit risk and operational risk.
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