September 14, 2026

Two questions arise regularly when an appraisal is ordered, and both are settled before work begins rather than after: which reporting option applies, and who is entitled to rely on the result.

Neither is a formality. The answers determine what the report contains and who may use it.

The two reporting options

USPAP Standards Rule 2-2 provides two options for a written real property appraisal report: an Appraisal Report and a Restricted Appraisal Report. Every written report must be prepared under one of them and must prominently state which option was used.

An appraiser may apply an additional label to a report, but not in place of the USPAP designation.

Appraisal Report, addressed in Standards Rule 2-2(a), is the more complete of the two. It must summarize the appraiser’s analysis and the rationale supporting the conclusions, and it must summarize the scope of work performed.

Restricted Appraisal Report, addressed in Standards Rule 2-2(b), contains the appraiser’s conclusions with substantially less explanation. It states rather than summarizes the scope of work, and it may not include the supporting rationale for the opinions reached. The option was previously designated a Restricted Use Appraisal Report.

The content requirements in Standards Rule 2-2 are minimums for each option, not descriptions of a typical report.

What a Restricted Appraisal Report requires

Selecting the restricted option carries specific obligations.

The report must state the identity of the client, or state that the identity has been withheld at the client’s request and is retained in the appraiser’s workfile. Any other intended users must be identified by name, not by category.

The report must also contain two disclosures made clearly and conspicuously: a restriction limiting use of the report to the client and the named intended users, and a warning that the report may not contain the supporting rationale for all of the opinions and conclusions it sets out.

A point on which older guidance is out of date

Published material on restricted reports is not consistent, and the inconsistency reflects a change over time rather than disagreement.

Older commentary states that a Restricted Appraisal Report is available only where the client is the sole intended user. Current guidance is broader: the option may be used when the client is the only intended user, or when additional intended users are identified by name. Two participating lenders, for example, may be named as co-clients with a restricted report provided, assuming restricted disclosure is otherwise appropriate.

Anyone consulting published material on this point should confirm they are reading current guidance rather than an older edition.

Reduced reporting does not mean reduced work

A restricted report is a reporting option, not a development shortcut. The appraiser’s obligation to develop credible assignment results is unchanged.

The workfile supporting a Restricted Appraisal Report must be sufficient to produce an Appraisal Report. The analysis is performed either way; what differs is how much of it appears in the delivered document.

Clients occasionally request the restricted option expecting a lower fee proportional to the shorter document. The reduction is generally smaller than expected, because the work is largely the same.

When the restricted option is appropriate

Published guidance identifies conditions that should be satisfied:

  • The client understands the limited utility of the option
  • The intended use is suitable for a report that does not contain the supporting rationale for all opinions and conclusions
  • The client, and any named intended users, do not require the level of information an Appraisal Report provides
  • The intended user is capable of understanding the analysis with limited explanation

Circumstances where the restricted option is generally unsuitable include assignments likely to be reviewed by a third party, matters that may enter litigation, and any situation where a party not named in the report may need to understand how the conclusion was reached.

Intended users

An intended user is identified by the appraiser at the outset, based on the client’s stated intended use. The designation determines both the report content and who may rely on the result.

Receiving a copy of a report does not make a party an intended user. A borrower who receives a copy of a lender-ordered appraisal under a disclosure requirement is not thereby an intended user unless the appraiser identified them as one. Similarly, a party who reads and critiques a report does not become an intended user by doing so.

The practical consequence is significant. A report is required to contain sufficient information for its intended users to understand it. The appraiser has no obligation to make it comprehensible to anyone else, and a party outside that designation is relying on a document not prepared for their use.

For clients, this argues for identifying all parties who will need to rely on the appraisal at engagement. Adding an intended user afterward is a new assignment, not a revision.

Practical guidance for ordering an appraisal

Establishing the following at engagement avoids a second engagement later:

  • The intended use. What decision the appraisal supports.
  • The intended users. Every party who will rely on it, named specifically.
  • The reporting option. Determined by the two items above rather than by budget.
  • Any third-party requirements. Lenders, agencies, courts, and programs may impose reporting requirements beyond USPAP minimums.

Where there is uncertainty, the more complete option is the safer selection. Converting an Appraisal Report to a restricted format is straightforward; a restricted report that turns out to be insufficient generally requires new work.

Teel Valuation Group prepares appraisals and appraisal reviews for lenders, attorneys, fiduciaries, agencies, and property owners across commercial, multifamily, land, and special-purpose property.

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