1. Preparing a CRE Evaluation Step-by-Step

Preparing a CRE Evaluation Step-by-Step

Event ID: 2141341
Date: Recorded on 1/7/2020
Duration: Scheduled for 90 minutes including question and answer period.
Presenter: Gary Deutsch, CPA, president, BRT Publications, LLC
Credits: 1.5 NASBA (Management Services)

Preparing a CRE Evaluation Step-by-Step

This webinar provides guidance on critical evaluation preparation issues that can help institutions to select and train employees to prepare evaluations. In addition, the material discussed during the webinar can assist institutions with developing evaluation standards and a quality review program to minimize risks related to making lending collateral decisions based on commercial real estate transactions at or below the appraisal exemption threshold. During the presentation we’ll address, step-by-step, how to complete an evaluation of commercial real estate to comply with regulatory guidance. Attendees will also receive handout materials to assist them with preparing evaluations of commercial real estate collateral with transaction values of $500,000 or below.

The threshold for commercial real estate loans requiring an independent appraisal is based on the commercial property transaction value. If the transaction value is over $500,000, then an appraisal is required. If a commercial property transaction value is $500,000 or less, then a commercial real estate evaluation can be used to support the loan decision. Unlike appraisals, evaluations don’t have to be performed by a licensed or certified appraiser. In fact, anyone that can comply with the Federal banking agency’s 2010 Interagency Appraisal and Evaluation Guidelines can prepare an evaluation.

The alternative of evaluations is unique to the banking agencies, so those choosing to prepare evaluations either must typically gain practical experience working in a financial institution’s lending function or take appraiser training courses. Complicating the evaluator selection process further, a person well qualified to prepare an evaluation would typically be an appraiser. Yet licensed or certified appraisers must prepare a restricted appraisal report with additional information to comply with both the Uniform Standards of Professional Appraisal Practice (USPAP) AND the 2010 Interagency Appraisal and Evaluation Guidelines.

Together, the interagency guidelines and the USPAP reflect how the banking regulators are holding institutions to a high standard that requires detailed insight into how to prepare a commercial real estate evaluation that can also pass a quality review program.


Some of the area that will be covered include:

  • Using sources of industry guidance when preparing evaluations
  • Selecting commercial real estate evaluation preparers
  • Deciding on an evaluation preparation and reporting approach
  • Ensuring an evaluation meets regulatory quality standards
  • Applying professional standards to evaluations
  • Specific steps to take to prepare an evaluation
  • Report content and formats to use

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