Why is it important for appraisers to identify the capacity in which they are performing?

Identifying the capacity in which appraisers are performing is essential because it helps align their services with the expectations of the users of the appraisal. Different users may have varying needs and requirements based on the context in which the appraisal is being used, such as for lending, tax purposes, or investment analysis. For instance, a lender might expect a risk assessment that focuses on collateral value, while a homeowner may want insights into market trends for a listing price.

By clearly stating their capacity, appraisers can tailor their reports and communications to meet the particular expectations and requirements of the users, ensuring that the appraised value is interpreted correctly and serves its intended purpose effectively. This understanding fosters trust and confidence in the appraisal process, which is vital for all parties involved.