Which type of property typically requires a "narrative appraisal report"?

A narrative appraisal report is typically required for commercial properties because of their complexity and the various factors that need to be considered when determining their value. These properties often involve detailed analysis of income, expenses, market comparisons, and physical characteristics, which requires a comprehensive and professionally prepared document.

The narrative format allows appraisers to convey the reasoning behind their valuation, including in-depth analyses of comparable properties, specific market conditions, and unique property features. This level of detail is essential for stakeholders such as investors, lenders, and property owners to understand the appraisal's basis and to facilitate decision-making related to financing or purchasing the property.

While residential properties, vacant land, and industrial properties may also need appraisals, they generally can be documented through simpler formats, such as form reports, that do not require the extensive detail found in a narrative report. Residential appraisals, for example, often rely on standardized forms that can adequately convey necessary information without the need for extensive narratives.