Use of Technology in an Appraisal or Appraisal Review Assignment

 

On April 23, 2026, the Appraisal Standards Board of The Appraisal Foundation adopted Advisory Opinion 41, Use of Technology in an Appraisal or Appraisal Review Assignment. The Advisory Opinion addresses an increasingly important issue in appraisal practice: how appraisers may responsibly use technology, including spreadsheets, regression tools, automated valuation models, machine learning systems, and generative artificial intelligence, while remaining compliant with USPAP.

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The central message of AO-41 is that technology may assist an appraiser, but it cannot replace the appraiser’s judgment or responsibility. A tool cannot comply with USPAP; only the appraiser can. The appraiser remains responsible for deciding whether to use a tool, whether to rely on its output, and whether that output supports credible assignment results.

 

AO-41 emphasizes that appraisers must evaluate technology through the existing requirements of USPAP, including the ETHICS RULE, COMPETENCY RULE, SCOPE OF WORK RULE, and RECORD KEEPING RULE. The Advisory Opinion does not create new standards or interpret existing standards. Instead, it illustrates how existing USPAP obligations apply when technology is used in appraisal or appraisal review assignments.

 

A key distinction made in AO-41 is between tool output and assignment results. Output produced by a spreadsheet, regression model, AVM, AI system, or other technology remains information until the appraiser analyzes it, determines its relevance, and decides whether it is appropriate to rely upon it. Assignment results are the appraiser’s opinions or conclusions, not the product of the tool itself.

 

AO-41 also explains that appraisers must understand a tool’s capabilities and limitations to the extent necessary for the assignment. This does not mean the appraiser must always reverse engineer a proprietary algorithm or fully understand a tool’s internal programming. However, the appraiser must have sufficient knowledge and experience to use the tool competently, recognize when its output may be unreliable, and determine whether reliance on the output is appropriate for the intended use.

 

The Advisory Opinion further addresses client-imposed restrictions or requirements involving technology. A client may prohibit or require the use of certain tools, but such conditions cannot limit the scope of work to a degree that prevents credible assignment results. If a technology restriction or requirement prevents the appraiser from complying with USPAP, the appraiser must decline the assignment, withdraw, or modify the scope of work.

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AO-41 also clarifies reporting expectations. USPAP does not require an appraiser to disclose every tool or technology used merely because it was used. Disclosure is necessary when omission would make the report misleading or would prevent intended users from understanding the work performed. For example, if a proprietary algorithm or generative AI tool materially contributed to an analysis or conclusion, the appraiser may need to explain how the tool was used and how its output was incorporated. By contrast, tools used only for formatting, grammar, spell checking, or other non-analytical report-preparation tasks generally do not require disclosure.

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Confidentiality is another major focus. AO-41 reminds appraisers that the ETHICS RULE continues to apply when technology is used. Before entering confidential information or assignment results into a tool, particularly an AI or cloud-based system, the appraiser must take reasonable steps to ensure that doing so does not improperly disclose confidential information or violate client confidentiality requirements.

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Finally, AO-41 addresses workfile obligations. If a tool’s output is relied upon in developing assignment results, the workfile must contain sufficient documentation to support the appraiser’s opinions and conclusions and show compliance with USPAP. This may include the tool’s output, related data, prompts or instructions, and the appraiser’s analysis explaining how the output was used. If a tool was reviewed but not relied upon, the necessary documentation depends on the scope of work, intended user expectations, and whether the decision not to rely on the tool affected the assignment results.

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In practical terms, AO-41 provides a framework for the modern evolution of appraisal practice: technology is permissible, and often valuable, but it must remain subordinate to the appraiser’s independent judgment, competency, ethical obligations, and responsibility for credible results.