1 Flashcards
appraisal
the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services
report
any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client upon completion of an assignment.
An _______ is an intellectual process, in which an appraiser forms an opinion of value. On the other hand, the ___________ is the communication of the appraisal, or value opinion, which the appraiser has formed.
appraisal, appraisal report
The reporting of a real property appraisal is the subject of:
USPAP STANDARD 2
STANDARD ___ covers real property appraisal development, and STANDARD ___ covers real property appraisal reporting.
1, 2
The key phrase in STANDARD 2 is “______”
not misleading.
the party or parties who engage, by employment or contract, an appraiser in a specific assignment.
THE CLIENT
Let’s revisit the appraisal process again. The steps include:
- Identification of the problem
- Determination of the scope of work
- Collection and analysis of the data
- Determination of highest and best use
- Application of the approaches to value
- Reconciliation
- Reporting of the appraisal
is that loss in value that occurs as a result of the normal deterioration or physical damage to the structure itself.
Physical deterioration
When a property is appraised with an effective date that is some time in the future, this is a(n):
PROSPECTIVE
What type of depreciation is always incurable?
EXTERNAL OBSOLESCENCE
an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.
EXTRAORDINARY ASSUMPTION
a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.
HYPOTHETICAL CONDITION:
When the intended users do not include parties other than the client, a _____________ may be provided.
Restricted Use Appraisal Report
In a written real property appraisal report, USPAP requires that a statement of the reporting option must be ___________.
PROMINENT
One exception to “summarize”, and “state” is that a Restricted Appraisal Report of a market value appraisal assignment must contain a summary of
The analysis of the subject’s sales, options, and listings. (Ch 2, Example of “State” from AO-11)
When an opinion of exposure time is developed, it must also be _______.
REPORTED
Two dates must be stated in the report – the effective date of the appraisal, and the date of the report. These two dates are required in every written real property appraisal report, regardless of the report option used. (Ch 3, SR 2-2 a vi)
TRUE
In an Appraisal Report, an appraiser must state the type and definition of value, and also
cite the source of the definition. (Ch 3, FIRREA - Market Value Definition)
As we stated in the previous chapter, Standards Rule ___ can be used as a convenient checklist for the minimum content requirements for USPAP-compliant real property appraisal reporting, no matter what the form or format. Simply go down the list of 12 required items, and check off the ones that appear in your appraisal report. If they are all in your report, then its content is USPAP-compliant.
2-2
T OR F:The Fannie Mae 1004 form is intended to be used to report an appraisal on modular or panelized homes.
T
Three common ways to identify a property are:
Metes & bounds, lot & block, and rectangular survey
T OR F: Properties larger than 1 acre are required to be reported in acres, not square feet.
T
At the top of page 2 of the URAR form, which listings and sales should be considered and reported?
Only properties that are comparable to the subject property
In a Fannie Mae appraisal, which FEMA zones would be considered special flood hazard areas?
ZONES A AND V
Which party is ultimately responsible for compliance with Fannie Mae and Freddie Mac policies and initiatives?
THE LENDER
Which federal government entity currently has oversight over Fannie Mae and Freddie Mac?
FHFA
T OR F:As part of the implementation of the Uniform Appraisal Dataset (UAD), Fannie Mae and Freddie Mac changed the layout and format of several appraisal report forms.
F
Which document would be MOST helpful for an appraiser in understanding the requirements of the Uniform Appraisal Dataset (UAD)?
UAD APPENDIX D
T OR F:GSEs require USPAP compliance.
T
If an MLS is used as a source for subject property offering data, the appraiser must enter:
The abbreviated MLS name and the MLS listing number or identifier
Appendix D states, “Valid descriptions include, but are not limited to, ‘Colonial,’ ‘Rambler,’ ‘Georgian,’ ‘Farmhouse’. Do not use descriptors such as ‘brick,’ ‘2 stories,’ ‘average,’ ‘conventional,’ or ‘typical’ as these are not architectural styles. Design style names may vary by locality. The appraiser should report the name of the design style that is applicable within the local market area.” (Ch 5, Improvements and Design)
T
An appraisal on which type of property, completed for a Freddie Mac lender, would NOT be subject to the requirements of the UAD?
DUPLEX
PUD
DUPLEX
T OR F:If reliable information about the physical characteristics of the subject property is not available in an exterior-only inspection appraisal, the appraiser may use unreliable sources as long as this is properly disclosed.
F
Which type of home has a small red metal label affixed to the exterior?
HUD-code manufactured home
Manufactured home appraisals are required to be reported on Fannie Mae form _________.
1004C
The 1025 form is sometimes referred to as the SRIPAR form, which stands for Small Residential Income Property Appraisal Report.
Small Residential Income Property Appraisal Report.
Austin is appraising a 3-unit residential property for a Fannie Mae lender. Which form should he use to report the results of this appraisal?
1025
An inspection made for the purpose of ensuring that repairs have been completed in accordance with a prior appraisal is ____________.
A recertification of value
How does Fannie Mae require that cooperative units be valued?
Sales comparison approach
Form 1004MC is actually an ______ to an appraisal report; it is not an appraisal reporting form
addendum
T OR F:Form 1004MC is an addendum that is required for all 1-4-family residential appraisals for Fannie Mae, Freddie Mac, FHA, and VA loans.
T
When appraising a manufactured home, an appraiser needs to look for the __________ to verify that the home was constructed in accordance with federal standards.
HUD LABEL
The differences in required information between the Fannie Mae 1004 and 1025 forms include:
A)The 1025 requires comparable rental information
B)The 1025 requires units of comparison (sale price per room, etc.)
C)The 1025 has a section where an indicated GRM can be extracted from
D)All of these answers
D)All of these answers
Fannie Mae requires which approach(es) to value in the appraisal of a HUD-Code manufactured home?
Sales comparison and cost approaches only
Austin is appraising a 3-unit residential property for a Fannie Mae lender. Which form should he use to report the results of this appraisal?
1025
Form 1025 is used to report the appraisal of
two-to-four-unit residential properties.
Why does the Individual Condominium Unit Appraisal Report require extensive information regarding the condominium project in which the subject unit is located?
Because common elements and amenities are essential to the value of a condominium unit
An Appraisal Report presents a synopsis of the information. This requires that the appraiser’s workfile must contain additional details, ready to be provided if necessary. This type of report requires an appraiser to “________” significant parts of the appraisal assignment.
summarize
appraisal report as four different sections:
Introduction
Appraisal problem and scope of work
Presentation of data
Analysis and conclusion
In a narrative appraisal report, generally, where should you include maps, photographs, graphs, and similar exhibits?
In the body, in the addendum, or in both places
The title page should also include the:
Name and address of the property appraised
Report Type (Appraisal Report or Restricted Appraisal Report)
Date of the report
Effective date of value opinion
Name and address of the client
“an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.”1
extraordinary assumption
is an assumed condition defined as “a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.”2
hypothetical condition
What is the best way to explain the appraiser’s highest and best use analysis in an Appraisal Report?
By separately explaining and describing each of the four test criteria
T OR F:It is a best practice, but not required by USPAP, to provide information about your scope of work in a separate identified section of the report.
T
Why is the title page important in a narrative appraisal report?
Because it is your opportunity to make a positive first impression
T OR F:In an appraisal report, it is not necessary to explain the meanings of acronyms such as USPAP because an intended user of an appraisal should already have a basic knowledge and understanding of appraisal terminology and USPAP.
F
A productive way to start writing a narrative appraisal report is to include an “Appraisal Summary” or “Summary of Salient Facts.” What should such a summary include?
Many of the USPAP-required items that can simply be stated
T OR F: Fannie Mae and Freddie Mac require the appraiser to possess the required competency before accepting an appraisal assignment.
F
T OR F: The current URAR form should NOT be used to report appraisals for non-mortgage lending intended uses.
F: The current URAR form is not recommended for reporting of appraisals for non-lending intended uses, such as estates, eminent domain, litigation, relocation, etc. (Ch 8, Fannie Mae)
Form for Modular homes
Fannie Mae 1004
