Ch 3-4 Quiz Report Writing and Case Studies

Question 1

A real property appraisal report must contain sufficient information to allow __________ to understand the scope of work.

Answer 1

Intended users

Question 2

_______________ have/has adopted the 1004 (URAR) appraisal report form.

Answer 2

HUD/FHA and VA

Question 3

A blank URAR form is BEST described as:

Answer 3

A container for an appraisal report

Question 4

A rectangular property measures 800’ x 900’. How would the site size be reported on the URAR form?

Answer 4

16.53 ac. 800 x 900 = 720,000 square feet. 720,000 sf divided by 43,560 = 16.53 acres. Properties larger than 1 acre are required to be reported in acres, not square feet. (Ch 4, URAR, Page 1: Site Section)

Question 5

A Restricted Appraisal Report does not require the appraiser to state the effective date of the appraisal.

Answer 5

FALSE

Question 6

A sentence in an appraisal report that indicates, “The subject property is currently under agreement for $550,000” would be considered __________.

Answer 6

A statement

Question 7

All of these may set forth guidelines establishing how recent and proximate comparable sales must be, except for_______________.

Answer 7

Ginnie Mae and USPAP

Question 8

An appraiser is engaged by an appraisal management company (AMC) who is acting as an agent of the lender. The AMC requests that the appraiser put the lender’s name on the appraisal report as the client. Which statement is TRUE about this situation?

Answer 8

The lender is the client.

Question 9

An appraiser is preparing a retrospective appraisal. Which statement is TRUE regarding the effective date?

Answer 9

It will be prior to the date of report.

Question 10

An appraiser is preparing an appraisal with an effective date of July 3rd. The report is dated July 5th. This would most likely be a ____________.

Answer 10

Current appraisal

Question 11

An appraiser is required to include a statement in the report certification even if he or she did not provide prior services regarding the subject property within the prior three years.

Answer 11

TRUE

Question 12

An appraiser is required to include a statement in the report certification even whether or not they provided prior services regarding the subject property within the prior___________.

Answer 12

three years

Question 13

An appraiser is required to state two dates in every Appraisal Report.

Answer 13

TRUE

Question 14

An appraiser may base a value opinion on special, non-market financing terms.

Answer 14

TRUE. If the client requests that the market value be based on non-market financing or special financing terms, the report must summarize the terms of the special financing and explain their effect on the subject’s value. (Ch 3, FIRREA - Market Value Definition)

Question 15

An appraiser may be engaged to perform an appraisal by an agent of the client.

Answer 15

TRUE

Question 16

An appraiser may not add __________ conditions to the URAR form, but is permitted to add ____________ certifications.

Answer 16

limiting, additional

Question 17

An appraiser may not add limiting conditions to the URAR form, but is permitted to add additional certifications.

Answer 17

TRUE

Question 18

An appraiser’s lender-client asks the appraiser to use the Fannie Mae URAR form to report his appraisal. This client is essentially asking for a:

Answer 18

Appraisal Report

Question 19

At the top of page 2 of the URAR form, which listings and sales should be considered and reported?

Answer 19

Only properties that are comparable to the subject property

Question 20

Barb is reporting an appraisal of a single-family home, using a URAR form. What is the BEST way to ensure that her report meets the requirements for an Appraisal Report?

Answer 20

Meet the minimum content requirements set forth in USPAP

Question 21

Brenda prepares an Appraisal Report, in which she states, word-for-word, the market value definition she is using. What other USPAP reporting requirements (if any) does she have regarding her definition of value?

Answer 21

She must cite the source of the definition.

Question 22

By fully filling out the URAR form, an appraiser has met his or her USPAP requirements for reporting.

Answer 22

FALSE

Question 23

Each of the report options outlined in Standards Rule 2-2 (a) and (b) has ___ numbered minimum content requirement items.

Answer 23

12

Question 24

Each of the report options outlined in Standards Rule 2-2 (a),and (b), has twelve(12) numbered minimum content requirement items.

Answer 24

False

Question 25

Eduardo completes an appraisal for a mortgage lender. One month later, a different lender calls and tells Eduardo that she has a copy of the report. She asks him to add her name onto the report as an intended user. What can Eduardo do under USPAP? 

Answer 25

He is not permitted to retroactively add intended users.

Question 26

Exposure time is the same as marketing time. 

Answer 26

FALSE. Exposure time is different than marketing time. Unlike exposure time, an opinion of marketing time is not required by USPAP, although some clients may request it in certain assignments. (Ch 3, Exposure Time)

Question 27

Fannie Mae last revised its residential appraisal report forms in:

Answer 27

38412

Question 28

Fannie Mae's pre-printed scope of work in the URAR form requires an appraiser to: 

Answer 28

Perform a complete visual inspection of the interior and exterior of the subject property. Inspect the neighborhood. Inspect the comparable sales from the street.

Question 29

For an appraisal for a Fannie Mae lender, the effective date of the appraisal is the date __________________. 

Answer 29

the property was inspected

Question 30

For an appraisal for a Fannie Mae lender, the effective date of the appraisal is the date the property was inspected. 

Answer 30

TRUE. Fannie Mae and Freddie Mac require that the effective date must be the date that the property was inspected. (Ch 3, SR 2-2 a vi)

Question 31

For Fannie Mae purposes, the date of the report is _________. 

Answer 31

The date the report is signed

Question 32

For purposes of the URAR form, which statement is true concerning effective age and actual age? 

Answer 32

The form asks for both.

Question 33

For real property appraisal reports, USPAP compliance is determined by: 

Answer 33

Content

Question 34

Generally speaking, Fannie Mae and Freddie Mac will not purchase a mortgage on a property that is an illegal use. 

Answer 34

TRUE

Question 35

How is a unit in a PUD defined by Fannie Mae? 

Answer 35

There is an HOA with mandatory automatic membership and the ability to lien properties

Question 36

Howard appraised a property for a very secretive client, who instructed him not to disclose to anyone that he had appraised the property. Twenty-seven months later, Howard receives an appraisal request from another client. What are Howard’s USPAP obligations?

Answer 36

He must decline the assignment.

Question 37

HUD/FHA and VA have adopted the 1004 (URAR) appraisal report form. 

Answer 37

TRUE

Question 38

If an appraisal report indicates three comparable sales adjusted to indicate $210,000, $220,000 and $230,000, the appraiser is not required to explain why he or she reconciled the value indication at $220,000. 

Answer 38

FALSE

Question 39

If an appraisal report indicates three comparable sales adjusted to indicate $210,000, $222,000 and $230,000, the appraiser is required to explain why _________________________________. 

Answer 39

he or she reconciled the value indication at $220,000

Question 40

If an appraiser checks the box on the URAR form that states that the highest and best use of the subject property is its current use, this is considered summary support for the appraiser's highest and best use opinion. 

Answer 40

FALSE

Question 41

In a Fannie Mae appraisal, which FEMA zones would be considered special flood hazard areas? 

Answer 41

Zones A and V

Question 42

In a mortgage lending appraisal report, the appraiser should emphasize the subject property's good points, while minimizing comments on negative features. 

Answer 42

FALSE

Question 43

In a Restricted Appraisal Report on a single-family residence, the exclusion of the income approach __________. 

Answer 43

Must be explained 

Question 44

In a written Appraisal Report, what is the predominant level of detail required?

Answer 44

Summarize

Question 45

In an Appraisal Report, the appraiser's opinion of highest and best use must be __________. 

Answer 45

Summarized

Question 46

In appraisals for federally-regulated lending institutions, the source of the market value definition commonly used by appraisers is: 

Answer 46

FIRREA

Question 47

In real-life appraisal practice, which written report option is most commonly used? 

Answer 47

Appraisal Report

Question 48

Jamal receives an appraisal assignment from a lending institution. What should be considerations for Jamal when he determines the scope of work for the appraisal development process? 

Answer 48

The intended use of the appraisal, The definition of value required, The physical and economic characteristics of the property

Question 49

James is appraising a proposed new home, and he believes the cost approach is necessary for credible results. However, the URAR form states the cost approach is not required. What should he do?

Answer 49

Complete the cost approach 

Question 50

Jeremy is asked to complete an appraisal by a mysterious client, who will not tell him exactly why he wants to have the property appraised. Does USPAP permit Jeremy to accept the assignment in this situation? 

Answer 50

No. An appraiser cannot complete an appraisal on a property without a clear understanding of the intended use of the appraisal. (Ch 3, SR 2-2 a ii)

Question 51

Jorge is preparing an Appraisal Report for use in a divorce proceeding. What are his USPAP reporting requirements regarding his definition of value? 

Answer 51

He must state the definition and cite its source. 

Question 52

Lola completes an appraisal for a property owner, and sends him the report. Two weeks later, the property owner calls and asks Lola to add ABC Bank onto the appraisal report as an intended user. What are Lola’s obligations under USPAP? 

Answer 52

She is not permitted to retroactively add intended users.

Question 53

Mike completes an appraisal for a property owner who is thinking of selling her property, and wants to know what she should ask for it. Two weeks later, the property owner calls and states she now wants to appeal her tax assessment. She asks Mike to change the intended use to “assessment appeal.” What are Mike’s obligations under USPAP? 

Answer 53

He may not change the intended use after the appraisal has been completed.

Question 54

Monica is approached by a very secretive appraisal client who insists that his name not appear in the appraisal report he is asking Monica to complete. What are Monica's responsibilities under USPAP? 

Answer 54

She can omit the client’s name from the report, but she must identify the client in her workfile.

Question 55

Most of the commonly-used residential appraisal report forms are created by ___________________________. 

Answer 55

Fannie Mae and Freddie Mac

Question 56

On an appraisal report for a refinance loan, the lender will want to ensure that the name of the borrower: 

Answer 56

Is the same as the current owner of record

Question 57

Rocky completes an appraisal on a small commercial building, and he does not develop the cost approach. What are his reporting requirements for an Appraisal Report, regarding the cost approach?

Answer 57

He must explain the omission of the approach.

Question 58

Secondary market appraisal guidelines are intended to take the place of USPAP. 

Answer 58

FALSE

Question 59

Sid is preparing an appraisal report, using a standard pre-printed appraisal form. What is the BEST way for him to ensure that he meets his USPAP reporting requirements? 

Answer 59

Follow the minimum report content requirements of STANDARD 2

Question 60

Special flood hazard areas, as identified by FEMA, include: 

Answer 60

Zones A and V

Question 61

Standards Rule 2-2 provides a convenient checklist for appraisers to ensure they are complying with the minimum report content requirements of USPAP. 

Answer 61

TRUE

Question 62

The certification statement used in a written real property appraisal report must be similar in content to USPAP Standards Rule _____. 

Answer 62

Two-Three

Question 63

The certification statement used in a written real property appraisal report must be used exactly word-for-word as it appears in USPAP Standards Rule 2-3. 

Answer 63

FALSE

Question 64

The effective age and the actual age are the same thing, for purposes of the URAR form. 

Answer 64

FALSE

Question 65

The Fannie Mae 1004 form is intended to be used to report an appraisal on modular or panelized homes. 

Answer 65

TRUE

Question 66

The Fannie Mae 1004 form may be used to report an appraisal on which of the following: 

Answer 66

Units in planned unit developments 

Question 67

The Fannie Mae 1004 form may be used to report an appraisal on: 

Answer 67

Single-family homes with accessory units. Single-family homes. Units in planned unit developments.

Question 68

The Fannie Mae 1004 form may be used to report an appraisal on: 

Answer 68

Units in planned unit developments 

Question 69

The Fannie Mae form ____ is intended to be used to report an appraisal on modular or panelized homes. 

Answer 69

1004

Question 70

The most requested residential appraisal report is the:

Answer 70

URAR report

Question 71

The party who engages the appraiser in the assignment

Answer 71

may be the client or an agent for the client.

Question 72

The party who engages the appraiser in the assignment is always the client. 

Answer 72

FALSE

Question 73

The requirement to research prior listings of the subject within the last 12 months is a(n): 

Answer 73

Fannie Mae/Freddie Mac requirement

Question 74

The URAR form can be used to report an appraisal on a modular home. 

Answer 74

TRUE

Question 75

The URAR form dictates the amount of information to be supplied to the appraiser's client. 

Answer 75

FALSE

Question 76

The URAR form has been identified by the ASB as generally meeting the reporting requirements for a: 

Answer 76

Appraisal Report

Question 77

There have been 45 sales in the subject neighborhood within the last 9 months. There are 35 properties currently listed for sale on the market. How many months' inventory is currently on the market? 

Answer 77

7. 45 / 9 = 5 sales per month. 35 / 5 = 7 months of inventory on the market. (Ch 4, Absorption Rate)

Question 78

There have been 45 sales in the subject neighborhood within the last 9 months. There are 35 properties currently listed for sale on the market. How many months' inventory is currently on the market? 

Answer 78

7

Question 79

Three common ways to identify a property are: 

Answer 79

Metes & bounds, lot & block, and rectangular survey

Question 80

Ty receives a single-family appraisal request from a small local bank which does not sell loans on the secondary mortgage market. Which appraisal reporting format is this client most likely to request? 

Answer 80

A form created by Fannie Mae. Fannie Mae forms have become the industry standard for residential appraisal assignments. In fact, many appraisers even use these forms to report appraisals for lenders that do not sell loans on the secondary market. (Ch 4, Fannie and Freddie)

Question 81

USPAP provides specific requirements that instruct appraisers which form to use to report the appraisal of a particular property type. 

Answer 81

FALSE

Question 82

USPAP requires an appraiser to disclose the _________________ of individuals who provide significant real property appraisal assistance to the appraiser. 

Answer 82

names

Question 83

USPAP sets forth guidelines establishing how recent and proximate comparable sales must be. 

Answer 83

FALSE. USPAP does not establish specific requirements for selection of comparable sales, although clients and intended users often do. (Ch 4, URAR, Page 2: Sales Comparison Analysis Section)

Question 84

USPAP sets forth guidelines establishing how recent and proximate comparable sales must be. 

Answer 84

FALSE

Question 85

What federal entity is overseeing the operations of Fannie Mae and Freddie Mac in government conservatorship? 

Answer 85

Federal Housing Finance Agency 

Question 86

What is a reason why residential appraisers are often “form-focused”? 

Answer 86

Forms have been standardized by Fannie Mae and Freddie Mac

Question 87

What is an acceptable format for communicating an Appraisal Report? 

Answer 87

Fannie Mae 1004 form, Fannie Mae 2055 form, Narrative format. We can also communicate an Appraisal Report in a narrative format, using word processors, spreadsheets, charts, and all of the other means available to us. The forms are one way of communicating an Appraisal Report, but they are not the only way. (Ch 3, SR 2-2 a iii)

Question 88

What is another name for a legal non-conforming use? 

Answer 88

Grandfathered use

Question 89

What is the primary reason for analyzing sales history of the subject and comparable sales? 

Answer 89

Determine that flipping actions have not occurred

Question 90

What is the USPAP requirement for disclosing the report option used in a written report? 

Answer 90

Prominently state which option is used

Question 91

When appraising a single-family home, an appraiser decides not to develop the income approach. What is the appraiser's requirement for reporting this on the URAR form? 

Answer 91

Explain the reason the approach was not developed 

Question 92

When is it INAPPROPRIATE for an appraiser to provide a Restricted Use Appraisal Report? 

Answer 92

When there are intended users other than the client

Question 93

Which of these conditions would be considered a "red flag" in a residential mortgage lending appraisal assignment? 

Answer 93

Seller concessions are excessive for the market

Question 94

Which report option specified in USPAP is the least detailed? 

Answer 94

Restricted Appraisal Report

Question 95

Which report option specified in USPAP is the most detailed? 

Answer 95

Appraisal Report

Question 96

Which statements are TRUE regarding disclosure of scope of work in an Appraisal Report?

Answer 96

It may consist of small summaries located in various places throughout the report. It must be summarized. It may include disclosure of both work that was done, and work that was not done.

Question 97

Which statements are TRUE regarding disclosure of scope of work in an Appraisal Report?

Answer 97

It must be summarized. It may include disclosure of both work that was done, and work that was not done. It may consist of small summaries located in various places throughout the report.

Question 98

Which term BEST describes the Fannie Mae 1004 (URAR) form? 

Answer 98

A container for a report. A form is not a report, although it can be a suitable “container” for a report. (Ch 3, Introduction)

Question 99

Which valuation principle is most closely associated with the sales comparison approach? 

Answer 99

Contribution

Question 100

Zoe is asked to provide an oral appraisal report. What is the USPAP requirement for oral reports? 

Answer 100

To the extent possible and appropriate, oral appraisal reports must meet the requirements for an Appraisal Report.