Chapter 12 - Advisory Opinions

Question 1

Which of the following statements BEST describes Advisory Opinions?

• They establish supplemental standards that build upon STANDARDS 1 through 10.
• They are not part of USPAP but illustrate applicability and provide guidance.
• They are part of USPAP, and they are the ASB’s way of addressing changes in the appraisal marketplace.
• They provide interpretation of USPAP requirements and are intended to be enforceable.

Answer 1

They are not part of USPAP but illustrate applicability and provide guidance.

Question 2

An appraisal that takes into consideration the full effect of known environmental contamination would be considered:

Answer 2

“As-is”

Question 3

In an appraisal report, the use of terms that reflect a scale such as “good” or “average”:

Answer 3

Should include explanation that provides context

Question 4

The competency required to appraise subsidized housing extends beyond typical residential appraisal competency.

Answer 4

True

Question 5

An appraiser provides raw AVM output to a client. This is:

Answer 5

Not an appraisal, and no workfile is required

Question 6

An appraiser agrees to provide a market value appraisal for a client. Which statement is true about this situation?

• All market value definitions are essentially the same; hence they are all interchangeable.
• Market value is the only type of value that appraisers provide, so defining the value is unnecessary.
• It is essential that the appraiser identify the source of the definition of value to be used.
• There is only one definition of market value so it is not important to identify the definition of value to be used.

Answer 6

It is essential that the appraiser identify the source of the definition of value to be used.

Question 7

Regulations and guidelines that apply to an appraisal for a federally-regulated lending transaction are:

Answer 7

Assignment conditions

Question 8

If a borrower attempts to engage an appraiser to complete an appraisal for a federally-regulated lending transaction, the appraiser should disclose:

Answer 8

That the lender must engage the appraiser, and that the appraiser cannot later “readdress” the report

Question 9

According to AO-33, the results of discounted cash flow (DCF) analysis should:

Answer 9

Be tested and checked for errors and reasonableness

Question 10

What type of appraisal would be indicated by the phrase, “On September 10, 2012, the market value of the subject property was $200,000”?

Answer 10

Retrospective

Question 11

What does the effective date of an appraisal establish?

Answer 11

The context of the value opinion

Question 12

Developing an opinion of value of a property as of a specified future date is:

Answer 12

A prospective appraisal