Chapter 2

Question 1

Standard 2 of USPAP established the ____ requirements for real property appraisal reports.

Answer 1

Minimum

Question 2

USPAP requirements are for _________ UPAP does not dictate the form, format, or style of an appraisal report.

Answer 2

report content.

Question 3

There are ____ Standards Rules in Standard 2.

Answer 3

4

Question 4

Standards rule 2-1 states:

Answer 4

1. will not be misleading
2. Contain sufficient information to enable intended users to understand the report.
3. **Clearly and Accurately **disclose all
   assumptions,
   extraordinary assumptions,
   hypothetical conditions,
   limiting conditions

Question 5

Standards Rule applies to both written and oral real property appraisal reports.
True/False

Answer 5

True

Question 6

Standard Rule 2-1 states that we must provide our client and other intended users with enough information to understand the report. That requires

Answer 6

us to communicate with clients “on their level”.

Question 7

An appraiser may provide more information and detail in the report than what is required by USPAP standard 2.
True/False

Answer 7

True

Question 8

Sandy is appraising an income property for very knowledgeable client. Which statement is True regarding how much information Sandy must insert in her appraisal report?

Answer 8

Because the client is knowledgeable, Sandy may put less information in the report.

Question 9

According to Standards Rule 2-1 how much information is an appraiser required to put in a n appraisal report?

Answer 9

Enough information so that the report may be understood ny client and intended users.

Question 10

An appraisal report must be written so that anyone can understand it.
True/False

Answer 10

False

Question 11

The same amount of information must appear in every written appraisal report.

Answer 11

False

Question 12

Definition of assumption:

Answer 12

that which is taken to be true.

Question 13

The appraisal Standards board deleted the definition of assumption because

Answer 13

its use is not intended to differ from the general english meaning of the word.

Question 14

According to SR 2-1 even ordinary assumptions need to be disclosed. For expample:

Answer 14

I assume property’s title is good and marketable, and will render no opnions about the quality of the title.

I assume there are no hidden or unapparent conditions of the soil or subsoil that would render it more or less valuable.

Question 15

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 opnions or conclusion.

Answer 15

Extraordinary Assumption

“is directly related to a specific assignment”

Question 16

An extraordinary asssumption is directly related to

Answer 16

a specific assignment.

Question 17

We acknowledge that if we find that the extraordinary assumption is actually not rue, then

Answer 17

our value opnion could be impacted or changed as a result.

Question 18

An extraordinary assumption might be used, for instance:

Answer 18

if we were to appraise a house with a small crack in the foundation. An appraiser is not expected to render an opinion about the structural integrity of the dwelling, and is generally not qualified to do so.

Question 19

USPAP requires that we disclose the extraordinary assumption in the appraisal report. This disclosure gives notice to the client and intended users that

Answer 19

our knowledge of the property only goes so far.

Question 20

When we disclose the use of the extraordinary assumption, we are also required to

Answer 20

state that its use may have affected the assignment results.

Question 21

A hypothetical condition is something that we

Answer 21

know is not true, yet we appraise the property as though it were true.

Question 22

What is the difference between an extraordinary assumption and a hypothetical condition

Answer 22

The level of certainty

Question 23

A hypothetical condition permits the appraiser to “tell a lie” in the appraisal but the disclosure of the hypothetical condition in the report informs the client that it is not currently true.

True/False

Answer 23

True

Question 24

A condition, directly related to a specific assignment, which is contrary to what is known ny the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

Answer 24

Hypothetical condition

Question 25

USPAP requires that a hypothetical condition be **clearly and accurately **disclosed, but does not specifically require that a hypothetical condition be labeled as a hypothetical condition.

True/False

Answer 25

True

Question 26

Standards rule 2-1 states that disclosure of assumptions, and hypothetical conditions be
Clear and accurate

Standard 2-1 states Clear and conspicuous

Answer 26

true

Question 27

An appraiser’s assumption that the subject property has clear and marketable title is an example of:

Answer 27

assumption

Question 28

An appraiser’s assumption that the subject property has no hidden or unapparent conditions of the soil is an example of:

Answer 28

assumption

Question 29

What distinguishes an extraordinary assumption from an “ordinary” assumption?

Answer 29

An extraordinary assumption is directly related to the specific assignment.

Question 30

If unknown information is presumed to be fact in a specific appraisal assignment, this is an example of a

Answer 30

Extraordinary assumption

Question 31

Kate notes an underground storage tank on a property she is appraising. The property owner gives her a copy of an environmental expert’s report stating the tank had leaked diesel fuel into the ground, and there was contamination which was never remediated. In appraising this property, can Kate employ an extraordinary assumption that the property is free of contamination?

Answer 31

No

Question 32

If a property is appraised contrary to known fact, this would be

Answer 32

a hypothetical condition

Question 33

Irving is appraising a proposed new home, based on plans. This is an example of:

Answer 33

A hypothetical condition