Chapter 3 Appraisal Report

Question 1

The more commonly use report option

Answer 1

Appraisal Report

Left Column of the table AO-11

Question 2

The Restricted Appraisal Report typically provides so little information and detail, that it is not

Answer 2

sufficient for our clients in most situations

Question 3

Remember that Standards Rule 2-2 states that the report must

Answer 3

prominently state which reporting option is used.

Question 4

USPAP also states that, to the extent that it is possible and appropriate, an oral appraisal report must meet the content requirements of an

Answer 4

Appraisal report

Question 5

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:
Violation of USPAP
Appraisal Report
Restricted Appraisal Report
FHA Appraisal Report

Answer 5

Appraisal Report`

Question 6

Zoe is asked to provide an oral appraisal report. What is the USPAP requirement for oral reports?
Oral appraisal reports require use of the DEPARTURE RULE.
Oral appraisal reports are prohibited under USPAP.
To the extent possible and appropriate, oral appraisal reports must meet the requirements for an Appraisal Report.
To the extent possible and appropriate, oral appraisal reports must meet the requirements for a Restricted Report.

Answer 6

to the extent possible and appropriate, oral appraisal reports must meet the requirements for an appraisal report

Question 7

What is the USPAP requirement for disclosing the report option used in a written report?
The client knows what report option is used, so disclosure is not necessary
Prominently state which option is used
This statement must appear in the certification
Use all capital letters

Answer 7

prominently state which option is used

Question 8

Standards Rule 2-2 (a) states:

Answer 8

(a) The content of an Appraisal Report must be appropriate for the intended use of the appraisal and, at a minimum:
(i) state the identity of the client; or if the client requested anonymity, state that the identity is withheld at the client’s request but is retained in the appraiser’s workfile;

Comment: Because the client is an intended user, they must be identified in the report as such. However, if the client has requested anonymity the appraiser must use care when identifying the client to avoid violations of the Confidentiality section of the ETHICS RULE.

Question 9

if you omit the client’s identity from the appraisal report, you must identify your client in your

Answer 9

workfile

Question 10

USPAP states that intended users are identified by the

Answer 10

appraiser

Question 11

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

Answer 11

False

Question 12

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?
The AMC is the client.
The lender and AMC are joint clients.
The lender is the client.
The appraiser should proceed as if there were no client for this assignment.

Answer 12

the lender is the client

Question 13

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

Answer 13

true

Question 14

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is sometimes referred to as

Answer 14

“FIRREA” or the “Savings and Loan Bailout Bill.”

Question 15

he most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

buyer and seller are typically motivated;
both parties are well informed or well advised and acting in what they consider their own best interests;
a reasonable time is allowed for exposure in the open market;
payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Answer 15

Market Value

Question 16

an opinion, based on supporting market data, of the length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal

Answer 16

Exposure time

Question 17

Exposure time is an _______developed by an _______, and it is required by USPAP when exposure time is a component of the definition of value being used.

Answer 17

opinion, appraiser

Question 18

Exposure time is different than marketing time. How?

Answer 18

Marketing time looks out into the FUTURE; it answers the question “If this property were put on the market today, how long would it take to sell it?”
Unlike exposure time, an opinion of marketing time is not required by USPAP, although some clients may request it in certain assignments.

Question 19

Exposure time is the same as marketing time.
True
False

Answer 19

False

Question 20

Jorge is preparing an Appraisal Report for use in a divorce proceeding. What are his USPAP reporting requirements regarding his definition of value?
He must state the definition and cite its source.
He must refer to the location of the definition in a law or regulation.
He may omit the definition from the report if the client permits.
He must use the FIRREA definition of market value.

Answer 20

He must state the definition and site its source

Question 21

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

Answer 21

True

Question 22

Two dates must be stated in the report

Answer 22

the effective sate of the appraisal and the date of he report

Question 23

the effective date in the appraisal is the date for which

Answer 23

the value opinion is effective

Question 24

The date of the report is the date that we

Answer 24

prepare and sign the appraisal report

Question 25

Scope of Work:

Answer 25

the type and extent of research and analyses in an appraisal or appraisal review assignment

Question 26

The SCOPE OF WORK RULE expounds on the definition, and states that scope of work includes but is not limited to:

Answer 26

the extent to which the property is identified; the extent to which tangible property is inspected; the type and extent of data researched; and the type and extent of analyses applied to arrive at opinions or conclusions.

Question 27

If an individual who provides significant appraisal assistance does not sign the certification,

Answer 27

the name of the individual must be stated in the certification and a summary of the assistance he or she provided must appear somewhere in the report.

Question 28

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

Answer 28

False

Question 29

An appraiser is preparing a retrospective appraisal. Which statement is TRUE regarding the effective date? It will be subsequent to the date of report. It will be prior to the date of report. It will be the same as the date of report. It will be the same as the date of property inspection.

Answer 29

it will be prior to the date of report

Question 30

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

Answer 30

False

Question 31

I have provided appraisal services regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment."

Answer 31

Disclosure of prior services

Question 32

``` In an Appraisal Report, the appraiser's opinion of highest and best use must be __________. Stated Described Omitted Summarized ```

Answer 32

summarized

Question 33

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? He must explain the omission of the approach. He must develop this approach in every commercial assignment. He is not required to explain the omission of the approach if the client had asked him to omit it. He should state in the report that he developed the cost approach and the results are retained in his workfile.

Answer 33

he must explain the omission of the approach

Question 34

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. True False

Answer 34

true

Question 35

``` An appraiser is required to state _____ dates in every Appraisal Report. two one Three At least two ```

Answer 35

two

Question 36

``` In real-life appraisal practice, which written report option is most commonly used? Appraisal Report Narrative Appraisal Report Complete Appraisal Report Restricted Appraisal Report ```

Answer 36

appraisal report

Question 37

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? He is not permitted to retroactively add intended users. He may add the new intended user because the new lender asked him to. He may add the new intended user only if the original client approves. USPAP does not address this situation.

Answer 37

he is not permitted to retroactively add intended users

Question 38

In a Restricted Appraisal Report on a single-family residence, the exclusion of the income approach __________. Need only be summarized Must be explained Need not be explained because it is typical to omit the income approach in the appraisal of a single-family residence Must be approved by the client prior to the assignment

Answer 38

must be explained

Question 39

Which is longer, exposure time or marketing time? Exposure time is always longer. They are different concepts and either could be longer. marketing time is usually longer. They are the same.

Answer 39

they are different concepts and either could be longer

Question 40

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 _________________________________. the average was not used he or she reconciled the value indication at $220,000 more sales were not used the range exceeded 5%

Answer 40

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

Question 41

``` In a written Appraisal Report, what is the predominant level of detail required? Describe Summarize State Expand ```

Answer 41

summarize

Question 42

In appraisals for federally-regulated lending institutions, the source of the market value definition commonly used by appraisers is: USPAP U.S. Department of Housing and Urban Development FIRREA Individual state appraisal boards

Answer 42

FIRREA

Question 43

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? Meet the minimum content requirements set forth in USPAP Fill out the form carefully and completely Insert a disclaimer stating that she is limited by the available space on the form Insert a competency statement

Answer 43

Meet the minimum content requirements set forth in USPAP

Question 44

When an opinion of exposure time is developed, it must also be _______. Expressed in months Stated in the certification statement Reported Supported with at least six sales of comparable properties

Answer 44

REPORTED

Question 45

Which statement is FALSE regarding disclosure of scope of work in an Appraisal Report? It must appear in a specific section of the report labeled “Scope of Work.” 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.

Answer 45

It must appear in a specific section of the report labeled scope of work

Question 46

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? She must cite the source of the definition. There are no other USPAP requirements regarding her value definition. The definition must appear in boldface, in a separate section of the report. She must use an extraordinary assumption regarding her value definition.

Answer 46

she must cite the source of the definition

Question 47

``` 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 ____________. Retrospective appraisal Prospective appraisal Current appraisal Extraordinary assumption appraisal ```

Answer 47

current

Question 48

``` For an appraisal for a Fannie Mae lender, the effective date of the appraisal is the date __________________. the property was inspected of the report the report was received by the lender the assignment was received ```

Answer 48

the property was inspected

Question 49

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? He must invoke the JURISDICTIONAL EXCEPTION RULE in order to accept the new assignment without disclosure of the prior assignment. He must decline the assignment. He must provide a copy of his prior report to the prospective new client. All of the above

Answer 49

he must decline the assignment

Question 50

The party who engages the appraiser in the assignment is always the client. may be the client or an agent for the client. Is always an agent for the client. must be named in the appraisal report

Answer 50

may be the client or an agent for the client

Question 51

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. True False

Answer 51

false

Question 52

``` 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: Violation of USPAP Summary Appraisal Report Restricted Appraisal Report FHA Appraisal Report ```

Answer 52

summary appraisal report

Question 53

``` An appraiser is required to state _____ dates in every Appraisal Report. two one Three At least two ```

Answer 53

two

Question 54

``` 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___________. three years Two years One year licensing cycle ```

Answer 54

three years

Question 55

``` The certification statement used in a written real property appraisal report must be similar in content to USPAP Standards Rule _____. 0-1 2-3 2-0 1-3 ```

Answer 55

2-3

Question 56

``` Which report option specified in USPAP is the most detailed? Appraisal Report Limited Report Narrative Report Restricted Appraisal Report ```

Answer 56

appraisal report