Chapter 3 - Ethics Flashcards
True or False? The mere fact that an appraiser has previously appraised property is typically NOT considered confidential information under USPAP.
True
True or False? An appraiser who selects only the data that supports the contract sale price in an appraisal has violated USPAP.
True
True or False? USPAP permits an appraiser to be biased in certain appraisal assignments, as long as the bias is properly disclosed.
False
What term is defined as “relating to what is good or bad; having to do with moral duty and obligation”?
- Morality
- Moral
- Ethics
- USPAP
Ethics
USPAP requires an appraiser to be
- advocate
- objective
- biased
- self-interested above all
Objective
An appraiser pays a fee for the procurement of an assignment. Where in the appraisal report does this payment have to be disclosed?
- In the certification and any transmittal letter where conclusions are stated
- The reconciliation section
- The scope of work section, or in an addendum if a form report is used
- Anywhere, as long as it is prominent
In the certification and any transmittal letter where conclusions are stated
An appraiser states to a client that the appraisal fee will be $100 higher than the standard fee because the appraiser’s value opinion is for the property is over $500,000. Is it a violation of USPAP for the appraiser to quote the fee in this manner?
- Yes
- No
Yes
True or False? If an appraiser does not charge a fee for an appraisal, he is not required to comply with USPAP in completing it.
False
When an appraiser discloses that she paid a fee for the procurement of an assignment, does USPAP require her to disclose the AMOUNT of the fee?
- Yes
- No
No
Is it ethical for an appraiser to offer a reduced fee on an appraisal if the client’s loan does not close?
- Yes
- No
No
An appraiser finds out after completing an appraisal that the lender/client’s loan did not close. What should the appraiser do regarding the appraisal fee?
- Charge the agreed-upon fee regardless of whether the loan closed
- Reduce the fee by 50% because the loan did not close
- Waive the fee entirely as a show of good faith
- Discount the fee, and make up for it by charging more for the next appraisal for this client
Charge the agreed-upon fee regardless of whether the loan closed
USPAP addresses an appraiser’s ethical obligations in:
- the ETHICS RULE
- the SCOPE OF WORK RULE
- the COMPETENCY RULE
- the RECORD KEEPING RULE
The ethics rule
The ETHICS RULE is the _____ of the Rules found in USPAP.
- last
- least important
- first
- shortest
First
May an appraiser disregard her USPAP obligations if she does not charge a fee for the assignment?
- Yes
- No
- It depends on whether the client is a non-profit organization.
- USPAP is silent on this issue.
No
An appraiser finds that the pending sale price of the subject residential property is not supported by market data. To avoid causing a problem for the buyer and seller, the appraiser reconciles the value conclusion to meet the sale price anyway. Which statement is true regarding this situation?
- The appraiser is helping the buyer purchase an otherwise unaffordable house.
- The appraiser has done what he was hired to do, and has earned his fee.
- The appraiser has violated his ethical obligations by doing this.
- The appraiser is helping the local market by making sure the appraisal meets the sale price.
The appraiser has violated his ethical obligations by doing this.
An appraiser paid a referral fee in conjunction with an assignment. Which statement is TRUE regarding this situation, according to USPAP?
- The appraiser must disclose that a fee was paid, but does not have to disclose the amount paid.
- The appraiser has violated USPAP by paying a referral fee.
- USPAP does not address this issue.
The appraiser must disclose that a fee was paid, but does not have to disclose the amount paid.
“A preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment” is the definition of which USPAP term?
- Certification
- Competency
- Ethics
- Bias
Bias
Webster’s Dictionary defines ethics as relating to:
- income versus debt obligations
- what is good or bad
- an individual’s mental health and well-being
- how an individual conducts himself or herself in a social situation
What is good or bad
When should an appraiser’s compensation be dependent on reporting of a predetermined value conclusion?
- Never
- When the client requests it in writing
- When doing so causes no harm to any party
- At the appraiser’s sole discretion
Never
Is an appraiser permitted to base his or her appraisal fee on the owner’s estimate of value of the subject property?
- Yes, this is permissible
- No, this is a violation of the ETHICS RULE
- Yes, but the appraiser must first obtain permission from the ASB.
- No, but it is only a violation if the appraiser gets caught.
Yes, this is permissible
Appraiser Bill pays a $150 fee to be included on a lender’s “approved appraiser” list. When Bill prepares appraisal reports for this lender:
- he must disclose the amount of the fee paid to be on the lender’s approved list
- he must disclose that a fee was paid, but he does not have to disclose the amount
- he may avoid disclosing the fact that a fee was paid if the lender waives the disclosure requirement
- he has violated USPAP for paying a fee for inclusion on this list
He must disclose that a fee was paid, but he does not have to disclose the amount
True or False? Webster’s Dictionary defines ethics as relating to the principles established by the world’s most common religions.
False
Appraiser Amy agrees to pay a fee to be included on Lender B’s “approved appraiser” list. Which statement is TRUE regarding this situation?
- This is permissible under USPAP as long as it is disclosed.
- This is a violation of USPAP, and Amy is subject to disciplinary action.
- This is permissible under USPAP and does not require disclosure.
- USPAP does not address this issue.
This is permissible under USPAP as long as it is disclosed.