Chapter 5 - Scope Of Work Rule Flashcards
The credibility of assignment results is measured in the context of:
The intended use
Appraisers have broad _________ and significant _________ in determining the appropriate scope of work in an assignment.
Flexibility, responsibility
In order to determine the appropriate scope of work, the appraiser must ________ the problem to be solved.
Identify
Intended use is:
Identified by the appraiser on the basis of communication with the client
Examples of assignment conditions include:
- Extraordinary assumptions
- Hypothetical conditions
- Laws and regulations
- All of these answers
All of these answers
Identification of the intended use of an appraiser’s opinions and conclusions is:
Necessary for determining the appropriate scope of work
In an appraisal or appraisal review assignment, the scope of work is an ___________ process.
Ongoing
The responsibility for determining an appropriate scope of work rests with the:
Appraiser
An appraiser must not allow client objectives to cause the assignment results to be _________.
Biased
An appraiser’s report must contain ____________ to allow intended users to understand the scope of work performed.
Sufficient information
The SCOPE OF WORK RULE provides appraisers with significant flexibility. Along with that flexibility comes:
Responsibility
If a client’s objectives result in an appraiser developing biased assignment results:
The appraiser is solely responsible
A real property appraiser agreed to perform an assignment to appraise a three-unit residential property. The intended use of the appraisal was for mortgage financing. The client requested that the appraiser not verify the legal status (e.g., compliance with zoning, building codes, use permits) of the three units with municipal officials. What should the appraiser do?
Withdraw from the assignment
A real property appraiser was engaged to appraise a one-unit residence. Based on the appraiser’s identification of the appraisal problem, the appropriate scope of work was determined to include development of the sales comparison and cost approaches. However, at the time of inspection, the appraiser discovered that the property was not a one-unit, but instead a three-unit property. What should the appraiser do?
Based on new information, the appraiser should reconsider the appraisal problem and the appropriate scope of work. The change in relevant property characteristics of the subject property significantly changes the appropriate scope of work. The initial scope of work is no longer suitable and would not produce credible assignment results.
An appraiser has been engaged to perform an “exterior only” inspection for the appraisal of a one-unit house for a potential home equity loan. Another appraiser has been asked to appraise a one-unit home in the same development for an FHA loan. Since the subject properties are similar, would the assignments require the same scope of work?
No. The subject of the assignment and its relevant characteristics is just one of several assignment elements that define an appraisal problem. Because of the critical differences in the intended use and the appraisal problem to be solved, the scope of work that is acceptable for the first assignment would not be acceptable for the second assignment (i.e., an appraisal performed for an FHA loan is subject to additional inspection requirements).
