Introduction and Part 1 Flashcards
The Appraiser and Public Trust
___________ ___________ is a valuation service performed by an individual acting as an appraiser.
Appraisal practice.
What are the three professional services that fall under appraisal practice include?
Professional services include:
1. Appraisal
2. Appraisal review
3. Other services while acting as an appraiser (i.e. consulting assignment, a rent survey, a feasibility study or a cost-benefit study)
“The act or process of developing an opinion of value; an opinion of value.” (USPAP, Definitions) is called what?
An appraisal.
An ________ can provide the client w/ an opinion of value on real property, personal property, or intangible business assets.
Appraiser.
Appraisers have an obligation to __________ ___________ __________ as they perform a valuation service for their clients
Protect public trust.
- Independent
- Impartial
- Objective
- free of self-interest
All summarize an appraiser’s what?
An ethical appraisal practice/ethical obligation an individual has when acting in the role of an appraiser.
An appraiser must inform a client prior to accepting the assignment if he or she lacks the requisite training, information, and/or work experience to complete the assignment competently, true or false?
True.
In real appraisal, fees based on a percentage of the conclusion of value are allowed if the client agrees, true or false?
False, fees based on a percentage of the conclusion of value are “never allowed.”
An appraiser must be competent in _ _ _ _ _ _ _ _ _ _ to produce a credible appraisal.
all the competencies that are necessary
An appraiser must be familiar w/ a number of factors:
A. The property type and the interest to be appraised
B. The market and the market’s participants
C. The geographic location
D. The intended use
E. The laws, regulations, and client requirements that may apply
F. The analytical methods and procedures
A - B best applies to which ___________ issues?
competency issues
The manner in which a client utilizes the information and opinions contained in the appraisal report may be best identified as what?
the intended use.
*This falls underneath Problem Identification and Scope of Work.
Your client, the bank, discovers an error in your report. The error could result in a change in your conclusion. Are you allowed to change the report?
Yes, if the error is verified and a change is logical.
*This falls underneath Competent Appraisal Practice.
Making a series of small errors in an appraisal is acceptable so long as it does not significantly affect the value conclusion, true or false?
Flase, “making a series of errors that, considered individually, may not significantly affect the assignment results but which, when considered in the aggregate, establish that the appraisal is being rendered in a careless or negligent manner (SR A-1(c))”
*This falls underneath Exercising Sufficient Diligence.
The first step in the valuation process before accepting an assignment is identification of the problem.
- Who is the client and any other intended users
- What is the Intended use
- What is the type and definition of value (also known as the purpose of the assignment)
- When is the effective date of the valuer’s opinions and conclusions
- What is the subject of the assignment and its relevant characteristics
- What are the assignment conditions*
These are the _____ ______ ______ an appraiser must identify prior to acceptance.
six assignment elements
*This falls underneath Problem Identification and Scope of Work.
The scope of work is determined when the report is written, true or false?
False, The Scope of Work is NOT determined when the report is written. Once the appraiser has properly identified the problem to be solved, the next step is to decide upon an acceptable scope of work.
