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Appraisal Principles > Module 1 > Flashcards

Module 1 Flashcards

1
Q

____________ is a valuation service performed by an individual acting as an appraiser

A

Appraisal practice

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2
Q

Professional services that come under appraisal practice include

A
  1. Appraisal
  2. appraisal review
  3. appraisal consulting
  4. other services while acting as an appraiser
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3
Q

what is an appraisal

A

An appraisal is “the act or process of developing an opinion of value; an opinion of value

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4
Q

Appraisals are commonly used in the following types of assignments:

A
  1. Transfer of ownership
  2. Financing and credit
  3. Litigation
  4. Tax Matters
  5. Investment decisions
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5
Q

The valuation process is a

A

systematic procedure employed by an appraiser to provide the answer to the client’s question about the value of the property..

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6
Q

How many steps are in the valuation process?

A

8

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7
Q

What are the steps in the Valuation Process

A
  1. Identify the problem
  2. Scope of Work Determination
  3. Data Collection and Property Description
  4. Data Analysis
  5. Land Value Opinion
  6. Application of the Approaches to Value
  7. Reconciliation of value indications and Final Opinion of Value
  8. Report of Final Opinion of Value
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8
Q

In our valuation career the foundation that we build upon is called

A

ethical principles

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9
Q

Data Collection and property Description

(3 areas) in the Valuation Process

A
  1. Market Area Data
  2. Subject Property Data
  3. Comparable Property Data
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10
Q

Two areas of Data Analysis in the Valuation process?

A
  1. Market Analysis

2. Highest and Best Use Analysis

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11
Q

What are the applications of the approaches to Value?

A
  1. Sales Comparison Approach
  2. Income Capitalization Approach
  3. Cost Approach
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12
Q

In the Valuation Process what is involved with identification of the Problem

A
  1. Identify client and intended users
  2. Identify the intended use
  3. Identify the purpose of the assignment (type and definition of value)
  4. Identify the relevant characteristics of the property
  5. Identify assignment conditions
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13
Q

If you were to picture your career as a high-rise building with each floor representing one year of experience, what kind of foundation would you need to support 30 stories?

A

Ethical Principles

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14
Q

In order to protect public trust, appraisers must develop and communicate their work in a manner that is _________

A

meaningful and does not misrepresent their services to the intended users of their services.

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15
Q

What four characteristics define what an appraiser if all about?

A
  1. Impartial or neutral
  2. Objective or fair-minded
  3. Independent or autonomous
  4. Free of self-interest
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16
Q

Appraisers have an obligation to_________ as they perform valuation services for their clients.

A

Protect public trust

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17
Q

When an individual is ______________________, he or she must perform assignments ethically and competently.

A

acting in the role of an appriser

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18
Q

Being competent requires that an appraiser _______________________

A

assess his own proficiency to complete the job competently before accepting an assignment.

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19
Q

The state of having the requisite or adequate ability or qualities to perform the specific assignment and produce credible assignment results.

A

Competence

20
Q

Before being engaged, an appraiser must determine his own competency to undertake the work. If not competent, the appraiser has 3 obligations.

A
  1. Inform the client about the identified competency issues.
  2. Complete all tasks and procedures essential for the assignment in a competent manner. (competency can be fulfilled by personal study, work with someone who does know.
  3. Disclose competency issues in the written report and
    Identify the steps taken to satisfy the appraiser’s lack of knowledge.
21
Q

When an appraiser is working on an existing assignment and determines he cannot complete the assignment competently, the appraiser must ______________________

A

cease work and inform the client of that determination.

22
Q

An appraiser must be_________ and exercise due care while performing valuation services for clients to ensure the assignment results are credible.

A

Sufficiently diligent

23
Q

In developing an appraisal, a valuer must:

A
  1. understand methods and techniques necessary to produce credible results.
  2. Not commit a substantial error of omission that significantly affects the results
  3. Not make a series of errors that, considered individually, may not significantly affect the assignment results but which, when considered in aggregate establish that the appraisal is rendered in a careless or negligent manner.
24
Q

Who decides the strategy to solve a particular valuation problem for the client?

A

The appraiser

25
Q

This strategy decision is what step in the valuation process and it is called_____________

A

step 2

Scope of work

26
Q

The Competency Rule is USPAP requires an appraiser to use_____________.

A

diligence and due care. (which does not require perfection and is impossible to attain.

27
Q

Before an appraiser accepts an assignment, he identifies the problem to be solved. There are 6 elements connected to problem identification. What are they?

A
  1. Identify the client
  2. Identify the intended use
  3. Identify the type and definition of value (purpose of assignment)
  4. Identify the effective date of the valuer’s opinions and conclusions
  5. Identify the subject of the assignment and it relevant characteristics.
  6. Identify assignment conditions.
28
Q

The type and extent of research and analyses in an appraisal or appraisal review assignment (USPAP DEFINITION)

A

Scope of work

29
Q

An overall strategy for solving your client’s valuation problem.

A

Scope of work

30
Q

___________will guide the appraiser in deciding the extent to which the subject property is inspected.

A

The scope of work decision in Step 2 of the Valuation process.

31
Q

The scope of work decision is an ___________the appraiser undertakes in the process to solve the client’s problem.

A

exercise in judgment

32
Q

Appraisers must develop and communicate their work in a manner that is meaningful and ____________ their services to intended users.

A

that does not misrepresent

33
Q

An appraiser must not advocate the cause or interest of any

A

party or issue

34
Q

At what point must an appraiser be competent regarding an appraisal assignment?

A

At completion of the assignment

35
Q

The appraiser must be prepared to demonstrate that the type and extent of research and analyses performed in the appraisal is sufficient to produce_______ assignment results.

A

Credible

36
Q

An appraiser performing an assignment in an unfamiliar geographic location must spend sufficient time to understand the _________ of the local market.

A

nuances

37
Q

True of False

A series of errors in an appraisal is acceptable as long as it does not significantly affect the value conclusion.

A

False

38
Q

True of False
An appraiser must inform a client prior to accepting the assignment if he lacks the requisite training, information,, and or work experience to complete the assignment competently.

A

True

39
Q

In an assignment that involves a dispute between two parties, it is the appraiser’s duty to represent his client’s position. True or False

A

False

40
Q

During the course of an appraisal, you discover a complexity that is beyound your ability and experience, What should you do?

A

Inform the client and explain how you will become competent. ????? Module 1 topic Ethical Practice

41
Q

An appraiser must be competent in_______ to produce a credible appraisal.

A

All the competencies that are necessary

42
Q

One minor error carries the same weight as a large error in the eyes of the appraisal standards.

A

False

43
Q

Making a series of small error in an appraisal is acceptable so long as it does not significantly affect the value conclusion. True or False

A

False

44
Q

The manner in which a client utilizes the information and opinions contained in the appraisal report may be best identified as

A

The intended use

45
Q

The purpose of the assignment is also referred to as_______-

A

Type and definition of value

46
Q

Which of the following is one of the assignment elements that an appraiser must identify prior to acceptance?

A

assignment conditions

47
Q

An appraiser has the —— to support the scope of work decision and the level of information included in a report.

A

burden of proof

Appraisal Principles (19 decks)

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