Module 20

Question 1

When appraisers use the word form, they are referring to

Answer 1

a residential (or commercial/general) report form.

Question 2

Appraisers should use the term________ instead of the word form.

Answer 2

report form

Question 3

. A phase of a valuation assignment in which two or more value indications are processed into a value opinion, which may be a range of value, a single point estimate, or a reference to a benchmark value.

Answer 3

Reconciliation.

Question 4

Resolving the differences among various value indications is called

Answer 4

reconciliation

Question 5

At the end of an assignment and prior to reaching a final opinion of value, an appraiser needs to ask a number of questions including the following:

Answer 5

Is there an adequate number of sales?
Are the sales truly comparable?
Is there market support for the adjustments that were made?
Do the cost estimates account for all the costs?
Is there market support for the capitalization method?
Does the method of capitalizing income reflect market patterns?

Question 6

In ___________ analysis, the conclusion upon which each approach is based is reexamined.

Answer 6

Highest and Best use analysis

Because the conditions of the appraisal may have changed during the course of the assignment and highest and best use may not be the same

Question 7

The following criteria aid the appraiser in forming a meaningful and defensible final opinion of value.

Answer 7

Appropriateness (including applicability, relevancy) - Are the sales comparable to the subject? Do they have a similar highest and best use?
Accuracy – Is the data reliable and the mathematics error-free?
Quantity of evidence1 – Is there enough data to support the conclusion in light of the scope of work?

Question 8

The final value opinion does not represent the average of the different value indications derived.

Answer 8

No mechanical formula is used to select one indication over the others.

Question 9

The opinion of value that is derived from the final reconciliation of value indications and stated in the appraisal report; may be expressed as a single point, as a range, or in relation to a benchmark.

Answer 9

Final value opinion

Question 10

The appraiser’s conclusions can take the following forms:

Answer 10

Point estimate.
Range of value
Probability range
Rounding

Question 11

A final value indication reported as a single dollar amount that is typically regarded as the most probable number, not the only possible number, and often required for revenue and condemnation purposes.

Answer 11

Point estimate

Question 12

. The range, or confidence interval, in which the final market value opinion of a property may fall;

Answer 12

Range of value

This range of values is not a statistical range.

Reconciliation is not a statistical process.

Question 13

The confidence level associated with a specific value opinion or set of value opinions.

Answer 13

Probability range.

This is generally not the preferred method, as it implies a certain mathematical precision to the reconciliation process, which should be thought of as a judgmental process.

Question 14

. Expressing an amount as an approximate number

Answer 14

Rounding

Question 15

What is appraisal reporting?

Answer 15

It is the communication of assignment results to the client and intended users

Question 16

Appraisal report.

vs

Report

Answer 16

The final communication,

Whereas a “Report” is ANY communication of an appraisal that is transmitted to the client upon completion of an assignment.

Question 17

In general, each written or oral appraisal report must

Answer 17

in a manner that will not be misleading

Contain sufficient information to understand the report properly;

Clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.

Question 18

The appraiser must address the following items in the report:

Answer 18

dentity of the client and other intended users (by name or type)
Intended use of the appraisal
Identity of the real estate involved in the appraisal
Real property interest to be appraised
Purpose of the appraisal, specifically the type and definition of value and its source
Effective date of the appraisal and the date of the report
Scope of work used to develop the appraisal
Information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions, and conclusions. Exclusion of the three traditional approaches must be explained.
Use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when the purpose of the assignment is market value, the support and rationale for the appraiser’s opinion of the highest and best use of the real estate
Clearly and conspicuously disclose all extraordinary assumptions and hypothetical conditions and disclose that their use might have affected the assignment results
A signed certification that complies with national ethical standards

Question 19

Uniform Residential Appraisal Report (URAR):

Answer 19

Freddie Mac Form 70 and Fannie Mae Form 1004,

Question 20

One additional form report may be required if the property is a rental unit:

Answer 20

Single-Family Comparable Rent Schedule (Freddie Mac Form 1000 and Fannie Mae form 1007) as an attachment to the appraisal form report.

Question 21

Exterior-Only Inspection Residential Appraisal Report

Answer 21

Fannie Mae Form 2055

Question 22

Individual Condominium Unit Appraisal Report

Answer 22

Freddie Mac Form 465 and Fannie Mae Form 1073,

Question 23

When appraising a unit in a new project,

Answer 23

at least one comparable sale should be from outside the project

Question 24

Manufactured Home Appraisal Report:

Answer 24

Freddie Mac Form 70B and Fannie Mae Form 1004C,

Question 25

Small Residential Income Property Appraisal Report:

Answer 25

Freddie Mac Form 72 and Fannie Mae Form 1025

Question 26

ERC Summary Appraisal Report

Answer 26

used by relocation companies and corporations that transfer employees with home guarantee programs.

Question 27

Uniform Commercial/Industrial Appraisal Report (UCIAR)

Answer 27

is a form report that has two formats—small properties and existing properties

Question 28

Appraisal Institute’s Residential Green and Energy Efficient Addendum

Answer 28

s a report form designed to describe high-performance (green) residential properties. T

Question 29

Workfile retention.

Answer 29

An appraiser must retain the workfile for a period of at least five years after preparation or at least two years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever period expires last

Question 30

Each written real property appraisal report must contain a

Answer 30

signed certification