Reporting Basics and Options Flashcards
STANDARD 2 of USPAP establishes the ____________requirements for real property appraisal reports. As such, these requirements are a good starting point for a discussion of appraisal reporting.
minimum
Remember that these USPAP requirements are for report _______
content
Each written or oral real property appraisal report must:
-clearly and accurately set forth the appraisal in a manner that will not be misleading;
-contain sufficient information to enable the intended users of the appraisal to understand the report properly; and
clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.
It is worth noting that this Standards Rule applies to both
written and oral real property appraisal reports
We can avoid being misleading in our appraisal reports by making sure that we
“clearly and accurately set forth the appraisal”
Sandy is appraising an income property for a very knowledgeable client. Which statement is TRUE regarding how much information Sandy must insert in her appraisal report?
The client’s level of knowledge does not matter; a report would be worthless.
Sandy should write the report to an eighth-grade reading level.
Sandy must ensure that her report cannot be understood by anyone.
Because the client is knowledgeable, Sandy may put less information in the report.
Because the client is knowledgeable, Sandy may put less information in the report.
The same amount of information must appear in every written appraisal report.
True
False
False
When reporting, USPAP states that an appraiser must clearly and accurately set forth the appraisal in a manner that will not be misleading.
True
False
true
An appraisal report must be written so that anyone can understand it.
True
False
False
that which is taken to be true.
assumption
an assignment-specific assumption, as of the effective date, which, if found to be false, could alter the appraiser’s opinions or conclusions.
extraordinary assumption
Whereas we believe an extraordinary assumption to be true, a hypothetical condition is something that we know is
not true, yet we appraise the property as though it were true
a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.
hypothetical condition
USPAP requires that a hypothetical condition be clearly and accurately disclosed, but does not specifically require that a hypothetical condition be
labeled as a hypothetical condition
Standards Rule 2-1 of USPAP states that disclosure of assumptions, extraordinary assumptions, and hypothetical conditions must be
clear and accurate
As a reminder, it is not sufficient for the report to merely disclose the use of an extraordinary assumption or hypothetical condition. USPAP requires the report to also state that the use of the extraordinary assumption or hypothetical condition might have affected the
assignment results
Kate notes an underground storage tank on a property she is appraising. The property owner gives her a copy of an environmental expert’s report stating that the tank had leaked diesel fuel into the ground, and there was significant contamination which was never remediated. In appraising this property, can Kate employ an extraordinary assumption that the property is free of contamination? Yes No Only if the client provides permission USPAP does not specify an answer
no
If a property is appraised contrary to known fact, this would be a(n) \_\_\_\_\_\_\_\_\_. Extraordinary assumption Hypothetical condition Disclaimer Competency statement
hypothetical condition
Under USPAP, disclosure of extraordinary assumptions and hypothetical conditions must be clear and conspicuous.
True
False
true
. The specific details of required minimum report content for written reports are found in Standards Rule 2-2:
Each written real property appraisal report must be prepared under one of the following options and prominently state which option is used: Appraisal Report or Restricted Appraisal Report.
An appraiser may use any other label in addition to, but not in place of, the labels set forth in this Standards Rule for the type of report provided. The use of additional labels such as analysis, consultation, evaluation, study, or valuation does not exempt an appraiser from adherence to USPAP.
The report content and level of information requirements in this Standards Rule are minimums for each type of report. An appraiser must supplement a report form, when necessary, to ensure that any intended user of the appraisal is not misled and that the report complies with the applicable content requirements
Two options for written real property appraisal reports:
Appraisal Report
Restricted Appraisal Report
In a written real property appraisal report, USPAP requires that a statement of the reporting option must be \_\_\_\_\_\_\_\_\_\_\_. Omitted Included in a list of assumptions Stated on every page Prominent
prominent
An appraiser prepares an Appraisal Report which does not contain all 14 of the minimum content requirements required by Standards Rule 2-2. Which statement is TRUE regarding the report?
It is still an Appraisal Report.
It is USPAP-compliant because most of the 14 content items are optional.
The appraiser should label it “Consulting Report.”
It does not comply with USPAP
it does not comply with USPAP
An appraiser may use another label in place of the report option label required by USPAP Standards Rule 2-2.
True
False
FALSE
