USPAP Flashcards
In 1989, eight major U.S. professional appraisal organizations came together and established what new organization?
The Appraisal Foundation (TAF)
What event in U.S. history leads to the creation and establishment of new appraisal standards?
The Savings and Loan crisis
What appraisal organization represented the mass appraisal industry during the creation of appraisal standards?
IAAO - International Association of Assessing Officers
How did USPAP gain acceptance in the appraisal industry?
Federal lawmakers incorporated (FIRREA)
With regards to the revision process, how often does USPAP see changes?
Once every 2 years (biennially)
What is the primary purpose of the Appraisal Standards Board within The Appraisal Foundation?
a) establishes the rules for developing an appraisal and reporting its results
b) responsible for writing, editing, revising, and interpretation of USPAP
c) promotes the use, understanding, and enforcement of the USPAP as required by FIRREA
The act or process of developing an opinion of value (verb);an opinion of value. (noun)
Appraisal
Valuation services performed by an individual acting as an appraiser, including but not limited to appraisal and appraisal review.
Appraisal Practice
One who is expected to perform evaluation services competently and in a manner that is independent, impartial, and objective.
Appraiser
Specific information needed to identify the appraisal or a appraisal review problem: client and any other intended users; intended use of appraiser’s opinion and conclusions; type and definition of value; effective date of appraiser’s opinion and conclusions; subject of the assignment and its relevant characteristics; and assignment conditions.
Assignment Elements
An appraiser’s opinion or conclusions developed specific to an assignment but not limited to value, they were developed when performing an appraisal assignment, an appraisal review assignment, or a valuation service other than an appraisal appraisal review
Assignment Results
A preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment.
Bias
The party or parties who engage, by employment or contract, an appraiser in a specific assignment whether directly or through an agent.
Client (usually Jurisdiction)
Information that is either: Identified by the client as confidential when providing it; or Classified as confidential or private by applicable law or regulation.
Confidential Information
The actual or estimated amount required to create, reproduce, replace, or obtain a property
Cost
The date to which an appraiser’s analysis, opinions, and conclusions apply; also referred to as date of value.
Effective Date (January 1st)
An assignment specific assumption as of the effective date regarding uncertain information used in an analysis which, it found to be false, could alter the appraiser’s opinions or conclusions
Extraordinary Assumption
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
Non-physical assets, including, but not limited to franchises, trademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets such as facilities and equipment.
Intangible Property (Intangible Assets)
An assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP
Jurisdictional Exception
The process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing.
Mass Appraisal
A mathematical expression of how supply and demand factors interact in a market.
Mass Appraisal Model
Intentionally or unintentionally mis-representing, misstating, or concealing relevant facts or conclusions.
Misleading
The amount asked, offered, or paid for a property.
Price
A physical observation performed to assist in identifying relevant property characteristics in a valuation service.
Personal Inspection
Any tangible or intangible article that is subject to ownership and not classified as real property, including identifiable tangible objects that are considered by the general public as being “personal,” such as furnishing, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; and intangible property that is created and stored electronically such as plans for installation art, choreography, emails, or designs for digital tokens.
Personal Property
Attributes of a property that are observable or measurable as a matter of fact, as distinguished from opinions and conclusions, which are the result of some level of analysis or judgment.
Physical Characteristics
Features that may affect a property’s value or markability such as legal, economic, or physical characteristics.
Relevant Characteristics
The type and extent of research and analysis in an appraisal or appraisal review assignment.
Scope of Work
A service pertaining to aspects of property value, regardless of the type of service and whether it is performed by appraisers or by others.
Valuation Services
The monetary relationship between properties, and those who buy, sell, or use those properties, expressed as an opinion of the worth of a property at a given time.
Value
Data, information, and documentation necessary to support the appraiser’s opinions and conclusions and to show compliance with USPAP
Work file
What is the purpose of USPAP?
To promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers.
The appraisal standards board has stated that USPAP is to be used by both and .
Appraisers and users of appraisal services
When must appraisers comply with USPAP
The Appraiser must comply with USPAP when service or the appraiser is required by law, regulation, or agreement with client or intended user
Appraisers should perform assignment with , ,and .
Independence, impartiality, and objectivity.
What must an appraiser do when the appraiser determines that he or she lacks competency
Disclose that they are incompetent to client but prior to accepting the assignment or withdraw
When certain laws or regulations preclude the appraiser’s ability to comply with parts of USPAP, this is known as what
Jurisdictional Exception Rule
In what manner, and under which rule in USPAP, is advocacy permitted in an appraisal assignment
Never
In determining the appropriate scope of work for an assignment, appraisers have ____________and ____________.
Broad flexibility and significant responsibility
If an appraiser chooses to exclude an appraisal method/technique, that would otherwise seem necessary to the client, what must the appraiser do
The appraiser must have sound reasoning behind the decision and must disclose the decision in the scope of work
Under what circumstances is the scope of work deemed acceptable
When it meets or exceeds: the expectations of parties who are regularly intended users of similar assignments; and what an appraiser’s peers’ action would be in performing the same or similar assignment
Problem identification is the 1st step in developing a proper scope of work. What are 6 elements in appraisal needs to correctly identify in order to correctly understand problem identification?
1 client and any other intended users
2 intended use of appraiser’s opinion or conclusions
3 type and definition of value
4 effective date of the appraiser’s opinion or conclusions
5 subject of the assignment and its relevant characteristics
6 any assignment condition
Once A-scope of work is finalized by the appraiser, can the scope of world be altered? If yes why?
Yes, information discovered during the course of an assignment might cause the appraiser to reconsider the scope of work
Standard one address what type of appraisal assignment
The development of a real property appraisal
According to standard 2, what 2 types of appraisal reports are allowed under USPAP
Appraisal reports and restricted appraisal reports
According to standard 2, what type of report is only intended for the client and warns the report may not be understood properly without additional information
Restricted appraisal reports
What standard of USPAP addresses the development of an appraisal review assignment
Standard 3
Both written and oral appraisal reports must meet the requirements of which rule
Record keeping rule
What do all standards rule instruct appraisers to do regarding exclusion of an appraisal methodology when developing an appraisal assignment
The exclusion of any of the approaches to value must be explained
The names of individuals providing significant appraisal assistance in an assignment, must be stated, or listed, where in the report
The signed certification
According to standards rule 5, calibration of mass appraisal models should be based on what
All 3 approaches to value when applicable
Who has the responsibility within the appraisal foundation of providing adversory opinions
The appraisal standards board
While adversory opinions are a form of guidance, and they do not establish new standards or interpret existing standards, what is the purpose of an adversory opinion
Adversory opinions are to illustration the applicability of USPAP in specific circumstances
According to A02, what inspection of property is not required of USPAP, what are some alternative inspection methods is a physical inspection is not performed
Plans, specifications, asset records, photographs, property sketches, recorded media
When should an individual, acting as an appraiser, comply with USPAP
When required by law or regulation, or the client
According to A032, who typically is the client in an Ad Valorem property appraisal
The government or taxing authority
In developing a mass appraisal, an appraiser must be aware of_________________ , and correctly employed those_______________ _____________and________________, necessary to produce and communicate credible mass appraisals
Understand, recognized methods and techniques
In developing a mass appraisal, an appraiser must identify the________ and____________of____________.
Type and definition of value
In developing a mass appraisal, an appraiser must employ recognized techniques for specifying____________ ___________ _____________; and employer recognized techniques ____________ ____________ ____________ ____________
Property valuation models and calibrating mass appraisal models
Each written mass appraisal report must ____________ and ____________ set forth the appraisal in a manner that will not be misleading
Clearly and accurately
Each written mass appraisal report must ________________ to enable the intended users of the appraisal to understand the report properly
Contain sufficient information
Each written mass appraisal report must contain a
Signed certification
The signing appraiser must also state the ____________ of those providing significant ____________in the certification
Name(s)
Mass appraisal assistance
How did USPAP became accepted as the standard across the country
Title XI of FIRREA required USPAP compliance on all federally related transactions
Mass appraisal is the process of appraising a universal properties rather than a single property. The mass appraiser utilizes methods and techniques not utilized in the other appraisal standards. In developing a mass appraisal, an appraiser must employ recognized techniques for specificifing and calibrating property valuation
Mass Appraisal Model
The Appraisal Foundation (TAF) is accomplished by three independent boards:
1) The Board of Trustees
2) The Appraiser Qualifications Board (AQB)
3) The Appraisal Standards Board (ASB)
Written or oral reports we must have…
A work file
Which standards apply to all mass appraisals and not just to Ad Volorem
Standards 5 and 6
In which standard the report must be in writing and not oral format?
Standard 6 - Mass Appraisal, Reporting
Means to have correct judgment and correct execution
Competency
List the Standards regarding development
Standard 1 Standard 3 Standard 5 Standard 7 Standard 9
List the Standards regarding review
Standard 2 Standard 4 Standard 6 Standard 8 Standard 10
Standard 1
Real Property Appraisal
Standard 2
Real Property Appraisal Reporting
Standard 3
Appraisal Review Development
Standard 4
Appraisal Review Reporting
Standard 5
Mass Appraisal Development
Standard 6
Mass Appraisal Review
Standard 7
Personal Property Appraisal Development
Standard 8
Personal Property Appraisal Reporting
Standard 9
Business Appraisal Development
Standard 10
Business Appraisal Reporting
