USPAP 17-18 Flashcards
The party who engages an appraiser is the
client
Assumes conditions contrary to a known fact
hypothetical condition
Services performed by an individual acting as an
appraiser
Appraisal Practice
Documents the support for the appraisers’
conclusions
Work file
Presumes as fact otherwise uncertain information
Extraordinary Assumption
A preference that precludes an appraiser’s
impartiality
Bias
The amount asked, offered, or paid for a property
Price
Services pertaining to aspects of property value
Valuation Services
The act or process of developing an opinion of
value
Appraisal
An opinion that expresses an economic concept
Value
_________ is a valuation service performed by an
individual acting in the role of an appraiser
Appraisal Practice
When performing valuation services outside of
appraisal practice, appraisers must be careful not
to __________ the client and other intended users
about their role.
Mislead
For assignments (Appraisal Practice) that fall
outside Standards 1-10, there are no ________ or
________ requirements in USPAP.
workfile / record keeping
What appraisal services are covered by USPAP?
Appraisal
Appraisal Review
When an appraiser JUST measures a building, the
service is within ________ and has no specific
performance requirements in USPAP
Appraisal Practice
True or False…If an individual who is both a
broker and an appraiser provides a “value”
opinion for a specific property to be used in a
listing agreement, the service is always outside
appraisal practice.
False
True or False…An individual must comply with
USPAP when required by law, regulation, or
agreement.
True
True or False….Appraisal practice pertains only to
market value appraisals
False
True or False…An appraiser has a professional
responsibility to identify the capacity in which he
or she is performing.
True
True or False….The purpose of USPAP is to
promote and maintain a high level of public trust in
professional appraisal practice
True
Real estate brokerage, appraisal reviews, and real property appraisals are included within A) appraisal practice B) Valuation services C) market analysis
B) Valuation Services
The PREAMBLE of USPAP states that the
Standards are
A) only for appraisers
B) for appraisers and users of appraisal practice
C) limited to state certified or licensed appraisers
D) only for users of appraisal services
B) for appraisers and users of appraisal services
According to USPAP, the party or parties who
engage an appraiser in a specific assignment
defines the
A) Client
B) Party who pays the fee
C) Appraiser’s peers
D) Other intended users
A) Client
USPAP is enforced by A) The Appraisal Foundation B) The Appraisal Standards Board C) Appraisal subcommittee, through congress D) State regulatory agencies
D) State regulatory agencies
USPAP is developed, interpreted, and amended by the A) Appraisal Standards Board B) Appraiser Qualifications Board C) Appraisal Subcommittee D) State regulatory agencies
A) Appraisal Standards Board
Which of the following best describes the
statements on Appraisal Standards?
A) Offer Advice, but do not carry the same weight as
the Standards Rules.
B) Have the full weight of a Standards Rule and be
adopted by the ASB only after exposure and comment.
C) Do not establish new standards or interpret existing
standards but are issued to illustrate the applicability
of appraisal in specific situations.
D) Are not an integral part of Uniform Standards and
are extensions of the Standards Rules
B) Have the full weight of a Standards Rule and be
adopted by the ASB only after exposure and
comment.
If an appraiser assumes a condition to be true that
does not exist for purpose of analysis, this is an
example of
A) an extraordinary assumption
B) an assumption
C) a limiting condition
D) a hypothetical condition
D) Hypothetical Condition
Why are USPAP Advisory Opinions issued? A) To illustrate the applicability of appraisal standards B) To establish new appraisal standards C) To interpret existing standards D) To revise existing standards
A) To illustrate the applicability of appraisal
standards
If an appraiser assumes a significant condition
related to a specific assignment to be true and
although that fact is not certain, this is an example
of …
A) an extraordinary assumption
B) an assumption
C) a limiting condition
D) a hypothetical condition
A) an extraordinary assumption
A workfile must be maintained for
A) Written appraisal reports only
B) Oral appraisal reports only
C) Valuation services that are outside USPAP
D) Any assignment that is covered by Standards Rules
D) Any assignment that is covered by Standards
Rules
Advisory Opinions are best described as A) issued by the ASC B) subject to Fannie May C) not part of USPAP, but included as guidance material D) an alternative index to USPAP
C) not a part of USPAP, but included as guidance
material
An electronic signature may be used only if the
A) software used to affix the signature is current
B) report is on an approved form
C) appraiser will be storing the report by electronic
means
D) appraiser has sole, personalized control of affixing
the signature
D) appraiser has sole, personalized control of
affixing the signature
A tangible object that is not real estate is A) a company’s logo B) only items in mass appraisals C) personal property D) borrowed property
B) Personal Property
Appraisal practice includes only
A) valuation services performed by an individual
acting as an appraiser
B) market value appraisals
C) work completed by licensed and certified
appraisers
D) appraisal, appraisal review, and appraisal
consulting
A) valuation services performed by an individual
acting as an appraiser
True or False….It is unethical to accept an
assignment with the understanding that payment
will be made if and when the loan closes.
True
True or False…Under USPAP confidential
information is information the appraiser receives
from the client, is not available from any other
source and is identified by the client as confidential.
True
True or False….An appraiser may only disclose
confidential information to the client and to
persons specifically authorized by the client.
False – peers, due process, state regulatory agencies
also
True or False…The Competency Rule requires the
appraiser to disclose lack of knowledge or
experience prior accepting an assignment.
True
The three parts of the Ethics Rule are Conduct,
Management, Confidentiality
True
True or False….An appraiser may accept
assignments with predetermined opinions and
conclusions as long as the purchase contract
supports the opinion or conclusion.
False - no predetermined results
True or False….Bias is allowed in an appraisal as
long as it is disclosed in the report.
False … no bias
True or False…Payment of a fee to procure
appraisal assignments is permitted if disclosed in
the certification and in any transmittal letter.
True
True or False…An appraiser obtain the necessary
competency prior to accepting the assignment.
False
In an assignment, the scope of work is an ______
process.
ongoing
In order to determine the appropriate scope of
work, the appraiser must _____ the problem to be
solved.
identify
An appraiser must not allow client objectives to
_____ the assignment results.
bias
Appraisers have broad ____ and significant ____ in
determining the appropriate scope of work.
flexibility/ responsibility
An appraisers report must contain _____ to allow
intended users to understand the scope of work
performed.
scope of work decision
True or False….Exclusion of a valuation approach
that is not applicable in a given assignment is an
example of scope of work.
True
An appraiser who allows assignment conditions to
significantly limit the scope of work can affect the
credibility of the assignment results.
True
Scope of work has no disclosure requirements
False
The credibility of assignment results is measured in
the context of the intended use.
True
True or False…Determining the scope of work
requires communication with the client.
True
When a part or parts of USPAP is contrary to law
or public policy in any jurisdiction, appraisers
must
A) ignore USPAP
B) ignore the law and adhere to USPAP
C) be allowed to take exception to the law and public
policy
D) Adhere to the law, taking jurisdictional exception
only to the part or parts of USPAP that is contrary to
law.
D) Adhere to the law, taking jurisdictional exception
only to the part or parts of USAP that is contrary to
law.
The purpose of the Jurisdictional Exception Rule is
to
A) allow for cooperation with other professional
appraisers
B) preserve the balance of USPAP when a part or part
is contrary to law or public policy
C) place additional requirements on the appraiser
D) permit acceptance of assignments in other
geographic areas
B) preserve the balance of USPAP when a part or
part is contrary to law or public policy
Appraisers peers are defined as
A) Other appraisers who have expertise and
competency in a similar type of assignment.
B) appraisers with similar level of education
C) hold the same level of state licensure
D) practice in the same market
A) Other appraisers who have expertise and
competency in a similar type of assignment.
Confidential information under USPAP is
information the appraiser
A) receives from the real estate agent
B) receives from another appraiser
C) receives from the client and is identified but is
available from other sources
D) Receives from the client, is identified by the client
as confidential, and is not available from other
sources.
D) receives from the client, is identified by the client
as confidential, and is not available from other
sources.
In order to accept an assignment when an
appraiser initially lacks the knowledge or
experience to complete an assignment, he or she
must
A) associate with an appraiser qualified to complete
the assignment
B) ask for more time and reduce the fee
C) refer the appraisal to appraisers qualified to
complete the assignment.
D) disclose to the client, prior to accepting the
assignment, the lack of knowledge or experience
D) disclose to the client, prior to accepting the
assignment, the lack of knowledge or experience
An appraiser has been asked to complete an
appraisal assignment. The fee is to be paid when
and if the Loan closes. According to USPAP, may
the appraiser accept the assignment under these
conditions?
A) yes, this is a business decision
B) no, the fee contingency arrangement and violates
the Ethics Rule
C) Yes, as long as the appraiser clearly discloses the
basis of such a contingency in the certification
D) No, unless the appraiser receives written
permission allowing the transfer of the appraisal to
other parties.
B) No the fee is a contingency arrangement and
violates the ETHICS RULE
Identification of the intended use of an appraiser’s
opinions and conclusions is
A) necessary only when doing non-mortgage
assignments
B) not required unless the client wants the intended
use to be disclosed
C) necessary for determining the appropriate scope of
work
D) not necessary in most appraisal assignments
C) necessary for determining the appropriate scope
of work.
The amount and type of information researched
and the analyses applied in an assignment defines
the
A) Scope of work
B) market analysis
C) property and market area inspections
D) assignment conditions
A) Scope of work
When is the payment of fees commissions or things
of value in the procurement of an appraisal
assignment allowed?
A) Never
B) only when the payment is in excess of the first fee
C) Always
D) Only when the payment is properly disclosed
D) Only when the payment is properly disclosed
The disclosure of confidential information to a third party is unethical unless A. instructed by an attorney B. authorized by the client C. beneficial to the borrower D. needed in another similar assignment
B) authorized by the client
Exclusion of an approach to value that is not applicable in a given assignment is a A) choice of the client B) Standards Rule C) scope of work decision D) jurisdictional exception
C) Scope of work decision
The payment of fees in connection with the
procurement of an assignment is
A) prohibited by a Standard Rules
B) jurisdictional exception acceptable is
acknowledged in the engagement letter
C) scope of work decision considered unethical in all
cases
D) allowed if appropriately disclosed
D) allowed if appropriately disclosed
In appraisal practice, advocating the cause or
interest of any party of any party or issue is
A) not permitted
B) permitted when a contingent fee is not involved
C) permitted when done by an undisclosed appraiser
D) permitted when appropriately disclosed
A) not permitted
True or False…Exposure time in a market value
appraisal is an opinion developed by the appraiser
True
True or False…Identification of the intended use of
an appraiser’s opinions and conclusions is not
necessary in most appraisal assignments.
False
True or False…An appraiser may use any
combination of a property inspection and
documentation in identifying relevant
characteristics of the subject property
True
True or False…When appraising the market value
of a property subject to favorable financing, it is
not necessary to identify the special financing terms
and develop an opinion of their effect on value.
False
True or False….Exclusion of a valuation approach
that is not applicable in a given assignment is a
scope of work decision.
True
When appraising real property, the appraiser must
analyze prior sales of the subject over a _________
year period.
three
An appraiser must be aware of _______ and _____
recognized methods and techniques.
understand / correctly employ
In developing a real property appraisal, an
appraiser must collect, _____ and ______ all
information necessary for credible assignment
results.
verify / analyze
Identification of the ____ and ____ of an
appraiser’s opinions and conclusions is necessary
for determining the appropriate scope of work.
intended use / intended users
The effective date of an appraisal can be _____,
______, or ________
Current / retrospective date / prospective date
Appraisal review is the act or process of ____ and
_____ an opinion about the quality of another
appraiser’s work.
developing / communicating
If an appraiser is asked to develop an opinion as to
the quality of another appraisers work and to agree
or disagree with the value conclusion, it is both a
_____ and an _____.
Review / Appraisal
The review appraiser must conduct an appraisal
review in the context of market conditions as of the
_____ of the appraisal under review.
Effective Date
An appraisal review requires the reviewer to
prepare a separate report setting forth the ______
preformed and the results of the appraisal review
Scope of Work
The subject of a review assignment may be ______
or _________ of a report a workfile, or a
combination of these.
all or part
True of False….An appraiser performing an
appraisal review must not sign the work of under
review unless he/she intends to accept the
responsibility as a co-signer.
True
True or false…An appraisal review can be a two-stage
assignment: an appraisal review and a value
opinion by the reviewer.
True
An appraisal review is the process of both
developing and reporting the supervision of an
appraisal.
False
A review appraiser may use additional information
that was not available to the original appraiser as
long as the information…
A) discredits the data in the appraisal report under
review
B) Supports the data in the appraisal report under
review
C) is not used as the basis to discredit the original
appraiser’s value opinion
D) is not used in a review that includes the reviewer’s
own opinion of value.
C) is not used as the basis to discredit the original
appraiser’s value opinion
In developing an appraisal review, the reviewer
must identify all of the following except…
A. the purpose of the assignment
B. the scope of work to be performed
C. the intended use of the reviewer’s opinions and
conclusions
D. the reviewer’s concurrence of the appraiser’s
opinion of value, if not part of the reviewer’s scope of
work.
D) the reviewer’s concurrence of the appraiser’s
opinion of value, if not part of the reviewer’s scope
of work.
A reviewer must develop an opinion regarding…
A) the appraiser’s qualifications to complete the
assignment.
B) the completeness of the work under review, given
the reviewer’s scope of work.
C) the appraiser’s knowledge of USPAP
D) the ethical and moral character of the appraiser
B) the completeness of the work under review, given
the reviewer’s scope of work.
In the development of an appraisal, the appraiser
must…
A) inspect the comparable sales, by at least driving by
them
B) inspect the subject property
C) not commit a substantial error that significantly
affects the appraisal
D) use the three approaches to value.
C) not commit a substantial error that significantly
affects the appraisal
To the extent possible and appropriate, an oral
appraisal report must address the substantive
matters that apply to a(n)
A) Appraisal Review Report
B) Appraisal Report
C) Self-Contained Appraisal Report
D) Restricted Appraisal Report
B) Appraisal Report
According to USPAP, any appraiser who signs any
part of an appraisal report is required to …
A) sign the letter of transmittal
B) inspect the property
C) sign the certification
D) read the report
C) sign the certification
All appraisal reports must contain
A) a signed letter of transmittal
B) sufficient information to enable intended users to
understand the report
C) adequate detail to allow the reader to understand
the appraisal process
D) maps, sketches, and photographs
B) sufficient info to enable intended users to
understand the report.
When reporting the results of an appraisal, dates that must be included are... A) effective date and report date B) inspection date and assignment date C) inspection date and report date D) inspection and contract date.
A) effective date and report date
If an appraiser is asked to appraise a property on
which there is a current agreement of sale, the
agreement should be….
A) disregarded as it is not a sale
B) used as a comp
C) used as a guideline to select comps
D) analyzed in the appraisal
D) analyzed in the appraisal
The review appraiser must conduct an appraisal
review in the context of market conditions as of
the….
A) effective date of the appraisal under review
B) original inspection date
C) original report date
D) review report date
A) effective date of the appraisal under review
An extraordinary assumption may be used in an
assignment only if …
A) mandated by the law or public policy
B) approved by the client
C) accompanied by a limiting condition
D) it is required to develop credible results
D) it is required to develop credible results
What special requirements, if any, are appropriate
when appraising the market value of a property
subject to favorable financing?
A) ignore the favorable financing
B) Appraise the property under typical financing only
C) include no special requirements as long as the
financing is to the typical purchaser
D) identify the special financing terms and develop an
opinion of their effect on value.
D) identify the special financing terms and develop
an opinion of their effect on value.
Which of the following is not required by USPAP to be in an appraisal report? A) type and definition of value B) Effective date of appraisal C) Client's specific name D) Name or type of other intended users
C) Client’s specific name
The client is the only intended user for A) Restricted Appraisal Reports B) An Appraisal Report C) An Appraisal Review Report D) An Oral Appraisal Report
A) Restricted Appraisal Reports
Compared to a value opinion expressed in an
Appraisal Report, a value opinion expressed in a
Restricted Appraisal Report is….
A) less reliable
B) more reliable
C) less credible
D) equally credible
D) equally credible
Which of the following best describes bias in
appraisal practice?
A) permitted in market analysis
B) Allowed as long as it is disclosed in the report
C) Not allowed
D) Allowed if disclosed prior to accepting the
assignment
C) Not allowed
The commitment to cultivate greater trust and
confidence in professional appraisal practice is the
task of the __________ and _______ with support
from the __________ _______ _________
_________.
AQB and ASB with support from the sponsoring
organizations of The Appraisal Foundation.
FIRREA
Financial Institutions Reform, Recovery and
Enforcement Act of 1989, also known as the “S&L
Bailout bill” provided recognition and authorized
federal financial institution regulatory agencies to
reference USPAP in their regulations.
True or False…The Appraisal Foundation is a
private entity and not a government agency. The
Foundation and its Boards have no legal authority
in any jurisdiction.
True
What are the four boards of the TAF?
The four boards of The Appraisal Foundation are ... BOT- Board of Trustees AQB- Appraiser Qualifications Board ASB- Appraisal Standards Board APB- Appraisal Practice Board
What is the difference between the two categories
of sponsors TAF has?
Appraisal Sponsors are non profit appraisal
organizations
Affiliate Sponsors are nonprofit organizations with an
interest in appraising
Who deals in qualification requirements for state
licensed and certified appraisers?
AQB
Who promulgates Appraisal Standards?
ASB
Board of Trustees (BOT)
Exercises all authority and power and performs all
functions of TAF except for the authority, powers and
functions that the Articles of Incorporation or the
Bylaws have directed or required to be exercised or
performed by the AQB or the ASB. Its three primary
functions are Appoint members to the AQB, ASB, and
APB, ensure financing of TAF, monitor performance
and oversight of TAF and its two Boards (AQB and
ASB)
The Appraiser Qualifications Board (AQB)
Exercises all authority over the establishment of
minimum education, experience, and other criteria for
licensing, certification, and recertification of qualified
appraisers. Defines, issues, and promotes such
qualification criteria. Disseminates such qualification
criteria to states, government entities, and others.
Creates the National Appraisal Examination.
Responsible for the administration of the 7 and 15 hour
national USPAP courses. Responsible for certifying
national USPAP instructors. Responsible for the
national Course Approval Program (CAP).
When appraising personal property, what time
period should an appraisal analyze prior sales of
the subject property?
A reasonable and applicable period
The Appraisal Subcommittee ASC
Created as a result of FIRREA, the ASC has as its
focus supervisory role over state boards and appraisers,
with a duty to ensure that the government has sufficient
controls in place over all real estate appraisal activity to
protect it from loss. The ASC has six members
Board of Governors of the Federal Reserve System
(FRB)
Office of the Comptroller of the Currency (OCC)
Office of Thrift Supervision (OTS)
Federal Deposit Insurance Corporation (FDIC)
National Credit Union Administration (NCUA)
Department of Housing and Urban Development
(HUD)
THE ASC IS NOT A PART OF THE APPRAISAL
FOUNDATION (TAF), BUT HAS AUTHORITY
FORM TITLE XI OF FIRREA TO MONITOR HTE
ACTIVITES OF TAF, INCLUDING THE AQB AND
THE ASB IN REGARD TO REAL PROPERT
ISSUES.
