USPAP Flashcards
An appraiser agrees to perform an assignment and soon realizes that she previously performed a valuation service involving the property within the last 3 years. What is the appraiser’s first obligation?
Inform the client of the prior service that she performed.
Corrine performs appraisal and brokerage work and has been engaged by a client to broker a property. What professional responsibility does Corrine have to the client in this assignment?
Identify the capacity in which she is performing the service.
What type of situation or assignment would permit a scope of work to be specified by the client?
When it allows the appraiser to develop credible assignment results.
Which entity is an Affiliate Sponsor of The Appraisal Foundation?
National Association of REALTORS
What services are included in USPAP’s requirement to disclose the scope of work in a report?
Appraisal and appraisal review assignments
According to USPAP, who may perform valuation services?
Appraisers and others
An appraiser performed an appraisal on a property involving a tax assessment appeal. One year later the same appraiser was asked by the property owner to perform an appraisal for an easement dispute. What obligation does the appraiser have in the latest appraisal?
Disclose that the appraiser performed an appraisal on the property within the last 3 years.
If an appraiser states that the purpose of an assignment is to analyze and develop a value of the controlling interest in a regional retail development, what type of assignment is this and what USPAP obligations does the appraiser have?
This is an appraisal of a business enterprise and STANDARDS 9 and 10 must be followed. Also, this is an appraisal assignment and STANDARDS 1 and 2 must be followed.
Personal property appraisals must use which type of written report option?
Restricted Appraisal Report, Mass Appraisal Report, Appraisal Report
What is the critical issue for an appraiser while acting in the role of a real estate agent when providing a brokerage service?
Not mislead intended users about his or her role in the brokerage services.
The owner of an appraisal firm must not impede a trainee’s ability to access a workfile under what condition?
Submission to a duly authorized professional peer review committee, submission to state regulatory agencies, compliance with due process of law
What type of assignment conditions initiates the requirement to use a jurisdictional exception?
A conflict between the requirements of USPAP and the law or regulation of the jurisdiction.
Roger previously worked for the Best Appraisals, Inc. and his supervisor retains the workfiles. Roger requested copies of several workfiles from his supervisor for submission to a professional peer review committee. What USPAP obligations does the supervisor have?
The supervisor must allow Roger to retrieve a copy of the requested files.
The ETHICS RULE makes a distinction between when an appraiser must comply with USPAP and when an appraiser should comply. How does this distinction apply to services that fall outside appraisal practice?
Laws and regulations may not apply to these services, but an appraiser has ethical obligations when acting in the role of an appraiser.
If an intended user is confused or misled as to the extent of analysis performed in an appraisal used in a tax assessment dispute, what is the problem?
The appraisal report does not contain sufficient information to allow the intended users to understand the scope of work the appraiser performed.
In written report assignments, what does the RECORD KEEPING RULE state about the appraiser’s workfile?
A workfile must be in existence prior to the issuance of any appraisal report.
An appraiser discovers that the property being appraised has a current agreement of sale. In this assignment, the agreement should be
analyzed in the appraisal, if made available to the appraiser.
Who selects the chairs and vice chairs of the Appraisal Foundation’s Boards, specifically the AQB and ASB?
Board of Trustees of the Appraisal Foundation
Tax assessments commonly involve mass appraisal techniques, but where else may mass appraisals be used?
In an eminent domain assignment that involves an entire town, a large group of properties that are subject to a widespread environmental contamination issues, the valuation of all properties within a subdivision located in a flood plain
For assignments involving personal property based on a market value opinion, the appraiser must analyze prior sales of the subject property over what time period?
Within a reasonable and applicable time period
What was the name of the appraisal organization formed in 1932 that later became a founding sponsor of The Appraisal Foundation?
American Institute of Real Estate Appraisers
What was the name of the National Association of REALTORS when it was originally established in 1908?
National Association of Real Estate Exchanges
What label is associated with the day the stock market plummeted on October 29, 1929?
Black Tuesday
Which statement was NOT part of the critical issues recognized by professional appraisal organizations after the stock market crash of 1929?
Real property appraisers should be federally licensed to protect public trust.
Prior to the collapse of the stock market in 1929, what happened in the real estate market around 1925?
Real estate values peaked.
What disciplines did the developers include in USPAP?
All appraisal and review appraisal disciplines
What is the primary purpose of USPAP?
To promote and maintain public trust in appraisal practice
Which historical event was the most influential to the formation of The Appraisal Foundation?
The savings and loan crisis during the 1980s
What did the Ad Hoc Committee believe was necessary in order to implement the standards they adopted?
Creation of a new organization
Identify the statement that best describes the purpose of The Appraisal Foundation?
A nonprofit private organization established for educational and scientific purposes.
Identify one of the ways USPAP achieves authority in various jurisdictions.
Through adoption, citation, or implementation of USPAP by government agencies through regulation or administrative actions
Which entity is NOT an Appraisal Sponsor of The Appraisal Foundation?
National Credit Union Administration
Which federal law significantly helped USPAP gain public acceptance?
The Financial Institutions Reform, Recovery and Enforcement Act
The Board of Trustees (BOT) of The Appraisal Foundation has three primary functions: one is to ensure that The Foundation is adequately funded. What are the other 2 functions?
To appoint members to the AQB and ASB and monitor the performance of these same Boards and two Advisory Councils.
Which existing entity of The Appraisal Foundation is comprised of nonprofit organizations and government agencies with an interest in valuation?
The Appraisal Foundation Advisory Council (TAFAC).
A client contracts for services with an appraiser and the client’s assignment requires compliance to USPAP. What is this an example of?
How USPAP achieves authority.
Which of the following is NOT an attribute that clients count on an appraiser to possess when performing assignments?
Advocacy
What do appraisal organizations, government agencies, client groups, work groups, appraisers, and members of the public have in common?
All may submit inquiries and concerns to the Appraisal Standards Board.
What are Advisory Opinions?
Guidance material issued by the ASB that illustrate the applicability of appraisal standards.
Who is responsible for developing minimum criteria involving education and experience for state licensed and certified real property appraisers?
Appraiser Qualifications Board (AQB)
What ASB communication is released for public comment that includes all the proposed changes to USPAP?
an Exposure Draft
Who is responsible for development and revision of the Uniform Standards of Professional Appraisal Practice (USPAP)?
Appraisal Standards Board (ASB)
“Any real estate-related financial transaction which a federal financial institution’s regulatory agency engages in, contracts for, or regulates, and also requires the services of an appraiser.” This defines what term according to the Appraisal Subcommittee (ASC)?
Federally related transaction
Which law required federal agencies to establish regulations to protect federal financial interests and public policy interests in real estate transactions requiring the services of an appraiser?
The Financial Institutions Reform, Recovery, and Enforcement Act
In order to fund the activities of the Appraisal Subcommittee, including a grant to offset some of the real-property-related work of ASB and AQB, what did the Appraisal Subcommittee establish?
A national registry fee
What entity has authority from Title IX of FIRREA to oversee the activities of The Appraisal Foundation, including both the ASB and the AQB?
Appraisal Subcommittee
What section of USPAP includes a description of the overall structure of USPAP?
the Preamble
What section of USPAP covers the detailed requirements for specific disciplines and assignment types?
the Standards
Which of the following is treated as “other communication” by the Appraisal Standards Board?
Advisory Opinions
What is the difference between USPAP Standards and Advisory Opinions?
Standards have the full force and effect of USPAP and Advisory Opinions do not.
The appraisal process applies to all disciplines of appraisal practice, but was originally created for what specific valuation discipline?
Real property appraisal
What is the first step in the appraisal process?
Identification of the problem
The appraisal process is divided among what two broad activities?
Development and reporting
USPAP is structured to follow what process?
The appraisal process
“Providers of appraisal services” as identified in USPAP references what group?
Appraisers
When an appraiser receives an assignment from a client, what should the appraiser immediately consider?
Which sections of USPAP might apply to the assignment
When should an appraiser comply with USPAP?
Any time an individual represents that he or she is performing the service as an appraiser
When must an appraiser comply with USPAP?
When required by law, regulation, or agreement with the client or other intended users.
What must an appraiser do when acting in another role in a valuation service that is outside USPAP?
Ensure that intended users are not misled as to the individual’s role.
A client’s expectation for an appraiser to comply with USPAP is
an integral part of maintaining public trust.
Valuation services are performed by
appraisers and others
What is the critical issue for Robert Agent in the ASB’s illustration of Brokerage and Appraisal?
He must not mislead intended users about his role in the brokerage services.
Valuation services performed by an individual acting as an appraiser are identified by USPAP as
appraisal practice
An individual who performs appraisal and brokerage work has been engaged by a client to list and sell his property. What professional responsibility does the individual have to the client in this assignment?
Identify the capacity in which he or she is performing.
In a valuation service, how is identification as an appraiser established?
By expectations about the manner in which the individual provides valuation services.
An appraiser who is also an accountant is providing counseling on the tax implications of a client’s real estate investments. If the individual is acting exclusively in the role of an accountant, what USPAP obligation exists?
None, other than to not misrepresent the individual’s role in the assignment.
The SCOPE OF WORK RULE applies to
appraisal and appraisal review assignments
An appraiser performing an appraisal or appraisal review must comply with the Standards Rules that apply to the assignment, and what else?
all USPAP rules
An individual has been retained to provide consulting and be an advocate for the client’s position in a valuation dispute. This service
cannot be performed if acting in the role of an appraiser
If someone provides litigation services as an advocate, then they are providing
a valuation service outside appraisal practice.
A service an appraiser might provide that is within appraisal practice, but STANDARDS 1 through 10 do NOT apply is
Verifying zoning issues and potential uses of a property, measuring the GLA of a residence, writing an article about adjustment techniques
USPAP establishes what type of requirements for professional appraisal practice?
Minimum
An appraiser is performing a valuation assignment for a federal financial institution. What definition of “market value” should the appraiser use in this assignment?
The definition required by FIRREA
Why does USPAP define only certain terms?
To address terms that differ in meaning from their common usage
The Appraisal Standards Board may remove a definition from USPAP. What was the reason the ASB removed the term “assumption” from a prior edition of USPAP?
The USPAP definition was not significantly different than its common meaning found in traditional dictionaries.
An appraiser with a financial interest in a property must not appraise the property if possessing that interest compromises the appraiser’s
impartiality
A property owner has asked an appraiser to work on a tax appeal assignment, but on the condition the tax value can be lowered. What must the appraiser consider in this situation?
It appears the client wants the appraiser to act as an advocate.
A preference that precludes an appraiser’s impartiality in an assignment is best define as
bias
The definition of advocacy is
not defined in the DEFINITIONS section of USPAP because the dictionary definition is sufficient.
An assignment involves a proposed renovation. What term best applies to the assignment condition if the appraiser’s conclusion is based on a current value as if the renovation is already completed?
Hypothetical condition
An appraisal is based on a “what if” scenario. What term does USPAP use to identify an assignment condition that is contrary to what exists?
Hypothetical condition
An appraiser is performing an appraisal of an apartment building and plans to physically inspect a sample number of each of the unit types in the building. What type of assignment condition should the appraiser use specific to this situation?
Extraordinary assumption
Which term best applies to conditions that are generally supposed in most appraisal assignments, such as the subject property having a clear title?
Assumption
An appraiser must be careful not to mislead when using what term alongside “price”?
Estimate
When an appraiser develops the replacement construction cost of improvements for a property, what is the appraiser essentially providing?
An estimated amount that is required to replace the property
What USPAP term is identified as opinion and never as fact?
Value
The monetary relationship between properties and those who buy, sell, or use those properties, best defines what term?
Value
Confidential information applies to information
classified as confidential by applicable law or regulation.
What USPAP term best identifies an appraiser’s opinions or conclusions, not limited to value, that were developed while performing an appraisal assignment or appraisal review assignment?
Assignment results
A valuation service that is provided by an appraiser as a consequence of an agreement with a client defines what USPAP term?
Assignment
Based on the USPAP definition of “client”, which of the following is true?
The client may engage and communicate with the appraiser directly or through an agent, the client is the party who engages an appraiser in a specific assignment, the client may be an individual, group, or entity
Who determines the intended use of an appraisal involving litigation of a federal highway easement?
The appraiser
Intended users in an Appraisal Report
must be identified by name or type.
A property owner engages an appraiser to assist in establishing an asking price of his land. The property owner in this assignment
is the client and the intended user.
Why doesn’t the USPAP definition for “signature” identify the specifics of what kind of mark or image qualifies for appropriate use?
Because technology is constantly changing.
What type of personalized evidence indicates authentication of the work performed by an appraiser?
A signature
In addition to a paper document, a report’s written communication may include
faxes, email messages, text messages
What type of valuation services requires a workfile under USPAP?
Appraisal and appraisal review assignments
The type and extent of research and analyses that an appraiser undertakes in an assignment is best identified as
scope of work
An accountant determines the book value on an asset; a broker establishes a listing price for a property, an appraiser provides an opinion of value. These are all examples of
valuation service
A wide-ranging world of value-related services best describes
valuation service
What do accountants, real estate agents, and automobile salespersons have in common with real property appraisers?
All may provide valuation services.
An appraisal review assignment
may be all or part of a report, workfile, or a combination of these.
In USPAP’s ETHIC RULE, what general conduct by an appraiser fosters public trust?
Observing high standards and professional ethics
A property owner contacted an appraiser on a tax appeal case. The owner stipulated the appraisal must indicate a value that is at least 25% lower than the tax assessed value. Can the appraiser agree to perform this assignment?
No, the appraiser cannot agree to perform an assignment that includes the reporting of a predetermined value.
An appraiser’s value conclusion favors the cause of the client and the opinion is well supported by market data. What can you conclude from this information?
The appraiser’s value opinion appears to be objective.
Can an individual acting in the role of an appraiser agree to perform an assignment that requires advocating on the client’s behalf?
No, advocating the cause or interest of any party is not permitted in appraisal practice.
USPAP Standards are paired to address what two areas in regard to an appraiser’s ethical obligations?
development and reporting of assignment results
Is it appropriate for an appraiser to ignore the prior services disclosure in the ETHICS RULE Conduct section if the appraiser has not provided any services at the subject property in the prior 3 years?
No, the appraiser must disclose even if no prior services have been provided in the last 3 years.
An appraiser performed an appraisal on a property involving a partial acquisition for a state highway project. Two years later the appraiser was asked by the property owner to perform an appraisal for a tax appeal. What obligation does the appraiser have in the latest appraisal?
Disclose that the appraiser appraised the property within the prior 3 years.
An appraiser realizes after arriving at a property for an appraisal assignment that she previously performed a brokerage service involving the property within the last 3 years. What is the appraiser’s obligation?
Disclose to the client the prior service she performed.
Fred has appraised a property in a rural location, but the mortgage broker involved in the assignment has asked him to restate the location as suburban. If Fred complies with the request, does this violate USPAP?
Yes, the appraiser must not use or communicate a report with the intent to mislead or to defraud.
Ray sometimes makes adjustments in his appraisals based solely on the type of people living in the location of the appraiser property. Is this practice ethical?
No, an appraiser must not use or rely on unsupported conclusions relating to characteristics such as race, color, religion, national origin, etc.
An appraiser has paid a referral fee in connection with the procurement of an assignment. What section of the ETHICS RULE addresses this issue?
Management
An appraiser provided a new client with hard-to-get tickets to a sporting event in order to ensure she would be selected to receive a specific assignment. When preparing the appraisal report, what disclosure obligation does the appraiser have?
Disclose that a thing of value was provided to the client in connection with the procurement of the assignment.
An appraiser has agreed to perform an appraisal review assignment in a litigation case. The appraiser has agreed to a fee based on an hourly rate. Is this fee arrangement acceptable practice under USPAP?
It is acceptable to charge by the hour.
An appraiser agrees to perform an assignment in which the appraisal fee is subject to a financial institution closing the loan. USPAP identifies this type of compensation arrangement as a contingency based on
the attainment of a stipulated event.
Harvey finished an urgent assignment for a client and left the next day for an extended vacation. Before the appraisal report went in the mail, Harvey’s business partner contacted him to say that he forgot to sign the report. To alleviate delays for the client, what can Harvey do that is acceptable practice under USPAP?
Authorize his business partner to sign the appraisal report for him.
To whom should the appraiser NOT disclose confidential information?
Persons not specifically authorized by the client.
What is significant about employees, co-workers, and sub-contractors that have access to an appraiser’s confidential information or assignment results?
The appraiser must ensure they are aware of the prohibitions on disclosure of such information or results.
What can an appraiser do to ensure that the client’s confidential information and assignment results are properly safeguarded?
The appraiser can use aggregation to address confidential elements, can redact the confidential elements, can obtain client authorization in regard to the confidential elements
Confidential information as addressed in USPAP is information the appraiser receives from
the client, is identified by the client as confidential, and is not available from other sources.
What USPAP obligations does a supervisor have to a trainee appraiser?
Supervisor must allow trainee to retrieve a copy of the workfiles.
How long must an appraiser retain the workfile for an assignment in which the appraiser testified in court?
A period of at least 5 years after preparation or at least 2 years after the final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever comes last
What item in the appraiser’s workfile must have a signature?
Appraiser’s certification
At what point in the assignment must an appraiser create the workfile?
A workfile must be in existence prior to the issuance of any report or other communication of assignment results.
The appraiser has no experience or knowledge specific to the subject property’s geographic location. What obligations does the appraiser have?
Decline the assignment.
An appraiser is asked to perform an assignment for which he knows he is lacking the knowledge to do. According to the COMPETENCY RULE, at what point must he disclose this to the client?
Before agreeing to perform the assignment.
An appraiser accepts an assignment. He realizes afterwards that he lacks the knowledge and is unwilling to satisfy the steps necessary to complete the assignment. What are the appraiser’s obligations under USPAP?
Decline the assignment.
An appraiser is asked to perform an assignment in an unfamiliar geographic area. If the appraiser agrees to perform the assignment, what can the appraiser do to satisfy the COMPETENCY RULE?
Collaborate with an appraiser who does possess the requisite competency and satisfy the competency requirement by the completion of the assignment.
At what point must the appraiser have the requisite knowledge and experience to satisfy the COMPETENCY RULE in a specific assignment?
by completion of the assignment
An appraiser’s initial planned scope of work was different from the scope of work that she disclosed in her appraisal report. Is this acceptable practice under USPAP?
Yes, determining the scope of work is an ongoing process in an assignment.
What must an appraiser do prior to determining an acceptable scope of work in a real property appraisal assignment that will lead to credible assignment results?
Identify the problem.
The scope of work disclosed in the appraisal report must be the scope of work
actually performed by the appraiser.
Which valuation services does the SCOPE OF WORK RULE apply to?
Only to appraisal and appraisal review services
The amount and type of information researched, and the analyses applied in an appraisal or appraisal review assignment defines
scope of work
An appraiser is processing through the six assignment elements of problem identification as part of her scope of work determination in an appraisal assignment. Which of the following is NOT one of the elements?
The date the assignment is due
A condition that is presumed to exist on the effective date for a specific assignment, but has a degree of uncertainty about it best describes
an extraordinary assumption
The “purpose” of the assignment is an element of problem identification that was replaced with what phrase that is in current use today?
Type and definition of value
A property owner wants an appraiser to provide a value opinion as if a renovation was already complete. What assignment condition should the appraiser consider as part of the scope of work?
A hypothetical condition
Assignment conditions as an element in the scope of work identification process might include
A hypothetical condition
An appraiser has excluded an approach to value that was not applicable in the assignment he was working on. What is true about the appraiser’s decision?
It is part of the scope of work determination.
What does it mean that an appraiser’s scope of work is an ongoing process that ends when the appraisal report is transmitted to the client?
The appraiser may need to modify or expand the scope of work during the assignment to ensure credible assignment results.
From a bottom line standpoint, when is the appraiser’s scope of work acceptable?
When it leads to credible assignment results for the intended use.
One of two tests to determine that an appraiser has developed an acceptable scope of work in an appraisal assignment is when it
meets or exceeds the expectations of parties who are regularly intended users for similar assignments.
One of two tests to determine that an appraiser has developed an acceptable scope of work in an appraisal assignment is when it
meets or exceeds what an appraiser’s peer’s actions would be in performing the same or a similar assignment
The requirement to disclose the scope of work in an appraisal report applies to
appraisal and appraisal review assignments.
Why are appraisers required to report the scope of work in an appraisal and/or appraisal review report?
To provide the intended users with a clear understanding of the extent of the research and analyses performed.
Does the scope of work have to have a specific heading in an appraisal report?
No, the report just has to disclose the scope of work performed.
An intended user of the report was confused as to the extent of analysis performed in the appraisal. What error did the appraiser commit?
The appraisal report must contain enough information to allow the intended users to understand the scope of work the appraiser performed.
Report disclosure of the appraiser’s scope of work must
be the scope of work actually performed.
What assignment element in the appraisal process is a jurisdictional exception identified under?
Assignment conditions
What triggers the use of a jurisdictional exception?
A conflict between the requirements of USPAP and the law or regulation of the jurisdiction
When a law or regulation undermines the requirements of USPAP, which statement is true?
If any applicable law or regulation precludes compliance with any part of USPAP, only that part of USPAP becomes void for that assignment.
An assignment condition established by applicable law or regulation that precludes an appraiser from complying with a part of USPAP is called
a jurisdictional exception
In addition to disclosing the law or regulation that precludes compliance to USPAP, what else is the appraiser obligated to disclose when a jurisdictional exception applies in an assignment?
Identify the part or parts of USPAP that are voided by the law or regulation.
What is true about the application of the JURISDICTIONAL EXCEPTION RULE in an assignment?
A jurisdictional exception is a rare event.
The JURISDICTIONAL EXCEPTION RULE provides a severability or saving clause. What does this mean?
It preserves the balance of USPAP if one or more of its parts are determined to preclude compliance to a pertinent law or regulation of a jurisdiction.
When developing a real property appraisal, an appraiser
must be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.
An appraiser’s assignment results must be credible, which means the results
are worthy of belief.
What is true about STANDARD 1?
It is paired with STANDARD 2.
What two terms in the Comment to the definition of “credible” help clarify the components of “support”?
Evidence and logic
Appraisers can use STANDARD 1 as a checklist because it follows the requirements in the
appraisal development process
Identification of the intended use of the appraiser’s assignment results is
essential to determine the appropriate scope of work.
What is the effective date of an appraisal?
The date of the value opinion
The response to “what is reasonable exposure time” should instigate what other question?
For what kind of property at what value range?
An appraiser is analyzing a comparable sale that includes favorable financing. What does the appraiser need to address if the appraisal is for market value?
The appraiser should identify the favorable financing terms and develop an opinion of their effect on value.
What assignment condition would an appraiser use when appraising a property with a building that is proposed with a current date of value?
hypothetical condition
When can an appraiser complete an appraisal based on an extraordinary assumption?
When required to properly develop credible opinions and conclusions.
When does USPAP require an appraiser to analyze a probable land use change in a real property appraisal assignment?
When necessary for credible assignment results.
When the sales comparison approach is necessary for credible assignment results, an appraiser
must analyze data on comparable sales.
When a valuation assignment includes an opinion of market value, what must the appraisal development include when it is necessary for credible assignment results?
Identify and analyze the effect on land use and develop an opinion of the highest and best use.
When the property has the valuation of trade fixtures in the scope of work, what does SR1-4 require in this situation?
The trade fixtures must be analyzed for the effect on value, and the appraiser must have the necessary expertise to do so.
When an appraiser identifies and analyzes the effect of existing land use regulations, what else must be considered?
Economic supply and demand, probability that the land use regulation might be modified, market area trends
To a large degree, “normal course of business” is controlled by the
scope of work.
What determines the “normal course of business” for an assignment?
Actions of an appraiser’s peers and the expectations of parties who are regularly intended users for similar assignments
The last procedure in the development of an appraisal requires an appraiser to
reconcile the data and the relevancy of the approaches used to arrive at the value conclusion.
If an appraiser is asked to appraise a property on which there is a current agreement of sale, the agreement must be
analyzed as part of the appraisal development.
In a real property assignment, the appraiser must analyze all sales of the subject property within what time period?
3 years prior to the effective date
How does STANDARD 2 address the form, format, or style an appraiser should use in written communication?
STANDARD 2 does not dictate these aspects of written communication.
What must all appraisal reports contain?
Sufficient information for the intended users to understand the report properly.
In accordance with Standards Rule 2-1, an appraiser must NOT disclose
the appraiser’s fee arrangement with the client.
What is true about extraordinary assumptions and hypothetical conditions?
These assignment conditions require clear and accurate disclosure in the appraisal report.
What 2 aspects of the appraisal process are distinctly different, yet are considered inseparable partners from the perspective of STANDARD 2?
Appraisal development and appraisal reporting
What key term is associated with the content and level of information provided in an Appraisal Report?
Summarize
When appropriate for the intended use of the appraisal, an appraiser may use a Restricted Appraisal Report provided
the identity of other intended users are stated by name rather than by type.
An appraiser labels his appraisal reports as “Comprehensive Analyst Report”. Does USPAP allow the appraisers to do this?
Yes, as long as the appraiser also discloses the report option used that complies with Standards Rule 2-2.
What key term is associated with the content and level of information provided in a Restricted Appraisal Report?
State
When reporting the results of an appraisal, what dates must be included?
Effective date and report date
According to USPAP, what is an appraiser required to do when he or she signs any part of an appraisal report?
Sign the certification
In the appraiser’s workfile, a true copy of the appraisal report delivered to the client must include what specific report component of STANDARD 2?
a signed certification
What must be included in the written report of an appraisal or appraisal review?
A signed certification
Hobbs and his associate signed the certification to an appraisal they both worked on. What must the certification disclose regarding the 2 appraisers?
Clearly specify which individuals did or did not make a personal inspection of the appraised property.
When can an oral appraisal report be used?
When an oral report is all the client needs, and would be meaningful and not misleading
To the extent possible and appropriate, an oral real property appraisal report must address the substantive matters that apply to an
appraisal report
What is unique about an appraiser’s signed certification with the written memorandum in the workfile that included an oral report?
It must be dated.
What is true about an appraiser’s workfile for an assignment in which the report was communicated orally to the client?
The workfile must be in existence prior to and contemporaneous with the communication of the oral report.
An appraiser reviewed and co-signed a real property appraisal report of an appraiser she supervises. What USPAP Standards does the appraiser’s work fall under?
STANDARDS 1 and 2
When an appraiser reviews another appraiser’s work, what must the reviewer do?
Prepare a separate appraisal review report setting forth the scope of work performed and the results of the appraisal review.
According to STANDARD 3, what process does the appraiser follow in a review assignment?
Appraisal review development process
What might be the subject of an appraisal review?
Some or all of an appraiser’s work performed as part of an appraisal or appraisal review.
In an appraisal review, a reviewer must develop an opinion regarding
the appropriateness of the appraiser’s research and analyses of the work under review
What is the predominant need for a reviewer in addition to the competency factors that generally cover appraisers?
Knowledge and experience in the appraisal review process, including USPAP Standards that address appraisal review/
The reviewer must conduct an appraisal review in the context of market conditions applicable as of the
effective date of the value opinion in the appraisal report under review.
A reviewer may use additional information that was not available to the original appraiser as long as the information
is not used to discredit or impeach the original appraiser’s opinions and conclusions.
What would be a two-stage appraisal review assignment?
An assignment that includes a review and the reviewer’s own opinion of value
Can an appraiser review only the workfile of another appraiser’s work?
Yes, the workfile can be reviewed separately.
If any portion of the review work involves significant appraisal or appraisal review assistance, the reviewer must
state the extent of that assistance in the review report.
The content of an appraisal review report must be consistent with
the intended use of the appraisal review.
According to USPAP, each written or oral appraisal review report must
be separate from the work under review.
The reviewer must state in the written review report the report date of the work and the effective date of the opinions and conclusions under review, What other date must be stated?
The date of the appraisal review report.
What is true of a workfile for an oral review report?
The reviewer is required to have and retain a workfile for the prescribed period.
A reviewer concluded that an appraisal report was unacceptable, but did not cite any specific USPAP violations in her review report. Was the reviewer correct?
The reviewer is not required to cite USPAP, but must include reasons for disagreement in the reviewer’s appraisal review report.
In Standards Rule 5-3, trade level, or wholesale levels of trade, is a market reference used in
personal property appraising.
A mathematical expression of how supply and demand factors interact in a market best describes
mass appraisal model
The requirement to include a signed certification in written reports is found in which appraisal disciplines?
All the appraisal disciplines covered by STANDARDS 1 through 10
A mass appraisal may be prepared
with or without computer assistance.
What appraisal discipline does STANDARDS 5 and 6 cover?
The development and reporting of mass appraisal.
Which reporting options are available to an appraiser performing a personal property appraisal?
Appraisal Report, Oral Appraisal Report and Mass Appraisal Report, Restricted Appraisal Report
A prohibition on the use of a machine in a particular location best describes what aspect of personal property valuation?
An encumbrance
When appraising personal property, the appraiser must analyze prior sales of the subject over what time period, assuming its relevance to the intended use of the appraisal and property type?
A reasonable and applicable time
In developing a personal property appraisal based on market value, the appraiser should NOT
analyze the highest and best use of the personal property
What is NOT true as to when a personal property appraiser must comply with USPAP?
When obligated to perform a valuation service outside of appraisal practice and the individual is not acting in the role of an appraiser
What best describes tangible or intangible articles subject to ownership and not classified as real property?
Personal property
What are examples of intangible property?
Securities, patents, trademarks
STANDARD 9 doesn’t specifically identify the cost, sales comparison, and income approaches to value. What analyses or approaches must the appraiser use to fulfill the USPAP requirement?
The appraiser must use one or more approaches that are necessary for credible assignment results.
In the development of a business appraisal, the appraiser is concerned about whether the ownership interest is
controlling or non-controlling in the business enterprise.
A written business appraisal report must be prepared in accordance with which of the following options?
Appraisal Report or Restricted Appraisal Report
Why should an appraiser pay attention to the guidance that is provided in an Advisory Opinion?
An Advisory Opinion illustrates how to apply USPAP in a specific situation.
Guidance published as “other communication” to illustrate the applicability of appraisal standards in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems are identified as
Advisory Opinions
What obligation does a trainee have in regards to workfile retention?
The trainee must maintain access to workfiles for a minimum of 5 years
When a trainee appraiser provides significant appraisal assistance in an assignment but does not sign the appraisal report, what obligations does USPAP require?
The name of the trainee providing significant appraisal assistance must be stated in the certification.
When an appraiser is engaged to perform an assignment for use by a federally regulated institution, what is the appraiser obligated to do according to AO-30?
Identify the laws, regulations, and guidelines that apply in this type of assignment
What portion of USPAP does an appraiser violate if he or she unintentionally fails to adhere to assignment conditions?
COMPETENCY RULE
When the effective date is contemporaneous with the date of the appraiser’s report, it is best identified as what date?
Current date
What is the primary concern when an appraiser uses a retrospective or prospective date in a valuation assignment?
The appraiser’s report has the potential to be misleading.
What is the primary type of analysis performed by computer-assisted valuation tools?
Regression analysis
What is one element in a Restricted Appraisal Report that requires the appraiser to summarize rather than state the content requirements?
The results of analyzing the subject sales, agreements of sale, options, and listings
Discounted cash flow analysis is an analytical tool used in what method of valuation?
Yield capitalization
Can an appraiser discuss opinions expressed in an appraisal to an intended user who is not a client and is not authorized by the client?
No, the appraiser cannot disclose confidential information or assignment results per the Confidentiality section of the ETHICS RULE.
How are AVMs (Automated Valuation Model) different from Computer Assisted Valuation Tools?
AVMS may be used to derive a valuation conclusion and computer assisted valuation tools are focused on a specific approach or analytical process.
A discounted cash flow analysis might be used in assignments of various property types, but what property type is specifically addressed in AO-33 on the subject of discounted cash flow analysis?
Real property
In what type of assignment must an appraiser’s workfile have a transcript of the appraiser’s testimony that is provided in the appraisal service?
For assignments involving both oral and written appraisal and appraisal review reports
When an appraiser considers the amount and type of information he will research and also the analyses he will apply in an appraisal or appraisal review assignment, the decision that results is identified as
scope of work
What assignment condition is defined as 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?
A hypothetical condition
In USPAP’s PREAMBLE an individual should comply with USPAP when representing oneself as an appraiser, but an appraiser must comply with USPAP when
required by law, regulation, or agreement with the client or other intended users.
What condition is assumed to exist on the effective date, but involves uncertain information connected to the condition?
An extraordinary assumption
A reasonable exposure time opinion for a property must combine sufficient and reasonable time on the market with what else?
Reasonable effort to sell the property
Who may provide suggestions on changes to USPAP?
Members of the general public, appraisers, users of appraisal services
If an appraiser excludes an approach to value that was not applicable in the assignment, what obligation does the appraiser have?
The appraiser is obligated to explain the exclusion, as this is part of the scope of work determination.
Under what condition would an appraiser use an extraordinary assumption in an appraisal assignment?
When required properly to develop credible opinions and conclusions.
The assignment is the value of a proposed building on a vacant site. If the client wants a value of the property with the proposed building as if completed as of a current date, what assignment condition should the appraiser use?
Hypothetical condition
If an appraiser incorrectly identified the relevant characteristics of the subject property, how does USPAP classify this type of error?
An error of commission
