USPAP Ch 5 Quiz Flashcards
A real property appraiser agreed to perform an assignment to appraise a three-unit residential property. The intended use of the appraisal was for mortgage financing. The client requested that the appraiser not verify the legal status (e.g., compliance with zoning, building codes, use permits) of the three units with municipal officials. What should the appraiser do?
In this instance, the appraiser withdrew from the assignment because she concluded that the client’s assignment condition limited the scope of work to such a degree that the assignment results would not be credible in the context of the intended use. The use of an extraordinary assumption about the legal use of the property would not produce credible assignments results in the context of the mortgage financing use. SeeAO-28,Scope of Work Decision, Performance, and Disclosure, Illustration 5.
A real property appraiser is engaged to appraise a 12-unit apartment building to provide a market value opinion. The appraiser initially decided that the scope of work should include the inspection of two of each of the three unit types (studio, one- and two-bedroom). In the course of conducting the inspection, the property manager had a key for only one of the two-bedroom units; thus, the appraiser was unable to inspect one of the two-bedroom units as planned. Does this affect the scope of work?
The scope of work, which includes the degree of inspection, was affected because of lack of access. If the appraiser decides he or she has sufficient information to produce credible assignment results, the appraiser can complete the appraisal based on the inspection completed. The report would include a description of the scope of work performed, stating that five units had been inspected.SeeAO-28,Scope of Work Decision, Performance, and Disclosure, Illustration 1.
A real property appraiser was engaged to appraise a one-unit residence. Based on the appraiser’s identification of the appraisal problem, the appropriate scope of work was determined to include development of the sales comparison and cost approaches. However, at the time of inspection, the appraiser discovered that the property was not a one-unit, but instead a three-unit property. What should the appraiser do?
Based on new information, the appraiser should reconsider the appraisal problem and the appropriate scope of work. The change in relevant property characteristics of the subject property significantly changes the appropriate scope of work. The initial scope of work is no longer suitable and would not produce credible assignment results. The type of data to be researched and the type of analysis to be applied changed when the property type changed from a one-unit to a three-unit. A new appraisal problem requires reexamination of the scope of work. The appropriate scope of work for the new problem includes considering the approaches to value that apply, such as the income approach and cost approach. Is either or both necessary for credible assignment results? SeeAO-28,Scope of Work Decision, Performance, and Disclosure,Illustration 6.
An appraiser has agreed to complete an assignment in the next two days. While conducting research, the appraiser discovers that the primary data source for the assignment, a regional computer database, is offline and will not be available for three days. What is the appropriate course of action?
If an appraiser is unable to perform research that the appraiser’s peers would conduct and intended users would expect, the appraiser must modify the assignment to allow time for the research to be conducted or withdraw from the assignment.
An appraiser has been engaged to perform an “exterior only” inspection for the appraisal of a one-unit house for a potential home equity loan. Another appraiser has been asked to appraise a one-unit home in the same development for an FHA loan. Since the subject properties are similar, would the assignments require the same scope of work?
No. The subject of the assignment and its relevant characteristics is just one of several assignment elements that define an appraisal problem. Because of the critical differences in the intended use and the appraisal problem to be solved, the scope of work that is acceptable for the first assignment would not be acceptable for the second assignment (i.e., an appraisal performed for an FHA loan is subject to additional inspection requirements). SeeAO-29,An Acceptable Scope of Work, Illustration 1.
An appraiser is engaged to appraise a single-unit dwelling. Upon inspection of the property, the appraiser realizes it is a three-unit dwelling. The appraiser’s best course of action is:
Reconsider the scope of work before proceeding
An appraiser must not allow client objectives to cause the assignment results to be _________.
Biased
An appraiser’s peers are defined as other appraisers who:
Have expertise and competency in a similar type of assignment
An appraiser’s report must contain ____________ to allow intended users to understand the scope of work performed.
Sufficient information
Appraisers have broad _________ and significant _________ in determining the appropriate scope of work in an assignment.
Flexibility, responsibility
Examples of assignment conditions include:
Hypothetical conditions, Laws and regulations, Extraordinary assumptions
Identification of the intended use of an appraiser’s opinions and conclusions is:
Necessary for determining the appropriate scope of work
If a client’s objectives result in an appraiser developing biased assignment results:
The appraiser is solely responsible
In an appraisal or appraisal review 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
