Different appraisal regulations among states.
Which is not one of the contributing factors that led to a need for regulation in the appraisal profession?
Appraisal Subcommittee (ASC)
Responsible for the Federal oversight of state real estate licensing and certification
TRUE
(T/F) The AppraisalSubcommittee monitors the activities of TAF to determine if policies and procedures are consistent with title XI of FIRREA
Appraisal Subcommittee (ASC)
Which board maintains the official National Registry of appraisers?
Appraisal Practices Board (APB)
The board that identifies and issues voluntary guidance relating to recognized methods and techniques is the
TRUE
(T/F) State agencies may impose appraiser requirements above and beyond those required by the Appraiser Qualifications Board and the Appraiser Standards Board.
State Regulatory Agencies
Who is responsible for enforcing USPAP?
Contains terms that have a specific meaning in USPAP
The definitions section of USPAP
Promote and maintain a high level of public trust in appraisal practice.
The preamble of USPAP sets the tone that the purpose of USPAP is to
A manner that is meaningful and not misleading.
The preamble of USPAP requires. Appraisers to communicate their analysis, opinions and conclusions in
- Disclose the scope of work in the report.
The Scope of Work Rule establishes three general requirements. 1. Identify the problem, 2. Determine the appropriate scope of work and
Illustrate the applicability of USPAP in specific situations.
Shelia had concerns about an appraisal situation and she was uncertain how to proceed. She consulted the USPAP Advisory opinions which
Advisory Opinions
Which is NOT a part of USPAP?
Standard 2
Which USPAP Standard addresses the reporting of an individual in a real property appraisal?
Problem identification
The USPAP Appraisal Process begins with
Reconciliation and final value opinion.
In the USPAP Appraisal Process, which is the final step in the development process?
All types of property.
The USPAP Appraisal Process can be followed for appraising what types of property?
Relationship to a previous appraisal or numerical benchmark.
An appraisal must be in a specific number, a range of numbers or a
Workfile
The subject of an appraisal review could be all or part of a REPORT, a___________________________, or a combination of these
Do not
USPAP definitions ________ specifically define the term “Market Value” that is consistently applied by the appraiser when the type of value in the assignment is market value.
An authorized representative of the lender
In an assignment for which the appraiser was hired by an appraisal management company (AMC) the appraiser may consider the lender the client as long as the AMC is
Opinions and conclusions
Within USPAP, the appraisers ___________________ are (is) always specific to the intended use
By name or type
Intended users in a specific assignment must be identified
Preference or inclination
USPAP defines bias as a ____________ that precludes an appraisers impartiality, independence or objectivity in an assignment
Identify the problem
In order to determine the scope of work to perform in an assignment, what must the appraiser first do?
Assumption
Craig, a real property appraiser is not an expert in real estate law. In every assignment, he includes a disclosure stating this fact and that in his conclusions, he is considering the property to have good and marketable title. which best describes Craig’s action?
Extraordinary Assumption
Appraiser Linda could not check the furnace to see if it is in good working order as the utilities are off. As the home is relatively new and the furnace appears to be in good condition, Linda believes it is in satisfactory working condition, but she is not sure. She bases her conclusion on an
Hypothetical condition.
Chad appraised a property that had an inoperative air conditioner at the date of the appraisal. Chad considered the air conditioner as if it was working in the analysis, thus basing his opinions and conclusions on a
Price
Considered factual once stated, this is the amount asked, offered or paid for a property.
Cost
The amount required to create, produce or obtain a property is known as
Exposure time
An estimate of __________ is required by USPAP when it is a component of the definition of market value in appraisal assignments for real and personal property
Before
Exposure time occurs_________________________ the effective date of the appraisal assignment
After
Marketing time occurs______________________ the effective date of the appraisal assignment
Assignment results
_________________ are the appraisers opinions and conclusions developed specific to an assignment
Documentation necessary to support the appraiser’s analysis, opinions and conclusions
Which best describes a work file?
Identified by the client as confidential and not available from any other source.
Per the USPAP definition, in order for information to be considered confidential, the information must be
Performed only by appraisers
Appraisal practice is best described as a service that is
Appraisers and other professionals
Who may provide a valuation service?
Hypothetical condition
If a property is known by the appraiser on the effective date as having an inoperable mechanical system component, but the appraiser is considering the component as if it were operating properly on that date for the purpose of his analysis, on what is the appraiser basing his opinions and conclusions?
No
If there is no client, can there be an assignment?
Research and analysis
The Scope of Work is defined by USPAP as the type and extent of ______________ in an assignment
problem identification
An appraiser determines the appropriate definition of market value to be used in the assignment during
At the time of
According to USPAP definitions, the appraiser identifies the intended use and the intended user___________________________ the assignment
Identifies applicable requirements and guidance
A Standards Rule
practice is not permitted
While in the role of an appraiser, advocacy
Appraisal course development
When acting in the role of an appraiser, all of the following require compliance with all sections of USPAP, including the applicable standards 1 through 10 except for
Appraisal practice only includes performing an appraisal or appraisal review.
Which statement about appraisal practice is false?
TRUE
(T/F) An appraiser providing a range of rents for a market area is engaged in appraisal practice
Misrepresent his role
When an individual is performing valuation services outside of appraisal practice, that individual must be careful not to
Evaluating another appraiser’s work.
Which of these services within appraisal practice has specific performance standards?
Yes, as long as there is no user expectation for the individual to act in the role of the appraiser
Can an individual who provides appraisal services as well as another professional service accept an assignment outside of appraisal practice?
Valuation services with no applicable standards
- A real estate agent providing a range of sale prices for a market is engaged in
Appraisal practice with no applicable standards
A real property appraiser teaching appraisal is engaged in
Appraisal assignment with performance standards
Lionel, a real estate appraiser, is in the process of developing an opinion of value, which is considered an
Appraisal practice with no performance standards or record keeping requirements.
A lender called an appraiser to determine the high and low sales prices in the past year for a particular subdivision. No mention was made of a subject property by the lender. The appraiser supplied a list of all the comparable sales in the subdivision. The service provided by the appraiser is
TRUE
(T/F) When an appraiser selects comparable sales and uses his judgement to interpret how the data relates to a particular property, the appraiser is expressing an opinion which is an appraisal
Must sign the report as an appraiser and USPAP would apply.
Ron is both a real estate broker and an appraiser. his client is aware of Ron’s ability to perform in either capacity and expects him to perform a BPO in the role of an appraiser. In this situation Ron
Is not required to follow USPAP, but she must not misrepresent her role.
Dottie is both an appraiser and a real estate broker. A client requested Dottie prepare a BPO as a real estate brokerage service. The state in which Dottie practices does not prohibit her from performing BPO’s, so she is going to prepare and sign the BPO as a real estate broker. Dottie
Including, but not limited to
Appraisal practice is defined as valuation services performed by an individual acting as an appraiser _____________________ appraisal and appraisal review
Users of appraisal services.
USPAP benefits providers of appraisal services and
Inquire about the intended users expectations.
- a valuation service performed by an individual acting as an appraiser requires the appraiser to
Yes. Since Scott is acting in the role of an appraiser, he has USPAP obligations.
Scott, an appraiser, has been asked to perform a market rent study for a private individual. Does Scott have any USPAP obligations?
No, she is a broker, not an appraiser.
Tonya, a real estate broker, performs a market analysis to estimate a listing price for a seller. does she have USPAP obligations?
Both appraisers and others
Who can provide valuation services?
Value
Which is never a fact, but always an opinion of the worth of a property at any given time based upon a specific definition?
Misrepresent their role
When the occasion arises to perform in a capacity other than an appraiser, individuals must not
Appraisal practice with performance obligations
When an appraiser supplies all sales data that he feels is most relevant for a particular property, the service is
Appraisal Standards Board (ASB)
The board that develops, interprets and amends USPAP is the
Establish minimum criteria for real property appraiser certification and licensing
Which is the role of the Appraisal Qualifications Board?
ETHICS RULE
If an appraiser makes a false statement either intentionally or by negligence, the appraiser has violated the
2-1(a)
Which Standards Rule requires that appraisal reports clearly and accurately set forth the appraisal in a manner that will not be misleading?
Standards Rule 3-6
Appraiser Vicky performed an appraisal review service for a subject property that she has previously appraised and she must disclose that prior service in the certification. Which Standards Rule addresses this?
He must disclose that to the client.
- Appraiser Ernie’s client requested an appraisal of a particular property. if Ernie has performed no service for the property over the past three years,
We’re either performed or not performed
The reporting of prior services in the report certification for Standards Rules 2-3, 3-6, 6-9, 8-3 and 10-3 indicates when services
The kitchen design service on the property needs to be disclosed.
- jarred is a real estate appraiser and a kitchen designer. He has been asked to appraise a property in which he designed the kitchen one year ago. Regarding the situation, which statement is true?
Prior appraisal services performed NOT other services, must appear in the report certification.
Which statement regarding disclosure of prior services within the past three years is false?
NO
- If an appraiser has agreed with a client in a past assignment to keep confidential the fact that he has appraised the property, can the appraiser accept a subsequent assignment from another client to appraise the same property within 3 years of the first assignment?
Conduct
Which section of the ETHICS RULE requires appraisers to disclose that. Prior services were performed for a particular property?
performing an appraisal assignment for the property.
Which action would constitute “Performing a prior service” for a property?
Extension of the first assignment.
- Blake performed an appraisal on a partially constructed home and he returned two months later to perform a final inspection per the original agreement with the client. The final inspection would be considered an
Is not required to disclose he received an item of value from the client.
Stella hired Sam to appraise her mothers home in exchange for some fine art. In his appraisal report Sam
In the certification and any transmittal letter
- A real property appraiser has paid a fee to procure an assignment. According to the Management Section of the ETHICS RULE, where must the fee be disclosed?
A fee based on the volume of total business from a client.
- Each of these fee arrangements would be an unacceptable fee arrangement except
Certify recognition and acceptance of USPAP
According to the Management Section of the ETHICS RULE, an appraiser affixes his signature for what purpose?
The confidentiality section of the ETHICS RULE does not apply to subcontractors of the appraiser.
Which statement is false regarding an appraiser’s duty to safeguard confidential information?
Yes. Given the agreement, he cannot disclose it, or accept the subsequent assignment.
If an appraiser agreed to keep confidential the fact that he appraised a particular property, would it be in violation of the Confidentiality Section of the ETHICS RULE to disclose in the certification of a subsequent assignment that the appraiser previously appraised the property in the last three years?
Conduct
Appraiser Jackie does not disclose a property condition in an appraisal report at the request of the property owner who is not the client. Which section of the ETHICS RULE applies to this situation?
Disclose the fact a fee was paid, although he does not have to give the amount.
If an appraiser pays a fee in connection with procurement of an assignment, the appraiser must
No- Omitting the discussion could provide a misleading report.
- Jane appraised a house located across from a factory, which she determined is affecting the value of the subject property. Jane applied a location adjustment in her sales comparison approach. Hoe=Weaver, the client asked Jane not to discuss the factory in the report. Since Jane addressed the condition with an adjustment, has she complied with USPAP?
Record Keeping Rule
Which Rule under USPAP addresses work-file access and retrieval?
Kent, since he assisted with the report and Brenda has custody.
Appraiser Brenda received significant appraisal assistance from Kent and Brenda has custody of the workfile. Who is responsible for making the arrangements for workfile access and retrieval arrangements?
5 Years
- Provided there is no testimony by the appraiser in connection with the assignment, how long is the appraiser required to retain a workfile?
2 years
- Last week appraiser ken provided testimony in a judicial proceeding concerning a particular appraisal report he did 5 years ago. How long after the final disposition of the Judicial proceeding must Ken retain the workfile?
Correctly identify the problem
- According to the Competency Rule, in order to be competent, the appraiser must
Prior to accepting the assignment
When must the lack of competency first be disclosed?
Decline or withdraw from the assignment.
If an appraiser is unable to comply with the Competency Rule to complete an assignment competently, he is obligated to
Knowledge and experience of the appraiser
Which most closely defines competency?
Prior to the issuance of the report
- When must the appraiser prepare a workfile for an oral report?
None
- What is the USPAP time limit for inspection of an appraiser’s workfiles by jurisdiction?
Appraiser’s credentials
Which would not be considered a competency factor in a particular assignment?
The responsibility of the appraiser
- Determining the appropriate scope of work in an assignment is
Competency in that type of assignment
Identification of the subject property’s relevant characteristics is a judgement made by the appraiser that requires
Will not be
The scope of work decision _________________ the same way in every assignment with every type of property
FALSE- new assignment may have different scope of work
(T/F) * An Appraiser can only use information obtained during the course of an earlier assignment if the information is not considered confidential and the SAME scope of work is decided in the new assignment
Scope of work that was actually performed.
- The scope of work disclosed in an appraisal report must include the
When it enhances understanding by intended users
- An appraiser should disclose research NOT performed in an appraisal report
Hypothetical condition
- 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, but is used for the purpose of analysis in a
The appraiser
- When the JURISDICTIONAL EXCEPTION RULE is used, who determines if the rule is appropriate?
Disregard the circumstances and proceed as originally planned.
Which is not an option when an appraiser finds circumstances that change the research and analysis that he originally planned at the onset of an assignment?
Reporting option to be used in the assignment
which is not an element of Problem Identification?
INTENDED USE
According to the Scope of Work Rule, credibility of assignment results is always measured in the context of the
When credible assignment results can still be developed
When can an extraordinary assumption be used regarding information not available to the appraiser due to assignment conditions?
Other appraisers who have expertise and competency in a similar type of assignment.
- An appraiser’s peer is defined as
Competency
- Standards Rule 1-1 elaborates the requirements found in the ________________ Rule of USPAP
Client and other intended users and the intended use of
- Standards Rule 1-2(a)and 1-2(b) respectively specifically address the appraiser’s obligation to identify the ________________ the appraiser’s opinions and conclusions
problem identification and determining the scope of work
- Standards Rule 1-2 elaborates on an appraiser’s obligations regarding
NO
- Do the days on market experienced by an actively marketed subject property have a direct relationship to the appraiser’s opinion of reasonable exposure time?
Exposure Time
- An estimate of ___________________ is required by USPAP when it is a component of the definition of market value in appraisal assignments for real and personal property
Prior to
- Exposure time occurs ___________________ the effective date of the appraisal
Definition of Value
An appraiser must develop an opinion of reasonable exposure time linked to the value opinion when exposure time is a component of the
FALSE- only when it is a component of the definition of value
(T/F) Exposure time must be developed by an appraiser in every assignment regardless of type and definition of value
Becky’s failure to report the building code would lead to a misleading report.
- Becky appraised a vacant property in a subdivision. The township has strict building code, which would place unusual limitations on any home constructed on the site. Becky didn’t analyze and therefore is unaware of the building codes. Thus there is no reference to them in the report. What is the result of this?
Identify relevant property characteristics, which include the legal attribute of the property
Standards Rule 1-2(e) requires the appraiser to
Examine and have available for future examination
For proposed improvements, an appraiser must ___________ plans, specifications or other documentation to sufficiently identify the extent and character of the proposed improvements
Extraordinary Assumption
An ________________ may be used in an assignment only if there is a reasonable basis for it’s use
Development of an opinion of highest and best use
Standards Rule 1-3, in part requires which action in a MARKET VALUE assignment?
Unsupported assumption or premise.
When an appraiser is forming opinions and conclusions regarding market area trends, effective age and remaining life, which should an appraiser avoid?
An assignment is NOT acceptable if foreclosures are disregarded as comparable properties.
Which statement regarding short sale properties is false?
Value the whole by adding together the value of the various fractional interests.
When an appraiser has developed a separate value for the various fractional real property interests, which must he not do?
Such comparable sales as are available
According to Standard Rule 1-4, what quantity of data must be analyzed when a sales comparison approach is necessary for credible assignment results?
Analyze comparable data as available to estimate accrued depreciation.
- Standards Rule 1-4(b) requires, when the cost approach is applicable, an appraiser to develop an opinion of site value, analyze the cost new of improvements and
Yes – transferred for value
Must a transfer that was the result of a foreclosure action be analyzed to be in compliance with Standards Rule 1-5(b) even though it is recognized such transfers don’t constitute arms-length transactions?
Reasonably clear and appropriate evidence
When developing an INCOME APPROACH, Standards Rule 1-4(c) in part, requires an appraiser to base projections of future rent or income potential and expenses on
Subject property
- In a MARKET VALUE assignment, Standards Rule 1-5 in part, obligates an appraiser to analyze all sales of the _____________ that occurred within 3 years prior to the date of the appraisal
exposure time is a component of the definition for the value opinion being developed.
According to the comment section to Standards Rule 1-2(c), an appraiser must develop an opinion of reasonable exposure time when
The scope of work to be performed
The intended use of an appraisers opinions and conclusions is a key element in determining ____________ in an assignment
Determine if foreclosed property data are relevant to the assignment
Brenda received an appraisal assignment for a property in an area that contains many foreclosed properties. Brenda’s client has instructed her to avoid using foreclosures as comps. What should she do?
Reconcile the applicability and relevance of
- in addition to reconciling the quality and quantity of data available within the approach used, Standards Rule 1-6 also requires an appraiser to __________________ the approaches, methods and techniques to arrive at the value conclusion.
Report the opinions and conclusions reached by an appraiser
Which is NOT one of the 3 general obligations of an appraiser under Standard 1?
Supplying published data regarding permissible improvements compliant with zoning. (Property tax assessment too high IS an assignment)
- Which would NOT be considered an appraisal report or assignment as defined by USPAP?
Restricted Appraisal report
- Standards Rule 2-2(b) corresponds to which report option?
Substantive content
The _____________ of a report determines compliance with the reporting options permitted by Standard 2
Appraisal report
- Which report action “Summarizes” information that is significant to the solution of the appraisal problem
Must
When there are intended users in the assignment other than the client, an appraisal report _____________ be used
Intended use and intended users
The level of information necessary in a report and the reporting option chosen by the appraiser depends on the ___________ in an assignment
In addition, but not in place of
An appraiser may use any other label_______________________ the label of Appraisal report or Restricted Appraisal Report
STATE
A RESTRICTED APPRAISAL REPORT requires the appraiser to _______________ the extent of assistance provided by another appraiser or appraiser trainee
SUMMARIZE. Appraisal = summarize, Restricted Appraisal = state
- When any portion of the work involves significant real property appraisal assistance, the appraiser must_______________________ the extent of that assistance when using the APPRAISAL REPORT option
Restricted Appraisal Report
- Standards Rule 2-2(b)
Appraisal Report only
Which reporting option requires a “summary” of the results of analyzing subject sales, options and listings in a market Value assignment?
Their use might have affected the assignment results.
Both reporting options require an appraiser to clearly and conspicuously state all the EXTRAORDINARY ASSUMPTIONS and HYPOTHETICAL CONDITIONS and state that
Restricted Appraisal report onlly
In which reporting method must an appraiser “State” the methods and techniques used?
Both appraisal report options
According to Standards Rule 2-3, which reporting option must contain a signed certification with a written real property appraisal report?
Signs any part of the appraisal report including a letter of transmittal.
- An appraiser who _______________ must also sign the certification
Multiple disciplines are involved
- When _____ in an appraisal assignment, an appraiser could sign a certification accepting responsibility only for the elements of the certification applicable to the Appraiser’s DISCIPLINE
Any oral report or testimony is communicated
A summary of an oral appraisal report or a transcript of testimony must be included in the workfile when
prominently state in the report
Standards Rule 2-2 requires an appraiser to ___________ which reporting option is being used in an assignment
Information that the appraiser identified as confidential
An oral report must contain all of this information except
Sufficient information
- Standards Rule 2-1 requires that appraisal reports contain _______________ to enable users to understand the report properly
Basic requirements for competency and diligence in an appraisal review
Standards Rule 3-1 contains language regarding
Hypothetical Condition
Use of a(n) _______________ is required for legal purposes, for purposes of reasonable analysis or for purpose of comparison
Standard
Carly is developing her own opinion of value in an appraisal review; thus she must comply with the ____________ applicable to the development of her opinion
Minimum report content for an appraisal review
Standards rule 3-5 expands the requirements of the
General reporting
Standards Rule 3-4 covers the _________________ requirements that apply to appraisal review assignment
Intended Use of the Appraisal Review
The content of an Appraisal Review report must be consistent with the
Standard 1
- Jerry is performing an Appraisal Review of a real property appraisal which includes whether he agrees or disagrees with the value opinion expressed in the appraisal report he is reviewing. Which Standard applies to his conclusions regarding the value opinion?
There is as reasonable basis for the Extraordinary Assumption.
- During an appraisal review assignment, Marty included an EXTRAORDINARY ASSUMPTION. What could be the reason for this?
ALWAYS! Unless identity withheld by client
- According to Standards rule 3-5(d), under what circumstances must a reviewer identify the appraiser(s) who performed the work being reviewed in the Appraisal Review Report?
Minimum report content
Standards Rule 3-2 identifies numerous assignment elements for an Appraisal Review Assignment. Which is NOT one of these?
Reasonably clear and appropriate evidence
Standards Rule 1-4(c) includes the requirement for an appraiser to base projections of future rent or income potential and expenses on
Development of opinion of Highest and Best use.
In a Market Value assignment, which is included in the requirements for Standards Rule 1-3?
Definition of Value
When Exposure Time is a component of the _________________ an appraiser must develop an opinion of reasonable exposure time
Calibrating
- Standards Rule 6-4(c) requires an appraiser to employ recognized techniques for _______________ mass appraisal models
Real and personal property
Standards Rule 6-3 contains analysis steps regarding mass appraisal of
Testing procedures and techniques
- In an appraiser’s final reconciliation analysis, Standards Rule 6-7(b) requires appraisers employ recognized mass appraisal ___________ to ensure that standards of accuracy are maintained
Standard 1
- In an appraisal for ad valorous taxation purposes, when only one real property is the subject of the appraisal assignment, which development standard would apply?
Standard 2
- Angela is preparing a real property appraisal for Ad Valorem tax purposes for only one property. Angela’s results for this assignment use need to be communicated using
Each level may generate its own data
- The Comment to Standards Rule 7-3 requires the appraiser to recognize that there are distinct levels of trade and
FALSE. Appraisal is summarized, Restricted Appraisal is stated.
(T/F) * For both appraisal reporting options permitted by Standard 8, the appraiser’s SUPPORT AND RATIONALE for the opinion of appropriate market or market level must be developed in the assignment must be STATED in the report
No specific time period
- In an appraisal of a business or intangible asset, past sales of capital stock or other ownership interests must be analyzed, when necessary, for credible assignment results for what period of time?
State
- All reporting options permitted by Standard 10 require the appraiser to ____________ the extent to which the interest appraised lacks elements of marketability and/or liquidity, including the basis for that determination
Specified Market or at a Specified Market Level
Under Standard 7, the concept of Highest and Best use is alternately examined in a _______________ based on potential sale of the property.
A reasonable and appropriate time period
- In an appraisal of PERSONAL property, prior sale of the subject property must be analyzed for what period of time?
Specifying property valuation models
- Standards Rule 6-4(b) obligates an appraiser to employ recognized techniques for
Reporting options and content requirements for real and personal property appraisal reports
AO-11 is very detailed regarding
Automated Valuation Model
AVM as described by AO-18 is an acronym for
Fair Housing
AO-16 applies to assignments involving
Appraisal and Mass Appraisal
AO-32 applies to Ad Valorem taxation assignments in ________________ being used to establish a value for a political subdivisions tax burden
BE
- AO-25 provides clarification of the appraisers obligations in a FEDERALLY RELATED transaction in compliance with FIRREA, which requires that an appraisers services _______ directly engaged by the regulated institution or its agent.
Appropriate Market
According to Standards Rule 7-3(b), an appraiser must define and analyze the _____________ consistent with the type and definition of value
Providing his own opinion of value
AO-20 addresses certain APPRAISAL REVIEW assignments in which the reviewer is
Subseqent to
- Advisory opinion 34, defines that PROSPECTIVE appraisals occurs when the effective date of the appraisal is _____________ the date of the report
Describe
- Standards Rule 6-8(j) requires that in a MASS Appraisal report, an appraiser must __________ the SCOPE OF WORK used to develop the appraisal
Specific names of other intended users
According to the Record Keeping Rule, what is NOT required in a workfile?
State the effective date of the appraisal and date of the report
Both the Appraisal Report and the Restricted Appraisal Report require the appraiser to
A two step process
Under Standards Rule 1-6, reconciliation is
Recognition by Congress
- Which action was significant by USPAP being initially accepted by the public?
A combination of these
The subject of an Appraisal Review may be an entire report, portions of a report, a workfile or
An assignment by assignment basis
- Authorization to affix or use an appraiser’s signature can be granted only
Takes way from
The purpose of the Jurisdictional Exception Rule is to provide an avenue for compliance with something in law or regulation, which _________ full compliance with USPAP by an appraiser
- Disclosure Obligations
- The Scope of work Rule addresses three primary obligations for appraisers when performing an appraisal or appraisal review assignment. 1. Problem Identification, 2. Scope of Work Acceptability and
Necessary to produce a credible appraisal
Standards Rule 1-1(a) obligates an appraiser to be aware of, understand and correctly employ recognized methods and techniques that are
Have a reasonable basis to believe those individuals performing the work are competent.
In the certification, when a signing appraiser has relied on work done by appraisers and others not signing the certification, the signing appraiser must
Three years
The Conduct section of the ETHICS RULE, requires an appraiser to disclose previous services regarding subject property for
YES. Competency is required at the date of the assignment rather than the effective date.
Joe has been asked to provide appraisal with effective date of owner’s death 3 years ago. He was not an appraiser three years ago and was not competent at that time. Can he accept the assignment?
High Level
The preamble of USPAP is to promote and maintain a(n) _______________ of public trust in appraisal practice
Record Keeping Rule
In which Rule would Virginia find information on workfile retention, access and retrieval arrangements?
The assignment CANNOT be accepted as advocacy is not permitted.
Which is True if an individual is offered an assignment that includes advocacy?
An entity pursuing an economic activity
A business enterprise as defined by USPAP can best be described as
Must address the substantive matters set forth in Standards Rule 3-5
An Oral APPRAISAL REVIEW Report
The report is NOT confidential.
- The State appraiser board has requested a copy of an appraisal report that was compiled last year. Which statement is true regarding appraiser’s obligation to confidential information?
Develop applicable approaches to value
- Which is NOT an obligation of an appraiser in a Market Value assignment under Standards Rule 1-3?
VALUE
___________ is an opinion, never a fact
Result of FIRREA. Not part of The Appraisal Foundation (TAF). Maintains database of appraisers. Appraisal Subcommittee is FEDERAL and has oversight authority over TAF divisions ASB, AQB, APB)
ASC – Appraisal Subcommittee
Identifies and issues guidance in topic areas, utilizes subject matter experts.
APB- Appraisal Practices Board
Establishes minimum education, experience and other criteria for certification of qualified appraisers.
AQB – Appraiser Qualifications Board
Establishes, improves and promulgates USPAP
ASB – Appraiser Standards Board
Development of a real property appraisal.
USPAP Standard 1
Reporting of a Real Property Appraisal
USPAP Standard 2
Appraisal Review, developing and reporting
USPAP Standard 3
Development and reporting of a MASS Appraisal
USPAP Standard 6
7 is Development of a real property appraisal, Standard 8 is Reporting
USPAP Standard 7 and 8 is for?
Standard 9 is Development of a Business or intangible asset appraisal and Standard 10 is reporting
USPAP Standard 9 and 10 is for?
Are not part of USPAP and DO NOT establish new standards or interpret existing standards.
Advisory Opinions
- Conduct, 2. Management, 3. Confidentiality
Three major components to ETHICS? - Effective Date, 2. Report Date
Date(s) that must be in an appraisal report? - Define Problem
- Scope of Work
- Data Collection and Analysis
- Applicable Approaches to value
- Reconciliation of Value indication and Final Opinion of Value
- Report of Defined value Options
Appraisal Process
Sales Comparison; Cost Approach; income Approach. Appraiser needs to either develop or not develop each. One cannot be skipped, the exclusion must be disclosed in the appraisal report. IF AN APPROACH TO VALUE IS REQUIRED FOR CREDIBLE RESULTS, THAT APPROACH MUST BE DEVELOPED.
Developing Approaches to Value
That which is taken to be true
ASSUMPTION
Estimated length of time the property would have been offered , prior to a hypothetical sale. It is a retrospective opinion based on an analysis of past events assuming a competitive and open market.
EXPOSURE TIME
The amount required to create, produce or obtain a property. Cost is either a fact or an estimate of fact.
COST
The amount asked, offered or paid for a property. The asking price, once it is stated is a FACT!
PRICE
The monetary relationship between properties and those who buy, sell and or use those properties. Value is an economic concepts and is always an OPINION.
VALUE
A type of value, stated as opinion. The conditions fall into three categories:
- Relationship of parties (buyer/ seller)
- Terms of Sale (cash, loan, terms)
- Conditions of Sale (Exposure time prior to sale)
Market Value
Exposure time is BEFORE and Marketing time is After effective date of appraisal.
EXPOSURE TIME AND MARKETING TIME
Law
Regulation
Agreement with client
An individual “Should Comply”
Both Users and providers of appraisal services benefit from USPAP
Compliance with USPAP stipulates compliance with/why?
- Possessing competency prior to accepting an assignment
- Having the ability to correctly identify the problem
- Knowledge and Experience to competently complete the assignment
- recognizing and complying with pertinent laws and regulations.
- recognizing when an appraiser lacks competency
- Disclosing lack of knowledge or experience before an assignment
- Methods for obtaining competency.
Competency Rule - Be aware of, understand and correctly employ recognized methods and techniques necessary to produce credible results.
- Not commit a substantial error of omission or commission that significantly affects an appraisal
- Not render appraisal services in a careless or negligent manner.
Standards Rule 1- Appraiser obligations
Client and intended users; intended Use; Type and Definition of value; Effective Date of Opinion; relevant property Characteristics; Assignment Conditions (Extraordinary Assumptions, Hypothetical Conditions, Jurisdictional Exceptions, Assumptions)
Elements of Problem Identification
A type of value stated as an opinion.
Market Value
- Sales Comparison Approach
- Cost approach
- Income Approach
Approaches to Value
Narrative Report
- Which is NOT one of the reporting options that an appraiser must use when preparing a real property appraisal report?