A local builder hires you to provide a market value appraisal in order to secure financing for a construction loan. He provides you with the necessary plans and specifications for the proposed construction. The site is currently zoned R-1 single-family residential and is quite confident that his application will be approved. The change will permit up to two residential units to be built on one lot. you treat the zoning as R-2 for the purpose of your analysis. In order to conform to USPAP, you must use a(n)
B. hypothetical condition - The zoning used for the analysis is contrary to what actually exists. This is the definition of a hypothetical condition
When developing a real property appraisal consulting assignment:
A. the opinion of value may or may not be that of the consulting appraiser
-An appraisal consulting assignment must include an opinion, analysis, or recommendation. The opinion of value may originate from a source other than the consulting appraiser.
Which of the following is not part of a real property consulting service?
C. advocacy
-An appraisal consulting assignment must include a scope of work decision, a signed certification, and must be performed with integrity. However, advocacy is a violation of the ETHICS RULE
When performing an appraisal review, an appraiser may evaluate all of the following except:
C. the competency of another appraiser
-An appraisal review is the development of an opinion about the quality of another appraiser's work, including the appraisal report, appraisal review report, or an appraisal consulting report. The reviewer considers the completeness, adequacy, relevance.
USPAP achieves legal authority through
a. Title XI of FIRREA
b. adoption, citation, or implementation by government agencies,
c. standards and contracts of private enterprises.
d. a and b
e. b and c
f. a and c
b. adoption, citation, or implementation by government agencies,
c. standards and contracts of private enterprises.
Comments are a(n) _____part of USPAP. Comments inerpret and establish the context and conditions for the application of DEFINITIONS. Rules, and Standard Rules. They have the same weight as these components
A. integral
Which Standards apply to reporting an appraisal?
D. S. 2,6,8, and 10
S2- deals with reporting a real property appraisal
S6- deals with developing and reporting a mass appraisal
S8- deals with reporting a personal property appraisal
S10 deals with reporting a business appraisal
Valuation services:
B. include appraisal practice
-Valuation services are defined as "services pertaining to aspects of property value. These services include services performed by appraisers as well as others.
Which Standards apply to developing an appraisal?
A. 1,6,7,9
S1- deals with real property appraisal development
S6- deals with mass appraisal development and reporting
S7- deals with personal property development
S9- deals with business appraisal development
Every appraisal must contain two dates, which are the:
B. effective date of the appraisal and the report date
According to Standards Rules 2-2[vi], the appraiser must state the effective date of the appraisal and the date of the report.
A client's business partner requests information relating to an appraisal report you prepared for your client. Can you disclose the results of the appraisal for the client's business partner?
E. yes, provided you receive authorization from the client before sharing any confidential information
An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client, anyone specifically authorized by the client, state enforcement agencies, or a professional peer review committee.
Which of the following are among the four rules promulgated by the Appraisal Institute?
D. none of the above
The Appraisal Institute does not write USPAP standards, statements, or rules. The Appraisal Standards Board of the Appraisal Foundation does this.
What is the term for a preference or inclination that precludes an appraiser's impartiality, independence, or objectivity in an assignment?
A. consulting
- Bias is a preference or inclination used in the development or communication of an assignment that prevents that appraiser's impartiality. See DEFINITIONS.
Which of the following is not an important element in the scope of work decision?
B. sales history
-elements in the scope of work decision include intended use, intended users, the purpose of the assignment and the type of value, the effective date(s), relevant property characteristics, and assignment conditions.
If an appraiser states the exclusion of any of the three valuation approaches, he or shes is completing which type of report?
D. any of the above
all 3 reporting options require the appraiser to state and explain the exclusion of any of the valuation approaches.
According to Standard 3, an appraiser performing an appraisal review must do all of the following except:
C. develop his or her own opinion of value
- the review appraiser may be asked to develop his or her own opinion of value, but the primary purpose of appraisal review is to form an opinion about the quality of another appraiser's work.
All of the following must be retained in an appraiser's workfile except:
C. a complete legal description of the subject property.
-An appraiser's workfile must contain the name of the client and the identity of any intended users, true copies of written reports, summaries of oral reports or testimony, and any other information that supports the appraiser's opinions and compliance with USPAP.
State appraisal boards are monitored by the Appraisal Subcommittee to determine
A. whether their licensing procedures are consistent with Title XI of FIRREA
The Appraisal Subcommitee was established to monitor the state regulatory agencies to determine whether their policies are consistent with title XI of FIRREA.
All appraisers peers are
D. other appraisers who have expertise and competency in a similar type of assignment
-an appraiser's peers are other appraisers who have expertise and competency in a similar type of appraisal assignment.
The URAR form is what kind of appraisal report?
C. summary appraisal report
-the level of detail in the presentation of information found in the URAR form is consistent with the requirements for a Summary Appraisal Report.
You are asked to review an appraisal report and limit your review to only the income approach to value.
C. can comply with this request, because of standards Rule 3-1(b)
-An appraisal review can focus on all or part of the report, workfile, or a combination, and it may be related to an appraisal review, or appraisal consulting assignment.
An appraiser must include which of the following in every certification?
C. disclosure of any personal interest the appraiser has in the property being appraised
-an appraiser must disclose any present or prospective interest in the subject property in every certification
The purpose of an ____ assignment is to develop an analysis, recommendation, or opinion where an opinion of value is a component of the analysis leading to the assignment results.
A. appraisal consulting
-the purpose of an appraisal consulting assignment is to develop an analysis, recommendation, or opinion where an opinion of value is a component of the analysis leading to the assignment results. An appraisal consulting assignment involves an opinion of value.
Standard 5 is similar to ____ in purpose and principle
D. 2
-Both Standards address real property reporting obligations.
An appraiser must retain a workfile for at least:
A. 6 years after preparation or at least 2 years after final disposition of judicial proceedings in which testimony was given, whichever period expires last.
The Record Keeping section of the EHICS RULE states: An appraiser must retain a workfile for at least 5 years after preparation, or at least two years after final disposition of any judicial proceeding in which the appraiser provided testimony related.
What is an extraordinary assumption?
D. an assumption that is presumed to be fact about the physical, economic, or legal condition of the subject property, which if found to be false, could alter the appraiser's estimate of value
-an extraordinary assumption presumes as fact uncertain information about the subject property's physical, legal, or economic characteristics, conditions external to the property; or about the integrity of that data used in analysis
In which section of analysis would you find the statement, "My compensation is not contingent upon the reporting of a predetermined value."
B. certification statement
- the certification statement deals with the appraiser's compensation.
Which provision or standard of USPAP requires an appraiser who has reviewed an appraisal to form an opinion regarding the adequacy and appropriateness of the report he or she reviewed and to clearly disclose the nature of the review process he or she used?
D. S 3
-Standard 3 state "appraisal review is the act or process of developing and communicating an opinion about the quality of all or part of the work of another appraiser. The appraiser's opinion about the quality must encompass the completeness, adequacy, relevancy.
One example of a situation in which a hypothetical condition may be used is:
A. when appraising proposed construction as of a current date.
-a hypothetical condition assumes something about the subject property that is contrary to its actual physical, legal, or economic characteristics, external conditions such as market conditions or trends, or the integrity of the data used in analysis.
A client asks Monique to perform a rental survey on a duplex to determine if next years rent increases are competitive in the marketplace. To produce credible results, Monique also performs an appraisal of the duplex, which she includes in the:
D. Appraisal consulting
- Appraisal consulting is the act or process of developing an analysis, recommendation, or opinion to solve a problem where an opinion of value is a component of the analysis leading to the assignment results. Appraisal Consulting involves an opinion of value.
An appraiser must consider and analyze any prior sales of the subject property that occurred within what period of time?
A. Three years of all property types
- standard 1-5(b) states that an appraiser must "analyze all sales of the subject property that occurred within the last 3 years prior to the effective date of the appraisal.
If a section of USPAP is contrary to a local law, an appraiser in that area must use which of the following to complete an appraisal assignment?
A. jurisdictional exception rule
- when the law and USPAP are in conflict, the appraiser must adhere to the law and invoke the jurisdictional exception rule.
Is an appraiser performing a review appraisal required to explain why he or she disagrees with the original appraiser?
A. Yes
- A review must develop an opinion of the appropriateness of the original appraiser's analyses, opinion, and conclusions, as well as develop his or her own reasons for any disagreement.
Does USPAP require every appraisal report to include a complete legal description of the subject property?
D. no, USPAP rules 2-2 requires information to identify the real estate
-standards rule 2-2 requires the appraiser to describe information that is sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics that are relevant to the assignment.
Appraisal practice is best described as:
C. valuation services performed by an individual acting as an appraiser, but not limited to appraisal, appraisal review, or appraisal consulting
- appraisal practice is defined as valuation services performed by an individual acting as an appraiser, including but not limited to appraisal, appraisal review, or appraisal consulting.
Is it ethical if an appraiser pays a fee to be included on a lender's "approved appraiser" list?
D. yes, provided the appraiser discloses the fee in the appraisal report
- an appraiser must disclose any fees, commissions, or things of value connected to the procurement of an assignment ni the certification and in any transmittal letter in which conclusions are stated.
If an appraiser makes his appraisal as-is but recommends that the subject property by inspected by an expert because of some observed cracks in the foundation, the appraiser's value is which of the following?
B. valid if the appraiser bases the value on an hypothetical condition
- the appraiser knows there are cracks in the foundation and will proceed to value the property as if it did not. This is contrary to its existence and is therefore a hypothetical condition. The appraiser is also using an extraordinary assumption to assume cracks were significant, then that information would alter the value of the property.
A seller asks a licensed real estate broker for his opinion of value. The broker tells the seller that he should list his home for $295,000. Which of the following is true?
B. the broker may give his opinion of value at any time
- a broker may give an opinion of value at any time. If the broker is also an appraiser, he must not mislead the client into thinking he is acting as an appraiser when he gives his opinion. With this clear understanding, brokers, property managers, agents, are expected to be an unbiased or disinterested party
USPAP contains _____ which clarify, interpret, explain, or elaborate on UsPAP and have the full weight of a Standards Rule.
A. statements
- statements clarify, interpret, explain, or elaborate on USPAP. Advisory Opinions offer advice and are not part of USPAP.
Which of the following is an acceptable practice for appraisers as a matter of conducting a dignified appraisal business?
C. agree to a referral fee for an appraisal engagement and clearly disclose such a fee to all parties relying on or otherwise using the appraisal
-disclosure of fees, commissions, or things of value connected to the procurement of an assignment must appear int he certification and in any transmittal letter in which conclusions are stated
You are practicing appraiser in Irvine, CA, and have been hired to appraise a farmhouse on 5 acres in Chowchilla, CA. You have never been to Chowchilla, but you research the average price for an agricultural land and residential properties in ChowChilla on you to do the work. So you proceed to complete the assignment and submit the report. Have you violated the COMPETENCY RULE?
C. yes, you did not take all reasonable steps necessary to gain geographic competency
-researching sales prices on the internet will only show an appraiser specific information to the one sale he or she is looking at. It will not reveal any market characteristics or show the presence of proposed changes ni the market place. the COMPETENCY following: ""personal study by the appraiser, association with an appraiser reasonably believed to have the necessary knowledge or experience, or retention of others who possess the required knowledge or experience."
When an appraiser describe his opinion of the highest and best use of the real estate he is completing which of the following?
C. a self-contained appraisal report
-in USPAP, standards rule 2-2 (a, requires the appraiser to describe the support and rationale for the appraiser's opinion of the highest and best use of the real estate as part of a self-contained appraisal report.
which of the following is always presumed to be prior to the appraisal's effective date and is always the opinion of the appraiser, not the client?
A. exposure time
- statement 6 states: "exposure time is always presumed to precede the appraisal's effective date" and is the opinion of the appraiser.
The general requirements for developing a real property appraisal review are:
D. very similar to standard 1.
- many of the general requirements are the same, just applied to a different methodology.
An appraiser sometimes pays a referral fee or commission in order to obtain appraisal assignments. This practice is:
A. allowed if it is disclosed
the management section of the ETHICS RULE only discusses undisclosed fees as being a violation. An appraiser may pay a referral fee as long as it is properly disclosed in the report so that all parties are aware.
What authoritative body sets the standards that the state are required to ahere to when established appraiser qualification criteria?
D. AQB of the appraisal Foundation'
- Title XI of the financial institutions Reform, Recovery, and Enforcement Act [FIRREA] sets forth the qualifications criteria set by the Appraiser Qualifications Board (AQB) of The Appraisal Foundation.
The ETHICS RULE consists of ____ sections
C. 4
- Conduct, Management, Confidentiality, and Record Keeping
An appraiser may perform a retrospective appraisal for a property as it was in 1995 if:
D. the appraiser has data to support an appraisal from that period of time.
- the appraiser must comply with the COMPETENCY RULE. The appraiser must be able to research data associated with the retrospective date and to analyze the data in light of market conditions as of that date. It is not necessary for the appraiser to be.
