Basic Appraisal Procedures Mckissock
UPDATED ACTUAL Questions and
CORRECT Answers
Valuation Process - CORRECT ANSWER✔✔- Systematic set of procedures an appraiser
follows to provide answers to a clients questions about real property value
Appraisal Process - CORRECT ANSWER✔✔- 1. Define Problem
2. Determine scope of work
3. Gather Record & verify dat
4. determine highest and best use
5. estimate land value
6. est. value by all three approaches
7. Reconcile est. value into final opinion value
8. report the final opinion
defining problem - CORRECT ANSWER✔✔- Identification and location of the real estate
Identification of the property rights
Definition of value
Purpose and intended use of the appraisal
Effective date of the opinion of value
Any special limiting conditions
identification and location of the real estate - CORRECT ANSWER✔✔- usually with a legal
description (metes and bounds, rectangular survey, lot and block) identify the characteristics
of the property that are relevant to the type and definition of value and intended use of the
appraisal
Standards rule 1-2E of USPAP - CORRECT ANSWER✔✔- Identify the characteristics of
the property that are relevant to the type and definition of value and intended use of the
appraisal
,market value - CORRECT ANSWER✔✔- stated as an opinion that presumes the transfer of
a property as of a certain date under specific conditions
Appraisers are cautioned to - CORRECT ANSWER✔✔- identify the exact definition of
market value and its authority applicable in each appraisal completed for the purpose of
market value
Standards 1-2c of USPAP - CORRECT ANSWER✔✔- identify type of value, if opinion to
be developed market value, ascertain whether the value is to be the most probable price:
terms of cash; terms of financial arrangements equ. to cahs; other terms; if not market value
must be clearly identified
purpose of the assignment - CORRECT ANSWER✔✔- objective of assignment. ex: to
develop an opinion of the defined value of a specified interest in real estate
intended user - CORRECT ANSWER✔✔- client and any other party as identified by name
or type as users of the appraisal review report by the appraiser
retrospective and prospective value - CORRECT ANSWER✔✔- Two dates are essential to
an appraisal report. Standards Rules 2-2(a)(vi) and 2-2(b)(vi) and 8-2(a)(vi) and 8-2(b)(vi)
require that each appraisal report specify the effective date of the appraisal and the date of the
report
standards 1-2d of USPAP - CORRECT ANSWER✔✔- identify the effective date of the
appraisers opinions and conclusions
extraordinary assumption - CORRECT ANSWER✔✔- an assignment specific assumption as
of the effective date if which found to be false could alter the appraisers opinions or
conclusions
hypothetical edition - CORRECT ANSWER✔✔- condition directly related to specific
assignment which is contrary to what is known by the appraiser to exist on the effective date
of assignment results but is used for the purpose of analysis
, Advisory opinions-22 os USPAP - CORRECT ANSWER✔✔- Accomplishing the first four
action steps (SR 1-2(a) through (d))... ...provides the basis for deciding which of the
property's characteristics are relevant in the assignment
determine scope of work - CORRECT ANSWER✔✔- the type and extent of research and
analysis or appraisal review assignment
advisory opinion-22 - CORRECT ANSWER✔✔- understanding whihc analysis methods and
techniques are necessary and what data are necessary to correctly complete the analysis is an
integral part of the scope of work decision
standards rule 1-2h of USPAP - CORRECT ANSWER✔✔- determine the scope of work
necessary to produce credible results in accordance with the SCOPE OF WORK RULE
scope of work rule - CORRECT ANSWER✔✔- identify problem; determine and perform the
scope of work necessary to develop credible assignment results; disclose scope of work in the
report
scope of work includes but is not limited to: - CORRECT ANSWER✔✔- the extent to which
the property is identified;
the extent to which tangible property is inspected;
the type and extent of data researched; and
the type and extent of analyses applied to arrive at opinions or conclusions.
standards rule 2-2a in USPAP - CORRECT ANSWER✔✔- summarize the scope of work
used to develop the appraisal
workfile - CORRECT ANSWER✔✔- documentation necessary to support an appraiser's
analyses, opinions, and conclusions
record keeping rule - CORRECT ANSWER✔✔- an appraiser must prepare a workfile for
each appraisal or appraisal review assignment
UPDATED ACTUAL Questions and
CORRECT Answers
Valuation Process - CORRECT ANSWER✔✔- Systematic set of procedures an appraiser
follows to provide answers to a clients questions about real property value
Appraisal Process - CORRECT ANSWER✔✔- 1. Define Problem
2. Determine scope of work
3. Gather Record & verify dat
4. determine highest and best use
5. estimate land value
6. est. value by all three approaches
7. Reconcile est. value into final opinion value
8. report the final opinion
defining problem - CORRECT ANSWER✔✔- Identification and location of the real estate
Identification of the property rights
Definition of value
Purpose and intended use of the appraisal
Effective date of the opinion of value
Any special limiting conditions
identification and location of the real estate - CORRECT ANSWER✔✔- usually with a legal
description (metes and bounds, rectangular survey, lot and block) identify the characteristics
of the property that are relevant to the type and definition of value and intended use of the
appraisal
Standards rule 1-2E of USPAP - CORRECT ANSWER✔✔- Identify the characteristics of
the property that are relevant to the type and definition of value and intended use of the
appraisal
,market value - CORRECT ANSWER✔✔- stated as an opinion that presumes the transfer of
a property as of a certain date under specific conditions
Appraisers are cautioned to - CORRECT ANSWER✔✔- identify the exact definition of
market value and its authority applicable in each appraisal completed for the purpose of
market value
Standards 1-2c of USPAP - CORRECT ANSWER✔✔- identify type of value, if opinion to
be developed market value, ascertain whether the value is to be the most probable price:
terms of cash; terms of financial arrangements equ. to cahs; other terms; if not market value
must be clearly identified
purpose of the assignment - CORRECT ANSWER✔✔- objective of assignment. ex: to
develop an opinion of the defined value of a specified interest in real estate
intended user - CORRECT ANSWER✔✔- client and any other party as identified by name
or type as users of the appraisal review report by the appraiser
retrospective and prospective value - CORRECT ANSWER✔✔- Two dates are essential to
an appraisal report. Standards Rules 2-2(a)(vi) and 2-2(b)(vi) and 8-2(a)(vi) and 8-2(b)(vi)
require that each appraisal report specify the effective date of the appraisal and the date of the
report
standards 1-2d of USPAP - CORRECT ANSWER✔✔- identify the effective date of the
appraisers opinions and conclusions
extraordinary assumption - CORRECT ANSWER✔✔- an assignment specific assumption as
of the effective date if which found to be false could alter the appraisers opinions or
conclusions
hypothetical edition - CORRECT ANSWER✔✔- condition directly related to specific
assignment which is contrary to what is known by the appraiser to exist on the effective date
of assignment results but is used for the purpose of analysis
, Advisory opinions-22 os USPAP - CORRECT ANSWER✔✔- Accomplishing the first four
action steps (SR 1-2(a) through (d))... ...provides the basis for deciding which of the
property's characteristics are relevant in the assignment
determine scope of work - CORRECT ANSWER✔✔- the type and extent of research and
analysis or appraisal review assignment
advisory opinion-22 - CORRECT ANSWER✔✔- understanding whihc analysis methods and
techniques are necessary and what data are necessary to correctly complete the analysis is an
integral part of the scope of work decision
standards rule 1-2h of USPAP - CORRECT ANSWER✔✔- determine the scope of work
necessary to produce credible results in accordance with the SCOPE OF WORK RULE
scope of work rule - CORRECT ANSWER✔✔- identify problem; determine and perform the
scope of work necessary to develop credible assignment results; disclose scope of work in the
report
scope of work includes but is not limited to: - CORRECT ANSWER✔✔- the extent to which
the property is identified;
the extent to which tangible property is inspected;
the type and extent of data researched; and
the type and extent of analyses applied to arrive at opinions or conclusions.
standards rule 2-2a in USPAP - CORRECT ANSWER✔✔- summarize the scope of work
used to develop the appraisal
workfile - CORRECT ANSWER✔✔- documentation necessary to support an appraiser's
analyses, opinions, and conclusions
record keeping rule - CORRECT ANSWER✔✔- an appraiser must prepare a workfile for
each appraisal or appraisal review assignment
