Principles of USPAP McKissok
- A reasonable and applicable time
- In appraisal of personal property, the appraiser must also analyze prior sales but, unlike SR
1-5 (real property), there is no minimum time period specified. SR 7-5 requires the analysis of
the prior sales that occurred within a reasonable and applicable time period, if relevant given the
intended use of the appraisal and property type. - ANS-When appraising personal property, the
appraiser must analyze prior sales of the subject over what time period?
- Analyzed in the appraisal
- STANDARDS RULE 1-5(a) requires appraisers to analyze current listings and agreements -
ANS-If an appraiser is asked to appraise a property on which there is a known, current
agreement of sale, the agreement must be:
- Appraisal report
- When providing an oral appraisal report, the appraiser must to the extent possible and
appropriate, include information sufficient to meet the requirements for an Appraisal Report [SR
2-2(a)] - ANS-To the extent and appropriate, oral appraisal reports for real property must
address the substantive matters that apply to a(n):
- Appraisal Report and Restricted Appraisal Report
- Like real and personal property appraisal reporting, there are two written report options for
reporting the results of a business or intangible asset appraisal. The report may be prepared as
an Appraisal Report or as a Restricted Appraisal Report. - ANS-A written business appraisal
report must be prepared in accordance with which of the following options?
- Appraisal report content
- USPAPS states STANDARD 2 addresses the content and level of information required in a
report...STANDARD 2 does not dictate the form, or style. - ANS-STANDARD 2 sets forth
requirements for:
- Assignment conditions
- The agencies' appraisal regulations and guidelines contain assignment conditions that are part
of competent performance when they apply in an assignment - ANS-Laws and regulations that
apply to an appraisal for a federally-regulated lending transaction would be considered:
- Biased
- The SCOPE OF WORK RULE states: an appraiser must not allow the intended use of an
assignment or a client's objective to cause the assignment results to be biased. - ANS-An
appraiser must not allow client objectives to cause the assignment results to be:
- Both current and prospective
- Both current and prospective value appraisals subject to completion of proposed
improvements to real property are permitted under USPAP - ANS-When appraising proposed
improvements, what type of appraisal is permitted by USPAP?
- Did not
- "The value opinion stated in the appraisal report is (or is not) adequately supported" is
provided in A0-20 as language that does not indicate a reviewer developed his/her own value
, opinion. - ANS-A statement by a reviewer that "the value opinion stated in the appraisal report is
not adequately supported" would be an indication that the reviewer _______ develop his or her
own value opinion.
- Extends beyond
- A0-14 states that appraisers should be aware that the competency required to appraise
subsidized housing extends beyond typical residential appraisal competency. - ANS-The
competency required to appraise subsidized housing _______ typical residential appraisal
competency.
- Extraordinary assumptions
- Hypothetical assumptions
- Laws and regulations - ANS-Examples of assignment conditions could include:
- False
- SR 1-5 does not require an appraiser to analyze the sales history of comparable sales used in
the sales comparison approach - ANS-Standards Rule 1-5 requires an appraiser to analyze the
sales history of the comparable sales.
- Generally, no, it is not a violation
- The Confidentiality section of the ETHICS RULE prohibits, with some exceptions, the
disclosure of "confidential information or assignment results prepared for a client." The mere fact
that an appraiser appraised a property is not confidential information as defined in USPAP.
However, the appraiser must be careful not to disclose confidential information from a previous
assignment in the new assignment. See FAQ 16, "Disclosing Prior Appraisal of a Property." -
ANS-If an appraiser discloses a prior assignment, has the appraiser violated the Confidentiality
section of the ETHICS RULE?
- Hypothetical assumption
- Development of a value opinion(s) for a subject property with proposed improvements in a
current value appraisal involves at least one hypothetical condition, specifically that the
described improvements have been completed as of the date of value. - ANS-When an
appraiser provides a current value opinion on a proposed new building, he or she is utilizing
a(an) ______________ that the proposed improvements are completed as of the effective date
of the appraisal.
- I reject the value conclusion as lacking credibility due to the errors and inconsistencies found.
- "I reject the value conclusion as lacking credibility due to the errors and inconsistencies found"
is provided in A0-20 as language that does not indicate a reviewer developed his/her own value
opinion. The other choices are listed in A0-20 as examples of language that indicate that the
reviewer did develop his/her own value opinion. - ANS-Which of these examples indicates that a
reviewer DID NOT develop his own opinion in an appraisal review assignment?
- If the reviewer develops his or her own opinion of value, it must be developed under the
requirements of STANDARD 1 - ANS-Which statement is TRUE regarding USPAP and the
appraisal review process for real property?
- Individual appraisers only
- USPAP does not apply to appraisal companies; however, the ETHICS RULE exhorts
appraisers who are employed by companies who do not conduct themselves in accordance with
USPAP to take whatever steps are appropriate to ensure USPAP compliance - ANS-The ethical
obligations of USPAP apply to:
- A reasonable and applicable time
- In appraisal of personal property, the appraiser must also analyze prior sales but, unlike SR
1-5 (real property), there is no minimum time period specified. SR 7-5 requires the analysis of
the prior sales that occurred within a reasonable and applicable time period, if relevant given the
intended use of the appraisal and property type. - ANS-When appraising personal property, the
appraiser must analyze prior sales of the subject over what time period?
- Analyzed in the appraisal
- STANDARDS RULE 1-5(a) requires appraisers to analyze current listings and agreements -
ANS-If an appraiser is asked to appraise a property on which there is a known, current
agreement of sale, the agreement must be:
- Appraisal report
- When providing an oral appraisal report, the appraiser must to the extent possible and
appropriate, include information sufficient to meet the requirements for an Appraisal Report [SR
2-2(a)] - ANS-To the extent and appropriate, oral appraisal reports for real property must
address the substantive matters that apply to a(n):
- Appraisal Report and Restricted Appraisal Report
- Like real and personal property appraisal reporting, there are two written report options for
reporting the results of a business or intangible asset appraisal. The report may be prepared as
an Appraisal Report or as a Restricted Appraisal Report. - ANS-A written business appraisal
report must be prepared in accordance with which of the following options?
- Appraisal report content
- USPAPS states STANDARD 2 addresses the content and level of information required in a
report...STANDARD 2 does not dictate the form, or style. - ANS-STANDARD 2 sets forth
requirements for:
- Assignment conditions
- The agencies' appraisal regulations and guidelines contain assignment conditions that are part
of competent performance when they apply in an assignment - ANS-Laws and regulations that
apply to an appraisal for a federally-regulated lending transaction would be considered:
- Biased
- The SCOPE OF WORK RULE states: an appraiser must not allow the intended use of an
assignment or a client's objective to cause the assignment results to be biased. - ANS-An
appraiser must not allow client objectives to cause the assignment results to be:
- Both current and prospective
- Both current and prospective value appraisals subject to completion of proposed
improvements to real property are permitted under USPAP - ANS-When appraising proposed
improvements, what type of appraisal is permitted by USPAP?
- Did not
- "The value opinion stated in the appraisal report is (or is not) adequately supported" is
provided in A0-20 as language that does not indicate a reviewer developed his/her own value
, opinion. - ANS-A statement by a reviewer that "the value opinion stated in the appraisal report is
not adequately supported" would be an indication that the reviewer _______ develop his or her
own value opinion.
- Extends beyond
- A0-14 states that appraisers should be aware that the competency required to appraise
subsidized housing extends beyond typical residential appraisal competency. - ANS-The
competency required to appraise subsidized housing _______ typical residential appraisal
competency.
- Extraordinary assumptions
- Hypothetical assumptions
- Laws and regulations - ANS-Examples of assignment conditions could include:
- False
- SR 1-5 does not require an appraiser to analyze the sales history of comparable sales used in
the sales comparison approach - ANS-Standards Rule 1-5 requires an appraiser to analyze the
sales history of the comparable sales.
- Generally, no, it is not a violation
- The Confidentiality section of the ETHICS RULE prohibits, with some exceptions, the
disclosure of "confidential information or assignment results prepared for a client." The mere fact
that an appraiser appraised a property is not confidential information as defined in USPAP.
However, the appraiser must be careful not to disclose confidential information from a previous
assignment in the new assignment. See FAQ 16, "Disclosing Prior Appraisal of a Property." -
ANS-If an appraiser discloses a prior assignment, has the appraiser violated the Confidentiality
section of the ETHICS RULE?
- Hypothetical assumption
- Development of a value opinion(s) for a subject property with proposed improvements in a
current value appraisal involves at least one hypothetical condition, specifically that the
described improvements have been completed as of the date of value. - ANS-When an
appraiser provides a current value opinion on a proposed new building, he or she is utilizing
a(an) ______________ that the proposed improvements are completed as of the effective date
of the appraisal.
- I reject the value conclusion as lacking credibility due to the errors and inconsistencies found.
- "I reject the value conclusion as lacking credibility due to the errors and inconsistencies found"
is provided in A0-20 as language that does not indicate a reviewer developed his/her own value
opinion. The other choices are listed in A0-20 as examples of language that indicate that the
reviewer did develop his/her own value opinion. - ANS-Which of these examples indicates that a
reviewer DID NOT develop his own opinion in an appraisal review assignment?
- If the reviewer develops his or her own opinion of value, it must be developed under the
requirements of STANDARD 1 - ANS-Which statement is TRUE regarding USPAP and the
appraisal review process for real property?
- Individual appraisers only
- USPAP does not apply to appraisal companies; however, the ETHICS RULE exhorts
appraisers who are employed by companies who do not conduct themselves in accordance with
USPAP to take whatever steps are appropriate to ensure USPAP compliance - ANS-The ethical
obligations of USPAP apply to:
