12 Ch2 Advanced Residential Appraisal Concepts quiz

Question 1

What is the purpose of USPAP?

Answer 1

Promote and maintain public trust

Question 2

If an appraiser determines he or she lacks necessary knowledge or experience to competently complete an assignment, the appraiser

Answer 2

May still accept the assignment. The appraiser may still accept the assignment, but must fulfill his/her obligations under USPAP. He/she must notify the client of the lack of knowledge and experience, take whatever steps are necessary to obtain competency, and disclose in the report the appraiser’s initial lack of knowledge and experience and the steps taken to obtain competency. It is not mandatory that the appraiser seeks the assistance of another appraiser, but this is often done. Ch 2, The COMPETENCY RULE

Question 3

If the appraiser discovers that he or she lacks necessary knowledge or experience after having accepted the assignment

Answer 3

The appraiser must notify the client

Question 4

If an appraisal assignment cannot be completed competently

Answer 4

The appraiser must turn down or withdraw from the assignment

Question 5

An appraiser is offered an appraisal assignment which he knows is beyond his level of competency. He must notify the client of any lack of necessary knowledge or experience

Answer 5

Prior to accepting the assignment. Remember this applies to BOTH a situation where you know before accepting the assignment AND to a situation where you discover after accepting the assignment. If you know before you accept the assignment, you must disclose and let the client decide whether to permit you to proceed. If you discover after accepting the assignment, you must stop, notify the client, then, if the client decides to let you proceed, you must gain the competence and include in the appraisal report the required disclosures. (Chapter 2)

Question 6

State enforcement agencies report that one of the most common violations of USPAP is

Answer 6

Failure to properly complete the appraisal of a 2-4 unit property

Question 7

Once an appraiser has orally notified the client of any lack of necessary knowledge or experience

Answer 7

It is still necessary to disclose this in the appraisal report

Question 8

The five basic rules of USPAP, which cover all of appraisal and appraisal review assignments, include all of the following

Answer 8

JURISDICTIONAL EXCEPTION RULE, COMPETENCY RULE, SCOPE OF WORK RULE, The RECORDKEEPING RULE (not Communication rule, not confidentiality rule)

Question 9

The COMPETENCY RULE is relevant to

Answer 9

The appraisal of all kinds of properties

Question 10

An appraiser might overcome a lack of necessary knowledge or experience by

Answer 10

Seeking the assistance of another appraiser

Question 11

Which statement is most likely TRUE regarding a property that is sold with special low-interest below-market financing?

Answer 11

Its sale price will probably be higher than its market value

Question 12

A scope of work that is appropriate for an appraisal used for mortgage lending would also be appropriate for use in an appraisal for litigation.

Answer 12

FALSE

Question 13

Why is it important to identify the intended use of an appraisal?

Answer 13

It is essential in making the scope of work decision

Question 14

When the appraiser believes something directly related to a specific assignment to be true, but there is some degree of uncertainty, he or she must employ

Answer 14

An extraordinary assumption

Question 15

What is the first step in the appraisal process?

Answer 15

Problem identification

Question 16

Most definitions of market value require an appraiser to value the property

Answer 16

With no unusual or atypical financing terms, Based on financing terms equivalent to cash, With no unusual or atypical concessions

Question 17

You are appraising a single-family home for a mortgage lender. At the property, you find that there is a leaking oil storage tank on the property. What should you do?

Answer 17

Notify the client about the problem as soon as is feasible

Question 18

Most appraisal assignments are based on a _______ effective date.

Answer 18

Current

Question 19

You are appraising a single-family home for a local mortgage lender. When inspecting the property, you discover that the inside of the home has been gutted down to the studs. When should you notify your client about the condition of the property?

Answer 19

As soon as you discover it

Question 20

In order to determine competence, the appraiser must complete

Answer 20

The problem identification process

Question 21

When an appraiser, in appraising a property, supposes something to be true which is actually known to be false, this is

Answer 21

A hypothetical condition

Question 22

Your appraiser friend Paul wants to use a “non-traditional” technique to value a complex property. What advice would you give him?

Answer 22

Explain the technique and why the appraiser believes it is appropriate

Question 23

The SCOPE OF WORK RULE states that appraisers have broad _______ and significant ________ in determining the scope of work.

Answer 23

Flexibility, responsibility

Question 24

The appraiser’s scope of work is acceptable when it meets or exceeds the expectations of

Answer 24

Parties who regularly use similar assignments

Question 25

Scope of work includes

Answer 25

The extent of the property inspection, The type and extent of data research, The type and extent of analyses applied, The extent to which the property is identified. It does not include The type of appraisal report option used.

Question 26

The appraiser’s scope of work is acceptable when it meets or exceeds what his/her peers’ actions would be in performing

Answer 26

The same or similar assignment

Question 27

In the appraisal of a complex property, who is responsible for making appropriate decisions necessary to produce a credible appraisal?

Answer 27

The appraiser

Question 28

“Worthy of belief” is the USPAP definition for

Answer 28

Credible

Question 29

The appraiser’s scope of work can be determined only through completion of

Answer 29

The problem identification process

Question 30

How is the credibility of assignment results measured?

Answer 30

Within the context of the intended use

Question 31

An appraiser is engaged to value a single-family home for a mortgage refinance. When the appraiser arrives at the property, she realizes it is an operating restaurant. The appraiser contacts the client. What is the MOST likely outcome?

Answer 31

The assignment will be cancelled

Question 32

Appraiser Anne is asked to appraise a property, however the client places conditions on her information gathering process that will not allow her to develop credible results. The client will not allow her to modify the scope of work, and will not allow her to use an extraordinary assumption about the information she is unable to obtain. What must Anne do under USPAP?

Answer 32

Withdraw from the assignment

Question 33

Where does an appraiser typically obtain most of the information necessary for problem identification?

Answer 33

Communication with the client

Question 34

Which statement is TRUE regarding the pre-printed scope of work statement that appears on the Fannie Mae URAR report form?

Answer 34

It is a minimum

Question 35

According to the Scope of Work Rule, for each appraisal or appraisal review assignment, an appraiser must:

Answer 35

Identify the problem to be solved, Determine and perform the scope of work necessary to develop credible assignment results, Disclose the scope of work in the report

Question 36

When an appraiser, in appraising a property, supposes something to be true which is actually known to be false, this is

Answer 36

A hypothetical condition

Question 37

While most appraisers understand the need for completing assignments competently, many do not understand that the COMPETENCY RULE can also be used as:

Answer 37

An escape clause

Question 38

Assignment conditions include all of the following

Answer 38

Assumptions, Extraordinary assumptions, Jurisdictional exceptions

Question 39

What rule dictates that you must to be competent to perform the assignment?

Answer 39

The Competency Rule. That is, you must have the necessary knowledge and experience to perform the assignment competently, prior to accepting the assignment. At least, that is “Plan A”. (Ch. 2, The COMPETENCY RULE)

Question 40

The scope of work is acceptable when it meets or exceeds:

Answer 40

The expectations of parties who are regularly intended users for similar assignments. What an appraiser’s peers’ actions would be in performing the same or a similar assignment