ARA Communication & Client Relations 2 — Questions and Answers
Question 1: When a rural property owner disputes a lower-than-expected appraisal value, what is the appraiser's most appropriate initial response?
- Immediately revise the value upward to satisfy the client
- Listen to the client's concerns and explain the methodology and data used (Correct answer)
- Refer the client to another appraiser without discussion
- Ignore the dispute since the report is already signed
Correct answer: Listen to the client's concerns and explain the methodology and data used
Appraisers should professionally explain their methodology and data, but never change a value due to client pressure alone.
Question 2: An ARA appraiser is engaged to appraise farmland for a lender but the property owner provides conflicting income data. What is the best communication approach?
- Use only the lender's data and ignore the owner's information
- Disclose the discrepancy to the client and document both data sets in the report (Correct answer)
- Accept the owner's data without verification
- Abandon the assignment due to conflicting information
Correct answer: Disclose the discrepancy to the client and document both data sets in the report
Disclosing data conflicts to the client and documenting them in the report upholds transparency and professional standards.
Question 3: Which statement best describes the appraiser's obligation when a client requests confidential appraisal information be shared with a third party?
- Share freely since the client paid for the appraisal
- Refuse all third-party sharing under any circumstances
- Obtain written authorization from the client before releasing confidential information (Correct answer)
- Share only verbal summaries, never written reports
Correct answer: Obtain written authorization from the client before releasing confidential information
USPAP's Confidentiality section requires written client authorization before sharing assignment results with unauthorized parties.
Question 4: A rural appraiser discovers a significant error in a completed report that was relied upon for a closed loan. What is the appropriate communication step?
- File the corrected version without notifying anyone
- Notify the client of the error and issue a corrected report (Correct answer)
- Wait to see if the error causes a problem before acting
- Delete the original report and deny its existence
Correct answer: Notify the client of the error and issue a corrected report
USPAP requires appraisers to notify clients of material errors and provide corrected reports promptly.
Question 5: When communicating an appraisal of an irrigated farm to a lender client, which element is most critical to explain clearly in the report narrative?
- The appraiser's personal opinion of farming practices
- The water rights status and its impact on value (Correct answer)
- The borrower's credit history
- Adjacent property owners' names
Correct answer: The water rights status and its impact on value
Water rights significantly affect irrigated farmland value and must be clearly communicated to lender clients making financing decisions.
Question 6: An appraiser's client asks for a verbal update on value before the written report is complete. What should the appraiser do?
- Refuse all verbal communication until the written report is finished
- Provide a preliminary verbal opinion but clearly state it is subject to change pending final analysis (Correct answer)
- Give a firm value commitment verbally to satisfy the client
- Delegate the verbal update to an unlicensed assistant
Correct answer: Provide a preliminary verbal opinion but clearly state it is subject to change pending final analysis
Preliminary verbal opinions are permissible but must be clearly qualified as subject to completion of the full analysis.
Question 7: In an eminent domain rural appraisal, how should the appraiser communicate with both the condemning agency and the property owner?
- Communicate only with the condemning agency since they are the client
- Avoid all communication until the final report is released
- Follow client instructions regarding communications while maintaining objectivity (Correct answer)
- Provide separate valuations to each party to facilitate negotiation
Correct answer: Follow client instructions regarding communications while maintaining objectivity
The appraiser follows client instructions on communications while maintaining impartiality and objectivity throughout the assignment.
ARA Communication & Client Relations 2
When a rural property owner disputes a lower-than-expected appraisal value, what is the appraiser's most appropriate initial response?