ARA Report Writing & Ethical Standards 3

Question 1

In a rural appraisal report, when the cost approach is used, which item must be clearly identified and supported?

Accepted Answer

Depreciation amount and its basis

Answer

The cost approach requires the appraiser to clearly identify and support the depreciation estimate applied to improvements.

Question 2

A rural property appraisal report must adequately describe the subject's agricultural characteristics because:

Accepted Answer

These characteristics directly influence market value and highest and best use

Answer

Agricultural characteristics such as soil quality, water rights, and productivity directly affect the property's market value and highest and best use conclusion.

Question 3

When reporting market conditions in a rural appraisal, an appraiser should include:

Accepted Answer

Supply and demand trends for similar rural properties in the market area

Answer

Reporting supply and demand trends for comparable rural properties gives the reader context for the market value conclusion.

Question 4

An appraiser who advertises guaranteed results or a specific value conclusion before completing the analysis violates which USPAP rule?

Accepted Answer

Ethics Rule – Conduct section

Answer

Advertising guaranteed or predetermined results violates the Ethics Rule's Conduct section, which prohibits advocacy for a client's cause to the detriment of objectivity.

Question 5

When comparable sales involve properties with water rights and the subject does not, the appraiser must:

Accepted Answer

Make a downward adjustment to the comparables for the water rights they possess

Answer

Comparables with water rights are superior to the subject in that attribute; the appraiser must make a downward adjustment to those sales to reflect the subject's lack of water rights.

(ARA) Accredited Rural Appraiser Practice Test

(ARA) Accredited Rural Appraiser Practice Test

ARA Report Writing & Ethical Standards 3