CAR Appraisal Reviewer Compliance & Standards 3 — Questions and Answers
Question 1: When reviewing a retrospective appraisal, the reviewer should evaluate the work using market conditions as of which date?
- The date the review is being performed
- The effective date of the original appraisal (Correct answer)
- The date of the reviewer's inspection
- The date the report was transmitted to the client
Correct answer: The effective date of the original appraisal
A retrospective appraisal must be reviewed in context of market conditions as of the original effective date, not the current date.
Question 2: Which type of review involves the reviewer developing their own value opinion independent of the subject appraisal?
- Technical review (Correct answer)
- Administrative review
- Field review
- Desk review with value conclusion
Correct answer: Technical review
A technical review may involve the reviewer developing an independent value opinion, going beyond procedural compliance to assess value credibility.
Question 3: What does USPAP require regarding the confidentiality of assignment results in an appraisal review?
- Results may be freely shared with any state agency upon request
- Results must not be disclosed to anyone outside the client without consent or legal authority (Correct answer)
- Results must be published in a public registry within 90 days
- Results may be shared with the original appraiser automatically
Correct answer: Results must not be disclosed to anyone outside the client without consent or legal authority
USPAP's Confidentiality section prohibits disclosure of assignment results to third parties without client consent or legal authority.
Question 4: Under USPAP Standards Rule 3-2, which of the following is NOT a development requirement for an appraisal review?
- Identify the work under review
- Identify the scope of work necessary to complete the assignment
- Inspect the subject property personally (Correct answer)
- Identify the effective date of the review
Correct answer: Inspect the subject property personally
USPAP does not require the reviewer to personally inspect the subject property — the scope of work is determined by the assignment.
Question 5: Which entity maintains the Appraisal Subcommittee (ASC) and oversees state appraiser regulatory programs?
- The Federal Reserve Board
- The Financial Institutions Reform, Recovery, and Enforcement Act Board
- The Federal Financial Institutions Examination Council (Correct answer)
- The Appraisal Foundation
Correct answer: The Federal Financial Institutions Examination Council
The Appraisal Subcommittee operates under the Federal Financial Institutions Examination Council (FFIEC) and monitors state appraiser programs.
Question 6: A reviewer discovers the original appraiser failed to analyze a prior sale of the subject within 3 years. Under USPAP Standards Rule 1-5, this omission is best characterized as:
- A minor scope limitation that may be overlooked
- A significant USPAP Standards Rule 1-5 violation (Correct answer)
- A breach of the Conduct section of the Ethics Rule
- An acceptable limiting condition under certain assignment types
Correct answer: A significant USPAP Standards Rule 1-5 violation
USPAP Standards Rule 1-5 requires analysis of prior sales within 3 years for the subject; omitting it is a violation that a reviewer must identify.
Question 7: In reviewing an appraisal for a non-residential property, which approach to value, if applicable, generally receives the most weight in an income-producing property review?
- Sales comparison approach
- Cost approach
- Income capitalization approach (Correct answer)
- Gross rent multiplier approach
Correct answer: Income capitalization approach
For income-producing properties, the income capitalization approach typically receives the most weight as it reflects investor behavior in the market.
CAR Appraisal Reviewer Compliance & Standards 3
When reviewing a retrospective appraisal, the reviewer should evaluate the work using market conditions as of which date?