CAR Appraisal Reviewer Report Analysis 3

Question 1

An appraiser reconciles the cost approach at $320,000 and the sales comparison approach at $295,000, then concludes $315,000. What concern should a reviewer note?

Accepted Answer

The reconciled value falls outside the range indicated by the approaches without explanation

Answer

A reconciled value that exceeds the highest approach indication without explanation is a credibility deficiency a reviewer must flag.

Question 2

When reviewing adjustments in the sales comparison approach, a reviewer finds all comparable sales received the same dollar adjustment for location with no explanation. This suggests:

Accepted Answer

Possible unsupported or arbitrary adjustments requiring further justification

Answer

Identical adjustments across all comparables without market support or explanation indicate potentially unsupported, arbitrary figures.

Question 3

A reviewer notes that the effective date of the appraisal under review is 18 months prior to the review date. What additional consideration applies?

Accepted Answer

The reviewer must consider whether market conditions have changed materially since the effective date

Answer

When significant time has passed, reviewers must assess whether market changes affect the continued reliability of the original appraisal.

Question 4

In the context of appraisal review, what does 'workfile adequacy' refer to?

Accepted Answer

Whether the appraiser's documentation is sufficient to support the opinions and conclusions in the report

Answer

USPAP requires appraisers to maintain workfiles with sufficient data and analysis to support their report; reviewers assess whether this standard is met.

Question 5

When reviewing an income approach, a reviewer finds the appraiser used a capitalization rate without citing any market data or extraction methodology. This is best characterized as:

Accepted Answer

An unsupported assumption that undermines the credibility of the income approach

Answer

Capitalization rates must be derived from and supported by market evidence; an unexplained cap rate represents an unsupported assumption.

(CAR) Certified Appraisal Reviewer Practice Test

(CAR) Certified Appraisal Reviewer Practice Test

CAR Appraisal Reviewer Report Analysis 3