CRPA Relocation Appraisal Methodology & Terminology 2 — Questions and Answers
Question 1: In a relocation appraisal, the 'amended value' refers to which of the following?
- The original list price adjusted for market time
- The appraised value revised after the property sells at a different price
- A revised appraisal opinion reflecting changed market conditions or new data (Correct answer)
- The value assigned after a buyer's inspection contingency is met
Correct answer: A revised appraisal opinion reflecting changed market conditions or new data
Amended value is a revised appraisal issued when new information or changed market conditions warrant an update to the original opinion of value.
Question 2: Which adjustment method is most commonly applied in relocation appraisals to account for differences in gross living area (GLA)?
- Income capitalization per square foot
- Cost approach depreciation schedules
- Paired sales analysis to extract a per-square-foot adjustment (Correct answer)
- Index trending from national housing data
Correct answer: Paired sales analysis to extract a per-square-foot adjustment
Paired sales analysis isolates the contributory value of GLA by comparing otherwise similar sales with differing sizes.
Question 3: Under ERC guidelines, which of the following best describes 'normal marketing time' in a relocation appraisal?
- The average days on market for all homes in the MLS over the prior 12 months
- The estimated exposure time in a competitive market under prevailing conditions for the subject property type (Correct answer)
- The number of days from listing to accepted contract for REO properties
- A fixed 90-day standard set by the ERC for all relocation assignments
Correct answer: The estimated exposure time in a competitive market under prevailing conditions for the subject property type
Normal marketing time reflects the estimated period to sell the subject property under current market conditions, not a fixed standard.
Question 4: A relocation appraiser is asked to value a property 'as of' a date six months prior to the inspection. This is known as a:
- Prospective appraisal
- Retrospective appraisal (Correct answer)
- Hypothetical condition appraisal
- Desktop appraisal
Correct answer: Retrospective appraisal
A retrospective appraisal establishes value as of a historical date using data available or known at that time.
Question 5: Which of the following is a key distinction between a relocation appraisal and a standard mortgage appraisal?
- Relocation appraisals never require a physical inspection
- Relocation appraisals use only the cost approach
- Relocation appraisals forecast a probable selling price under anticipated market exposure (Correct answer)
- Relocation appraisals are limited to properties under $500,000
Correct answer: Relocation appraisals forecast a probable selling price under anticipated market exposure
Unlike mortgage appraisals that estimate current market value, relocation appraisals forecast the most probable selling price under a defined marketing scenario.
Question 6: When a relocation appraiser identifies a 'seller concession' in a comparable sale, what is the appropriate action?
- Discard the comparable entirely
- Add the concession amount to the sale price before adjusting
- Adjust the comparable's sale price downward to reflect market-based pricing (Correct answer)
- Report the concession but make no adjustment
Correct answer: Adjust the comparable's sale price downward to reflect market-based pricing
Seller concessions inflate the nominal sale price, so the appraiser adjusts downward to reflect the true cash-equivalent market price.
Question 7: The ERC Appraisal Guidelines specify that the minimum number of closed comparable sales an appraiser should analyze is:
- Two
- Three (Correct answer)
- Five
- Six
Correct answer: Three
ERC guidelines require a minimum of three closed comparable sales to support the value conclusion in a relocation appraisal.
CRPA Relocation Appraisal Methodology & Terminology 2
In a relocation appraisal, the 'amended value' refers to which of the following?