CRU CRU Property Appraisal & Valuation 2

Question 1

What is 'functional obsolescence' in the context of residential appraisal?

Accepted Answer

Loss in value due to deficiencies or super-adequacies within the property

Answer

Functional obsolescence is a loss in value from features that are inadequate, outdated, or excessive relative to current market preferences.

Question 2

An underwriter notices the appraiser used comparables located more than one mile from the subject in a dense urban neighborhood. What concern should this raise?

Accepted Answer

The distance may indicate the appraiser could not find truly comparable local sales

Answer

In dense urban markets, comparables beyond typical proximity may reflect a different sub-market, potentially distorting the subject's value.

Question 3

Which condition in an appraisal report most directly triggers a requirement for a FHA/HUD repair escrow or completion certificate before closing?

Accepted Answer

Safety hazards, structural deficiencies, or property condition issues flagged as 'subject to repair'

Answer

FHA requires that health, safety, and structural deficiencies identified in the appraisal be corrected prior to or at closing via escrow or completion certificate.

Question 4

What is the primary reason an underwriter would request an appraisal desk review or field review?

Accepted Answer

To independently verify the appraisal's credibility when value or methodology appears questionable

Answer

A desk or field review provides a secondary opinion to validate or challenge the original appraisal when the underwriter has concerns about accuracy or methodology.

Question 5

Under USPAP's Competency Rule, what must an appraiser do if they lack the knowledge or experience to complete a specific appraisal assignment?

Accepted Answer

Disclose the lack of competency and either acquire the necessary competency or withdraw

Answer

USPAP requires appraisers to disclose competency limitations and take steps to gain competency or decline the assignment.

(CRU) Certified Residential Underwriter Practice Test

(CRU) Certified Residential Underwriter Practice Test

CRU CRU Property Appraisal & Valuation 2