IACP Reporting Standards & Documentation Practices 2 — Questions and Answers
Question 1: Under USPAP, which report option provides the least detail while still being compliant for a credible appraisal?
- Self-Contained Report
- Summary Report
- Restricted Appraisal Report (Correct answer)
- Narrative Report
Correct answer: Restricted Appraisal Report
The Restricted Appraisal Report contains the least detail and is intended for use only by the client.
Question 2: An appraiser's workfile must be retained for a minimum of how many years after the date of the appraisal report under USPAP?
- 2 years
- 3 years
- 5 years (Correct answer)
- 7 years
Correct answer: 5 years
USPAP requires appraisers to retain workfiles for at least five years after preparation or two years after final disposition of a legal proceeding, whichever is longer.
Question 3: Which element is REQUIRED to be disclosed in an appraisal report when the subject property was sold within three years prior to the effective date?
- The identity of the seller
- Prior sale price and date (Correct answer)
- Seller's motivation
- Listing agent's commission
Correct answer: Prior sale price and date
USPAP requires disclosure of prior sales of the subject property within three years of the effective date, including sale price and date.
Question 4: What is the primary purpose of the limiting conditions section in an appraisal report?
- To list comparable sales used
- To define the scope of work
- To identify assumptions that bound the analysis (Correct answer)
- To describe the neighborhood
Correct answer: To identify assumptions that bound the analysis
Limiting conditions identify specific assumptions and restrictions that define the boundaries within which the appraisal conclusion is valid.
Question 5: When preparing a form report (e.g., FNMA 1004), an appraiser adds extra pages to address complex issues. These additions are known as:
- Addenda (Correct answer)
- Exhibits
- Attachments
- Supplements
Correct answer: Addenda
Additional pages appended to a form report to provide expanded analysis or disclosures are called addenda.
Question 6: An extraordinary assumption differs from a hypothetical condition in that an extraordinary assumption:
- Assumes a condition known to be false
- Assumes an uncertain fact as true if it were known (Correct answer)
- Requires client consent to use
- Only applies to income-producing properties
Correct answer: Assumes an uncertain fact as true if it were known
An extraordinary assumption treats an uncertain fact as true for purposes of the analysis, whereas a hypothetical condition assumes something known to be contrary to fact.
Question 7: Which statement about the effective date of an appraisal is correct?
- It is always the date the report is signed
- It is the date to which the value opinion applies (Correct answer)
- It must match the date of the physical inspection
- It is set by the client, not the appraiser
Correct answer: It is the date to which the value opinion applies
The effective date is the specific point in time to which the appraiser's value opinion applies, which may differ from the inspection or report date.
IACP Reporting Standards & Documentation Practices 2
Under USPAP, which report option provides the least detail while still being compliant for a credible appraisal?